Manitoba Committee Hansard — 4 July 2013 (Social and Economic Development Committee, Sitting 4, 40th Legislature, 2nd Session)

40-2-sed4

Manitoba — Debates (Hansard)

Second Session - Fortieth Legislature of the Legislative Assembly of Manitoba Standing Committee on Social and Economic Development Chairperson Ms. Melanie Wight Constituency of Burrows Vol. LXV No. 4 - 6 p.m., Thursday, July 4, 2013 ISSN 1708-6698

MANITOBA LEGISLATIVE ASSEMBLY Fortieth Legislature Member Constituency Political Affiliation ALLAN, Nancy, Hon. St. Vital NDP ALLUM, James Fort Garry-Riverview NDP ALTEMEYER, Rob Wolseley NDP ASHTON, Steve, Hon. Thompson NDP BJORNSON, Peter, Hon. Gimli NDP BLADY, Sharon Kirkfield Park NDP BRAUN, Erna Rossmere NDP BRIESE, Stuart Agassiz PC CALDWELL, Drew Brandon East NDP CHIEF, Kevin, Hon. Point Douglas NDP CHOMIAK, Dave, Hon. Kildonan NDP CROTHERS, Deanne St.

James NDP CULLEN, Cliff Spruce Woods PC DEWAR, Gregory Selkirk NDP DRIEDGER, Myrna Charleswood PC EICHLER, Ralph Lakeside PC EWASKO, Wayne Lac du Bonnet PC FRIESEN, Cameron Morden-Winkler PC GAUDREAU, Dave St. Norbert NDP GERRARD, Jon, Hon. River Heights Liberal GOERTZEN, Kelvin Steinbach PC GRAYDON, Cliff Emerson PC HELWER, Reg Brandon West PC HOWARD, Jennifer, Hon. Fort Rouge NDP IRVIN-ROSS, Kerri, Hon. Fort Richmond NDP JHA, Bidhu Radisson NDP KOSTYSHYN, Ron, Hon. Swan River NDP LEMIEUX, Ron, Hon. Dawson Trail NDP MACKINTOSH, Gord, Hon. St.

Johns NDP MAGUIRE, Larry Arthur-Virden PC MALOWAY, Jim Elmwood NDP MARCELINO, Flor, Hon. Logan NDP MARCELINO, Ted Tyndall Park NDP MELNICK, Christine, Hon. Riel NDP MITCHELSON, Bonnie River East PC NEVAKSHONOFF, Tom Interlake NDP OSWALD, Theresa, Hon. Seine River NDP PALLISTER, Brian Fort Whyte PC PEDERSEN, Blaine Midland PC PETTERSEN, Clarence Flin Flon NDP REID, Daryl, Hon. Transcona NDP ROBINSON, Eric, Hon. Kewatinook NDP RONDEAU, Jim, Hon. Assiniboia NDP ROWAT, Leanne Riding Mountain PC SARAN, Mohinder The Maples NDP SCHULER, Ron St. Paul PC SELBY, Erin, Hon. Southdale NDP SELINGER, Greg, Hon. St.

Boniface NDP SMOOK, Dennis La Verendrye PC STEFANSON, Heather Tuxedo PC STRUTHERS, Stan, Hon. Dauphin NDP SWAN, Andrew, Hon. Minto NDP WHITEHEAD, Frank The Pas NDP WIEBE, Matt Concordia NDP WIGHT, Melanie Burrows NDP WISHART, Ian Portage la Prairie PC Vacant Morris

179 LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON SOCIAL AND ECONOMIC DEVELOPMENT Thursday, July 4, 2013 TIME – 6 p.m. LOCATION – Winnipeg, Manitoba CHAIRPERSON – Ms. Melanie Wight (Burrows) VICE-CHAIRPERSON – Ms. Sharon Blady (Kirkfield Park) ATTENDANCE – 11 QUORUM – 6 Members of the Committee present: Hon. Ms. Irvin -Ross, Hon. Messrs. Lemieux, Mackintosh, Rondeau, Struthers Ms. Blady, Messrs. Cullen, Pedersen, Mrs. Stefanson, Ms. Wight, Mr. Wishart APPEARING: Hon. Jon Gerrard, MLA for River Heights PUBLIC PRESENTERS: Ms. Allison Campbell, private citizen Mr.

John Morrison, Concerned Citizens of the Sturgeon Creek Watershed Mr. Larry Baker, private citizen Mr. Jim Riske, private citizen Mr. Glen Melnyk, private citizen Mr. Rodney Harder, private citizen Ms. Lynne Fernandez, Canadian Centre for Policy Alternatives Ms. Elfriede Kuenstler, private citizen Mr. Norm Gould, Manitoba Teachers' Society Mr. Keith Bazin, private citizen Mr. John Loxley, private citizen Ms. Shauna MacKinnon, private citizen Mr. Harry Paine, private citizen Ms. Trudy Turner, private citizen Mr. Evan Thompson, private citizen Mr. Peter Hudson, private citizen Mr.

Earl Skundberg, private citizen Mr. Ed Huebert, Mining Association of Manitoba Mr. Dave Sauer, Winnipeg Labour Council Mr. Ken Guilford, private citizen Mr. James Aisaican-Chase, private citizen Mr. Kevin Perrier, private citizen WRITTEN SUBMISSIONS: Chuck Davidson, Manitoba Chamber s of Commerce Mickey Stanley, private citizen Keith Thompson, private citizen MATTERS UNDER CONSIDERATION: Bill 20 –The Manitoba Building and Renewal Funding and Fiscal Management Act (Various Acts Amended) * * * Deputy Clerk (Mr. Rick Yarish): Good evening.

Will the Standing Committee on Social and Economic Development please come to order. Before the committee can proceed with the business before it, you must elect a new Chairperson. Are there nominations for this position? Hon. Kerri Irvin -Ross (Minister of Housing and Community Development): I nominate Ms. Wight, MLA for Burrows. Mr. Deputy Clerk: Ms. Wight has been nominated. Are there any other nominations? Seeing none, Ms. Wight , would you please take the Chair. Madam Chairperson: All right. I hope you can all hear me, I know you're kind of far away, but I'll do my best to really be speaking up for you.

Our next item of business is the election of a Vice-Chairperson. Are there any nominations? Ms. Irvin -Ross: I nominate Ms. Blady, MLA for Kirkfield. Madam Chairperson: Ms. Blady has been nominated. Are there any other nominations? Hearing no other nominations, Ms. Blady is elected Vice-Chairperson. This meeting has been called to consider Bill 20, The Manitoba Building and Renew al Funding and Fiscal Management Act. Various acts are amended. As per agreement of the House , dated June 20th, we have 26 people scheduled to speak on Bill 20 tonight

180 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 and you have the list of those presenters before you, which is also posted at the entrance of the room. On the topic of determining the order of public presentations, I will note that we do have out-of-town presenters in attendance. They are marked with an asterisk on your lists. And with this in –consideration in mind then, in what order does the committee wish to hear the presentations? Mr. Cliff Cullen ( Spruce Woods): I would suggest we have the out-of-town people present first.

Madam Chairperson: Is that the will of the committee? [Agreed] I would also like to remind members of the committee that in accordance with the agreement mentioned before, the committee may also by leave decide to hear from other presenters in addition to those scheduled for tonight's meeting. So, before we proceed with presentations, we have a number of other items and points of information to consider for the information of all presenters. While written versions of presentations are not required, if you choose to accompany your presentation with written materials, we ask that you provide 20 copies.

If you need help with photocopying, please speak with our staff. As well, I would like to inform presenters that in accordance with our rules, a time limit of 10 minutes has been allotted for presentations and another five minutes allowed for questions from comm ittee members. I will do my best to try to remember to tell you at nine minutes that you have one minute left so that you can kind of wrap it up. Hoping I will remember that each time.

Also, in accordance with the rules agreed in the House, for these meetings hearing from presenters on Bill 20, if a presenter is not in attendance when their name is called, they will drop to the bottom of the list of tonight's presenters. If the presenter is not in attendance when their name is called a second time tonight, they will be dropped to the bottom of the global list of presenters. Okay? The following written submissions on Bill 20 have been received and distributed to committee members. So we have Chuck Davidson, president and CEO of the Manitoba Chambers of Commerce, and Mickey Stanley.

Does the committee agree to have these documents appear in the Hansard transcript of this meeting? [Agreed] Now, speaking in committee: This is how it works. Prior to proceeding with public presentations, I'd like to just advise you of the process for speaking in committee. The proceedings of our meetings are recorded in order to provide a verbatim transcript. Each time someone wishes to speak, whether it be an MLA or a presenter, I first have to say the person's name. That's the signal for the Hansard recorder to turn the mikes on and off, okay? So that's why we're doing that.

Thank you so much for your patience. We'll now proceed with public presentations, yes. Mr. Blaine Pedersen (Midland): Madam Chair, I think, just as a reminder to all committee members, I think it's a respectful thing to do if we put our BlackBerrys away, and various other electronic devices, and if you need to use them, just step back or sit back to the back row of chairs, and rather than– so we can give our full attention to the presenters. Madam Chairperson: Is that the will of the committee? [Agreed] I think, of course, everybody's in agreement with that. Excellent. Person–perfect.

So, if you do need to use your BlackBerry, if you wouldn't mind just stepping to the side and taking a seat on the side, that would be excellent. Thank you so much for bringing that up. I will now call on Mr . John Morrison. Is Mr. Morrison in the room? [interjection] Okay, should I say his name one more time? Mr. John Morrison. Okay, if the committee agrees, we'll just drop him just to the–[interjection] He was here a moment ago. He did check in, so we do know that he's somewhere close. So if it's okay, we'll go to the second one of out-of-town presenters.

Is that all right with the committee? [Agreed] Excellent, okay, so we will now call instead on Allison Campbell. Allison Campbell. Thank you, Ms. Campbell. Do you have any written materials for distribution to this committee? Ms. Allison Campbell (Private Citizen) : No, I don't. Madam Chairperson: All right, please proceed. Ms. Campbell: Okay. I'm quite nervous, so. I came here to speak tonight because I f eel I have a unique

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 181 perspective to offer to you. I own a small business in Winnipeg. I do bookkeeping for several businesses in Winnipeg, and I'm obviously a taxpayer of Manitoba. When this budget first came out, and I heard what was happening with the PS T, I was extremely upset and very concerned about what was going to happen in the future.

I've been listening very carefully in the last little while to a lot of people and what their reactions are to this increase in the PST, and a lot of people have been saying they're very angry about what they perceive to be lies told by the current administration. In the last election, they promised they were not going to raise the PST, and people seem to be upset because they have now done that and they feel they lied. That is not my perspective at all. I understand that sometimes taxes need to be raised. I do understand that. What I think people are not seeing is the bigger picture.

And that's what I hope to present to you tonight. What is going to be very crucial i n the next six months to a year is the ripple effect that's going to happen because of this PST increase. I heard somebody call in to a radio show on Tuesday and he was saying he'd gone through his regular morning Timmy's run, and he noticed his $5 breakfast now cost an extra 5 cents, as–because of the 1 per cent increase in the PST. So he kind of went, well, not a big deal.

What that person doesn't know at this point in time is what's going to happen in the near future. * (18:10) Businesses across the bo ard are going to be experiencing increases in their operating costs in many different ways. And what's going to happen is those increases in costs are going to translate to having to raise their sales prices, and, ultimately, the consumer is going to be pa ying that. This is going to happen in a variety of ways. We'll take Tim Hortons for an example.

If Tim Hortons is renting a location in a mall, their rent is probably going to go up in the next six months because the rent agency has to pay companies to do repairs and maintenance on the mall. They have to pay employees and perhaps their wages have gone up because minimum wage is going up again. So their costs are going up because the companies they deal with are charging them more because they have to because of the increase in their costs.

It's going to trickle down and trickle down and trickle down, and what's going to end up happening is that $5 Timmy run that right now is costing extra 5 cents is probably going to end up costing more like 50 cents. So it's not a 1 per cent increase at all. It's quite a bit more than that, and I don't think the general public is really aware of how that's going to impact them in the near future. We can all agree that 1 per cent doesn't sound like a whole lot, but it's going to compound, absolutely. I have one client that I work with who is in the construction industry.

I had a very interesting conversation with him yesterday regarding this PST hike. And with the construction industry, there's a very specific set of rules as to how to implement this PST increase because of contracts being in place by a certain date. So we sat down and we talked about this, and there's going to be a great deal of cost involved for my client because of this. He's going to be paying me extra money to comply with this law to make sure that we're doing everything that we're supposed to be doing with this implementation.

That extra cost is going to have to be borne somewhere, and it's going to be directly to his customers. His customers are goin g to be charging their customers more, and that's why I say it's a ripple effect. It's just going to keep compounding and compounding. For myself personally as a business owner, I own a business in one of the most difficult industries right now. I own a s pa in Winnipeg. In the last 15 months, from last July until this coming October, my industry will have been impacted four times by this administration.

Last July, you added PST to spa services, which we had never had to charge our customers before. So, all of a sudden, my clients were now paying an extra 7 per cent for the exact same service they had yesterday; now it was 7 per cent more. Again, I understand why that was brought in, but that was a hardship for some of my customers. Now, instead of coming maybe every one month, they're coming every six weeks to two months. My business has lost money. I have lost clientele. My revenue is down. Last October, the minimum wage was raised.

All of my staff, their wages are tied to minimum wage because of the App renticeship branch, so minimum wage goes up, their wage has to go up. So now I'm looking at reduced revenues because people are not coming as much because it's costing them more, and I have increased costs, because my main cost in my business is my labour. So I've been struggling with this particular business to try and make ends meet.

182 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 Now, with this additional increase in PST–again, the 1 per cent is not a big deal. If they're coming in and spending $50, a few extra pennies is not going to hurt them, but the overall effect of what every person is going to be paying out for all their things is going to reduce the amount of cash that they have available to spend in certain areas. And I will tell you for sure my industry is going to hurt because of this. R estaurants are going to hurt because of this.

They also, as well as myself, will have increased in their minimum wage coming again this October. People have less money to spend; they have to decide where they're going to spend it. And, if it's a choice between going and having a pedicure or buying clothes for their children, I'm pretty sure we can all agree they're going to be buying clothes for their children, as they should be. But what that means for my business is I have a shrinking volume of customers who are spending less because they don't have it to spend any more.

So, in this particular case, unless I can make some pretty drastic changes, I'm looking at possibly having to lay off a person because I will not be able to afford to keep them. I will not have the client base to earn the revenue to keep them. So, in my business, that, I think, is going to be very detrimental. As a taxpayer, I find it very difficult to understand how the administration expects the average taxpayer to survive this. I really do. Wages are stagnant right now. My husband is negotiating his contract right now, and, if he gets a 2 per cent increase this year, we're go ing to be thrilled.

My wage has not gone up for several years. It is what it is. It's not going to go up any higher. With the increases in everything that's going to be happening, with the ripple -down effect from the PST, we are going to have to start lo oking at where we're spending our money, because if all of our things go up 5 per cent, his wage goes up 2 per cent, there is an issue there. I can't make that work. A financial genius couldn't make that work. If you have less money coming in, the only way you can survive is to put less money out.

What is going to happen is, my –in my particular case, my husband and I are going to have to sit down and look at where can we start trimming some of our expenses, because every time I turn around, something's going up. My property taxes are going up. Gas keeps going up. The fuel tax went up. Now the PST has gone up, and all of the expenses are going to be going up because of that. So we have to look at where –[interjection] Okay. We have to look at where we can cut the fat, so to speak, so that we're going to be able to survive this. I don't want to be working until I'm 70 years old.

I don't want that for me or my family. So what's going to happen is things like going out to restaurants is not going to happen. We 're not going to be able to afford to. We're not going to be able to afford to go out to movies, or those kinds of things are going to be falling by the wayside, and that's going to be happening for a lot of taxpayers in Manitoba. So what's going to happe n to these restaurants that have been hit with minimum wage increases and are going to have trouble getting people in the door because we can't afford it anymore? What's going to happen to them?

They're going to be going out of business. They're going to be laying off people. I'll tell you one thing for sure that I think is going to happen because of this: It's going to take some time for this ripple -down effect to come into play. This Christmas is going to be the worst one for retailers in Manitoba. I gua rantee you. Absolutely. I've spoken to a lot of people who are already telling me: We're going across the border to shop. It's cheaper. Madam Chairperson: Thank you so much. You did that without looking nervous. Do members of the committee have questions for the presenters? Hon.

Stan Struthers (Minister of Finance): Ms. Campbell, thank you very much for coming and speaking with us here tonight. I think I found your presentation very helpful to understand exactly how this will impact somebody with a small business and their family, as you've, I think, quite 'articularly' – articulately–that wasn't very articulate at all–but how eloquently you said it to us. I was very interested in what you had to say about the ripple effect, and I understand that, and thanks for pointing that out.

I had a conversation on the weekend with somebody in the construction industry who used almost the same language but in a different way. The premise that that guy had was that the ripple effect would come from the investments t hat we make into infrastructure. If we take the 1 cent on the dollar and

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 183 use it for infrastructure, there will be a ripple effect in terms of jobs and more Manitobans will be able to participate in the economy. Do you see that ripple effect, too? Ms. Campbell: No, I don't. I'm sorry, I don't. I think that it's going to –I'm not talking about big business. I'm talking about small business.

Yes, there will be some opportunities and, yes, there may be some job growth in some areas, but there's going to be more detrimental in smaller business, and I think smaller business is a huge part of Manitoba, and I don't think that you give small business enough credit for what they actually provide to this province in jobs and economy. Hon. Jon Gerrard (River Heights): Yes. Wow. You helped Mr. Finance Minister understand what this ripple effect is all about. You've done better than anybody in the last three nights that we've been sitting here. * (18:20) Ms. Campbell: Sorry– Madam Chairperson: Dr. Gerrard. Mr.

Gerrard: –and also just to ask you–I mean, you're business has been hit particularly hard, and there's quite a number of others which are similarly so. And so, you know, is there going to be a consolidation or are businesses going out of business in the spa industry? Ms. Campbell: Businesses in the spa industry, in particular, are constantly opening and closing. If I may say, there are a lot of other issues in that industry, but definitely for my experience with my business, if I don't make something happen very soon I will be closing my doors and I will have four people out of bus–out of work. Mrs.

Heather Stefanson (Tuxedo): Thank you very much, Ms. Campbell, for being here tonight and for your presentation. I think you articulated very well in terms of what the imp act is going to have on your business and your industry in Manitoban and, indeed, that ripple effect and how what kind of an impact that will have on ordinary Manitobans that are just trying to make ends meet. So I –and have to, you know, are now going to be forced to make choices like you mentioned between going to a –spa services or children's clothing and that kind of a thing.

And so I just want to thank you, I don't really have a question for you, but I want to thank you taking the time out and coming and presenting tonight. Madam Chairperson: Does anyone else have any questions? No? Thank you very much for presenting. All right, Mr. John Morrison? We already have Mr. Morrison's materials. Everyone should have them in front of them already. Thank you. Mr. John Morrison (Concerned Citizens of the Sturgeon Creek Watershed): I'll start right off.

Basically, the presentation that I am making is in print in front of you, as well, so I'll shorten a couple of items on it to fit the 10 minutes. Chair, Standing Committee, members of the Manitoba Legislative Assembly and attendees, my name is John Morrison. I'm the vice -president of a watershed group north of the Assiniboine River and west of Portage Avenue and Sturgeon Road. The group is called the Concerned Ci tizens of Sturgeon Creek Watershed. Our presentation today was approved by our board of directors on May of 2013.

It concerns the management and infrastructure decisions being made by Manitoba Infrastructure and Transportation and Conservation, and the effects of these decisions on the finances of this Province and the effect on the provincial treasury of previously approved bills and legislation by this government and the failure to properly allocate –excuse me–financial resources to support that legislation in this budget.

Additionally, there is not proper oversight of MIT and Conservation in their management of watersheds and their infrastructure to protect Manitobans and their personal financial investments and homes in the budget for –reflect these co sts and risks. Please refer to the

section 2 of your presentations, find a copy of The Water Resources Administration Act. It's in effect since February the 27th of 2011 and enforced at this present time. On page 7,

section 12.1(1) states that a person may claim compensation against the Province for artificial flooding; 12.1.(2)(

a) outlines that the property damaged must be in Manitoba. Now, refer to

section 3 of our presentation, and that would be The Shellmouth Dam and Other Control Works Management a nd Compensation Act, also approved in 2011 and promoted by press releases and personal promotion by senior Conservation, Water Stewardship and MIT staff. Please refer to 12.1 and 12.2 for the parallels to the preceding section; also refer to 5.2(3) and the requirement for public consultation.

184 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 On the basis of this legislation, EMO has advised that the applications would be made available for these programs after the April 2013 budget announcements and that claims would be inclusive to the years 2010 to today. In short, the operation of a water control structure causes losses, which is the description of artificial flooding. The Province is obliged to pay for these losses. The current budget does not reflect any consideration for the payment of these losses to property owners in Manitoba that we were able to confirm as allocated.

How much money does a province need to address this legislation and where's the allocation within the budget? CCSCW, our organization, is a great collector of information, and having signed a research agreement with the Province of Manitoba and using FIPPA requests and consultations with government groups and bodies we have a wealth of information.

Section 4–this is the interesting one –refers to a federal grant to the Province of Ma nitoba in 1960 of $80 million for economic development that was to be used in part for development of man -made drainage in the municipalities of Rosser, St. François, Headingley and Woodlands in the Sturgeon Creek watershed. I highlight the drainage of highly 'qual' – high-quality agricultural lands at which we also have the maps and, in most cases, the original 'earining' – engineering diagrams.

Section 4 also provides two photographs of one of the main drains that was created under that in this watershed. Looking at it, here is the drain that was made–and I'm standing, actually, on top of a dike that goes across the drain that was announced in 2002 was to protect Winnipeg. That picture is from Winnipeg facing to the north and from the north of the dike. Also, another picture was taken, which is the next picture you have here, which is a view from the south, which is where the man -made dike ends and the man-made drain then goes on into Winnipeg.

The dike you see was installed to protect Winnipeg from flooding after the spending of the federal funds to develop the drain. In essence, to stop the flow of the very water that was being funded to move. I now refer you to

section 5 of the presentation, which is a technical study –268 pages folks, I hope it's good reading. It was completed in 2009, the majority funded by the Province of Manitoba at the cost of approximately a quarter of a million dollars. Page 70, in the last line in blue under Colony Creek, this is the current size of the culverts in that dike. You can also note that the study indicates that the structure will fail on the average of every two years. Also note the size recommended in the study for replacement to extend the expected failure to a larger timeline.

In 2010, a year after, MIT rebuilt the di ke–now called Doer's dike–but installed the original- size culverts rather than the recommended size. In discussions with the assessment branch of the Province, it was indicated that $35 million of assessment is at risk. It lost a reduction in only the municipality of Rosser and Woodlands due to flood damage as well as crop and other operation losses. In comparing the study to municipal information and based on the study, most of these losses are due to artificial flooding. Extrapolated across the province of Manitoba, these losses would exceed $3 billion every two years.

Nowhere in the provincial budget is there any accommodation for these losses to the economy, either in compensation or real mitigation. This, however, is not the worst news for the budget under consideration. In early 2011 in a meeting with MIT, Water Stewardship, MAFRI, the study technical advisory committee members, the consultant providing the study and CCSCW, it was determined that the Province failed to provide the information for the study to fully determine the losses and risks within our little watershed.

Highlighted at that meeting was the fact that MIT had continued to add new drainage and structures including additional culverts to the upper watershed that increased volume and capacity, without approval of Water Stewardship, and none of the information was made available to the consultant of the govern– or by the government. Additionally, a substantial number of permits had been issued by the Province for other drainage projects aga in in the upper watershed that increased volumes and capacity, but Water Stewardship refused to provide them.

I'll leave over the next portion of it there only to say that we've had to provide a FIPPA request to get information and we've only received so far about 10 per cent of it after several years. The Manitoba Ombudsman investigated Water Stewardship for those problems several years ago, and it was determined the government thought they were fixed. They're obviously not. To obtain a permit for drain age, the Province or applicant is required to provide proper plans to provide consultation to those upstream or downstream that are affected by the project. In our findings, those affected in most cases were not

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 185 consulted, and, under The Water Rights Act, are afforded the right to proceed to the minister, then the Municipal Board, for compensation. Under legislation, those affected are required to apply within 15 days of the publication of the permit information. None of these permits appear to have been publicized in the past, specifically when considering that the Province has refused to make them available to the public.

These actions take an additional financial risk to the Province in billions of dollars if extrapolated across the province, and those affected should proceed for compensation. Installing proper oversight of spending and economic hardship and risk to the Province's finances should now be a giant, flashing red light. Something's wrong here folks. * (18:30) I'm going to skip over a portion about CP and I'm going to skip over the Shoal lakes area where the farmers have been bought out except for one little point on the bottom.

When the landowners went to the Municipal Board for their settlements and to get land evaluations, it turns out that the provincial appraisers had never even attended most of the sites that were being appraised and the final decision was by the Municipal Board. If we go back to

section 2 and 3 of our presentation and consider the legislation, artificial flooding has caus ed substantial damage especially in 2011. After the passing of this legislation, landowners, farmers and businesses have seen their operations decimated and not even received an application for compensation for over two years, just public announcements, not delivery of programs. Many farmers angered by provincial management of the watersheds and seeing their investments and funds disappear are now looking for ways to publicize their plight when the government refuses to address the core issues.

MIT has now set out to criminalize some of those who've spoken out against the government. Why not criminalize the administrators that have failed to follow the recommendations? The budget of Manitoba should reflect the legislation passed previously in this province. The government should be accountable for its actions and pay the price of its failures by properly funding legislation like the water resources management act. In fact, its $3 -billion cost should be funded from the MIT budgets and projections currently be fore the Legislature.

Property evaluation of projects and reporting of costs of operations with the appropriate oversight may offset these costs and protect Manitobans in the future. If the current situation is not addressed, it could well mean the Provinc e is back for another sales tax increase in 2014. Madam Chairperson: Thank you, Mr. Morrison. You did a good job getting that all in. Do members of the committee have any questions for the presenter? Mr. Struthers : Thank you very much, Mr. Morrison, for coming in and speaking with us here today. I appreciate your advice. Mr. Morrison: Thank you, Mr. Struthers.

I'd also commented you were out at a meeting in Meadow Lea over the flooding and people did appreciate the fact that you come out, although they di dn't like the answers from the Province. Mr. Gerrard: Yes, I'm just trying to skip through the big, heavy brief that you've handed us. I take it that in this brief you've laid out the da mages that – eventually caused by I presume it is primarily flooding behind the dike. Mr. Morrison: It's artificial flooding that is the main detractor across the whole watershed.

This is one structure, but there are a multitude of structures built by the Province of Manitoba that are considered as control structures. We did receive a letter from the deputy minister of MIT saying that the dike that you have photographs of, that there isn't an actual water control structure. But a week ago three senior people from Water Stewardship were in a Municipal Board hearing, and under sworn testimony said that is was a control structure. Mr. Ian Wishart (Portage la Prairie): Thank you, Mr. Morrison, for your presentation.

I think you've done a really good job of laying out one of, as you pointed out, many of the water management issues that we experience in this province, and we've certainly in the past been on -board to help find some solutions for those. They are –it's a strategy that the whole province needs to participate in and we have yet to move in that direction. So I certainly appreciate your presentation. Madam Chairperson: Thank you. Does anyone else have any other questions? Mr.

Gerrard: Just to continue with my earlier question, I think what you were implying is that the amount of flooding was due partly to the presence of the dike and partly due to all the drainage that's

186 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 occurred so that instead of the water being held up it pools behind the dike. Is that– Madam Chairperson: Mr. Morrison. Mr. Morrison: The Province has put other dikes in place in the watershed. They've also reduced culvert sizes. They've changed drainage flows. They've done a lot of things that cause other places to close up, but yes, and all of those are all noted in the study. So, basically, they identified the ones that the Province made them available in the information. The ones they didn't, of course, aren't in that study. Madam Chairperson: Thank you.

Anyone else? Not? Thank you so much for coming. And, Mr. Larry Baker, Mr. Baker in the room? Do you have any written materials to distribute? It looks like you do. Mr. Larry Baker (Private Citizen): Yes, I have 20 packages here. Madam Chairperson: Thank you. The st aff can do that for you. Please go ahead and proceed with your presentation. Mr. Baker: I'm very thankful for being able to address Bill 20 tonight and I'm going to deal with taxes and debt.

I was a victim of the 2011 flood, being a property owner on Lake Manitoba, and if I had known we could address other issues, I would've – I've got 63 pages here –I would've brought another 63 and really speed -read and see if could get them both in.

Provincial sales tax: expanded to include – three times, since 2000 –insurance premiums, property and group life, salon services, pedicures, manicures, women' s haircuts, tattooing, plumbing– spelled wrong–furnace repairs, accountants, lawyers, electricians, heating and cooling service, archi - tectural engineering, security, priva te investigation, travel and baggage insurance. The current provincial government, by expanding the PST, is well on the way to establishing a harmonized sales tax in Manitoba via the back door. And the PST, with the 8 per cent, Manitoba's going to have one of the highest rates.

There are three provinces that are higher: Québec at 9 and a half per cent and they're higher with just about everything; Nova Scotia at 10; and Prince Edward Island at 10. This is–the next page is just a

summary of when the PST was expanded, and I hope that some of you, afterwards, will take time to read some of these, because I'm just going to cover the highlights. The NDP government passes a huge tax increase. The NDP's $182- million tax hike budget, announced April 17th –this is 2012 –is the largest overall provincial tax increase since 1987 with an additional $83 million in higher user fees and other charges, including higher fees for things like birth certificates and child abuse registry checks. The budget represents $260-million increase in taxes and fees.

The highest increase before that was in 1987 under the Howard Pawley government when we had a PST increase. Expanded PST, provincial –this is just the different things under the 2012 budget that the PST applied to: gas tax, PST, tattooing, piercing, blah , blah, blah. Budget 2'13–2013 included the largest provincial tax increase in the past 26 years, even bigger than the 2012 increase. Provincial income taxes: In 1999, the year the NDP government was elected, provincial inc ome taxes were indexed as a percentage of federal income tax. The percentage in 1999 was 48 and a half per cent.

In the year 2000, provincial income taxes were de-indexed and provincial tax rates were established. This, in my opinion, was done to avoid corresponding decreases in provincial income taxes as federal taxes were being decreased. Over the years, provincial income taxes have been increasing as a percentage of federal income taxes. In the 2012 tax year, my provincial income taxes were 100 per cent of federal incomes taxes. The amounts were almost equal, within a few cents of each other. Next page is the different income tax rates, and Manitoba pretty well has the highest –at the highest rate.

Nova Scotia's higher at 21 per cent. And at the lower rate, Manitoba is –outside of Saskatchewan –is the highest, and on the lower end of the income. This has resulted in–and this is a PricewaterhouseCoopers study in 2009–this has resulted in individual at $20,000 paying the most income taxes of all the provinces–Manitoba at $2,734. This probably could be helped by increasing the personal tax exemption, and this is just a letter to the editor that I wrote that was in the papers and I've written numerous, numerous, numerous letters to the editor. The next one is E rnst & Young, and this is a really neat program.

You can go on there and you can punch in any amount you want as –for taxable income, $20,000, $30,000, et cetera, and you're going to get the different taxes for each province.

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 187 And in this case –and this is 2013 personal tax calculator–at $20,000 income, Manitoba pays the highest taxes at $5,125. * (18:40) And the next one is from the Alberta website – and the Alberta website is fantastic, you're going to– on there, the Alberta advantage is all about taxes. If you want to know what taxes are across Canada, go to the Alberta website, because they're very competitive. This is what Canadians can earn before paying the provincial income tax: in 2010, Manitoba–$10,604, which is the lowest of all the provinces.

The next one–and this is 2010, a couple of years ago. And in here the personal tax exemption for Manitoba at $8,134 was the lowest. It's been increased but the other provinces has also increased, and one that really increased their personal tax exemption, of course, was Saskatchewan. Interprovincial tax comparison rates, corporation income tax–Manitoba doesn't have a corporation on a small rate, and I know in the last election in a news release, which I have with me tonight, the Premier (Mr. Selinger) said that we have eliminated five taxes, and that was one of them.

Well, you don't have a corporation small-tax rate, but you do have a health and education levy of 2.15 per cent, which is one of the few provinces that has that. It's just the same thing in a different form, so the corporations here are not gaining any advantage. You could call that–put it up above there in the corporation income tax small rate and you'd be equal to the other provinces. This is a study from across Canada on education taxes. I went on all the websites and studied all this. Manitoba, at 16 mills, has the highest average mill rate of all the provinces in Canada.

Several of the provinces have a–and territories have completely taken education taxes off property. And I wrote a letter to the –or a letter to the editor and I sent that to the Minister of Education (Ms. Allan), and the letter I got back says property tax–or mill rates are only one factor in determining a property tax bill. When comparing Manitoba to other tax–other provinces' taxable portion of a properties of value –portion value, to also reference your evaluation aid assessment, should also be taken into account, and that's true.

And every–we are subject to increases every year through the mill rate and every second year through assessment. And the next is just –however, because some of the mill rates are so low in other provinces –and my brother lives in Alberta, so I phoned him and I said, what's your mill rate, what's your taxes? His house is assessed at $620,000. His mill rate is 2.6147, so his education taxes equal $1.621.11. In Manitoba, we're portioned at 45 per cent, 279,000 times 16 mills, which is the average–a lot of them are more than that and some are less–the education tax here is 4,464 less the 700 you get –if you get it.

I don't get that at my cabin. Net tax is 3,764–twice what it is in Alberta. The–there's very little interest in running for a trustee for school board elections, and we're one of the last provinces in Canada where the school boards still have the right to tax –some provinces have eliminated the property tax completely. In others, the Province has taken over and set standard mill rates. There's very little interest running as a trustee f or school board elections. In the 2010 school board elections, 149 seats were filled by acclamation.

All the ones in the Interlake School Division, which I live in, were filled by acclamation, and Lakeshore School Division, I don't –even though I pay taxes to them, I don't have a right to vote, which I don't believe is very democratic and I don't agree with it. I think if I pay taxes to a certain entity, that I should have the right to vote. And 11 seats are left vacant to be filled by appointment. Voter tur nout is also very low. I think the school board taxing is outdated and it's got to be changed and the Province should be taking over and setting province -wide mill rates.

There's very many equities also in a school taxing, which I could talk on for –and property taxes should be the sole jurisdiction of municipal governments. In many cases, the education tax is more than 50 per cent. If they had–if education taxes were taken off properties, they'd have more room to tax, and I wouldn't mind paying more taxes t o my municipality, I–they give me a lot of services. And it would go a long ways to solving our infrastructure problems.

Just–I'd like to read –over a five -year period education property taxes on my cottage –lake school division–increased from $471 to $1,281 or 172 per cent, and I keep hearing how the education taxes are going down. Over a five-year period, 2005– oh, over a three -year period, 2009 to 2012, net education tax on my principal residence in Interlake School Division increased–it increased from 90 0 to 1,136 or 26 per cent. My education taxes aren't decreasing.

188 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 Madam Chairperson: Thank you, Mr. Baker. Thank you very much. We'll just move to a period of questions now. Mr. Struthers : Thank you, Mr. Baker, for coming and speaking with us here tonight , and I want to commend you on the amount of homework you've done in preparation for this presentation. Thank you very much for that. You make a strong case on the tax side. I'd like to talk to you about some of the tax credits, as well, that we've put in place to get a full picture on the tax side.

But I'd be interested to know, every government collects taxes and every government spends that money out. We are faced with a couple of things that we're responding to, some big challenges. One was a billion-dollar report that came to us that said we have to invest in flood proofing, flood mitigation projects. The other is the opportunity to participate in the Canada-Manitoba infrastructure program that the federal government, to their credit, brought forwar d in their federal budget a few short months ago.

Would–what would your advice be to us in terms of how–because we've said we're going to put this one-cent-on-the-dollar increase directly into infrastructure–what's your advice as to where that – what that infrastructure should be? Mr. Baker: With regards to my cottage, it's very important that a channel be built out of Lake Manitoba, because my value on my property decreased from $208,000 to $108,000. It's been devalued tremendously and I don't see that c oming back. And there have been no sales; I've been to talk to several real estate people that deal on there.

You can't establish a value there because there is no market. And it's very important to me –and not only me, but to the municipalities because they have lost a tremendous amount of tax base –that that channel be built which will give, I think, people confidence that that flood is not going to occur on Lake Manitoba again. And to me that's a very important issue, and all the owners around Lake Manitoba and I think it would give confidence to people. They would start rebuilding and rebuild the tax base for the municipalities.

And all –and, you know, businesses have been tremendously affected there, because 70 per cent of the tax base in St. Laurent was from cottagers and a lot of the businesses there depend on the cottagers to come down for ice cream. In fact, there was a Beachside Delights there was closed for about a year and a half and it didn't open up again, and there are other businesses that were closed. That channel is very important to Lake Manitoba and the confidence to bring back values. Mr.

Struthers : Yes, and thank you very much for that, and you do know, then, that we have made the announcement it's going to be a $250-million project. We've–the Premier (Mr. Selinger) has made that announcement and we're working as quickly as we can to make sure that that channel does become a permanent reality. Mrs. Stefanson: I think it's important to note when discussing that, though, that it is nothing more than an announcement.

We've seen lots of different announcements from this government that we have not–that have not seen the light of day, and I just want to make sure I caution you on that that, of course, this increase in the PST –none of that money will go towards that outlet at all. It's nothing more than announcements that will potentially, maybe happen at some date in the future. So I did want to say, Mr. Baker, thank you very much for being here tonight. Your presentation is very well thought out, very thorough.

I think you bring forward a lot of examples of the reality that we face as Manitoban taxpayers here and, you know, the fact that we are one of the highest taxed provinces in Canada, you've got the statistics within your presentation here. My question for you is with respect to Bill 20 and the increase in the PST going from 7 per cent to 18 per cent–which, as you know, is effectively about a little over a 14 per cent increase–what kind of an impact does that have, do you think, on Manitobans and what kind of advice do you have for the government on this tonight? Mr.

Baker: In my opinion, it's certainly going to affect the businesses that are along the border like Roblin and Russell. People can go to Yorkton and they're going to get –pay 3 per cent less. It's going to affect people along the American border. And, if you want to see what a difference taxes can make, all you've got to do is go to Lloydminster, half of which is in Saskatchewan and half of which is which in Alberta, and for a long time Saskatchewan had a lot higher taxes. And where did all the development take place? It took place on the Alberta side.

The Walmarts, et cetera, were all built in the – on the Alberta side. * (18:50)

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 189 So it can affect business a lot, and it's going to affect a business a lot. If you're going to buy a vehicle, you know, a $20,000 vehicle, if you can go across the border into Yorkton and buy a vehicle and save a significant amount of money. So I 'suppect' some of those areas along the border are really going to be affected. Madam Chairperson: Dr. Gerrard, briefly. Mr. Gerrard: Just in terms of Lake Manitoba, I'm not sure how much your cottage or home was damaged there and how things are recovering and when you will be able to think clearly about the future.

The outlet as is currently envisaged probably won't be completed for another several years. I just want to give you an opportunity to reflect on this. Madam Chairperson: Mr. Baker, just briefly, we have a–the time is expired, but if you give a brief answer. Mr. Baker: In my particular case, we were very fortunate because the RM of Coldwell spent money to do the flood, and they didn't worry about it. And we have a reeve who's very well versed in construction industry. He's involved with a large construction company, and we had an EMO guy who had lots of experience.

They did eve rything to save us, and they did save us. My yard was all tore up because they used it as a staging area for the Bobcats to go up and down with pallets with the sandbags on them and also later with clay. But it was just my yard that was tore up, and I had a little bit of water in my crawl space. It didn't hurt anything. I'm pretty much back to normal. I did it myself. But the values haven't increased yet. But we were very, very fortunate with the council we had. Madam Chairperson: Thank you very much. We really appreciate you coming. Our next presenter is Mr. Jim Riske.

Do you have any written materials for distribution to the committee, Mr. Riske –[interjection] Riske? Thank you. Mr. Jim Riske (Private Citizen): No. Madam Chairperson: No? Please proceed. Mr. Riske: Mr. Struthers, Dr. Gerrard, members of the committee, let me begin by thanking you for continuing this process of hearings of the public. I'm imported from Detroit. I've lived in four US states and now two provinces here in Canada. Maybe I missed something along the way in those places, but this practice of actually listening to regular people in these committee hearings is unique and I appreciate that very much.

Let me apologize to you for not having handouts for you. Usually, I would have that level of detail, but a friend's personal crisis has eaten up most of my prep time this week. I'm also happy that I was called for this day. It's somehow appropriate that an American is here protesting a tax increase by Her Majesty's government on the 4th of July. An Honourable Member: You didn't bring any tea, did you? Mr. Riske: I'm sorry? An Honourable Member: You didn't bring any tea with you? Mr. Riske: Sadly, no, I did not. I'm here because I'm confused. Mr.

Struthers and Premier Selinger have said that we can't hold a referendum on the PST increase because there's not time. If I'm reading the budget documents correctly and following the news correctly, the fiscal year started on April 1st. The budget wasn't presented until April 16th. Now, I'm gathering that's common practice here. But I also keep up with Michigan's Legislature because I was twice called upon to be a qualified sacrificial lamb for the Republican side on the–in that body. Michigan's fiscal year doesn't start 'til October 1st.

They pass their budget through two houses of Legislature and a governor who all have to agree because it's not a unified government. They passed it and signed the budget two weeks ago. It gets even worse in a divided government. You have Republican, Demo crats, both sides. The worst they've ever done, that I've figured out: fiscal year starts on October 1st; they passed it on October 2nd. I know most of these people; they're no brighter than you guys. I'm quite impressed by the people I've met in this Le gislature. Surely, you guys can figure that out. You can call the Legislature back a few months early.

They'd certainly appreciate it, given the temperatures. So you should have been able to sort this out in plenty of time. But I'm also confused by the budget numbers. If I'm reading the budget documents put out by your office correctly, the PST increase, along with whatever remains of last year's expansion of it, adds $213 million in new revenue. We'll include the fuel tax increase that should generate $5.6 million only because, presumably foolishly, I presume that it goes

190 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 to roads. So I kind of figure that would go in infrastructure. I might be misreading it, but this isn't my first rodeo. I only count 89 and a half million dollars in new infrastructure spending. Certainly there's plenty of it there. I only see that much new, which leaves a pretty big gap. Along with that there's an increase in the budget deficit of $57 million –increasing revenues, increase in deficit, bringing a totaled budget deficit of $505 million. I understand running a deficit when times are tight.

As much as when it's not going as fast we'd like, this is not the tightest times that have come around, and unless the US gets its act together, it's not the tightest times that are to c ome. Probably we should figure out how to close that hole sooner rather than later. I might be with you on this increase if I could see the numbers that you've presented. I've driven across enough of this province to strongly support increased spending on roads. The further out you get from Winnipeg, the more of a disaster they are. But I don't see the numbers there. Please tell me what I'm missing. Show it to me in this budget.

At the very least, get better staff for writing your press releases to show it to us. If you told me that you were doubling the number of MRI machines in this province, I'd be fighting with you publicly. If you told me were going to air condition this room, I'm sure everybody here would be with you. If these new funds were going into a 'segredated' piece of the budget, where we could see that this is new dollars matching what the feds are bringing in and see it separately accounted for, we'd all have a lot more faith in this.

That's certainly the way I do accounting even if I'm pr esenting it separately, even if the accountants have to do it some way different, that way you can see what's going on. I'm actually really impressed by the fiscal management here in Manitoba. I've never seen more careful boards than the Steinbach City Co uncil, even though I think they should have made the library bigger when they expanded it recently. They're very careful, they spend very well –same for the Hanover School Board.

I'm trying to presume that out of this provincial government–as much as ways as they're said by my friends on the Conservative side, and I count Kelvin Goertzen a friend, and so I'm –as much as ways that said there, I'm not seeing it in the budget. But I'm also not seeing these new dollars mapped out in a way that makes sense. That's really it. I'm hoping that I'm missing something when I'm ask you to show it to us in a way that we can follow. Thank you. Mr. Struthers : Yes, thank you very much. Happy Independence Day, and welcome to sunny Manitoba.

Bill 20 has a clause in it tha t dedicates every nickel of the revenue from the cent increase on the PST into infrastructure. What is your advice to me as to exactly what that infrastructure should be? I know you mentioned roads; I live in Dauphin, which is three and a half hours northwest of here, and I go through some very good patches of road and some that aren't quite up to snuff, and you've mentioned that. What other kinds of infrastructure do you think we need to be targeting with this revenue? Mr.

Riske: The simplest list is obviously the roads, since I haven't driven very much of this province –as much as I've driven on some of those roads, I don't know what the list is, but I would assume that you have a list, that there is a priority list and you should able to look down tha t list and see how much we should be spending, how much–okay, if we increase this, we can spend this extra. Steinbach certainly needs expansion of schools because our population's growing at a ridiculous level. I haven't seen this level of growth since I lived in Port St.

Lucie, Florida, which went through a major boom cycle and then a massive bust with the whole housing meltdown. So it scares me a bit, but it seems to be sustained –we should be preparing for that. And then, certainly, we have flood control problems. If we have a billion dollars that we have to spend there, yes, that can go there, great. I'm not seeing it listed in the budget. Maybe I'm missing something. But I went through as much detail as you give us in the estimates of expenditure and revenue.

I don't see it, at least I don't see that change. * (19:00) I can certainly believe that as much you're saying is going there, but if it's –heck, if it's a tax increase, I would expect an equivalent increase in all those areas in total. Mr. Stru thers: Thank you very much, and just quickly, I’m really pleased that you mentioned

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 191 flooding infrastructure because we believe that's very important. I want to correct the record from what the member for Tuxedo (Mrs. Stefanson) has said in the previous question, that is, $250 million to make the channel permanent, that is money that is made possible through the 1- cent-a-dollar increase to the sales tax. I've looked hard, as hard as can, I don't see a tree out at the back growing money to pay for this.

And we absolutely reject the proposal made by Conservatives across the way to cut money out of health care and education to the tune of $550 million in order to pay for it. So I just wanted to make sure we corrected that record, make it very clear, a cent on the dollar would go directly into making that channel permanent. Mr. Gerrard: You've clearly done a fair amount of careful work on the looking at the budget. I've come to the similar conclusion to you, but tell us a little bit about your background that you're –have the experience looking at budgets like this. Mr.

Riske: I grew up in politics for –probably because I wasn't bright enough to stay away –and so I've grown up in US politics following both federal and local budgets. But since I was asked to be –run for the Michigan House of Representatives, I dove into that budget and followed it, as well as local budgets and the law. I've served on foundation boards, church boards, all different places. I'm a teacher. I've looked at the budgets in every distr ict I've been in. At least the overviews are fairly easy to read. Certainly, there's depth beyond on, but standard accounting is supposed to be standard.

You're supposed to be able to go from place to place and see the same stuff without having to dive thr ough pages of explanation of: oh, we decided to put it here. Mr. Cullen : Thank you very much, Mr. Riske. I appreciate your coming tonight and hopefully you enjoy the rest of your 4th of July celebrations. Appreciate your insight on this, and certainly your different perspective on it.

I guess, I think, it's safe –we on this side, appreciate where you're coming from in terms of we don't understand really where the money is going to be spent as well, and I'm just wondering if you've been kind of following the announcements. The governments making announcements all the time in terms of investments, have you been following those announcements and your perspective on that? Madam Chairperson: Mr. Riske, briefly. Mr. Riske: Yes, I certainly see them, but I don't follow them nearly as close to as I did when my wife was alive because she–as a reporter, she got all kinds of stuff all the time.

Now I see bits and pieces, but I've got other stuff to do. So I'm just looking at the total document and I'm presuming that responsible budgeting says it's all in there. Madam Chairperson: Thank you. Time for questions has expired. Thank you so much. We've completed our out-of-town guests and we will go back up to the top and begin with our in-town guests. So I will now ask, Mr. Glen Melnyk, if he's in the room. Excellent, and Mr. Melnyk, do you have any written materials for distribution to the committee? Mr. Glen Melnyk (Private Citizen): I do not. Madam Chairperson: All right, thank you, please proceed. Mr.

Melnyk: Good evening. I know some of you are going to pretend to listen and be attentive this evening, but the reality is you've made up your mind and you're thinking about where else you could be and what else you could be doing. Perhaps you're thinking about the Bombers, but I have an update for you. As I was driving here tonight, I saw a sign that said Highway 59, Bombers nothing. So that's where they are so. But that's another fiasco for another time. We're here because this is important. It affects me. It affects you. It affects my family, my friends, my neighbours and my community.

Why am I here on a beautiful July evening with no air conditioning? So I can look my daughters in the eye and at least say, I tried. My daughters are 19 and 17. I try to take advantage of teachable moments for them . This government has given me many over the years. As one enters third- year university and the other enters grade 12, I worry for their future in this province. I can't tell you how many times I hear them and their peers discussing better provincial alternatives. It doesn't have to be this way for our young people. The Premier's (Mr.

Selinger) not here tonight, but he directly lied to the citizens during the last election. That's ridiculous, was the quote the Premier said when asked about tax increases.

192 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 Ridiculous indeed, illegal, immoral, dishonest are other descriptors. Power does indeed corrupt here in friendly Manitoba. You not only expanded the PST to other goods and services, but now are attempting to illegally raise it: double dipping at its finest. I teach my kids to be responsible, accountable and independent in all aspects of their lives. One additional tax this year has cost me over $400 alone, and that's at 7 per cent, insurance premiums. Instead of rewarding people for taking control and responsibility for their lives and property, you penalize it.

But I guess that's the socialist way, government knows best. I'm not sure what the play is here, but you remind me of a third -generation trust fund kid who gets left a lot of money, a successful business, tons of potential and opportunity, and then proceeds to flitter it all away. They blow it all and then they wait for someone else to come and clean up the mess. Of course, I refer to the Pawley administration leaving Premier Filmon to clean up the mess then. Now Premier Doer and Premier Selinger blowing it all again, perhaps leaving Mr. Pallister to try to put Humpty Dumpty back together again.

Talk about history repeating itself. Is that the play? I don't know. Take 10 years off from the mess and t hen play hero again with other people's money down the road. Well, we'll learn this time. Our province deserves better. The law was put in place for a PST increase referendum to allow for clean, clear, sober second thought. A stopgap for out-of-control politicians to spend their way out of mismanagement, basically, a bill to protect you from yourselves.

It's funny, well, not funny, but it's ironic at best that you want to legislate everything else to protect Manitobans, but you ignore this most important p iece of legislation. New Democratic Party, I think not. If you feel so strongly about the extra $278 million and where we need to go in the future, why don't you take it to the people, sell it to Manitobans. But you know you can't. You know they're not buy ing, democracy be damned, slippery slope from socialism to the C word. If you had a referendum and it passed, so be it.

I would not be happy, but I would respect the voice of democracy and the voice of the people. Instead, you try to make people live in f ear. Fourteen years and you still can't run on your record, just fearmonger with glib anecdotes and untruths about the alternatives. You're politicians, I'm sure you've all heard the three- envelope joke. Have a referendum, convince us you're right, that's leadership. According to media sources, we receive a record amount of federal support, I believe $3.4 billion, yet you continue to gouge: MPI, liquor, hydro–oh, look, bipole there's an extra billion–user fees.

Just paid $25 on the weekend for a fishing licence, I remember when it was six. And the absurd land transfer tax, with our housing market that alone should be enough to sustain us for years. Without a PST increase, according to media reports, we still have an extra $2.5 billion and two sixteen from t he expanded tax base. Those are insane numbers. In business, to achieve a palatable bottom line you either cut spending and expenditures or you raise top-line revenue. Government is not an industry or an economy, as the NDP like to think, they're only client is the taxpayer.

So the only responsible and sane thing to do is reduce spending just like any sound business or family unit would and does. Don't spend more than you make. Ask Europe how that overspending's working for them. I myself have told many Saskatchewan jokes over the years, but, really, the joke's on us. You know, I had an opportunity to move there about five years ago, and if I do the math I would've been way better off as I pay, you know, as I pay three times the provincial tax that they d o. It's not rocket science: don’t spend more than you have, find other revenue streams other than the taxpayer.

Here's a hint, the oil and gas in Saskatchewan didn't magically stop in the ground at the Manitoba border, probably some potential there. Financial freedom means different things to different people: for some it's about having enough gas to put in your 10- horsepower boat and motor to go fishing, for others it's about building a mansion, for others it's travelling, for others it's doing charity work. But the whole idea is that it's their choice. They know how to spend their hard- earned money better than any government. * (19:10) Do the right thing, have a referendum and uphold the law.

If you can sell it, more power to you, but give us the opport unity instead of breaking the law and treating us like loyal minions. Put the democratic back in NDP. If you'd like me to spend an afternoon or an evening with each minister to go over synergies and savings, I would gladly donate

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 193 my time. Remember, it's al ways easier spending other people's money. To conclude–I think Mr. Struthers already used this, but to conclude, I'd like to quote my father: Money doesn't grow on trees. Thank you for your time. Madam Chairperson: Thank you, Mr. Melnyk. We're going to do questions. I just wanted to let people know we have five minutes for questions for each person so I will take one question from each person and then go back to the beginning so that we're fair, starting with Honourable Mr. Struthers. Mr. Struthers : I just want to thank you, Mr.

Melnyk, for coming in and giving us your advice tonight in your presentation. Thank you very much. Mr. Pedersen: Mr. Melnyk, you mentioned your two daughters, and they were talking about, if I heard you right, other province s. Can you expand on what you're hearing from them and what do you say to them in conversations with them? Mr. Melnyk: I've had many opportunities to move over the years and I never have because I've always believed, you know, this is where my family is, this is where I wanted to build a future. But as we go along, I'm running out of things to say to them.

So they talk abo ut Alberta; they even talk about Saskatchewan. They talk about different places where better jobs, you know, friends already –I guess why they do this is because all their friends that they've made during school, these people are moving away right now. So, with the Twitter and Facebook and everything else, they're keeping in touch with people that are in BC, Alberta, Saskatchewan, Ontario, Québec–wherever it may be. So the world's smaller for them now than it ever has been and they've made a lot of friends during their school years that, you know, live in other places now.

And–so they're selling them, and I try to sell them right back. I tell them things are going to get better, but we have a lot of work to do. Madam Chairperson: Thank you, Mr. Melnyk. Does anyone else have any questions? Mr. Gerrard: Mr. Melnyk, thank you very much. I would guess that you are a businessman and that you've kind of seen what impact this is having and will have on business. Maybe you want to comment on that. Mr. Melnyk: You know, just–business in general, I mean it's–I think the first speaker today–I don't know if she's still here–I mean, she spoke eloquently about it.

I mean, that's the reality that's out there right now. You know, every nickel counts. And you can say, oh, it's only another million dollars, or, oh, it's only another this, or it's only another that. But when you extrapolate that down to the –and, you know, the common denominator of per capita, per person, of what it costs, like I said, $400 for me, you know, f or just insurance premiums this year, so I can look after my property, so I don't have to rely on government to look after me, so I can look after myself –$400.

You know, that's an airfare somewhere, you know, that's a tank of gas –well, it's more than one t ank, but it's close to a tank. So, I mean, those are some of the things. So it just keeps getting wetter. And you can't–I don't care– you can't spend your way out of messes like this. You have to make tough decisions and you have to make hard decisions, a nd no one's saying it's easy. Goodness gracious, I know you guys are in here all – you know, for a long time tonight, and you've been here for at least –I know it's –but that's –that comes – that's what it is.

You've got to make tough decisions, and tough decisions just doesn't mean– you know, in business–like I said, in business, you know, you have salespeople to go out and, you know, you try to do top-line revenue growth. But if you can't do top -line, you've got to look elsewhere. But here we have a consistent ongoing trough of top-line revenue. It's just like oh, well, we need more money; let's just get more money. And that's the issue, and that's what makes it different than everything else for me. Madam Chairperson: Thank you, Mr. Melnyk. Are there any other questions? No? Then thank you very much. Appreciate it.

And we will go to Mr. Rodney Harder. And do you have any written materials for distribution, Mr. Harder? Mr. Rodney Harder (Private Citizen ): I do not. Tonight it's an oral presentation only. Madam Chairperson: Okay. Please proceed. Mr. Harder: Okay. Ladies and gentlemen of the public–unfortunately my back's to you, but no choice in this event– members of the Manitoba Legislature – which I'd like to remind are elected and accountable to the people of Manitoba–I'm rising today for the first time in my life at any public political arena

194 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 because of what I view as the offensive actions of the current NDP government. As my friend said, once you rile a mild -mannered accountant you know you've crossed a line, so I'll send that message. I speak today as a concerned citizen, a professional accountant, a past volunteer board member, a volunteer with Big Brothers association and I'll tie all those in to my presentation and speak on behalf of thousands of Manitobans who would be here today except they're afflicted by the most common of fears, and that's public speaking. I am not.

The central issue I speak today about is trust. The basis of any successful relationship in any aspect in this world is trust. We all know that to be true and vitally important for our society to function properly. Merriam-Webster's Dictionary defines trust as the assured reliance on the character, the ability, the strength or truth of someone or something, in this case, elected officials. I'll come back to this later but I would like all of us in attendance to stew on that for a moment as I go through this and look at the actions that have been taken and we've heard already some of those.

I'd also like to consider the words of Gandhi when he proclaimed, actions express priorities –not words, but actions. During the run- up to the recent October 2011 election, the NDP leadership, when questioned about raising taxes, called the idea ridiculous, complete nonsense and so on in a manner that made it crystal clear that their promise was not to raise taxes, expressed with great disdain for even bringing up the suggestion that that would take place. On this platform, Manitobans elected the NDP to power.

Immediately, or very shortly after, the PST was enlarged to cover items never before covered in our history, such as insurance and many of the services we talked about today. This is in direct violation of election promises. One year later, here we are, NDP decided to break existing laws that stated a referendum must be held in order to raise the PST, further ignored their promise not to raise the PST now to 8 per cent, which is the highest in western Canada and one of the highest in our country.

The background to this, our Riders -football-loving neighbours recently reduced their PST over the last few years to 5 per cent and many other provinces have worked hard to make their governments more efficient and effective, reducing the burden on their taxpayers. The rise to 8 per cent is not only offensive , then, in terms of its promises broken but also in the direction that it's taken and the manner with which it's been done. Thirdly, you had the business community collect the higher taxes without allowing the due process such as these meetings today to happen before implementing the increase.

That's also offensive. This is done, in my view, without a credible or trustworthy explanation to the increases. I struggled, as many of the people speaking today did, to find, where are these, you know, what's the reasons for this great big increase, you know, and it may seem like 1 per cent is a way to slip, you know, money past, but it is a big increase. I'd also say that the fourth action that's happened is something that I just heard last week.

I was talking to a senior, rural municipal administrative leader during my regular course of duties who volunteered to me, from a large municipality, that they had received some strange requests by the Province last – just last little while, asking them to submit a list of projects for 2013 that were not yet funded, quickly. This was so strange a request, has never happened before, that they thought there must be an error and they submitted 2014 list of projects, only to be told shortly after, no, no, it has to be 2013. And they said, well, this is directly against the rules of government.

Why would we be asked that? The only conclusion for this was the government was scrambling to find some sort of justification for the PST increase. Actions, not words. To properly compare actions, you must look at other choices that were available, too, otherwise, if there's only one choice, then the actions are justified. It's been researched by others that the Manitoba government has–could have chosen to reduce, say, public sector employ ment to the average of all Canadian provinces. Okay. That's not an unreasonable amount to ask for. Let's be what is considered normal in this country.

According to the Canadian federation of taxpayers, this would save us over $1 billion annually, way more than the amount that the PST increase is. Many other suggestions and opportunities have been itemized and were not chosen. I don't have time to go through all of them right now. * (19:20) I want to talk about the impact, both economical and non- economical, of this [inaudible] decisions and go with that. These actions that we’ve heard, of course, increased PST by 1 per cent. It also means

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 195 credit card companies now get to charge 1 per cent more on their charges to businesses which further hurts the business community such as the one we heard earlier today. Landlords who are rent controlled have received a 1 per cent raise to various things like insurance and everything else, but are limited in what they can charge their renters so, practically speaking, are b etter off kicking out their current renters and bringing in new renters where they can raise the rent. That is not good for our society.

Not-for-profit organizations now have to raise 1 per cent more simply to provide the same programming from citizens who now have 1 per cent less to work with–not good for our society. Manitoba business that sell out of province are now less profitable and they could lead to loss of jobs –and some things we already talked about. I won't go into detail for saving time, but t his could be a triple –a trickle effect, ripple effect, whatever you want to call it, that leads to these further problems.

I personally know of one business that decided not to come into Manitoba because of – un–this is their quote, unfriendly business environment. Non-economic impacts. We all know stories of disenchanted voters who are saying, ah, they're all crooks. Why should I bother voting? Democracy, though, is central to a –proper workings of our society. Actions that lead to that kind of skepticism are not helping our society. I mentioned before I was part of Big Brothers. My dad died when I was young, when I was 9 years old in a car accident from a drunk driver. I understand the need for leadership for young people.

As a big brother in that organization, what these kids really need is examples of what to look for and become as they grow up. What are we demonstrating as political leaders in this province by doing the actions that we've taken now? What are we telling our young people? I find that very offensive. It simply increases voter distrust of politicians. Living and doing business in Manitoba is now not as attractive or appealing as well. So those –and that's also a non -economic impact that also has, you know, quality -of-life impact.

If we evalu ate the situation and we say that as a conscientious Manitoban what has happened here is that we're running the huge deficits that NDP has run over the past few years. The government has a spending problem. I think that's obvious enough to state as truth. The truth is likely that you have a spending problem and you need to –think you need more money. When this happens in a voter's household–and as an accountant I've been involved with this several times.

And as far as advice goes, the wisdom of established counselling tells you to reduce your spending to a strict budget based on needs, sell your wants to increase your cash so that whatever that may in your personal life and in the political life–and never are people counselled to break societal rules and steal money from your employer, okay? Never, and, in fact, you know, just to keep on living a lavish lifestyle, this is unfortunately exactly a parallel to what the NDP has done in this case.

You broke the law to protect citizens from this unjustified exac t action, and after just a few months of promising there'd be no increase and no platform for tax increases. I would ask the question then, if the government had good reasons to raise the taxes, why would you not say so in an election platform? Why would you not say so during a referendum of following the law? And why would you not do so in the full due process? Likely, the answer is because the real reasons for wanting an increase are too embarrassing to put in front of the voters.

The conclusion is that either the government is incompetent or delusional – I'll put them together, thank you–or else unscrupulously untrustworthy. In either case, action is required. As an accountant, I'm part of a professional accountants' organization which, for the best, I think, in the public, if it is decided that we need to have a voluntary code of ethics. I must abide by these in order to be a professional accountant; otherwise, I lose my job and my designation.

I would think if you compare the power that account has compa red to a politician, the politicians–we should have at least the same code of ethics for political life. And, if people are not afraid of that, then it should be something you willingly do. Conclusion, again, trust is the basis for any relationship, and if we see the actions that have taken place here–you demonstrate that you cannot be putting reliance on your character, on your ability to manage the moral strength or truth you supposedly represent. In Gandhi's words: Actions express priorities.

Your actio ns have expressed your priorities as obtaining as much money as possible now without consultation, which I would suggest it parallels that of an addict's behaviour.

196 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 In short, you have broken a bond of trust and expressed priorities in parallel to criminal behaviour. When this happens, relationships are either separated at the parties because trust is too important to continue with, or reconciled because they both want to make it work together. Madam Chairperson: Thank you, Mr. Harder. Appreciate that. Mr. Struthers: Thank you, Mr. Harder, for coming to the Legislature this evening and speaking with us. We appreciate your advice. Mrs. Stefanson: I, too, just want to thank you, Mr.

Harder, for being here tonight and for your presentation. I think you brought forward some very compelling arguments here in terms of this PST increase and what it means on Manitobans. And, as an accountant, I just wanted to ask you, what are you hearing from some of your clients about this PST increase and how it will–what kind of an impact it will have on them? Mr. Harder: I do have some clients, but I'm working in industry.

So, as far as some clients that I have, a sm all-business owner is lamenting the fact that he has to–he already has so much pressure to do things on the side without having people pay tax, right? He's a man of integrity and he wants to do the right thing. He tells me he's going to lose business because of this tax, because he wants to do the right thing. Madam Chairperson: Thank you. Mr. Gerrard: Thank you. I think it's very helpful to have the perspective of an accountant looking at this carefully.

I suspect you've looked at the budget and had a look at how the claims and counterclaims with regard to whether in fact this money will go to infrastructure. And I just –I'm not sure that that is a critical issue for you, but I raise it so you can comment. Mr. Harder: I want ed to focus–I heard there'd be a lot of discussion today, probably, and other days, about the–what the economic impacts and the well – that'll be well covered. I wanted to just speak mainly today about the importance of integrity in leadership, and that's the main message that I wanted to bring across.

But, certainly, to answer your question, Dr. Gerrard, I look at that number –one number that keeps going through my head and I haven't heard from yet, is the deficit that this Province has, okay? It's huge, okay? Over $13 billion, and that s hould be a priority, if this does go through, that we certainly tackle that, too, because that is mortgaging the future for all of our kids. Mr. Wishart: Thank you, Mr. Harder, for your presentation. I certainly appreciate your perspective from someone in the financial world that is used to putting controls on when it's necessary.

But you touched on an issue early on that I think, frankly, is the big issue here, and it's loss of trust, which, I think, is something that you've reflected and we certainly hear that from others, and it will be something that impacts us all as elected officials in this province. And is there any way to reverse this process? Can we do anything to bring back the trust? Mr.

Harder: To answer your question, I'd just like to say that this is probably the last stop as far as the – you can choose a different path to go here, and if you continue on this cause, you'll cause the economic and non-economic cost of damage we talked about. But you can choose a narrow path, too, which would be to stop this dictator -style madness, really, and confront the voters honestly –referendum. And if there's good reasons, you know, go ahead. At least we'll respect the process. That would go a long way to reducing the damage. Madam Chairperson: Thank you. Do we have any more questions?

If not, thank you very much. Appreciate it. We'll move on to our next presenter which is Mr. Clayton Rumley. Mr. Rumley. Is Mr. Rumley in the room? If not, he'll drop to the bottom of the list. All right then, Ms. Lynne Fernandez. And do you have any written materials? Ms. Lynne Fernandez (Canadian Centre for Policy Alternatives): I do. Madam Chairperson: Okay, thank you. I'll let them pass that out, and if you want to go ahead and proceed. Ms. Fernandez: Sure.

On behal f of the Canadian Centre for Policy Alternatives Manitoba, I'm here to speak in favour of Bill 20, The Manitoba Building and Renewal Funding and Fiscal Management Act. Our support of this bill is based on several interconnected issues and arguments, which I will explain as follows: * (19:30)

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 197 Firstly, this government has been cutting revenue since it took –first took office in 1999. It is now collecting around $1.2 billion less every year than it did when it took office. The cumulative effect of these cuts h as left Manitoba unable to deal with crises in physical and social infrastructure. Although Bill 20 is crafted to deal with the physical infrastructure crisis, which I will address next, CCPA has published extensively on why investing in social infrastructure is critical to job creation, and as such, a legitimate economic driver.

If Manitobans are undereducated, undertrained, poorly housed, poorly paid and suffer from poor health–and we know that many do –all the physical infrastructure investment in the w orld will not increase our economic performance or quality of life. A recent CCPA report found that fully 63 per cent of Aboriginal children are living in poverty.

We know that the Aboriginal population is the fastest growing in the province, and by draini ng provincial revenues through sustained tax decreases, we are missing the opportunity to invest in the social infrastructure that would lift these children out of poverty and improve our labour market performance and economic outlook. That said, physica l infrastructure is needed as well, and we understand that a series of federal government cuts in infrastructure spending have downloaded a heavy burden on provincial governments.

This has exacerbated the problem of dwindling revenues brought on by provincial tax cuts and, unfortunately, bad luck in the form of flooding has now brought us to a crisis situation. You must react quickly to the most recent damage to our infrastructure. CCPA's senior economist, Hugh Mackenzie, reports that spending on Canada's infrastructure has been in decline for 40 years. Public investment in infrastructure was as high as 3 per cent of GDP in the late 1950s, then declined steadily until recent fiscal stimulus spending temporarily reversed the trend in 2009.

The 3 per cent of GDP trend of the 1960s and '70s went down to 1.5 per cent in the 1990s, and Mackenzie estimates that decline to equal a 24-billion-a-year loss in infrastructure investment, and this is Canada -wide. To give us an idea of the gravity of the situation, Mackenzie estimates that to maintain our existing level of infrastructure, we would have to invest on an annual basis 2.9 per cent of GDP, which is a bit more than what we were temporarily spending during the fiscal stimulus spending which the federal government has now ended.

We repeat that this level of infrastructure spending would simply maintain existing infrastructure. It is generally accepted that Canada's current infrastructure stock is not sufficient to meet our needs. Prior to the point when our infrastructure gap appeared late in the 1970s, our infrastructure stock's depreciated value was equal to a bit more than 30 per cent of GDP. In order to get Canada's infrastructure value back to this level would require an annual investment rate of 4.3 per cent of GDP.

Now, Mackenzie's calculations do not take into consideration the impact of floods in Manitoba, which have further added to our infrastructure woes. Now, neither does his report disaggregate spending by province, so I referred to this year's budget papers and did some quick calculations. I estimated GDP for this year by giving it a modest 2 per cent–sorry, thank you. I estimated GDP for this year by giving it a modest increase of 2 per cent, bringing it in at just over $60.5 billion.

So your pledge to spend $1.8 billion on infrastructure means we'll be spending pretty close to 3 per cent of GDP on infrastructure, so we're still well below the 4.3 per cent that Mackenzie recommends in order to address the infrastructure gap, let alone what is required to deal with the damage caused by extreme flooding. We don't know any one person or any sector of the economy who does not understand that we need to spend on infrastructure. The business community understands this better than any of us, which is why even they support this increase.

And as much as we can complain that the federal government has irresponsibly downloaded this responsibility to provincial and municipal governments, this will not change the facts that you have to live with. You can spend now or you can spend more even later. You have chosen wisely. Your choice is politically unpopular in the short run, as ev idenced by the process we're going through right now, but clearly sensible and responsible in the long run.

Besides the obvious need to shore up our infrastructure, which will allow our economy to function more efficiently, the other benefit to this spending is the economic spinoff we will realize. For every dollar spent on infrastructure, $1.06 circulates through the economy through job creation and increased spending. So, having established that it's time to reverse 13 years of destructive tax decreases and begin to reinstate investment in infrastructure, we can now

198 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 turn to the issue of balanced budget legislation and the wrong- headed stipulation that the Province submit a tax increase to a referendum. We have argued for years that balanced budget legislation needs to be eliminated. The idea of forced balanced budgets is counterproductive and just bad economics, so much so that few if any governments that have such legislation ever adhere to it when the going gets rough. Even Alberta, which also has balanced budget legislation, finds ways to skirt around it when needed.

And we'll see what happens this year with the flooding that they've been facing, as well. Research done by economists Wesley and Simpson shows that, and I quote: If the recent experience in western Canada offers any indication, our study suggests that balanced budget legislation does not always live up to its promise.

If balanced budget legislation is designed to create a series of political legal constraints to prohibit budget deficits , prioritize fiscal constraint on economic downturns, restrain the growth of government spending and otherwise force governments to live within their means, the balanced budget laws in most western Canadian provinces were 'ajep'–abject failures. At the s ame time, the staunchest critics of balanced budget legislation were also wrong in their predictions. Balanced budget laws did not prove to be unduly restrictive.

They did not embed neo-liberalism and outlaw Keynesian counter-cyclical spending, nor did t hey remove the ability of governments to protect core government programs and services in times of recession. End quote.

Now, as one of those staunchest critics of balanced budget legislation, I would add that although the legislation did not prevent thi s government from 'ganjy' –engaging in Keynesian counter-cyclical spending, which was urgently required, it did force it to jump through a series of costly and counterproductive hoops in order to do what was merely sensible and prudent, especially in the throes of an economic financial crisis.

We now have to go through yet another long- drawn-out public consultation in order to 'intcrease' the PST by 1 per cent, which by all sensible consideration, should be simply an administrative adjustment made by a government which was elected to carry out such business. Using costly referendums for any sort of budgetary decision is fraught with problems besides the obvious expense involved. To quote Loxley: When government subjects one narrow aspect of fiscal policy to referendum, it abrogates responsibility for its fiscal mandate and treats taxes in isolation from the broader policy and fiscal perspective.

End quote. This government has a fiscal mandate to attend to the issues at hand, whether they be shoring up social infrastructure or responding to the physical infrastructure crisis that threatens to hobble our economic development. Even the Winnipeg Free Press, hardly a bastion of progressive economic thought, was opposed to balanced budget legislation when it was introduced, arguing that it would hamstring the government and prevent it from prudent fiscal management.

The Free Press claimed that balanced budget legislation–quote–is a silly idea fraught with danger –unquote–for the Conservatives and future governments. In sum, the bleeding of revenue caused by tax cuts, which–and tax cuts never have to be submitted to a referendum, regardless of how reckless they are– combined with both the social and physical infrastructure crises, give this government no choice but to increase taxes on some level, so we do support this bill; although, we would have preferred that corporate and/or high- income-earner taxes had been increased instead.

Given that we're also critical of both the spirit of balanced budget legislation and i ts ability to constantly inhibit effective governments of the budget, we also agree that no referendum should be called on this issue.

I would like to close with a quote from the former Conservative Premier of Manitoba, Gary Filmon, when arguing against use of a referendum to decide the question of the Winnipeg Jets arena, and I quote: In our parliamentary 'decon' –democratic system, people elect people to make judgments on their behalf, judgments that are ultimately in the best interest of the province an d its future; we are in office with the mandate to exercise our judgment. We are pleased that you are taking Mr. Filmon's words to heart. Thank you. Madam Chairperson: Thank you, Ms. Fernandez. Do members of the committee have questions? Mr.

Struthers : I thank you very much, Ms. Fernandez, for coming in and speaking with us here tonight. I take your point in terms of the tax relief that has occurred over the last number of years–point taken.

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 199 I do have a question–I wonder if you've done any work in thi s area or if you have an opinion– Brian Pallister has said very clearly that he favours a two-tier, private, for -profit system of health care for Manitoba, and that if he was elected Premier, he would put that in place. What impact is that going to have on our provincial economy? What impact, in your view, would that have on everyday citizens? * (19:40) Ms. Fernandez: I–did he say that? [interjection] Oh, I find that quite shocking. I haven't heard that.

So a two -tiered health -care system would be better than what we have now –well, I mean, we know that then we would also have two tiers of patients, some who would get fast and efficient health-care coverage right away and attention, and others who wouldn't. It would split resources and we know that the resources would then go to where the money is, and the money would go to the private sector of the health care and the public sector would be left scrambling. That would leave –I mean, I keep going on and on about –or we do, at CCPA, about this social infrastructure deficit and the number of poor people.

The whole social determinants of health, which is an area that we have studied in depth, and one of the social determinants of health is actually having access to health care. Notwithstanding that, if you have proper housing and education and jobs and everything you're not as likely to get sick, but when you do get sick you do have to go and you have to have access to health care. And having a two -tier system would clearly prevent many people who already have many problems, because of living in poverty, et cetera, then , they would not have the health care that they need.

So I could not speak strongly enough against such an idea, and it would have a devastating effect, I think, on our province. Madam Chairperson: Thank you. Mr. Wishart? Mr. Wishart: No. Madam Chairperson: You had your hand up before–no. Does anyone else have any other questions? Mr. Struthers : Yes, just one more. I wanted to confirm that that is exactly what Mr. Pallister had said. It was on CJOB a number of weeks ago.

That was just a few weeks after he had proclaimed that there would be $550 million cut out of the provincial budget, an indiscr iminate across -the-board cut to every department, including health care. So I just wanted to confirm that that is, indeed, their position. Madam Chairperson: Ms. Fernandez, did you want to comment? Ms. Fernandez: Thank you for your information. It's clearly something that we're going to have to look into. Madam Chairperson: Anyone else with questions? No. Okay. Thank you very much for coming. And our next presenter is Elfriede Kuenstler.

If I am saying that name wrong, please correct me. Ms. Elfriede Kuenstler (Private Citizen): I have some sheets. Madam Chairperson: Yes. Ms. Kuenstler: But I'd rather you listen to me read. Madam Chairperson: Okay. Would you like them distributed after instead, then, or? Ms. Kuenstler: Sure. It's like–yes. Madam Chairperson: Okay, and I'll just remind everyone, if you could keep your papers off that microphone that's on there, just for the Hansard's ears. Thank you so much. Ms. Kuenstler: Thank you for this opportunity. I am a senior and I am poverty line.

Just so that – I would love to speak to all the issues that were presented, but no time. Reasons not to raise the PST, my presentation is partly in response to the propaganda that arrived at my residence recently. I almost gave up coming in until I read this. Th e presumption by our current government that our PST is the third lowest in Canada is based only the provinces or territories that actually have a PST. There are four that have no PST at all. Based on all constituents, we are in the middle of the pack.

Manitoba has almost the highest personal income taxes in the country; only Saskatchewan, one fifth of a per cent is higher, however, Saskatchewan only has a 5 per cent PST. At the end of my document is a comparison of taxing. I'm excluding Québec because it' s under a different tax system altogether.

200 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 For example, Ontario taxes are 5.05 per cent personal, as opposed to Manitoba's 10.8 per cent personal provincial taxes, putting ours to double that of Ontario,

whereas Ontario presently has an 8 per cent PST, which is where we are proposing or have gone. The propaganda sheet refers to spending cuts implemented ten years ago. I was also around and considered it prudent. I was also around 50 years ago in the working force before public health care was ever available and CPP was just being implemented. One of the biggest spending sprees began with the creation of the WRHA, creating a huge hierarchy of departments, lots of top- heavy administration, much more confusion than ever existed before in our hospital staffing. And I have health -care people in the family.

My suggestion is that the government streamlines their spending instead of expanding it. The thought to improve schools and health centres sounds good, but why did the government revamp education in the first place, that in the last years we regressed with teaching our basic three R's like reading, writing and arithmetic to the extent that our students lag behind in the country's comparisons. Why are we concentrating on social concerns over teaching school? I won't even start with Bill 18 and what it concentrates on.

What is wrong with our health centres right now, other than that we go to the emergency for minor cuts and bruises instead of putting a patch on at home. People use the ambulance service as though it was a taxi ride. I've seen it many times. The suggestion of redirecting savings to the services for families is quite ambiguous as well. If it means opening up more public funded daycares, school breakfasts and lunches, organized sports and drop-in centres and so on, it may simply encourage lazy parents to abdicate their duties to their families even more.

Many of these families already are heavily subsidized in their existence and it often empowers them even more to spend time away from their children. I think it is very socialistic to use taxpayer's money to fund that. Overall, our families were stronger before all the social services were offered. Our welfare/social programs are so generous and tax exempt that persons have no incentive to go to work and pay taxes on their earnings. A Metis descent youth in high school, for example, may receive well over $500 a month, just because.

In the end, also, those young people are allowed to attend university free of charges,

whereas taxpaying others pay everything. Why I'm in opposition to overtaxing and then distributing the proceeds freely? It is because I have seen first-hand the long-term effect. I was born several years post -World War II in East Germany, the third in a family of five children. My family, in miraculous steps and stages, was able to flee from East Germany to West in 1953. There we lived as displaced refugees until five years later – our own home country –when in 1958 we had the privilege to immigrate to Canada sponsored by our relatives in Winnipeg.

There was no assistance provided by Canadian governments to help us settle in. Every help came from kind, private individuals or taking up a loan from the bank. There were no English classes, no health care and any other benefits. Somehow, we all five kids grew up and were able to attain jobs, some education and make a life here. Why am I telling you my story? I have seen what socialism and communism does to a people. This is now after the wall came down in 1989 of November, my late husband and I, in 1990, returned to my birthplace, a small city on the East German/Polish border.

East Germany had become totally rundown, the countryside looking poor with dilapidated buildings. The greater the government takes control and tries to distribute c ommonly, the less incentive there is for individuals to try hard and achieve. Much has changed since communism, but the mindset of those people is hard to change. We have to foster a better work ethic instead of handouts. I now have three grown children with families of their own.

By the age of junior high, each of my kids had little jobs and by the time they graduated from grade 12, each of them had saved enough money to pay for their first year of university. Continuing with part -time work during the school year and working for the four months in summer, they were able to keep abreast each year with paying their tuition and so on. Each of them graduated with a degree, never having taken a single dollar of student loans. Nowadays we keep increasing the l oans while the students fly to destination holidays, texting and doing who knows what.

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 201 It seems foreign that anyone should have to work for anything. We have produced a society of takers and very few who care to give. Unfortunately, all the assistance has to come from somewhere, namely the taxpayer and consumer, who actually pays the PST. Our senior population is quickly expanding in numbers and I am in that category. Many programs are geared to making our life easier, and that is appreciated.

However, in my observation, there are many seniors who hesitate to cash in their RSP's because they would rather be considered to qualify for the Guaranteed Income Supplement , while they keep their half a million or more in the bank account. Our nursing homes are gr eat caring facilities for people who need to be there, but the bank accounts of these people are not really considered, rather only the income. In Ontario, the subsidy by the government is considerably less and people have to pay from their own resources a nd savings.

I know that would be unpopular, possibly in my own future, but we have to consider the young working people of our day and be careful not to burden them with the aging society and their wants. Everyone knows that nothing comes from nothing, someone has to pay –people before me have spoken to this. Let's expect everyone to contribute and be fair to all, especially those who have to–who pay their own way in society. In private, if I earn a hundred dollars, I cannot spend more than a hundred dol lars to keep afloat. I need to live within my means.

The government needs to learn to work with what comes in and be diligent to serve all the people's interests and services, not just those who would like a free ride. * (19:50) Furthermore, this is not i n the official script that you have, and this is not in your –provide the text, yes. The matter of infrastructure, especially in response to floods: Residents in communities that choose to build and live in flood- prone areas such as near rivers and lakes have to be aware that natural disasters happen and that you place yourself in the path of fire or flood. You may be overtaken and goods may perish.

This is not speaking to the fact that we had created infrastructure that directed waters into either waterways and so on, and I totally empathize with what took place –and unforeseeable. That's another point. The government cannot possibly predict and prevent natural disasters. And we cannot, as people, expect the government to dish out and dish out. I mean, the horror stories that came in about the communities that were housed in hotels and the spending that took place. I don't go out to eat a whole lot.

I don't have that kind of money, but a lot of money was wasted in those hotels just eating out – just a small thing. Families, second point: Families in need–again, big announcement in today's Free Press, of assisting families, particularly the Aboriginal community. It all sounds good, but why is the money that is currently given to these people not sufficient? My understanding is that, per child, a hefty sum is already provided. My understanding–it means the more children, the more cash.

Some recently drew attention to the fact that these families, often singles– single parents –who knows where the father is – produce eight to 10 children. They said they're baby machines. The rest of society would be hard -pressed to provide for such a large family. Lastly, I am disappointed that a Premier would go back on his word not to raise the PST without a referendum, and now it is already in effect before it is solidified with a vote or a referendum. I am all help –I am all for helping the underprivileged people.

I'm also involved in charities and personal giving to needy, but I am not in favour of handouts endlessly. We are going to run out of money. The working numbers are decreasing. Our children and grandchildren will not be able cope. Madam Chairperson: Thank you very much for your presentation. Mr. Struthers: Yes, I want to thank you very much for coming down and speaking w ith us tonight, Mrs. Kuenstler. One of the things we did in–not this past budget, but the budget before, was that we actually took your advice, what you just gave us, in terms of watching how we spend our money.

We –when we became government, we had 13 re gional health authorities, all with their administrative structures around the province. We reduced that down to five. We saved millions of dollars in health care that we now can move into the front lines to help people who become sick and need that health care. Is that the kind of model we should use, in your opinion, elsewhere in government to reduce administrative costs and redirect spending?

202 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 Ms. Kuenstler : Thank you. I do have health care workers in the family, so I do hear a lot of stories, and I'm someone who's been in there for 20 years, so they've seen things come and go. And I think once the system was streamlined there's probably a lot of good in it. And I do believe in home care; I think that's all good. What model should we use? I think that this whole idea –my husband, unfortunately, died with cancer and we spent a lot of time at ERs and observing what happens in the ER.

Unfortunately, at Health Sciences, I would say 80 per cent of the people were not sick. They were just drunk or whatever, and they were delivered by ambulance. I know of people who are elderly who are right now kind of struggling, not knowing how to live life alone. They call an ambulance, but, really, it's not an emergency. Like, there are just so many things that are–I know a lot of private–like Blue Cross and so on are covering, but, in the end, it all comes from somewhere. And there's just a lot of streamlining needed. I truly believe we need to work within our revenues.

We need to –and I do believe in balanced budgets. Madam Chairperson: Thank you. Mr. Cullen: Thank you very much for coming down tonight. I do appreciate you making the effort to come down and we appreciate hearing your personal story. And, certainly, thanks for putting some of those taxes we have in Manitoba in perspective relative to other provinces; I think that's very important. And you did provide a lot of useful information that, hopefully, the Minister of Finance (Mr. Struthers) will be listening to.

So I just want to say thank you very much for coming, and it's certainly good to hear your voice as a senior, as an important part of our population. So we do appreciate you coming down tonight. Thank you. Madam Chairperson: Thank you. Does anyone else have any other questions? If not, thank you very much for coming down. Our next presenter is actually a substitution. In the place of Mr. Paul Olson, Mr. Norm Gould will be presenting. Is Mr. Norm Gould here? Mr. Norm Gould (Manitoba Teachers' Society) : Yes. Madam Chairperson: And do you have any written materials? Mr. Gould: Yes. Madam Chairperson: Okay.

Staff will help you distribute those. Mr. Gould: Paul sends his regrets. He's at home ill. Otherwise, he would've been making the presentation. Madam Chairperson: Thank you. Thank you for coming in his place. Please proceed. Mr. Gould: My name is Norm Gould and I'm the vice-president of the Manitoba Teachers' Society. Thank you for the opportunity to make this presentation to the Legislative committee considering Bill 20. Prior to being elected to a leadership position with the Manitoba Teachers' Society, I was a classroom teacher, guidance counsellor and resource teacher.

Part of the reason I became involved with my local teachers' association with MTS was the regressive legislation and budget cuts of the '90s that were passed as part of the austerity measures of the Filmon government. These measures led me to leave the province for a three -year period to teach English as a second language in Japan. There's a whol e generation of activist teachers who became involved in the Manitoba Teachers' Society because their students and schools were directly affected by the cuts at that time.

These teachers would never have become involved in MTS politics or politics of any kind if they hadn't seen the impact of those cuts with their own eyes. The 1990s were a time of frozen or reduced provincial operating funds for public schools, which, with inflation, is simply two different levels of cuts. With less money coming from the Province, more of it had to come from local communities. In those communities, without the tax base or the political will to raise the revenues that were needed, opportunities and programs for students were cut. Art, music and athletic programs were cut.

Guidance counsellors and librarians were cut. More than 700 teaching positions were lost in a period of relatively flat student enrolment. Class sizes grew and textbooks and other supplies were rationed. The current government is still trying to recover from a decade when minimal investment was made in public school infrastructure. One cannot reduce or eliminate funding for an extended period and then simply turn the tap back on and expect that normal

July 4, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 203 monthly or yearly support levels will suffice. There is a lost ground to recover. In addition to these cuts, the government of the day passed Bill 72. The legislation stripped teachers' bargaining rights, recognized by the UN charter of rights and the Supreme Court of Canada as human rights, incidentally, and enabled school divisions to argue ability to pay. Despite being repealed in 2000, the Bill 72 era is still referred to by members, many members, as a black time for teachers in Manitoba.

During that decade, teachers lost 18 per cent of their salary due t o inflation. On top of this, Bill 22 resulted in the loss of professional development days for some teachers. For a decade, no amendments were made to the teachers' pension plan. Teachers were willing to pay more into the plan, but no one would listen. Our pension plan became woefully underfunded. Manitoba Teachers' Society members actively protested all of these cuts in the mid -'90s.

We marched on the Legislature, attended government consultations en masse, spoke at legislative committees like this one an d spent members' money on public advertising. I would emphasize that this sort of treatment of any group has a double impact. The first is a direct attack on the welfare of the groups' members; the second is the resulting impact such cuts have on the peopl e served by the group in question, which, in this case, is students. We knew that schools were deteriorating as a result of these cuts.

Our polling of Manitobans during those years confirmed that classes were getting larger and there were fewer resources like textbooks for Manitoba students. It takes many years for public schools to overcome a decade of short-sighted decisions made under the pretext of balancing the provincial budget. I'm here today to speak in support of Bill 20 because we have seen the havoc created in public schools when a government is hell bent on balancing a budget without regard to making public services like health and education a priority.

Investment in a public good, like public education, is not governed by the same rules of deciding whether you can afford dinner out. Public health care and public education are not the same as a trip to Hawaii. Austerity works on luxury items, not on basics. Governments make tough choices about revenues and expenditures all the time. Our experience as teachers is that when governments choose to reduce supports and service for education, there is a direct, material impact on student welfare and learning.

The Teachers' Society would typically have no position as such on the advisability of raising or lowering the PST. We very much have a position that it is the responsibility of government to adequately fund education so that the child welfare is the top priority and quality learning can take place in a safe building and reasonably sized classes wit h modern materials and learning resources. * (20:00) I was a teacher during the last period of significant cuts to education support in this province and the impact on children was real and long- lasting.

I'm here today because the teachers of Manitoba support the legislation that demonstrates the government has chosen a different path to one that would place the burden of short -sighted leadership onto the backs of students. I would like to close by quoting the Nobel Prize-winning economist, Paul Krugman, who can make the case that legislation like Bill 20 is taking the right approach more eloquently than I can: part of the answer surely lies in the widespread desire to see economics as a morality play, to make it a tale of excess and its consequences.

We live beyond our means, the story goes, and now we're paying the inevitable price. Economists can explain ad nauseam that this is wrong, that the reason we have mass unemployment isn't that we spent too much money in the past, but that we are spending too little now and that this problem can and should be solved. No matter, many people have a visceral sense that we sinned and must seek redemption through suffering and neither economic argument nor the observation of the people now suffering aren't at all the same people who sinned during the bubble years makes much of a dent.

So thank you very much for the opportunity to present on this significant issue on behalf of the 15,000 public school teachers in the province of Manitoba. Madam Chairperson: Thank you, Mr. Gould. Do members of the committee have questions? Mr. Struthers : Thank you very much, Mr. Gould. Thanks for coming and speaking with us here tonight. I, too, was a teacher in the '90s and I remember the cuts and the impacts that they had on my classroom out in rural Manitoba. I also remember being an MLA and–from '95 o n–and I remember the protests of which you speak and the draconian cuts

204 LEGISLATIVE ASSEMBLY OF MANITOBA July 4, 2013 that the Filmon government put in place then. I would point out that Mr. Brian Pallister was a member, a Cabinet member, at the time of those decisions, those cuts to education and has today proposed a –what his solution is and that is further cuts. This year we funded education, public schools to the level of growth of the economy, 2.3 per cent, that meant about a $27- million increase to public schools. Mr. Pallister has indicated a min us 1 in terms of across the board, to every department including education.

That would mean a decrease in funding somewhere in the tens of millions of dollars in education alone. Can you tell us what that is going to mean if Mr. Pallister had his opportu nity to come through with that, what would that mean for the kids in your class? Mr. Gould: If there's a reduction in educational funding, it certainly has a direct impact on the classroom environment for students throughout the province of Manitoba.

We ha ve equity issues as you are all well aware in different parts of the province in the haves and have -nots, and that would be further exacerbated if there was funding cuts within the education portfolio. It would have significant cuts – certain cuts –or impacts , certainly, in class size, resources available for students. Transportation would certainly be affected. It would have a over -all negative environment, never mind, what impact – negative impact it would have, certainly, on the trustees within school divisions and would force their hand in terms of increasing the mill rate and a greater burden in

Document details

Collection	Manitoba — Debates (Hansard)
Citation	40-2-sed4
Type	hansard
Volume / chapter	40th 2nd hansardpdf sed4.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	802b133582ff3fa55b1c488f7b37cb59d5593f4c

Source file is stored in the law ingest library (pdf).