LEGISL ATIVE ASSEMBLY OF MANITOBA Tuesday, 3 June, 1980 Time - 8:00 p.m. CONCURRENT COMMI TTEES OF SUPPLY SUPPLY - NORTHERN AFFAIRS MR. CHAIRMAN, Morris McGregor (Virden): I call the committee to order. We are on Resolution 116, 4.(a)( 1)- pass - the Member for Lac du Bonnet. A MEMBER: We're on a point of order aren't we? MR. CHAIRMAN: We sort of closed and I'm not sure. I need some advice. The Member for Rock Lake. MR. HENRY J. EINARSON: Mr.

Chairman, I think when we closed at 4:30, we were on a point of order and we were in di sagreement as to whether or not the CE DF was appropr iate to discuss on th e estimates where we are at the present time. The Minister, Mr. Chairman, indicated that was already discussed, and I want to suggest, Mr. Chairman, to the committee, that repetition is not in order. So I suggest, Mr. Chairman, that we carry on with the next item. MR. CHAIRMAN: The Member for Rupertsland on the same point of order. MR.

HARVEY BOSTROM: At the risk of repeating myself, I believe that this issue which I raised was not discussed before; it could not have been discussed before because the information on which I based the questions to the Minister was not provided until after th e CE DF commi ttee had met and adjourned, and finished their report for the last fiscal year. The question that I'm raising is not on the report which CEDF presented to the commit tee, which was for the fiscal year ending March 31, 1979.

The question I am posing is for loans that were made by the Communities Economic Development Fund for the year 1979-80 and, Mr.

Chairman, it is with respect to one very major loan, or a series of major loans to two individuals, which I believe is a proper subject for questioning to this Minister, since he reports for the Communi ties Economic Development Fund, part of the salary which he receives as a Minister is salary he receives for the purpose of report ing for the Commun ities Econom ic Development Fund and some point during these estimates, I intend to pursue these questions and I shall demand answers from this Minister. MR. CHAIRMAN: The Honourable Minister. HON. DOUG GOURLAY (Swan River): Thank you, Mr. Chairman.

On the same point of order, during the Standing Committee on Economic Development dealing with the Communi tie s Economic Development Fund, as I recall, the Chairman of the Committee indicated, and I'll just quote from his spee ch: The new lo ans referred to includ e significant investment in a hotel project in Snow Lake, probably the largest loan this fund has made. That was indicated at the beginning of the meeting and there was not one question raised about the motel at Snow Lake. So I'm not prepared to discuss at this meeting tonight, loans referred to under the CEDF .

There was op portunity to do that and mem bers opposite chose not to even raise the question at that time. MR. BOSTROM: The issue of the hotel loan may have been raised by the Chairman as an offhand comment but there was no report at that meeting of the nature of the loan, the amount of the loan, and the terms of the loan, and these are questions which I intend to pose to the Minister now or at some point during his estimates, because we want to know how much money was loaned to that hotel, who it was loaned to, and why was it loaned, on what financial basis was that loan made. MR. GOURLAY: Mr.

Chairman, as I indicated, this information was available at that time. The Chairman indicated the loan, he made mention of this special loan, and the members opposite chose not to even raise the question at that time. Ho wever, I don't intend to get into loan discussions tonight and I make that clear at this point, and if you want to rule on it, you can do it, that there was a time and place to discuss the CEDF loans and it is not in Northern Affairs estimates. I am not prepared to budge on that.

However, if the mem ber would like more detailed information on the Sno w Lake Project, I would be very happy to provide this information to him, but outside of these estimates. MR. CHAIRMAN: The Member for Lac du Bonnet. MR. SAMUEL USKIW: Mr. Chairman, let's then clear the ai·r. Whose estimates does CEDF fall under? Who is the Minister that reports for the CEDF and under what set of estimates do we debate CEDF? MR. GOURLAY: Under Economic Development, I guess. MR. USKIW: No, no, that's reports or boards and commissions. We are dealing with the Minister here, not with the board. MR. GOURLAY: Mr.

Chairman, we are dealing with the estimates under Northern Affairs. There was opportunity to discuss the estimates for CEDF under the Standing Committee on Economic Development and, furthermore, when the Minister of Finance goes through his estimates he doesn't discuss Public Accounts at that time. MR. CHAIRMAN: Is the Member for Lac du Bonnet finished? MR. USKIW: No, Mr. Chairman. It seems to me that there is ample precedents for discussing the operations of loan agencies of the Crown during departmental estimates of the Minister in charge of that particular board or commission that makes the loans.

I recall on many occasions when members 4319

Tuesday, 3 June, 1980 opposite were on the oppo site side of the House, that is in opposition, that we were able to discuss this both in committee when the boards reported and on the estimates of the Minister. In fact, there were days of debates in the House with respect to certain operations in northern Manitoba that could have been properly, according to the Mini ster now, referred only to committee, the committee that heard the report from those particular boards. But that was not the case. The Leader of the Opposition chose to belabour the point before the estimates committee of the relevant department.

So I think that you, Sir, are trying to impose new rules with respect to whether or not the opposition has a right to discuss any aspect of the operations of Northern Affairs, whatever that may be. Yes, there may be a board that reports for the operations of that particular program in northern Manitoba, the loan program under CEDF, but that doesn't mean that the Minister's Salary comes into question when that takes pl ace.

Now the es tim ates of the department is where the Min ister's salary comes into question and where the opposition ha s an opportun ity to vote non-confidence in the Minis ter because of the method of his operation or because of certain things that have occu rred in his department. There is where the vote of confidence takes pla ce, Mr. Chairman; it doesn't take place before committee or before a board that reports to a committee. MR. CHA IRMAN: The Minis ter of Spor t and Recreat ion. HON. ROBERT (Bob) BANMAN (La Verendrye): Mr.

Chairman, I think there is a basic fundamental question that we have to ask ourselves here at this time. If the members require detailed information with regards to CEDF, that is why we bring the chairman of the board in front of the group. It's the board of directors, Mr. Chairman, that make the decisions with regards to the loans. The loans are not made or ratified in the Minister's office, that's why we have a board of dir ectors. Well, Mr . Chairman, the Member for Rupertsland says that's where they are. I beg to differ with that.

I think one of the strongest points that the Member for ln kster constantly raised, he says if the boards are not operating in a way and loaning the moneys in a proper way that they should be, then you replace the board. But I want to make it clear here that the Mini ster doesn't go through every loan and checking securities, that's why we have a board of directors. If the board of directors aren't doing a good job, you replace the board. Therefore we have the Chairman of CEDF, Mr. Goodman, from Flin Flon, was in here, answered all the questions and that particular item was dealt with.

Now if the members want further information, the Min ister has indicated, and the members know full well, that he hasn't got the resource people here right now to give him all the particulars and neither would any of us expect him to have all of them. But he has indicated that if you want the information, he will be providing it but he does not have it tonight.

I think it has to be clearly under stood that if we are going to have Economic Development Committee hearings and have. these people who are responsible for thes e di fferent funds, whether it be Flyer Ind ustries or CEDF or whatever, when thos e chairmen appear, they answer the detailed questions. If the members op posite are not happy with the way this Mi nis ter is adminis trating the fund or the guidelines under which the fund is opera ting, that's room for deba te and I have no argument.

But I think if you are asking for detailed questions, you are putting the Mini ster in a position where he doesn't have the staff here to answer it. There are no members from CEDF here and I think there should be that un ders tanding here. The Mi ni ster has indicated that he does not have the answers tonight but any questions on some of the loans and the guarantees, there is no problem, he can provide it for you. But there is no way that we can discuss things like that here tonight. MR. CHAIRMAN: Well, I have about five people indicating they want to speak.

I am not sure if we should go thr ough all this but the Member for Churchill, the Minister of Hig hways, the Minister of Government Services, the Member for Rupertsland, at least that many, but in rotation I would have to then go to the Member for Churchill . HON. HARRY J. ENNS (Lakeside): Mr. Chairman, on a point of order . . . MR. CHAIRMAN: We are on a point of order, to the Minister of Government Services. The Member for Churchill. MR. JAY COWAN: I'll be very brief because, as the Minis ter has indicated, he doesn't have to provide us with any answers tonight.

He doesn't have to provide us with any answers to any of our questions. We have been on this side long enough to realize that is the case and that the Minis ter himself, and other Mi nisters, have exercised that right from time to time. So we have no quarrel with the fact that he may not answer but we do have a quarrel with the fact that we might be precluded from asking the questions because of a ruling. The members seem to be basing their argument on the fact that the CEDF board has been before another committee of this House and there was opportunity to ask questions during that time.

While I am not on that committee and was not present at that hearing, I am certain that there were opportunities to ask questions at that time and questions may or may not have been asked - not being there I don't know - but the fact is that we many times have opportunies to question more than once in the proceedings of the House - (Interjection)- Well, according to the rules. Yes, according to the rules we have opportunity. We can ask this question in Question Period; we can ask this question in Debate in the House; we can ask this question at the committee mee ting.

I would suggest, since the Min ister is ultima tely re spo nsi ble for adminis tering the fund or ensuring that the fund is properly admin istere d, tha t we can ask th ose questions under his estimates, although he does not have to provide us with answers and sometimes, as happened this afternoon, we know full well that he can 't because of lack of staff, because of the detailedness of the questions, but we still ask them to put them on the record and we still make our comments to put them on the record. 4320

Tuesday, 3 June, 1980 I think we should have that opportunity, knowing full well that for whatever reason the Minister may not have the information here and will report back to us, as he so kindly agreed to do this afternoon on numerous questions that we had asked following, I might add, from a book called The Third Year Review. That book also mentions the Community Economics Development Fund as being under the jurisdiction of the Northlands Agreement, under the jurisdiction of the Minister. So I would suggest that we are in fact in the approp riate area and we are talking to the appropriate Minister.

We would like the opportunity to ask the questions. We understand that the Minister may not have the answers. We would hope that he would take them as notice and report back to us. We would like the opportunity to speak to the subject by way of statements which we have in every other regard.

I have to agree with the Minister responsible for Sports and Recreation when he said that if we believe the Minister is not admin istering the fund properly, or is not operating the fund properly, or is not ensuring that the fund is administered properly, that this is the place to discuss that That's what he said and I'm in agreement with him, that this is the place to discuss it We can discuss it by statement; we can discuss it by question but we should have the opportunity to discuss it and I think even a Minister of your own government is agreeing with us on that point - and I don't know th e details of thi s particular instance so I can't speak to the subject per se, to the hotel in Snow Lake - but I do believe that the members here do have some questions as to how the Minister is admin istering the fund and therefore wou ld hope that you would follow the advice from the Minister for Fitness and Recreation.

MR. CHAIRMAN: The Minister of Government Services. MR. ENNS: Mr. Chairman, I believe at this time a little bit of common sens e and a li ttle bit of recog nition of the traditional way that we handle the discussions of estimates is about due, and perhaps I am a rea sonable example. As Mini ster of Government Services my estimates were discussed for the better part of a week, which of course included my respon sibili ties as Minister reporting for Autopac, for the Manitoba Telephone Systems. On a whole week of questioning, Mr.

Chairman, did none of the honourable gentlemen opposite question me about Autopac or the affairs of Autopac, which is a fairly substantial operation in the pro vince of Manitoba, nor was a single question raised by any mem bers oppo site during the estima tes of Government Services, who pays my salary as the responsible Minister, on the Affairs of Manitoba Telephone Systems, which I would submit is not a totally insign ificant operation in the province of Manitoba because they knew, by tradition and by practice, that they would have the full and maximum opportunity in front of the Public Utilities Comm ittee to have the Minister and the appropriate Chairman and staff ap pear before the Public Uti lit ies Comm ittee to answer all and sundry questions having to do with those associated agencies that a particular Minister is responsible for.

Now surely, Mr. Chairman, honourable members opposite will concur that this is a pretty common sense resolution of the problem. This Minister has a reporting status and concern for the affairs of the Economic Development Commit tee fund but we have the similar kind of situation that I just described prevailing. And for the honourable members opposite not to take cognizance of that fact, simply belies a sense of understanding of the way we have operated traditionally in this Legislatur e and in th ese comm ittees.

I repeat that in Government Services during a week's consideration of the estimates of Government Services, none of the honourable members opposite had any concern expressed about how the Minister, who was being paid on the Minister's salary, how the affairs of Autopac were being run.

By the way, Autopac is something near and dear to the hearts of honourable members opposite and one might expect that they might have raised that question if they thought the particular responsible Minister wasn't doing an appropria te job or not conducting himself in a way that the members opposite thought he ought to conduc t hims elf with respect to th at corporation. Or perhaps even in that multi, multi­ million dollar cor por ation kn own as Manitoba Telephone System, for which I also report to the House and am responsible for, that the honourable members might have raised a question then. But, Mr.

Chairman, and I direct this question directly to you, that the pattern, the tradition, and I take some exception . . . I note that the Honourable Member for Lac du Bonnet has left because his last comment was that for you, Sir, to rule that the affairs of the Community Economic Development Fund should not now be discussed would be some radical departure of the rules. It simply isn't true, Mr. Chairman; you were my Chairman when we discussed both the estimates of Government Services and, then in comm ittee, discussed MTS and Autopac and I am sure you will recall that wasn't the case.

So I believe the Minister of Northern Affairs is simply following a well-established precedent, a well­ accepted tradition of the way we deal with estimates and the way Ministers, who have repor ting responsibilities but who are dealing with agencies that report separately to established committees, and the affairs we are talking about has reported to an est abl ished commi ttee. Honour able mem bers opposite have had full opportunity to deal not just with the Minister but with the Chair man directly responsible, with a backup staff of CEDF, and that report was accepte.d and passed. Mr.

Chairman, what they are doing is that they did something wrong a few days or a few weeks ago. Now if the honourable members want to take the Honourable Minister up in the House in debate that can be done and they have their occasions to do that, and the Minister has agreed to do that. But surely for the passage of these estimates, we should not be unnecessarily delaying the function of the House. Thank you, Mr. Chairman. MR. CHAIRMAN: The Honourable Minister. MR. GOURLAY: Well, thank you, Mr. Chairman. - (Interjection)- I was on the list a long time ago and I was missed and I didn't say anything about it. I 4321

Tuesday, 3 June, 1980 would like to say at this time that CEDF does not come under the jurisdiction of the Department of Northern Affai rs. It could be a separate portfolio. It just happens that I handle both areas and we only receive dollars for staff support. Furthermore, the development agencie s and the Communit ies Economic Development Fund has not been discussed in estimates yet; it comes up later on in the estimates, Page 32 and Page 33. So, I'm not sure whether this is a valid point or not but one thing I know for sure, I'm not prepared to discuss loans under Department of Northern Affairs. MR.

CHAIRMAN: In asmuch as the Chair has allo wed several members on both sides to enter on this point of order, I find the Minister's point of order is reasonable and the subject being discussed is not relevant to the item being discussed on Resolution 116. The Member for Flin Flon. MR. BARROW: On another point of order, the Minister sitting here came in last, he was recogni zed long before other people who had their name on the list. MR. CHAIRMAN: That was the ruling of the Chair. It is true the . . MR. BARROW: The ruling of the Chair.

You said before we broke off, in all fairne ss this should be discus sed , questions should be asked and answered in this particular phase of the estimates, that's what you said. Now if they don't dispute that then the y must challenge your ruling, before you make any decision. Is that not right? MR. CHAIRMAN : Well we closed . . . MR. BARROW: Well if you're going into red tape, let's go all the way into red tape. MR. CHAIRMAN: The committee rose at 4:30, we were discussing the point of order as I understand it; we continued on at 8:00 discussing that same point of order.

And as I said, I let several members on both sides; that's the decision that the Chair has made and you know you can challenge it if you desire. I think . . MR. BARROW: No, it is up to tha t side to challenge you, Mr. Chairman, you had made the decision; I can reproach you. In all fairness, at this particular time we should discuss this, that's what you said. If you check the record you would find out that's what it was. Now if your rule ... MR. CHAIRMAN: I didn't have any right to say it because we were discussing the point of order and it was just at 4:30, I called 4:30 because time ran out.

To the Member for Lac du Bonnet, I made a ruling. The Member for Lac du Bonnet on a point of order. MR. USK IW: Yes, I wish to ask guidance of the Chair then as to when members of the committee might debate the operations of the CEDF. Mr. Chairman, I belie ve that I have the floor.

As I under stand it, and perhaps you might correct me or the Minis ter may, if the operations of the CEDF result in the qu estioning of confidence in the Minister on the part of the committee, I want to know where that can be done, where is the proper place to question the role of the Minister in the operations of the CEDF, if the question results in a vote of confidence being put on that issue. MR. CHAIRMAN: The Honourable Minister. MR.

GOURLAY: On the same point of order and I've already mentioned it, just before you came in, with respect to the CEDF, it comes under Development Agencies, Page 32 and Page 33, and that still has to come up in estimates. MR. CHAIRMAN: The Member for Lac Du Bonnet on the same point. MR. USKIW: Mr. Chairman, I appreciate that the Devel opment Agencies have not yet been before committee and that at some stage we will get to it. The problem I have is that if the committee wishes to vote non-confidence on this issue, they cannot do it under Development Agencies because Ministerial Salaries do not show up there.

They don't show up before a committee of the Legislature when CEDF reports to the committee and the only place they do show up is under the Department of Northern Affairs. Therefore, I suggest to you that while it may not be in order to discuss the operations of CEDF under Resolution 116, that when we get down to Ministerial Salary, it's in proper order, Mr. Chairman, to have a full debate on the total operations of the department and this Minister. That's what the salary question is all about, Mr. Chairman. So I have no problem with de ferring it to the point where we get to the Ministerial Salary. But, Mr.

Chairman, I hope that we're not getting the impression from the government side that we cannot discuss it whatever and that's the point I wish to make. -(l nterjection)­ Look, we can say what we want about it. Whether you agree with us or don't agree with it, that's up to you. MR. CHAIRMAN: The Chair has made the ruling. 4.(aX1) - the Member for Rupertsland. Before ... MR. USKI W: Mr. Chairman, can we have a clarification?

Are you in agreement, Sir, that we can discuss the CEDF, the Minister's role with respect to the CEDF unde r the Minister's Salary. (Interject ion)- Well, he doesn't have to answer; nobody says he has to answer. Nobody says he has to answer. MR. CHA IRMAN: To answer the Member for Lac du Bonnet, I would agree that can be discussed. All right, 4.(aX1) - the Member for Rupertsland. MR. BOSTROM: (ln terject ions)- Well, Mr. Chairman, I - MR.

CHAIRMAN: I would appreciate if all members would recognize the Chair and have their discussion through the Chair, or else I might as well go home and I'll enjoy and let you fight it out. That would be much easier for me. The Member for Rupertsland. 4322

Tuesday, 3 June, 1980 MR. BOSTROM: Thank you, Mr. Chairman. I believe the precedent was set before we raised the points of order before the adjournment at 4:30 that the the Communities Economic Development Fund, its opera tion , its policies, were proper ends for discussion under this item. I asked the Minister several questions about the Communities Economic Development Fund, to which he responded at that time. He refused to respond to the question I put to him on the loans but, Mr.

Chairman, if he refuses to answer that particular question, I can only assume he's too emb arrassed to answer those kinds of questions. But, Mr. Chairman ... MR. CHAIRMAN: The Member for Rock Lake on a point of order. MR. EINARSON: Mr. Chairman, on a point of order. I thought, Mr. Chairman, that we had discussed this matter on the point of order before and the Member for Rupertsland is coming back and trying to renegotiate the kind of agreement he thought he was going to get at 4:30. Mr.

Chairman, the Minister had indicated his position very clearly and I would sugg est that th e Memb er for Rupertsland is com pletely out of orde r on th e comments that he has just made. I would suggest, Mr. Chairman, that he would get back to the resolution at task on Salaries and Wages where we are talking about the Manitoba Agreement. MR. CHAIRMAN: I don't believe the Member for Rock Lake has a point of order, but also I caution the Member for Rupertsland that I really did make a ruling earlier and, if he abides by that, his subject matter shouldn't be discussed at this point. MR. BOSTROM: Mr.

Chairman, I believe I still have the floor; is that correct? MR. CHAIRMAN: The Member for Rupertsland. MR. BOSTROM: Thank you, Mr. Chairman. Well, Mr. Chairman, I have questions on this item. It is not passed; I have questions on this item. MR. CHAIRMAN: The Member for Lac du Bonnet on a point of order. MR. USKIW: I would like to deter mine, Mr. Chairman, whether or not CEDF comes under the description Northlands Agreement in any way, shape or form. MR. CHAIRMAN: The Honourable Minister. MR. GOURLAY: Mr. Chairman, I can indicate to the mem bers here that 148, 000 come s from Northlands for CEDF for salaries. MR.

USKIW: Mr. Chairman, can I then ask the Minister whether in that 2, 114,200, that out of that 148,000 is for CEDF? MR. GOURLAY: No. MR. USKIW: We ll, then can we have an explanation as to where we find the 148,000.00? MR. GOURLAY: Item 6., under Canada-Manitoba Northlands Agreement. MR. USKIW: Oh, all right, so that's where we can discuss it then. Mr. Chairman, the Minister confirms that ... MR. GOURLAY: salaries. Tha t's only the 148,000 for MR. USKIW: That 148,000 for the admin istration of CEDF is found in Item 6., Resolution 118, Canada­ Manitoba Northlands Agreement. So then it would seem to me, Mr.

Chairman, that is probably the proper place to debate the whole operation of CEDF. There's 148,000 in there. MR. CHAIRMAN: All right. 4.(a)( 1)- pass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, I have some questions on the poli cy of the Com mun it ies Economic Development Fund which I believe would be in order in some place during these estimates, since it does receive funding from this department and there is at least some point in the estimates where that is shown as an appropriation for the Communit ies Economic Deve lopment Fund.

So I would ask for your ruling at this point in time so it would be very clear and we will not be confus ed by points of order in the future as to what item under which I can pose these questions. MR. CHAIRMAN: I'm not sure if that's a decision the Chair should be continually making. I'm chairing this comm ittee and I'm taking orders from the comm itte e, rather than giving orders to the committee. The Honourable Minister. MR. GOURLAY: The funding of 148,800 goes to Appropri ation 27 (1) (

c) which is the Dev elopment Agencies and recovered from Item 6 under the Northlands or Northern Affairs. MR. CHAIRMAN: 4.(a) (2)- pass; (a )(3)- pass; 4.(b)( 1)- pass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, I believe that this item would cover the Northern Flood Agreement as indicated in the covering statement at the top.

Could the Min ister ind icate what is the status of the Northern Flood Agreement and what funds, if any, are pr ovided for the commun itie s in northern Manitoba under th at agreement and what the department is doing to assist the commu ni ties concerned, in terms of the agreement signed between the provincial government and the communi ties concerned? MR. GOURLAY: Mr.

Chairman, under the Northern Flood agreement, I might advise the committee that parties have agreed to the appointment of Judge Patrick Ferg as the arbitrator, and Manitoba has passed an Order-in-Council appr oving his appointment, and the federal Order-in-Cou ncil is awaited before final announc ement - well that was com plet ed. Wh at has hap pened sinc e their agreement was signed? Land exchange, mapping for 4323

Tuesday, 3 June, 1980 the five communities will be complete by March, 1980, the cost will be roughly 800,000; Remedial works, Manitoba Hydro is respo nsible for remedial works; Commercial fishing and trapping, Manitoba Hydro is de livering a registered trapline compensation program giving income assistance and incentiv es to trappers; Citizens groups, appointments have been made to the Communi ty Liaison Committee, Wildlife Advisory and Planning Board and Emp loyment Task Force; Devel opment, the province of Manitoba has gr anted a total of 800,000 to the Neyanun Devel opment Corporation since its inception and Manitoba assisted in the management and training for this corporation's emp loyees.

MR. CH AIRMAN: 4.(b)(2) - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, a problem has been raised in recent days regarding the water levels in Cross Lake and the problems associated with those water levels for the community of Cross Lake. No. 1, they're having problems with access to their community; and secondly, the y are having serious problems with respect to the fishing industry.

I am wondering what, if anything, the staff of Northern Affairs are doing to assist that community in terms of their negotiations with the relevant agencies of government, whether it be Hydro or whatever, to assist them through the problems that they are having. I understand, for example, that if it is not possible for them to fish Cross Lake because of the water levels, the fishermen are requesting that the government provide them assistance to fish Walker Lake, which is a lake near their community.

In order to do that, of course, they would need assistance from either Manitoba Hydro or Northern Affairs, whichever is the relevant agency, to move their fishermen and their equipment and supplies in and out of the lake before and after the fishing season and also possibly some assistance thr ough the freight of the fish over that period of time of the fishing season. I wonder if the Minister could indicate what action, if any, his department is taking on this issue. MR. GOURLAY: Mr.

Chairman, first of all, with respect to the low water situation in Cross Lake, I might point out that when the water services were installed back in 1976 by the previous administration, they did not take into consideration the low level water intakes, in spite of the recommendations at the time that this could be a problem. The government of the day completely ignored the fact that there may be a low water situation.

Although this was ignored the problem has now surfaced and as a result of the low water this season, there was a problem with safe drinking water in the community and immediately action was taken by the staff of Northern Affairs to install a submersible pump, and the water supplies are adequate and safe and will be such until fall. However, if the low waters continue until fall then there will be a problem over winter.

In order to ensure safe water supplies over winter, it's estimated it would cost somewhere in the neighbourhood of 100,000 to supply the proper equipment and facilities to ensure safe water over the winter season under low water situation. That's the story on the water situation. With respect to the fishing, of course again, the problem with the low water does create a problem for the fishermen. We have staff in Cross Lake at the present time consulting with the local communities and the fishermen, to ascertain how they can be compensated for the problem with which they are now faced.

You raised the question of using Walker Lake in the area as a source of fishing. I under stand that this is being agreed to. But nevertheless, we have staff in the Cross Lake community discussing the prob lems with the local communi ty people, in clud ing the fishermen, to try and resolve thi s important problem to the people of that area. MR. BOSTROM: Mr. Chairman, it's very nice to hear the Minister report that he has people in the commu ni ty di scussing the problem with the fishermen. However, I think the fishermen would be more intere sted to know what the government is prepared to do to assist them.

I posed a very specific qu estion to the Minis ter and that is, is the government prepared to assist the fishermen by way of transportation assistance for men and materials and supplies to move into Walker Lake to do the fishing; to move their men and eq uip ment and materials out of the lake after the fishing season; and secondly, to assist the fishermen in the community by way of freight assistance to move the fish out of the lake to market during that period, since the low water situation in the lake is somet hing which is not the fault of the community, not the fault of the fishermen, in fact, they probably have some concern over the way in which the water level is being managed.

Perhaps the water level could be managed so that more water could be let through the control structure at Jenpeg so that the Cross Lake water level could be more up to normal levels. I wonder if the Minis ter has investigated that possibility. MR. GOURLAY: Mr. Chairman, with respect to the problem with the fishermen, as I mentioned, there are people in the area at the present time discussing the problems with the local community people with respect to compensation for the losses that the y are sustaining because of the low water problem, and the problem is mainly because of the drought.

Hydro are operating within their limits. Ho wever, that doesn't remove the problem with the local people and compe nsation is being discussed at the present time. MR. BOSTROM: Mr. Chairman, I repeat, I beli eve the fishermen would be more interested in knowing what specifically the government is prepared to do. You are expressing a concern, but what, in terms of funding and assistnce, is the government prepared to do to assist the fishermen to follow their livelihood this summer if the y are not able to fish in Cross Lake? MR.

GOURL AY: Again, this is why the people are in there from the department to discuss with the local people with respect to all these problems. They are negotiating this with the local people as to their future. 4324

Tuesday, 3 June, 1980 MR. BOSTROM: Mr. Chairman, can the Minister indicate where the assistance will come from if the fishermen req uire the assistance which I have outlined which I believe they do require and which the y are requesting? Will the assistance come from the Minister's Department of Northern Affairs or will it come from funds made available through the Northern Flood Agreement, or will it come from other sources, and if so, can the Minister indicate which source that would be? MR. GOURLAY: Mr. Chairman, the funds would come through Manitoba Hydro. MR.

CHAIRMAN: (b)(2)- pass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman , who would be administering those funds? Would it be the Northern Flood Agreement people who report to the Minister or would it be officials of Manitoba Hydro? MR. GOURLAY: Officials from Manitoba Hydro. MR. BOSTROM: What role, Mr. Chairman, would the Department of Northern Affairs play in this whole issue? MR. GOURLAY: They are co-ordinating the whole exercise. MR. CH AIRMAN: (b )(2)-p ass; (b )(3)-pa ss; 4.(c)(1)- pass - the Member for Rupertsland. MR. BOSTROM: Mr.

Chairman, could the Minis ter indicate the present status of the Special ARDA Agreement between Canada and Manitoba? MR. GOURLAY: This is the Special ARDA, it's basically the same as it was last year. MR. CHAIRMAN: (c)(1) - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, for the information of the committee, could the Minister be more specific as to what programs the y are carrying out under the Special ARDA Ageement? MR .. CHAIRMAN: (b)(2)- pass - the Member for Rupertsland. MR. HARVEY BOSTROM: Mr. Chairman, who would be administering those funds?

Would it be the Northern Flood Agreement people who report to the Minis ter or would it be officials of Manitoba Hydro? MR. GOURLAY: Officials from Manitoba Hydro. MR. BOSTROM: What role, Mr. Chairman, would the Department of Northern Affairs play in this whole issue? MR. GOURLAY: They're co-ordinating the whole exercise. MR. CH AIRMAN: (b)(2)-pa ss; (b )(3)- pass; 4.(c)(1)- pass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, could the Minister ind icate the present status of the Special ARDA Agreement between Canada and Manitoba? MR. GOURLAY: It's basically the same as it was last year. MR.

CHAIRMAN: (c)(1) - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, for the information of the committee, could the Min ister be more specific as to what programs they are carrying out under the Special ARDA Agreement? MR. GOURLAY: Mr. Chairman, with respect to the Special ARDA, under the year ending March 31st, 1980, there were nine projects under fishing; nine under trapping; one under agriculture and infrastructure; and there were 21 under training, for a total of 41 projects. MR. CHAIRMAN: (c)(1)-pass - the Member for Rupertsland. MR. BOSTROM: Mr.

Chairman, can the Minis ter indicate what is the status of this agreement between Canada and Manitoba and when the agreement is expected to expire? MR. GOURLAY: Mr. Chairman, the Special ARDA Agreement runs out March 31st, 1982. MR. BOSTROM: Can the Minister indicate if his staff of his department and/or other government departments concerned are having negotiations with the federal government with a view to exten ding the program or negotiating a new program along the same lines? MR. GOURLAY: Mr.

Chairman, there have been some preliminary discussions and the advice that I'm receiving is that it looks very favourable at this point. MR. CHAIRMAN: (c)(1) - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, is the Minister proposing to negotiate agreement very similar to the one which is in pl ace now or is there some suggestions or proposals for amendment to it or the changes to it, and if so, what are they? MR. GOURLAY: The final format or decision on that has not been decided. It will be part of the ongoing discussions. MR. CHA IRMAN: (c)( 1)- pass; (c)(2)-pa ss.

Resolved that there be granted to Her Majesty a sum not exceeding 2, 114,200 for Northern Aff airs-pass. 5.(a)- pass; 5.( b)-p ass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, can the Minister indicate what is being proposed here in terms of the Construction or Acquisition of Physical Assets? Does he have a program list which he can supply to the committee or perhaps read to the committee, so we would know what the plans are for these funds? 4325

Tuesday, 3 June, 1980 MR. GOUR LAY: Mr. Chairman, under the shareable arrangement we anticipate some 694,000 will be spent on roads; 78, 700 on water and sewer; another 20,000 on equipment and repairs; 110,000 on garbage facilities; 261,600 on buildings; 34,000 on docks; 55,300 on detention centres and 106,300 on subdi vision deve lopment; the fire program will amount to 349,500, for a total of 1,711,200.00. MR. CHAIRMAN: 5.(b)- pass - the Member for Rupertsland. MR. BOSTROM: Mr.

Chairman, can the Minister indic ate how much of the funding which was available for last year was actually spent and what were the programs that covered? MR. GOURLAY: While I'm waiting for those figures, I'd like to indicate that those figures that I indicated earlier are shareable cost figures. We have an additional 873,000 that's non-shareable covering basically the same items de aling with roads, garbage, detention centres, subdivision development and that sort of thing. Mr.

Chairman, this past year on shareable items we spent 1.1 million on the items indicated , such as roads, water and sewer, equipment, and garbage and so on. MR. CHAIRMAN: 5.(b)- pass; 5.(c)-pa ss. Resolved that there be granted to Her Majesty a sum not exceeding 873,200 for Northern Affairs -pass. 6.-p ass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, since this item contains funds for the admini stration of the Communities Economic Development Fund, I have some que stions reg arding the operation and admin istra tion of the Communitie s Economic Development Fund.

One question pertains to the level at which the Board of Directors of the Fund have the authority to make loans. Previously, the Communities Economic Development Fund Board of Directors had the authority to make loans up to 75,000.00. Anything over and above 75,000 had to have the approval of the Minis ter and/or Cabinet. Can the Minister indi cate if this policy is still in effect? MR. GOURLAY: Mr. Chairman, on a point of order, I think I indicated earlier that the appropriation of 148,800 is under Appropriation XXVll (1)(

c) but the money is recovered under this item No. 6, as it is for other departments. So that would come under the item of XXVll (1 )(

c) which is the Deve lopment Agencies, which has not come up for estimates at this point. MR. BOSTROM: Mr. Chairman, there are funds within the 25 million-plus here which relate to the Communities Economic Development Fund. This was the indication of the Minister earlier in the estimates this ev ening. My que st ion simply relates to the adminis tration of the Communit ies Economic Development Fund.

It's a pre tty straightfo rward question regarding the operation or administration of the Communities Economic Development Fund and since there are funds within this line in the estimates for administration, for the Communities Economic Development Fund, I think it's appropria te for me to put the qu est ion at this time and I think it's appropria te and rea sonable for the Minister to reply to that question. MR. GOURLAY: Mr.

Chairman, there are some 11 or 12 departments that are covered under this Item 6 and the item that supplies the salaries of some seven staff man years to the CEDF is recovered under this item but the appropria te is under XXVll (1)(c), which is the Development Agencies the CEDF, and that item still comes up before the estimates some time later on, in the next matter of weeks. MR. CHAIRMAN: The Member for St. Johns. MR. CHERNIACK: Mr. Chairman, just on a point of order here.

There was a direct question asked to the Minis ter and I gather he has not refused to answer it but he has indicated that it appears under another item. What specific item under Northern Affairs does it come? MR. GOURLAY: It doesn't come under Northern Affairs, it comes under Development Agencies which is the Communities Economic Development Fund. MR. CHERNIACK: Is the Minister responsible for the CEDF? MR. GOURLAY: Yes. MR. CHERNIACK: Well, Mr. Chairman, I do n't quite see that. The Mi nis ter apparently has not answered the question; he doesn't seem to want to answer it now. Therefore, I would like to know, Mr.

Chairman, whether this Minister, who is responsible for it, will answer it un der the estimates of his department, Northern Affairs. If he says he'll answer it under Salary, then I for one can unde rstand that, but, Mr. Chairman, if he is refusing to answer it under Northern Affairs, then surely, Mr. Chairman, that is not his right so to do. MR. CHAIRMAN: For the Member for St. Johns, it was agreed that the members could discuss this under the Minister's salary.

The Chair didn't agree that the Minister, of course, does not have to answer but it was allowed that this was where it would come, under the Minister's salary. MR. CHERNIACK: What would, Mr. Chairman? MR. CHAIRMAN: The CEDF. MR. CHERNIACK: CEDF will be discussed under Minister's salary. The Minister is prepared to discuss CEDF under his salary; is that what you say has been agreed to by the Minister? MR. CHAIRMAN: The Chair agreed that could be discussed. MR. CHERNIACK: Mr.

Chairman, I heard back there somebody saying there was an agreement, I just want to know, did the Min ister agree that it will be discussed under his salary? 4326

Tuesday, 3 June, 1980 MR. GOU RLAY: The items th at are under discussion right now by the Member for Rupertsland comes under appropriate XXVll (1Xc) which is the Development Agencies or Communi ties Economic Development Fund, which still has to come up later in estima tes, and I'm not prepared to answer those qu estions now because I don't have the appropriate staff here to do that.

Furthermore, the Communities Economic Development Fund was discussed under the Standing Commi ttee of Economic Devel opment some ten days ago and the questioning of the Member for Rupertsland could have been dealt with at tha t time but he chos e not to raise th ose questions. MR. CHERNIACK: Mr. Chairman, then on the point of order, I unde rstand -(Int erjection)- Pardon. MR. BOSTROM: Just on a point of privilege, Mr. Chairman, I indicated to the Minister earlier that the reason I could not discuss the question which I was posing to him tonight is that I did not have the detailed information at that time.

I requested that detailed information at that meet ing; the Minister supplied it to me by letter later on that week. After receiving that information and looking it over, I was able to pose the question that I have for the Minister tonight. If he's saying that now he's not going to answer under these estimates, there will be other places during the estimates process which we will be asking the Minister these qu estions.

But don't let the Minis ter attempt to say that we were able to pose the se particular, specific qu est ions at the la st meeting of the Economic Development Committee because we didn't have the information available at that time. MR. GOURLAY: Mr. Chairman, the information with respect to the Snow Lake Project, we had the information; that information was here, you didn't raise that question at the time.

The Chairman of the Board of CEDF, in his opening remarks, made reference to the Snow Lake Motel Project, indicating that it was the largest loan that had ever been made under the CEDF and no one ever raised a question any further on that. MR. BOSTROM: Mr. Chairman, the record will show that at that meeting I requested of the Minister and of the Chairman that they supply me with a list of all of the loans made during the fiscal year 1979- 80. They indicated to me that they did not have that list readily available at the meeting.

I said it would be fine if they provided that to me later, which was done, but I did not have the specific information on which to base these questions. There may have been some general comment regarding a Snow Lake Hotel or wha tever but I did not have the detailed information on which to base these questions. MR. GOURLAY: That is correct.

However, at the same time, the qu estions you 're raising with reference to the Snow Lake Motel, whic h was identified at that meeting and, had you wished to pursue questions with respect to details on the loans and the people involved and the whole feasibility of that project, could have been fully discus sed at that time but it was not raised. MR. CHAIRMAN: The Member for St. Johns. MR. CHERNIACK: Mr. Chairman, on that point of order, it is the tradition that one does not go hard on a new Minister; that's not always observed, as you know, Mr. Chairman, but it's sort of a tradition.

But in this particular case, as I understand it - and that's why I want clarification on it, Mr. Chairman, because there are two committees sitting and we can't all be in both committees at the same time - you have ruled tha t you are going to permit questions about the CEDF during the salary and I under stand the Minister now to be giving notice in advance th at he's not going to answer th ese qu estions. That being the case, then (Interjection)- A MEMBER: That was the ruling. MR. CHERNIACK: Mr. Chairman, I don't know any rulings that were made and did you, Mr.

Chairman, make a ruling that the Minister was not to answer questions under his salary dealing with CEDF? Was that a ruling that you made? MR. CHAIRMAN: No, I agreed that it could be discussed at the Minister's salary; there was nothing about answering for, you know, things that were not involved here. MR. CHERNIACK: Then, Mr. Chairman, . . . MR. CHAIRMAN: It was agreed between the Min ister and myself, I think, that earlier discussion would fall in the Minister's salary. MR. CHERNIACK: Then, Mr.

Chairman, the Minis ter is incorrect if he suggests it was ruled that he would not answer questions on CEDF, that's what he said. MR. CHAIRMAN: It was not ruled, it was agreed. MR. CHERNIACK: Mr. Chairman, I bel ieve, now again, that under his salary anything dealing with any department with which he is charged comes up and ther efore -(I nterjections)- You know, I'm getting support from my left and of course, I admit there are people who are sometimes to the left of me, and they're supporting me and suggesting that every question dealing with the Minister's responsi bili ty comes -(I nterject ion)- Mr.

Chairman, let it be noted that there are people sometimes on my right who are to the left of me too, you know. Some of my best friends sit on my right. Mr. Chairman, ther efore it seems that it is clear that all the questions to be asked, that wish to be asked on CEDF or anything else dealing with the Minister's responsibility, may be asked under the salary and I would like to know, before we move off this item, whether the Minister is now agreeing that he will answer those questions or whether he is refusing in advance to deal with them.

Because if he's refusing in advance then I want to support my colleague on asking his questions now rather than 4327

Tuesday, 3 June, 1980 wait until the salary, when he is going to refuse it anyway. MR. CHAIRMAN: The Minister of Government Services. MR. ENNS: Mr. Chairman, on the same point of order. Mr. Chairman, the Hono urable Member for St. Johns, understanding his responsibiliti e s in other committees as well, was not here when I made the appeal to you earlier, Mr.

Chairman, and I speak particularly as Minister of Govern ment Services respon sible for Autopac, a not in signif icant corporation in the affairs of the province of Manitoba and the Minister respon sible and answerable to the Manitoba Telephone System, employing some 4,000 empl oyees and expending of considerable sums of money. I made the point, Mr.

Chairman, in response to the Honourable Member for Lac du Bonnet, who suggested that there was some departure from a traditional approach to this question and to the estimates before us, by simply acknowledging that the affairs of CEDF have been fully discussed at the Economic De velopment Committee of this Legislature, have passed and been appr oved by members opposite and the Economic Development Committee and that surely that should be noted, Mr. Chairman, as establ ishing, you know, a reasonable approach to discussion of the estimates.

The tact of the matter that honourable members may wish to raise, may wish to discuss on the Minister's salary any or all items dealing with what they perceive or believe to be germane to this Minister in his responsi bilities to Northern Affairs and the operation of CEDF, of course it is taken for granted, but I believe what also should be taken for granted is that the Minister does not have the officials of CEDF with him here. They were provided already to members opposite, just as I provided officials for Autopac, just as I provided officials for MTS.

During the di scussion of my salary as Government Services Minister, no members opposite chose to depart from a well-established tradition and procedure in discussing MTS or Autopac affairs during my salary, on the item as the Minister of Government Services. So, Mr. Chairman, honourable members, I know, can persist, and obviously will, but I just want to put it on the record that it is a particular departure of that tradition that all members opposite now are suggesting.

I'm not suggesting for a moment that they should not be able to address the Minister - indeed if the Minister wishes to respond about the operations of CEDF - or talk to him about policy matters about the fund, or particular ways that he should direct or use his influence as a Member of Cabinet and as Minister of Northern Affairs about CEDF, but to suggest that the affairs of CEDF have not received a full, a very full and proper hearing, in front of a committee of the Legislature simply is contrary to the facts and honourable members opposite know that. MR. CHERNIACK: Mr.

Chairman, I don't know who suggested it; I, for one, have not sugge sted that CEDF has not presented its report and had opportunity to dis cuss it. I'm talking about the Minister, Mr. Chairman, I'm not talking about CEDF, and the Minister for Government Services knows very well that Ministers are accountable for the work the y do and they are most accountable when one deals with their salary. So, Mr.

Chairman, there isn't the sligh test doubt in my mind that one needn't go too far into the records to find the Minister for Government Services, when he was in Oppo sition, making sure tha t every Minister justified the salary when it came before him, and I have no doubt that this is the case here. Now there was a qu estion asked by the Member for Ru pertsland whic h I belie ve asked ab out Ministerial involvement in decisions and the item we brought it up under is an item which deals with some money that goes to CEDF or some of this money goes to CEDF.

Now if the Minister said, I don't want to answer that question now, I'll answer it under my salary, I for one can understand it, I've seen that happen, but for him to indicate - and I don't think he had really the sup port of the Min ister for Go vernment Services on that basis - but he seemed to indicate that he's not going to answer questions abou t his own in volvement . (Interjection)- Good. MR. ENNS: On the point of order, if the Honourable Member for St. Johns will permit. MR. CHERNIACK: I would certainly permit him to interrupt me. MR.

ENNS: Well, I asked that with some cour tesy because we were both not in the committee at the same time. The que stions that were being asked of the Minister were specific questions about particular loans that CEDF had made, specific involvement in projects that CEDF was involved in and these, Sir, I suggest, Mr. Chairman, are precisely the kind of things that were taken up properly at the time that the management and the responsible Minister was answ ering for CEDF in front of the Economic Development Committee. MR. CHERNIACK: Mr.

Chairman, we're back to were we where when I first asked some questions and that is, if this Minister really cannot rely on his memor y to de al with qu est ions relating to his involvement in CEDF decisions, then surely we're just as far from the sour ce of in form ation as the telephone is - I would think that it's not that difficult for him to make himself familiar with his problems of memory - but to indicate a refusal to answer means that we get stuck right here.

Whereas, on the other hand, an indication that he will deal to the best of his ability, and none of us can expect more than that, under his salary, I think is wrong. If he would indicate he will deal to the best of his ability on his salary, then I, for one, would suggest that we wait for his salar y and deal with it to the best of his ability. MR. CHAIRMAN: All I can think was agreed that we would allow all to put qu estions unde r the Minister's Salary. That's where it ended, if there was an agreement to that earlier. MR. CHERNIACK : specifically if the . 4328 Mr. Chairman, I asked

Tuesday, 3 June, 1980 MR. CHAIRMAN: The Honourable Min ister. MR. GOURLAY: Mr. Chairman, with respect to the last question tha t was posed by the Member for Rupertsland, as I under stand it, he was dealing with a specific item, 27.(c)(1) , which comes under the CEDF, the sum of 148.8 thousand, which still will be subject to discussion when those estima tes come up. It's recoverable under item 6. MR. CHERNIACK: Mr.

Chairman, I wonder if the Min ister realizes he didn't answer my question as to whether or not he would respond under his salary to questions asked of him, dealing with his involvement, to the best of his ability. MR. GOURLAY: Mr. Chairman, I would be very pleased to answer qu estions that are posed to me under my salary and if I feel I can't answer them adequately here I will certainly get the information and forward it to the respective member. MR. CHAIRMAN: The Member for Rupertsland . MR. BOSTROM: Mr.

Chairman, that's precisely what we wanted from the Minister and the question I asked him just a few minutes ago was with respect to a pol icy of the Communi tie s Economic Dev elopment Fund, and the Min ister, being respon sib le for the Communities Economic Development Fund, surely should know what the policy is with respect to the level at which the board of directors can approve a loan and what level has to come to Cabinet or to his attention for approval.

That is a valid qu estion ; tha t is a re asonable question, and it's one which I would expect the Min ister to kno w without checking any facts or checking with any relevant staff. It's something which is within his immed iate purvie w as a Mi n ister responsible for the Commun ities Economic Development Fund. MR. GROULAY: Mr. Chairman, I would be pleased to deal with that under Mini ster's Salary. MR. CHAIRMAN: The Member for Rock Lake. MR. EINARSON: Mr. Chairman, I now understand the Min ister is prepared to ind icate that he is prepared to deal with answers to questions on his salary.

I would lik e to say, Mr. Chairman, that repetition is not in the rules of our com mittees. The Min ister has indicated that answers were given, or at least if answers weren't given the members opposite have the opportunity to pose the kind of questions for information they want to seek when the matter came up. The other thing, Mr. Chairman, on the point that I wanted to point out, is that when we come to the Minister's Salary it's normal, and has been traditional as long as I have been in this House, that the official critic of the respective department makes his comments to the Min ister.

It's a sort of summa tion, not necessarily that they're seeking information and, Mr. Chairman, if the members want to pose questions in their summation, that's their right, but the Min ister does not necessarily have to answer. But all I want to say and the point I want to make, Mr. Chairman, is that the repetition is not requi red to an answer by the Minister if it is being posed on other areas where questioners had the opportunity by the opposition to pose, and in this case, the CEDF, where they have the opportunity, with the proper staff who were there to answer any questions they had before them.

They did not take tha t opp ortu ni ty. I don't think that's the re sponsi bili ty, Mr. Chairman, of the Min ister in question. MR. CHAIRMAN: The Minister agreed to answer all questions within his ability or facts, so I would hope that we pass 6, get on to the Mi nister's Salary, where these questions can be put and the answers supplied if possible. 6.- pass. Resolved that there be gr anted to Her Majesty a sum not exceeding 25,966,400 for Northern Affairs­ pass. 1. (

a) Mini ster's Compensation - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, I'll put my question again with respect to the policy of the Commu nities Economic Development Fund and the amount of loan which the CEDF board of directors are allo wed to make without reference to the Mini ster and/or the Cabinet. I would ask the Min ister if the pol icy is still in effect, that the board of dir ectors is only empowered to make loans up to 75,000, anything above that must come to the Mini ster and/or the Cabinet for approval? MR. CHAIRMAN: The Honour able Minister. MR. GOURLAY: Thank you, Mr. Chairman.

The limi t is 75,000 as you state, and anything above that has to have Ministerial approval. MR. BOSTROM: Mr. Chairman, if we take that further, can the Min ister indic ate if that is in effect for individuals and/or individuals who may have interests in companies which are loaning from the Communities Economic Devel opment Fund. I ask the Min ister if the individuals are loaning from the fund and a company which they own is also loaning from the fund, if all of the loans are taken into account when considering whether or not they are above the 75 ,000 limit. MR. GOURL AY: Excuse me, Mr.

Chairman, I wonder if I could impose the member to just run through that again. MR. BOSTROM: Mr. Chairman, I'm looking at a specific case where two individuals received a loan of 5,000 from CEDF, which would normally be in their purview to make the loan. The same individuals as shareholders of a Limited company, made a 581 ,000 loan and the information supplied from the Mini ster indicated there was an additional 248,000 loan.

If you put them all together, of course, they are well over the limit of 75,000, and I am wondering if the board would have the power to approve the 5,000 loan on their own, knowing full well that there are other loans if totalled in with the 5,000 would be well over the 75,000 limit, or if all of those loans would have to come to the government and the Minis ter for approval. 4329

Tuesday, 3 June, 1980 MR. GOURLA V: It would sound as if you were ref erring to the Snow Lake Hotel project, and of course the total of 75,000 limit was adhered to and beyond that had to get my approval. Now I am not sure at what point they received a 5,000 loan but I know that I had to approve that particular loan in excess of 75,000.00. MR. BOSTROM: Mr.

Chairman, I'm looking at the Manitoba Gazette of May 17 th, 19 80, in which the two individuals in question received a loan at inte rest rates of 12 -1/ 2 percent for six months for 5,000; and in the same period, January 1st, 1980, to March 31s t, 1980, they received a loan for five years at 12 - 1 /2 percent under the company name of Diamond Willow Inn Limited for 581 ,000.00. I'm wondering if both of those lo ans would have come to the attention of the Min ister, not only the 581 ,000 but also the 5,000 loan. MR. GOURLAY: Mr.

Chairman, there was some difficulties with respect to the construction of that project, whereby the original contractor declared bankru ptcy and there was a complete refi nancing of the project. The sums that you mention of 5,000 and 248,000 and 581 ,000, was accumulative, and this is not the case. The total loan, I think, amounted to 500 and some thous and dolla rs, as a res ult of refinancing. MR. BOSTROM: Can the Mi nister ind icate how much the principals involved had put in by way of their own financing? MR. GOURLAY: Mr. Chairman, as I recall, they put up 42,000.00. MR. BOSTROM: Mr.

Chairman, is this in keeping with the policies of the Communi ties Economic Development Fund that the individuals must put up a certain percentage of the total project before receiving funding through the Communities Economic Development Fund? MR. GOURLAY: Mr. Chairman, there was, as I indicated, at the outset there was some difficulties with respect to this project when it was initially approved. There was federal funding and there was some bridge financing by the CEDF that I guess was secured by a second mortgage.

When the original contractor went bankrupt there was a request for the CEDF to put in further funding or abandon the whole project and drop over 100,000, or else to finance the entire project at some 54 1 ,000, I'm just trying to recall the exact figure, but it was over 500,000.00. So the CEDF had the choice of refi nancing and taking a first mortgage on the whole project which it was recommended that they do. That's the situation they're in at the present time. MR.

BOSTROM: I believe the amount reported in the Manitoba Gazette is 581 ,000 to the Diamond Wil low Inn Limi ted , the loan inte rest at 12-1/ 2 percent over five years. I would ask the Min ister, in view of this large loan made to a hotel operation in Snow Lake, which I believe already has a hotel, can the Min ister explain how this fits in with the policy of northern development and with the policy of assisting remote commun ities to develop em ployment opportunities.

I would ask the Min ister if any of the objectives, original objectiv es of the Communities Economic Devel op ment Fund were taken in to account when considering making such a massive loan to two individuals in a community that already has a hotel facility. MR. GOURLAY: Mr. Chairman, there was a great deal of pressure put on by the community of Snow Lake with respect to the advancement of this motel project.

I am sure that the Member for Flin Flon is well aware of the need for the additional facilities in this community where they attract a lot of tourists in the summer months, and furthermore, the project is built adjacent to the new hospital in Snow Lake. It's a compl imentary type of construction; they're simi lar design. Furthermore, the hospital does not have meal facilities; there is an arrangement made with the motel to supply meals to the hospital.

The hotel will engage some 12 people and I would say that the people of Snow Lake are looking anxiously forward to the day when the motel will open, some matter of three or four weeks, the first of July I would expect, that the motel will be open for business. MR. BOSTROM: Mr.

Chairman, the question I pose was how does this fit the original objectives of the Communities Economic Development Fund, which were to pr omote economic development in depr essed areas of northern Manitoba where there was a need to create employment opportunities and to give disadvantaged people an opportunity to find financing that they would not normally be able to obtain.

In the case of a hotel operation in a fairly well-established industrial community in northern Ma nitoba, I would wonder how these or igin al objectives of the Com mun ities Economic Development Fund would apply to this project, if they were applied at all. MR. GOURLAY: Mr. Chairman, again, I have to refer to the circums ta nces surrounding the developments that took place with respect to this project. The young couple that are promoting and owning the project, have put in, the y feel, a very substantial input in providing some 42,000.00.

That's a lot of money as far as they are concerned and it is a lot of money, period. The fact that the original contractor had some difficulties and had to declare bankrupt cy put a different slant on the whole project and it was a matter of CEDF abandoning the project and dropping 100 and some thousand dollars or else trying to salvage it and make it a viable operation. Basically, it may not originally, at this present time, fulfil! the guidelines. However, it was a result of extenuating circumstances. MR. BOSTROM: Mr.

Chairman, I would ask the Min ister to elaborate more fully on what he refers to as extenuating circumstances and I would challenge him on his statement that 42,000 is a substantial amount of money when one considers the total investment. If 581 ,000 even is consider ed the total investment in the operation, the 42,000 is less than 8 percent of that. So if one is looking at their input as a percentage of the total investment, it's a very small amount for anyone to put up who is intending to go 4330

Tuesday, 3 June, 1980 into hotel business. Certainly with that kind of financing, the y would not be able to arrange financing of that nature through normal lending institutions. I would agree with that.

But given that that is the case and that they would not be able to go to a bank or a trust company for mortgage financing or venture financing for a hotel in Snow Lake, why would the government see fit to put up that massive amount of money to provide a facility which is, to a certain extent, a dupli cation of a facility that's already in place, in that there is already a hotel in the town of Snow Lake and I believe a facility for a beverage room. The Honourable Member for Flin Flon indicates there are two, including the Legion, I believe, which is available for people to use.

So I would ask the Minister, with those facts in mind, if he would elaborate on what extenuating circu mstances would persuade him, as Min ister, to agree to making such a massive loan to two individuals. I would also ask him to elaborate on the busi ness experience of the individuals in question. Have they ever operated a hotel before? Have they ever been in any kind of busi ness before? Have they been checked out as to their financial worth and their ability to operate such a busine ss and to make the business pay so that the loan some day could be recovered?

All of these things are important in terms of assessing the financial viability of an operation and I would expect that the Mini ster took these things into consideration when he made the approval for this loan. On top of that, Mr.

Chairman, I would point out that the interest rate of 12 1/ 2 percent over 5 years is, in itself, a substantial subsidy to this operation, since if the person was able to go to a normal lending institution during the period, January 1, 19 80 to March 31, 19 80, as everyone else in Manitoba is painfully aware, they would have to arrange for financing at much higher rates, possibly around 18 percent. So that the 581 ,000 loan at a saving of at least 5 percent over other normal lending institutions is a substantial subsidy to the operation in itself.

I would ask the Mini ster to elabor ate on those issues and give us a better explanation as to why he saw fit to lend over a quarter, I belie ve, of the total CEDF loans to two individuals for a hotel facility. MR. GOURLAY: Mr. Chairman, the total cost of the project, as indicated, some 581,0 00, of which the proprietors are entitled to a special ARDA grant of 18 5 ,000, which reduces the cost to the owners, brings it down to 396,000, I believe.

Now, when I came into the portfolio this pr oject was already under way and the CEDF were financing to the tune of 248,000 in conjunction with the Federal Business Development Bank, I believe, and subsequently, as I mentioned , the or iginal contractor declar ed bankruptcy and so I was faced with the decision of scrapping our investment, at that time it was well over 100,000, we could forget it, write it off, abandon the whole project or else inject further CEDF funding in co-operation with the federal people and not have really any blue-chip collateral as far as security.

The decision was made that the CEDF should finance the whole project at a total end or bottom- 1 i ne cost of 396,00 0 and we would have first mortgage. The CEDF has first mortgage on the project and I might admit that it is a very fine building. I was able to have a quick look at it 10 days ago or so when I was up in the area looking at the fire situation.

I feel that, as far as the business aspect of it, we are much better off having a first mortgage on the project involving some 396,000 than we would have been to scrap the project and losing 15 0,000-or-so several months ago, walking away from it, or even if we had continued to finance the project in co-operation with the federal government, we basically wouldn't have any colla teral to fall back on. Just to add further with respect to the credibili ty of the couple that are operating the motel, I'm not personally familiar with them.

CEDF personnel supplied me with background information on the couple and strongly recommended that they had the desir e and the att itude, together with some managerial input, to make this a viable operation, and I feel that this can work out. MR. BOSTROM: Can the Min ister be more specific as to the original loan approval? Apparently he indic ates 248,000 was originally approved. Would that have been approved by the previous Minis ter responsible for Communities Economic Development Fund? MR.

GOURLAY: I can't recall the original date of the application, but it was some time before the time that I became involved as Mi nister of Northern Affairs. MR. BOSTROM: Wh en the financing was recommended to the Minister for 581 ,000, can the Min ister indicate if that was a decision that he took on his own as Mini ster or did he take that decision to Cabinet for discussion? MR. GOURLAY: I made this decision on my own. MR. BOSTFIOM: Mr. Chairman, can the Mini ster ind icate fur ther to hi s com ments ab out the capabilities of the couple? He indicated they have a desire and enthusiasm for operating a hotel.

If that were the only qualif ications, I'm sure there would be many couples in Manitoba who would be rushing in to the Min ister and wanting him to approve funding for hotels. I would ask the Mi nister if he had asked his staff in the Communities Development Fund to provide him with any information on this couple in terms of their business experience. Had they had any previous busi ness experience in any kind of busine ss in which he could draw from that, at least make some judgement as to their possible success in terms of operating a hotel facility? MR.

GOURLAY: With respect to the couple's background, I don't recall all the details; I know that they were not involved in a hotel operation before. I just can't recall, you know, a lot of their details. I was concerned about their ability to be able to make this project oper ate because it does take a lot of managerial ability to make this type of operation a viable operation and to pay the heavy debt that was attached to it. As I mentioned, I can't recall all the details with respect to the couple. I recall considerable discussion with consultants from CEDF tha t sp ent time with this couple and related 4331

Tuesday, 3 June, 1980 in formation to me, that I ev entually made the decision to approve this. MR. CHAIRMAN: The Member for Flin Flon. MR. BARROW: I haven't too many qu estions, Mr. Chairman, but I have a few comments to make. It concerns me, it's in my area, I lived there for six or seven years. I admire the young couple for their ambition and their desire to get ahead. I'll give you a little bac kground : He was a miner, she is a daughter of a miner. So they have no business background as such, except the ambition. Snow Lake is a town of 2,000 people.

We have a motel there, it's rundown; we have a nice Legion, which takes up most of the drinking facilities. For tourists it's not that good because you are 25 miles off 39 1, which is the main road. You have two lovely parks there with camping grounds and a huge lodge. The people, tourists, that are hunting or fishing very seldom live in the town, it's mostly out. It's a facility that is an asset to the town; it's a facility which would fit very well here in the centre of Winnipeg. It's an elaborate fixture. What bothers me is, how are they going to make a go of it?

Disregarding the paybacks, the cost of the motel is 834,000 at 12 percent or 12 1/ 2 -(Interje ction)- well whatever. At 12 11 2 percent, how much is that, Mr. Chairman? How much? -(I nterjection)- Pardon? MR. USKIW: 45,000.00. MR. CHERNIACK: More than that, Sammy - (Interjection)- Come on . . .. MR. BARROW: So you have this huge amount off the top. You say they are going to employ eight people; they are going to have three cooks. Or the other five are, besides themselves, or them, but they have that payroll to meet, plus they are going to have to buy food. They are going to have a big eating facility.

They are going to cater to weddings, but this is few and far between. What I am worried about, Mr. Chairman, is what happens to these kids if they go belly-up? Personally, I would not invest that much money in Snow Lake, although I lived in Snow Lake, and this bothers me to a great extent. MR. GOURLAY: Mr. Chairman, I think to refer to Snow Lake as a tourist centre, I think it is an important tourist attraction in the north. There is a lot of fishing. I know that the motel in question has had lots of bookings, actually going back to the first part of June or even maybe into May.

They originally had hoped to have opened in the middle of April, I believe, before the original contractor ran into difficulties. The indications are they have heavy bookings in their rooms and they have adequate din ing facilities which, as I unde rstand from the people of Snow Lake, are anxious to see this project proceed. Now, you indicate that the cost of the project was 800,000-and-some. Those figu res are not correct.

I think the Member for Rupertsland indicated early this afternoon the project; however, the total project being 581 ,000, less some federal grants brings the cost down to, I believe - and I'm just going by memory - I think it's 396,000.00. Granted, it will be a very difficult task to make this thing pay for itself. It's going to take a lot of hard work and a lot of effort by the people that will be owning the pro ject and I'm sure that had this proposal been given to me as an initial proposal, it would have received a different response from me.

However, as I indicated, there was some extenuating circumstances how we got into this project and it was a case of abandoning the project where we would drop 15 0,000 or so. The way it is now I hope that CEDF doesn't have to recover it under the first mortgage. However, the aspect of recovering that motel in the case of further bankruptcy by the owners, certainly I think still puts us in a better financial gamble than it would have by walking away from it three months ago. MR. CHAIRMAN: The Member for St. Johns. MR. CHERNIACK: Mr. Chairman, I'd like to get this trans act ion clear in my mind.

The first de al apparently was 42,000 put up in equ ity and was it a loan of 248,000, approxi mately? MR. GOURLAY: Yes. The initial requirement from CEDF as I recall, was 248,000 plus some - I'm not sure how much the federal government was involv ed - but they had the first mortgage. MR. CHERNIACK: And what was CEDF to have? What security was CEDF to have? MR. GOURLAY: I'm only guessing, I presume it was a second mortgage. MR. CHERNIACK: The Minis ter indicates 42,000 equity, CEDF 248,000, which is a total of 290,000, and an in dete rmina te amount from the federal government.

Would that have been substantially less than the 18 5,000 figure he has given for the final deal? MR. GOURLAY: I can't be specific on the details prior to the involvement of the federal financing. MR. CHERNIACK: Could the Minister ind icate whether there was more buil t after the second financing than was expected to be built under the first? Or was it the same end result? MR. GOURLAY: To my knowledge the design was the same as previously. It was just completed the same as originally intended. MR. CHERNIACK: Then does the Minister recall how much was the cost of the changeover?

How much additional money did the CEDF put up? MR. GOURLAY: The total cost as I recall or indic ated earlier, I belie ve is 581 ,000 and this is financ ed entirely by CEDF. MR. CHERNIACK: That then means tha t the federal government was going to advance money which it was now relie ved of advancing, is that correct? MR. GOURLAY: Mr. Chairman, with respect to the construction end of it, you mean? 4332

Tuesday, 3 June, 1980 MR. CHERN IACK: The financing. The federal government was going to finance and have a first mortgage. That financing has been relie ved now, is that right, by the CEDF taking over the whole burden of loan? MR. GOURLAY: That's right. MR. CHERNIACK: Then the Minister in making the second deal relieved the federal government of some moneys that it would otherwise have been putting up? MR. GOURLAY: Mr.

Chairman, th e federal government was going to be required to put in additional funds as well as CE DF but it was a recommendation of the board of CEDF that they were getting too much money involved to be held with a second mortgage, and it appeared to be more desirable to finance the whole project knowing that there would be recovery of some 185,000 through the Sp ecial AR DA appl ication, which has been approved and I understand the money has been now paid. MR. CHERN IACK: Mr. Chairman, I'll come back to the other in a moment.

This special 185,000, would it not have been payable in either event under the first deal and the secon d? MR. GOURLAY: I expect it would have been. Mr. Chairman, I know that you were not present when I indicated earlier this evening that I could provide full and accurate details of the whole transaction from CEDF and I'd be pleased to do that. I'm just trying to recall from memory some of the details and I may not be com pletely accurate as to the total figures. MR. CHERN IACK: Mr.

Chairman, I clearly recog ni ze the Minister 's dilemma, yet he has remembered quite a bit here and I'm trying to get a picture now which appears to be developing, as I see it, that there was an underestimate of the cost.

The first contractor went bankrupt; then in order to complete the job additional moneys had to be paid out; and I don't know yet how much more had to be paid than was originally contemplated for the same st ructure; which suggests to me that wha tever contract was let the first time was substantially less than it should have been, and I should think the Minister would have asked questions as to what happened? Why this increase in cost? Why does a company go broke? The fact that it goes broke is apparently an indication that it couldn't match its bid.

It couldn't build for the price at which it had contempla ted to build so they went broke, that's the normal thing. Now I see the Minister saying that it's better to have a first mortgage than a second mortgage. Well, Mr. Chairman, I'd have to question whether that's true. If you're going to put up the money equivalent to the first mortgage, why is it better to have a first than a second? It's the total exposure that counts. And meanwhile apparently the government has put up more mone y at 12-1/2 percent interest than it would have been requi red to do had the federal people stayed in.

So the direct question to the Minister is, were the federal people prepared to go in on this new transaction to the same extent as in the first? MR. GOURLAY: I can't accurately indicate the position of the federal government at this point in time. However, as I indicated, I'd be happy to supply the full details of the project . I kno w th at the additional cost in the const ruction of the hotel drastically increased when the original contractor went bankrupt and they had to find a new contractor to come in and finish a project tha t was well advanced, that still a considerable amount of work had to be done.

I know that the original estimate, the cost of the motel went up as a result of this new transaction with a new contra ctor on site. MR. CHERN IACK: Mr. Chairman, any lender has to have some idea as to whether the mone ys origina lly proposed to be advanced would be sufficient to compl ete the job, and if it turns out that there was a substantial price to be paid in excess of the original in order to complete the job, then it means that there has been some bad mistake in estimating or in monitoring the disbursements of the first time.

I wonder how the Manitoba government could sink over 100,000, you said - I think 150,000 - into a project without knowing that all the money that went in was intangible building which would not be lost if it were developed from thereon in. But now the Minister says it was much more than it was origina lly contemplated which sounds most peculiar to me - I'm talking about generalities, not specifics; I understand the Minister doesn't have specifics now - the first question that would occur to him if he were told it's better to have a first mortgage than a second, is whether he had a choice.

It seems to me that since it had to be a choice between the feds and the province, the feds may have said, we're out of it, and the Minister doesn't even know if they said, we're out of it, or not. MR. GOURLAY: Mr. Chairman, I'm trying to recall the specific details and I would suspect, and I can't recall for sure, but I rather doubt that the federal government was prepared to put more money into the project at the time.

It was going to recall further CEDF funding to complete the project and still have no further collateral to cover their investment, and was a decision of the board that they undertake to completely finance the project at this point in time. Was the better of two evils. MR. CHERNIACK: Mr. Chairman, now the Minister and I are both inclined to agree, I mean, we are agreed in suspecting that the federal were going to pull out of it. Now he doesn't know for sure but I was aiming at that because I'm pretty sure they were going to pull out of it and leave it high and dry.

And I'm saying, if they were protecting taxpayers money that way then I'm marv elling th at the Manitoba government wasn 't prepared to protect taxpayers money to the same extent rather than putting it in. It's beginning to look to me like it wasn't a matter of choice but of CEDF saying, well, we'll take a first mortgage, because, Mr. Chairman, if there's 100,000 first and you have a 300,000 second, the total indebtedness is 400,000; and if you replace that first 100,000 and the second 300,000 by one fi rst 4333

Tuesday, 3 June, 1980 mortgage for 400,000, it's the same amaount of money that is exposed, only somebody else is subsidizing the interest rate to the extent of the first mortgage. So the rea soning seems to me, Mr. Chairman, to be faulty. But what I'm really concerned about is, what is the true value of that place? It was intended to come in at a much lesser figure; it came in at much more. Is that still to say ... You know, Mr. Chairman, I have to say, shades of the CFI. I have to say shades of that boat on the Winnip eg River, rather on Lake Winnipeg.

I have to say all those things that the Mini ster of Fitness can reel off one after the other of terrible deals he in herite d from the previous government, and my goodness, Mr. Chairman, it looks to me like we've got another one here. Here we have an equity of some 7 percent and we have apparently an ARDA forgiveness of 18 5,000.00. Is that forgiven right off the bat whether or not they make it? Because as I recall OREE, Mr. Chairman, as I recall CFI, the arrangement had to continue I think for a period of three years, during which time there was some forgiveness.

Now I would want to know from the Minis ter whether this 18 5,000 is in fact forgiven or whether it is potentially forgiven. That's a rather important question because that would affect, surely, the exposure by the Manitoba government. MR. GOURLAY: The 18 5,000 is forgiven, totally forgiven. MR. CHERNIACK: Now we are told, Mr. Chairman, tha t there's a mortgage for 540, 000 odd ... Pardon? MR. GOURLAY: 396,000.00. MR. CHERNIACK: We were told it was 54 1 ,000 and when the Mini ster says forgiven 18 5,000, does he mean that the federal government paid that to the CEDF? MR.

GOURLAY: I think I did throw out a figure of 541 ,000 earlier in the discussion. That figure should have been 581 ,000 less 18 5,000 Special AR DA Gr ant, bringing the total cost to the owners, 396,000.00. MR. CHERNIACK: Mr. Chairman, how much is the investment approxima tely by CEDF? MR. GOURLAY: 396,000.00. MR. CHERNIACK: And in addition to that the owners have 42,000, is that correct? MR. GOURLAY: Right. MR. CHERNIACK: All right. So that the figure of 581 ,000 which included the 42,000, was a figure which also included the forgiveness by ARDA? MR.

GOURLAY: As I indicated earlier, I would like to supply you with the specific figur es. I'm only trying to recall from memory and these are only what I can recall, and I would be pleased to supply you with the compl ete details for your records. MR. CHERNIACK: Mr. Chairman, I for one would very much app reciate receiving those but I also would like an opportunity, once having them, of discussing them with the Minister.

Really what I'm now interested in is assessing the Mini st er's judgement in this deal, and as I say, the Min ister of Fitness is here and he can reel off without any difficulty, criticisms of various transactions that have taken place in the past where there was hardly any equity, and here, it looks like taxpayers' money is into this whole thing all the way, whether it's federal or provincial. The one thing that bothers me is, the Minis ter said that there was Snow Lake pressure. Frankly, I don't unde rstand that as being a reason of any kind whatsoever.

I mean, either this was a viable operation or it wasn't, and if the department was not prepared to write off 100,000 or 15 0,000, how much is it prepared to write off in order to make sure that this is viable? Let's face up to it now. If these people are walking in with something like a 7 percent equity, then has the government revamped its projections as to viability and decided to make it on a more practical basis in order to take a loss? The government doesn't object to making grants so is it going to make a grant or does it see already that these people are burde ned with an imp ossible burden?

Is he taking two people, young people I gather, without any experience in the hotel business, and going to make them work very hard and does he see that they will be able to walk out of that with something, or will they be working for the next few years and finally have to give it up because they're not making payments to the government? In other words, is the government going to give them grants to finance the opera tion; is it going to reduce interest, waive interest, waive principle, like ARDA did apparantly, in order to make this viable? Do these people have a hope?

So I have to ask the Mini ster specifically, what efforts is he making to monitor the ongoing operations of this hotel to make sure that these people who appear to be unfortuna te people who are now caught in a vise, are not going to be sque ezed so tha t all their hope s and expectations are dashed to the ground. MR. GOU RLAY: Mr. Chairman, CEDF will be monitoring the operation of this hotel project very closely in co-operation with the owners. There will be expert advice available to the couple that will be running this project.

The member ind icated the pressures from the people of Sno w Lake, what bearing would that have? All I indicated was that the people of the community are enthusia stic about this project, were anxious to see it proceed. They feel that it is needed in the community, in spite of what the Member for Flin Flon has indicated, and the fact that the tourist trade is also antici pated to be very great, and mind you, this was prior to the dry season and the forest fire hazard that struck the community and this may affect the tourist trade for the balance of this year.

Hopefully that will not be the case and the weather situation will change that situation. Granted , the people that will be in this project are going to have a big task ahead of them to make this function. They are willing to take this risk and to work hard at it and I am sure that they have the right 4334

Tuesday, 3 June, 1980 attitude and desire to make it function properly and viably. MR. CHERN IACK: Mr. Chairman, the Tory government wiped out effectively the MDC and say, we don't believe in that kind of financing, we do not beli eve that that should be done, but th ey maintained the CEDF. Why? Because of the reasons I think mentioned by the Member for Rupertsland. To help st imula te the gro wth and economy in the northern areas of Manitoba and especially to help the underprivileged people start to surface in their own operat ions.

Now the Minister is giving us all the traditional justifications that the Tory government has been so crit ical of in opp osit ion. Tourism , the townspeople like it. Of course they liked it. The city of Winn ipeg people enjoyed hearing all about Trizec until they found out the extent to which they were taken in financing Trizec. So everybody seems to think that seeing a building going up is good. But I am really shocked that the justifications given by the Minister don't at all jibe with what I understood, and the Memb er for Rupertsland understood, were the objectiv es of CEDF.

It seems to me that the government got tr apped into an operation which was not feasible. There was a bankruptcy. The government stepped in, pitched in more money, pitched in more money, decided that a first mortgate looked better on its books than a second mortgage and therefore took the federal people off the hook, and though the Minister and I suspected the federal people were not going to go along with this second project, and yet we find they have sunk 185,000, already forgiven, he says, they've already advanced 185,000 into a motel.

I would ask the Minister when he gives us all the information, to file with us the necessary documentation to show that the ARDA money was paid and made as a grant which is not repayable under any circumstances to the federal government so we get a fuller picture of that. So I would ask the Minister if he would produce that information as well. Then, Mr.

Chairman, if the Minister would see to it that we got this information before we dealt with that other item, which he says also deals with this, then we could possibly review it with him when he gives us the information under that - I forget . . . page, 32 is it, Mr. Chairman? MR. GOURLAY: Yes, 32, 33. MR. CHERN IACK: Then we could probably come back to it with that information. Can the Minister see that we have that information before we deal with 32, 33? MR. GOURLAY: Mr.

Chairman, I indicated earlier that I would get this information with respect to the Snow Lake Motel as soon as I possibly could and supply it to the members. MR. CHAIRMAN: 1.(a)- pass - the Member for Rupertsland. MR. BOSTROM: Mr. Chairman, just a follow-up on the comments of the Honourable Member for St. Johns. I believe someone from behind me here said the more we hear about this, the more it sounds familiar. Mr.

Chairman, if one remembers the comments made by honourable members of the Prog ressive Cons ervative Party when they were discussing the Thunderbird Lodge and lamenting the fact that the provincial government had made any loan financing whatsoever towards th at venture, and to use a comparison, Mr. Chairman, the Thunderbird Lodge, I believe the final tally or total for that project was probably about the same level as the project we're considering here. That was, as you recall, a lodge in northern Manitoba, supposed to be for servicing tourists on a lake which was supposed to be a viable lake.

It had a main lodge cabin with several out­ camps. I just don't recall the numbers that were reported. But, Mr. Chairman, the operations were certainly similar in many respects as to scale and also type of operation. Honourable mem bers of the Prog ressive Conservative Party were very critical of the Manitoba gov ernment's involvement in that even though they knew full well at the time that the loan that was made -(I nterject ion)- Mr.

Chairman, to use that example as a cont rast and for the information of the Honou rable Min ister of Hi g hways, who is commenting from his seat again, the Communities Economic Development Fund made a loan, as I understand it, to the Thunderbird Lodge operation of 75,000 which was within the authority of the board of the directors of the com muni tie s economic development fund to make. That was made, as I understand it, an operational loan. There was no involvement of any Cabinet Minister in any funding to the Thunderbird Lodge. In contrast, Mr.

Chairman, here we have a hotel operation in Snow Lake, which is being operated by two individuals who have had no experience in hotel busin ess, who have ob tained a lo an from the Manitoba gover nment th rough the communiti es economic development fund, and in this case, Mr. Chairman, in contrast to that which was received by the Thunderbird Lodge where the board of directors had the authority to make a decision and made a decision without reference to a Minister of Cabinet, in this case the amount was so substantial as to require the approval of the Minister.

In the first case I assume it was the Honourable Memb er for Thompson, when he was the Minister of Northern Affairs, that made the original approval of 248,000 for this facility. The honourable present Minister had to pick up the pieces of that problem and in order to try to salvage the government investment, had to increase the loan by over 100,000 so the net amount now is somewhere in the order of 370-380 thousand owing to the Manitoba government.

All of which I point out was made under the authority directly of the Minister and not directly by the communities economic developm ent fund board of directors because it's beyond their authority to make such a loan. Mr. Chairman, I am shocked that the government would take this kind of action with respect to one loan in a community, in a town, with all due respect to my colleague from Snow Lake and the need for such a facility in that community, I would maintain that that facility is not so desperately needed that this kind of financing need be provided to one 4335

Tuesday, 3 June, 1980 project, and particularly to two individuals who have no experience in the operation of that kind of business, if indeed they have had any experience in the operation of any business at all at any time. The information I received from the Min ister tonight and from other sources would ind icate that they have not had any business experience.

So I am indeed very surprised and shocked that this government that prided itself in its original statements of getting the government out of business and of making loans to losing propositions, would put themselves out on a limb on a project like this that's not really needed and making a huge loan to individuals who have no real experience in the business world. Mr.

Chairman, I think the honourable members will have plenty of time to lament and to weep over this decision that was made by this Mi nister and his colleague who was the former Min ister for this department, because I belie ve that this project will have gr eat difficulty in days ahead, gi ven the management abili ty that's been ind icated by the individuals in question. MR. CHAIRMAN: 1.( a)-pa ss - the Member for Churchill. MR. COWAN: Thank you, Mr. Chairperson.

When opening the remarks from this side in regard to the Mi nist er's esti mates, we made some ge neral statements in reference to the pr ob lems th at confront the Mini ster in northern Manitoba, and I wanted to make the record explicitly clear that these problems have been around for quite some time. They are not problems of the Minis ter's making. They are not problems of any one government's making. They are historical problems. I said that at the beginning, and at that time I belie ve that perhaps one of the member's opposite had misinterpreted what I said.

So I wanted to make certain that the record is clear in the fact that we don't wish to assess blame in this regard but we wish to examine the situation and we do wish to examine what the government has done in regard to dealing with them.

Because while they may not be blamed - it would be unfair to blame them for the situation tha t confronts them, pa rticularly this Min ister who has been in the portfolio for a very short time - we can very reasonably assess what they have done and analyze it and try to determine whether or not it will meet the need according to our perception of the need and our perception of the activities of the Minister.

I would like to put some specific statistics on the record because I believe they are pertinent and I believe they are important and I would like for any person who is interested in what is happening in northern Manitoba, in the north of this country, among particularly the Indian and Metis people of this country, to understand the full extent of the problem that confronts the Mini ster. Maybe I'll go through them piece by piece which is probably the best way. Taking the life expectancy, Mr.

Chairperson, is probably one accurate way to reflect, not only the number of years that an ind ividual lives, but the quali ty of life that an ind ividual has during that lifetime, because if their life expectancy is in fact out of line with the life expectancy of other groups within the society, we can assume that it is that way because of lack of health care, because of lack of other facilities, because of lack of opportunity to live a produc tive and complete life.

If we look at the life expectancy in years of the Indian people versus all Canadians, we'll find that for females the life expectancy of Indians is 43.3 years. We have to compare that with all Canadians for females, which is 69.1 years, and we have to ask ou rselves why that tremendous difference of almost 23 years? Why does a Canadian person, primarily white Canadian person, live on an average 23 years longer than an Indian person?

There is something terribly wrong in our society when we recognize the extent of the difference in life expectancy between Indian people, in this instance, Indian females, and Canadian females generally. The statistics are not much different for males,

whereas Indians have a life expectancy of 41. 5 years and all Canadians have a life expectancy of 63.6 years. So we see a 22-year difference. Those 22 years have been taken - statistically mind you, but we have to realize that the statistics do in fact represent real people - have been taken from the Indian people because of many of the problems that they find they must confront throughout their lifetime.

The quality of life is by and large determined right from the very moment that a person is born, and we find that, in fact, the statistics regarding infant mortality for 1, 000 live births do show that Indian people again are suffering far more mortalities among their infants than are the Canadian society as a whole. The Indians suffer 39.6 infant mortalities per 1, 000 live births while all Canadians, on average, suffer 15. So we're looking at more than double in that regard.

But then after surviving the birth trauma, if they have - and we have to look at why more Indian childr en die within the first year than Canadian childr en in general, and that is because of the housing that they find themselves in; that the housing is substandard in many instances; that the housing is deplorable in many other instances.

We also find that the diet of the pregnant mother is different, that the di et of the preg nant mother is not, in many instances, as healthy as it is for other Canadians, and tha t is because of la ck of access to transportation systems as well as a lower median income which would result in them having diets that are not par with other Canadians. We also have to look at the health care because that's a very difficult time for any individual entering this world, and that is when they are born. It is impor tant that the health care at that time be sufficient to meet the very severe needs of a new­ born.

We find that in the reserve community, in the Metis com mun ity, in northern communit ies in general, that we don't have the health access system setup that we do in the more urban centres. So we find that there is a problem there. Then we look at them as they follow their life through education and we find that only 19.1 percent of all Indians, on average, complete high school as compa red to 88 percent of all Canadians. So we see a very signi ficant different there and we have to question why that difference exists and why we're allowing it to exist; because these figures, Mr.

Chairperson, while impr oving somewhat, are not 4336

Tuesday, 3 June, 1980 improving siginficantly to any great extent and are not, in fact, improving to the same degree that are impr ovements being made in other areas of the society. Then when the Indian and the Metis person goes to find a job they will find that because of poor health, because of lack of educational opportunity, that they are going to be frozen out of the job market.

This is an area where the Mini ster can have some profound impact with programs under the Northlands Agreement that teach skills that have not been taught before, and we were quite concerned to see many of those programs cut back, many of those programs sold off to private enterprise. We know for a fact that in most instances when that happened the programs emplo yed fewer people or went entirely out of busi ness because there was a need for government involvement if the dedication was there.

So we find 47 percent of all In dia n people on average unem ployed as compared to the 8 or 9 percent that we find throughout the rest of society. We find that 54 percent of all Indians are living in what can be considered substandard housing as compared to 9. 7 percent in regard to all Canadian society; and both those figures are deplorable. That anyone in this day and age should have to live in substandard housing, Mr. Chairperson, is something that we should reflect upon for quite some time and develop programs to deal with.

We're concerned that those programs aren't being developed to the extent that they should be. I'd like to quote just very briefly from a report that was entitled, The Study of Accidental and Violent Deaths of Indian People in Manitoba. It's copyrighted in 1978 by the Manitoba Indian Nurses' Association. What it shows, Mr. Chairperson, is that accidents and violence are the leading cause of death among Indian people. They are not among white people. They are not among most other segments of society. But among Indian and Metis people they are.

If the present patterns continue - and this report studies patterns from 1974 to 19 78 - we will find that one out of three Indian persons and Metis persons will die due to a violent or an accidental death and that's a staggering statistic on its own. Unfortunately we have a societal tendency among ou rselves, and it's perfectly natural and understandable although it is unfortunate nonetheless, to blame the victim, to blame the Indian person, to blame the Metis person for the circumstances that cause the frustration and desperation that lead to these accidental deaths, that lead to these violent deaths.

I have read off some of the statistics. I would suggest, Mr. Chairperson, that if we lived under those same conditions, if we lived under the same circ umstances, that the frustration and desperation tha t man ifests them selves in the accidents and the violence that are reported in this very pertinent document - a document I might add, by the way, which the government has refused to table; not this Minister but the Mi nister of Health has refused to table - but if it were you or I who were in th ose circums tances, confr onted with a similar situation, we would suffer the same statistics.

If it was you or I who suffered a 20-year reduced life expectancy; if it was your or I who had 25 percent of our friends and colleagues going to high school; if it was you or I who watched our children die off in circums tances like tha t or suffered the unem ployment levels or had to live in substandard housing, we too would suffer the same sort of statistics in regard to accidental and violent deaths.

So I believe that the situation that confronts the Min ister, the situation tha t confronts this go vernment, the situation th at confronted our government, the situation that will confront the next government, whiche ver government it may well be, is a serious situation and is worthy of some very strong action. It's not that we're saying the Minis ter is not taking any action. We have just suggested on this side that he's not taking strong enough action and that they have cut back on what we consider to be some very important programs.

We deplore that and we hope that the Min ister who has from time to time during these estimates, showed that he is willing to reco nsider some of his actions; tha t he will reconsider some of the cutbacks that have taken place in regard to programs under the Northlands Agreement, programs under his Minis try and that he will reconsider the attitude that his government has shown in regard to northern Manitoba.

We can only encourage him to do that, suggest very strongly that he do that, because if he does not, these statistics will not get better, they will in fact worsen and as they worsen they will create frustration, they will create strains on the entire society. The problems will not confine themselves to northern Manitoba. We saw that last year with the demonstration on the lawn and we saw tha t last year with the demonstration in the Federal Building; because the fact is that you cannot confine that type of poverty and tha t type of frustration and tha t type of desperation to a geographical area.

It will move out and it will have an impact on every area in the province. So we are not just talking about nor thern Manitoba. We are in fact talking about Manitoba on the whole. We are in fact talking about Canada as a whole. We .are in fact talking about our world as a whole. The true test of a government, of any government, of a legislator, is how they react to this specific type of problem, because this is the type of problem that is difficult to solve; this is the type of problem that demands extraordinary dedication and extraordinary action on the part of a government.

It is the type of problem when you cost it out in dollars and cents it does not make economic sense if you look at the very narrow vision of, does this program in fact pay for itself right now. One has to devise and implement a social cost­ benefit analysis system that will determine whether or not there are hidden costs to allowing this frustration and this poverty to exist. I will suggest that there is, I will suggest that we will find that those hidden costs will, in some way, impact themselves on the economic conditions of our province as a whole.

So it is best to try to deal with that problem in the most productive manner possible, and that is to provide economic opportunity; that is to provide educational opportunity; that is to provide better ho using, better food ; that is to provide an opportunity for persons that they don't suffer the frustration and the despera tion, and that is to, in very broad terms, paint a broad stroke in regard to the type of programs that you deal with. You can't cost them out on a single program basis. It won't 4337

Tuesday, 3 June, 1980 work. We will end up paying for it in other programs. We will end up paying for it in welfare programs. We will end up paying for it in hospital programs. We will end up paying for it in maintaining jail populations. The fact is, that we can solve the problem by attacking the problem at the root, and the root, Mr. Chair person, is the cir cumstance; and the circums tances are one of poor health .conditions, poor housing conditions, poor economic conditions. So we are dissatisfied with what has been done. We would have hoped that more would have been done.

We had hoped that we'd put in place some mechanisms to deal with those problems that would be continued by this government and expanded upon rnoreso than they have done. We have felt that they have become trapped from time to time in their own ideology in wanting to sell off programs that were perfo rming a function, to the private sector.

We have found in the case of, say, Athapap Builders, in the case of Pakwagan Loggers, that when these projects which were providing employment, providing opportunity, most important, were providing hope, were sold off to the private sector, that they failed, and the government should have known that. We knew that. They cannot exist alone. They need support. But the money that is spent on those programs will pay benefits for a long time to come.

So we just hope that the Minister, between now and the next estimates, will have opp ortunity to re­ exarnine some of the actions of the previous Minis ter, some of his own actions and will come back next year with an expanded program, with a bit more dedication to solving the problems that we've just outlined and we can discuss the better use of his Department of Northern Affairs. Having said that, Mr. Chairperson, I hope that we have offered him some encouragement as well as some support in that regard. MR. CHAIRMAN: (1 )(a)- pass.

Resolved that there be granted to Her Majesty a sum not exceed ing 208,800 for Northern Affai rs- pass. Committee rise. SUPPLY - EDUCATION MR. CHAIRMAN, Abe Kovnats (Radisson): This committee will come to order. I would direct the honourable members attention to page 39 of the Main Estimates, Department of Education. Resolution No. 51, Clause 2. Research, Item (

a) Salaries -pa ss - the Honourable Member for Rossrnere. MR. VIC SCHROEDER: Yes, Mr. Chairman. In the Minis ter's opening remarks he'd indicated that one of the proposed plans of the Research Branch was to impl ement a test-scoring support service for the department and school divisions. It may be that I' ve missed any discussion of this during these estimates, but could he just expand on that for a minute? MR. CHAIRMAN: The Honourable Min ister. HON. KEITH A. COSENS ((Gimli): Mr.

Chairman, I believe the honourable member is referring to an optical scanner which this particular department will be utilizing in the corning months. This particular equipment will enable them to provide a great deal of support, not only to the assessment program of the department but also for the particular programs that school divisions are offering. MR. CHAIRMAN: Item (a)- pass; (b)- pass; Clause 2.- pass. Resolution No. 51-p ass. Resolved that th ere be gr anted to Her Majesty a sum not exce eding 299,300, Department of Educa tion. Research, 299,300- pass. Resolution No. 52, Clause 3.

Financial Support Public Schools, Item (

a) School Grants and Other Assistance -pa ss - the Honourable Min ister. MR. COSENS: Mr. Chairman, jus t as an introduction, this is the particular

section that covers the gr ants under the Foundation Program, and other grants that go out to assist school divisions in the financing of the particular programs that they offer during the year. The sum that appears there this year is some 221 ,229,300, which rep resents I believe in a rough calculation, some 8.4 percent increase over last year. There are a number of areas where we have increased these grants this year, Mr. Chairman, and perhaps I could just touch on them briefly.

Under the Foundation Program the transportation gr ant has been increased from 255.00 to 290.00 per transported pupil, an increase of some 35.00 per pupil We are well aware, Mr. Chairman, tha t transportation costs are increasing and this is, in part, the government's response to that perceived concern of school divisions. We also have increased the print and non-print materials grant. This was a grant of some 16.00 per pupil; we have increased this to 20.00 per pupil, Mr.

Chairman, realizing that costs of textbooks are increasing as is almost every thing else in our society, with the exception perhaps of Hydro rates. The per pupil grant which forms a large portion of the Founda tion Pr og ram is the area that has received the single most sign ificant increase, Mr. Chairman. It is increased from 307.00 per pupil to 365.00 per pupil, an increase of some 58.00.

These are some of the, perhaps, most sign ificant increases although the declining enrolment grant that I alluded to this afternoon in our discussions on declining enrolment has been increased from 350 per student to 500 per student, a rather significant increase, Mr. Chairman. There are a number of other areas where there have been increases as well, Mr. Chairman. These are some of the highl ights that I thought I would touch on at this time . This particular

section is composed, not only of the Foundation Program, but also the Other Grants portion, as well. So there are actually two components to the Educational Finance section. MR. CHAIRMAN: The Honourable Mem ber for Rossrnere. MR. SCHROEDER: Could the Minister advise as to the amount of Item (

a) which goes to public schools and the amount which goes to private schools? MR. CO SENS: Mr . Chairman, the mone ys budgeted for private school agreements and that is for instruction in private schools, for 19 80-81 is some 2,7 07,98 5.0 0. That amount is separate from the 4338

Tuesday, 3 June, 1980 funding that we have been discussing for the public schools. MR. SCHROEDER : Mr. Cha irman, could the Mi nister advise, although that funding is separate, could he advise as to whether that funding is a part of the 221 ,229,300 we are discussing here? MR. COSENS: No, Mr. Chairman, I repeat, it's separate and not part of that particular program. MR. SCHROEDER: Could the Min ister then advise as to where it is located in the depa rtmental estima te? MR. COSENS: It's found under this particular hea ding , Mr. Chairman, 3.(

a) Gr ants and Other Assistance. I supp ose you could give it the appellation, Other Assistance, if you wish. MR. CHAIRMAN: (a)- pass - the Honourable Member for Rossmere. MR. SCHROEDER: Well, Mr. Chairman, 3.(

a) states Sc hool Gr ants and Other Assistance, total 221 ,229 ,300.00. If we ha ve 221 ,22 9 ,300 being applied to the public school system, then where is the extra 2,700,000.00? MR. COSENS: Pardon me, Mr. Chairman. Of cou rse, it's in this sec tion. I thought tha t the honourable member was referring to the Foundation Program. Certainly, it's included in the 221 million. I'm sorry if I mislead him. MR. CHAIRMAN: (a)- pass - the Honourable Member for Rossmere. MR. SCHROEDER: Yes, Mr.

Chairman, are there any small school grants included and cou ld the Min ister advise as to, if not, when the last year was that we had small school grants and why we no longer have them in view of situations which have arisen in the past year, such as Elkhorn, in the Fort la Bosse School Division? MR. COSENS: There are no small school gr ants, as such, Mr. Chairman.

The last year these were paid was in 19 78, I believe, and what we have done there on the recommendation of the ·special Advisory Board on Educ ational Financ iilg, made up of repres en tatives from the Scho ol Trustees Asso ciations, superintendents and Teachers Associat ion, on th eir recommenda tion we have abolished that particular grant and we have added additional moneys under the per pupil grant that we feel that more than compen sates for the moneys that school divisions have received under the previous small schools grant.

There were several inequi ties that existed in that particular grant, there were some divisions who had considerable number of small schools but did not quali fy under the particular formula that applied. MR. CHAIRMAN: The Honou rable Mem ber for Rossmere. MR.

SCHROEDER: I ask the Min ister whether in the Fort La Bosse School Division had the small schools grant applied they would not have had the problems that they had this past year, and I refer to the month long situation where the children were not in school, the local school division was sque ezed for funds and is one of the reasons why those things are happening, the fact that these types of grants are no longer in existence. MR. COSENS: Mr.

Chairman, I can assure the honourable member that under the present system with the enrichment of the per pupil grant that the Fort La Bosse School Division, without even checking the figures, and I am not sure of the discrepancy between what exists now and what would have existed with the small schools gr ant, without checking that I can assure t