LEGI SLATIVE ASSEMBLY OF MAN ITOBA Tuesday, 22 June, 1982 Time - 8:00 p.m. MR. SPEAKER, Ho n. J. Walding: Order please. The di scussion on the Rules before the House at 5:30. The Hono urable Memb er for Vir den on a point of order. MR. H. GRAHAM: Mr. Speaker . on the same point of order that was raised at 5:30 or was in dis cussion at 5:30, if I may speak to it before you make your ruling.

I have, over the supper hour, done some research and I have failed to find any reference in past history of this Ho use where the Premier of the provinc e has ever delegated the authority to anyone to speak for unlim­ ited time on a grievanc e. I admit that I may have missed some poi nts in the records of the Ho use, but so far, I have found nothing in that field. SPEAKER'S RULING MR. SPEAKER: I thank the honourable members for their advic e. I would like to give a ruling on the matter.

The di scus sion on the Rules at 5:30 appears to hinge on whether the di scus sion of a Matter of Gr ie­ vanc e is a debate and if so, whether the Mini ster of Energy and Min es was entitled to speak for an unlim­ ited time. Beauchesne's Fourth Edition in referring to Gr ie­ vanc es says in Citation 234, in part, "The debate in such a case is limited by the rules respec ting any order passed by the House for the purpose of regulat­ ing its discus sions." Our own Rule 36( 1) says that, "The following motions are debatable, that is to say, every motion (

a) standin g on Orders of the Day. " These would appear to indic ate that the grievance procedure is in fact a debate. Si nce, as a princ iple, debate only occurs in the Ho use when a motion is put before the members, the Ho use will surely recall that the motion put to them by the Speaker is, that, Mr. Speaker. do now leave the Chair, etc .. etc. Gi ven that the di scu ssion was in fact a debate, our Rule 33(2) would appear to enable the Honour able Min ister of Ene rgy and Mi nes to speak for his Leader and consequently enjoy unlimited time.

If the foregoing is not a strong enough argument, parity and fair play would indic ate that a Member of the Treas ury Benc h reply to the Leader of the Op posi­ tion's remarks. I therefore concl ude that the Mi nister of Energy and Mi nes is entitled to speak on a grievanc e without time limit. The Honour able Min ister of Energy and Mine s. HON. W. PARASIUK: Mr. Speaker. I rise to respond to the Leader of the Conservative Party with some con­ sid erable regret and di sappointment.

I'm a politician, as we all are in this Assembly, and we should and are used to sli ngs and arrows directed to us personally, but we have just witnessed the Leader of the Oppo si­ tion, a former Prem ier, who got up and played the ch eapest and shoddiest of politics. He did so. I beli eve, at the expens e of ongoing negotiations and dis cussions. I get concerned about that when we have the former Premier of the government com ing in here and tabling a document dealing specifically with negotiations and then using that docu ment to do a running sme ar attack on civil serva nts. Mr . Speaker, ... MR.

SPEAKER: Order please. The Leader of the Op position on a point of order. HON. S. LYON: The Deputy Min ister of Energy and Mi nes, Mark El iesen, he is not a professional civ il servant. He's a party hack hired by these people. He's not a professional civil servant at all. He's a party hack. He's one of your Reds. MR. SPEAKER: Order please. The Honour able Min is­ ter of Energy and Mi nes. HON. W.

PAR ASIUK: This is what concerns me when we have this man co me in here, usually in the evening session I might add, and then starts again the charac­ ter assassination of an indi vidual saying, this man's a hired socialist; that this man is a Re d; patronage peo­ ple, he says. Mr. Speaker, I ask, is the age of McCar th­ yism dead when we have an indi vidual like that in the Legislature? 3487 You know, he reminds me of some politicians that you see and I had hoped that these were caricatures actually.

The fellow who gets up and starts attacking another person and ca lls him every name under the sun and then, when that person runs out of breath and runs out of thought, adds the cl inc her; he's a Commi e or he's a pi nko. That was the age of McCarth yism; that was the smear tactic. What did it do to the ca lib re of the bureauc racy of the United States? What did it do to the foreign servic e? What did it do to the army? What did it do to the Civil Servic e internally? We had that whole thing happen in the 50s.

We had that whole thing happen in North America in the 50s and this person, who should know better, comes in and con­ stantly and consistently tries the smear attack. Now, Mr. Speaker, surely the people of Manitoba on Novem ber 17 th rejected most defi nitively that approach to politic s. Mr. Speaker, I say that it is impor­ tant that we get out of the gutter, that we debate the issues, that we di scuss them, but we don't get into it with smears on deputies or smears on teams of staff and leaking docu ments, bri nging in docu ments. Bringing in the docum ents, Mr.

Speaker, and then saying and attributing everything totally to those indi­ vidua ls as if somehow there is this malicious co nspi­ racy under way within the administration of the day today to somehow rip apart these projects that existed. Now, what I find so astonishing about this, in rela­ tion to some of the items that were raised by the Leader of the Op position, is that I was concerned, and I still am very concerned, about the Western lntertie. I indeed talked to the Leader of the Oppo sition off the record about three-and-a-half months ago, indic ating -( Interjec tion)- fine .

I raised it, I told you specifi­ ca lly what the item was of major concern. I did that because I felt it's important that we develop a non par-

tisan approach to try and get these projects pulled together in good shape. I indi cated to him what I felt the major weak ness of the Inter-Tie agreement was. I ind ica ted that I felt an agreement that comm its Mani­ toba to build a Hydro dam at a fixe d cost whereby Manitoba would be responsible 10 0 percent for any overruns and if you look at the history of Hydro devel­ opment, we've had overruns. You know, here we are.

That was a com mitment on the part of that govern­ ment and I said, that was something that the people cf Mani toba couldn 't accept because if there were over­ runs the taxpayers of Manitoba or the consume rs of Manitoba Hydro would have to pay that overrun and pay it as it's amortized over a full 35-year period. Imagine if we had an overrun of $200 million. $300 million or $400 million at 18 percent, who would be responsible for that? So, I raise that. I told that in confidence to him because I cared. I thought it was very important that we not underm ine that.

I have never ever raised and tabled docume nts relating to any of the mega project negotiations. I did not want to jeopardize them in any way. shape. or form. I did not want to and I think the experience holds here. I didn 't table the docu ment today. It was the Leader of the Opposition who did that; who used that to ridicule staff in particu lar. I have said that it is impo rtant that we try and pursue those mega projects, even though the times are extremely dif ficult; that we would negotiate in good faith.

That is what we had said we would do and we indeed are pursuing that, but at the same time we would nego­ tiate to try and insure a fair deal, not only for today but for future generations. We said that is a very good princi ple in terms of negotiation and, with respect to the Power Grid, we said that we should inde ed look at it in terms of one province not having to subsidi ze the other two provi n­ ces. I think that's a fair position to take.

Sec ondly, we said that there should be a fair and equitable sharing of risk and sharing of benefit, and that's the approach that we took when we reviewed the projects and we had some conc erns. The Leader of the Opp osition is the one who forced the issue. tabled the docu ments, tabled them in a particu lar way that I'll get back to later, which in a sense almost puts them in the position of arguing and deba ting agai nst Man itoba's interests. That's what I found so surprising.

He took a document to the Sas­ katchewan Power Corpor ation; he took that and he used that as his focus of argument against what the Manitoba Government had been doing. Now, I find it amazing that we would have the Leader of the Op position agai n try to negotiate, not to protect the interests of Manitoba, but rather somehow to promote the interests of those people whom we are negotiating agai nst.

The Leader of the Opp osition has just said that somehow the negotiating position adopted by the Man itoba Government was in fact de­ veloped by party hacks, and I want that on the record because that is the position that he has been taking consis tently with respect to every one of the negotia­ tions. I will come back to that, Mr. Speaker. I'll come back to that because it is so wrong and that's why I find that the char acter assassination of the Leader of the Op position is so unjustified. But fi rst, before I get to the mega projects, I want to talk a bit about the 22 June, 1982 expectations.

I want to talk about the so-called bequest that govern ment gave to us. You know, to you the torch we pass. It's interesting. When I assumed office, Mr. Speaker, I walked into my office; there literally wasn't a file in sight. The Min ister had taken all of his files. Now, we had a special assistant who was involved in so many of these activities. He really didn' t take many of his files; apparently, he shredded them. That's the bequest; that's the turnover. So it did take us some time, Mr.

Speaker, looking through dif ferent sources. dif ferent parties, to put together the information relating to various of these negotiations. We didn't want to publicize that too much because we cer tainly didn' t want to con tact Alcan or any of these companie s and say, "P sst. Would you please send us your package of files because we don't have them." But slowly we put together what I call a reconstituted set of file s and we were able then, in the process, to develop negotiation strategies which we are con tinuing.

Now, one of the things that happened is that when we were looking for these fi les we saw that there were some fi les on a dis c in a word processor. We have a govern ment word processor in my office. So we pulled those fi les off the di scs and we found that some of them were a bit more recent and we could then add to the files, because what's important in negotiations is getting some chr onology of what's taken place; what was the starting position; what was given, what wasn't given; what's the give-and-take over a period of time.

The other thing that I found astounding about these so-called brilliant businessmen over there is that they never took notes; they never kept records; it was all ad hoe. It was all almost word of mouth, backs of enve­ lopes. There were consulting studies done from time to time, but there weren't systematic cons istent notes of what had taken place. But what was really interest­ ing, in terms of the material that we pulled out, was a particular docu ment and it relates very much to expect ations and the approach of the government in its last days.

It's interesting to note that this is called "R iel and City Telephone Interview Resu lts" - it's a poll. It's a poll run con ceivabl y, privately or publicl y, I don't know, but certainly it was on the government word processor, Mr. Speaker. That's where that poll was by the Conservative Party. It's an interesting thing, it says the attached is the result of a telephone interview survey comm issioned by Don Craik and carried out August 17 th to 22nd , 19 81 ; 200 calls in Ri el Consti­ tuency and 300 in the remainder of the City of Win­ nipeg.

Now. the interesting thing about the poll is it was carried out between August 17 th and August 22nd. Note the date- before September. Come back to that, also on a government machine. I won't go through all of the material here. 3488 It's interesting, sure. It's here. You know, one of the things that's in it, one of the points is Premier Lyon is strongly dislik ed by some respondents; we knew that. We didn't have to co mmission a poll for that. It showed that, Mr. Sp eaker. This is the interesting thing, and I don't want to take too much time going into it because it rehashes so many di fferent things.

It's an attitudinal survey, a poll. If people want to see it, they might take

Tuesday, 22 June, 1982 a look at it. The y might find it interesting, but there are some interesting pieces when you get to Page 10 . It said, in Ri el, the figur es were PC, 39 percent; NOP, 28 perce nt; Lib s, 9 percent; Progressives, 2 percent. Re moving the 'do n't knows' and the ·refusals' - which is a tricky thing in polling as a number of people have found out subsequently - the PCs would get 50 per­ cent of the vote; the NOP would get 36 percent of the vote. It said that in a citywide sample, the preferences were as follows: NOP, 33 percent; PC, 30 percent.

Removi ng the don't knows and refusals gives us a fig ure of NO P, 45 percent; PC. 40 percent. Wha t it goes on to say is, "Th is represents a loss of PC support to the NOP in Winnip eg possi bly sufficient to put at risk such seats as Ra disson, St.

James and Wolseley without much chance of compensa ting gai ns; however, it is impossible to project with any cer tainty the outcome in indi vidual constituencies from a citywide sample." The conclusions were, "Don Craik is the cle ar favorite in Ri el and would win re­ elec tion; however, the party has lost some ground in Winnip eg and some seats we cu rrently hold might be lost." It's a warning at the end of August. "The PCs benefit from the op timism gener ated by the mega projects," says the report.

"sup port for their stand on the constitution, their image of efficient, decisiv e gov­ ernment and fears about the NOP and its weak leader­ ship. We lose ground on acco unt of the perfo rmance of the econo my. Further. the Premier is not especially popular, though the PC team may be an asset in com ­ parison with the people in the NO P. My sense of it all is that an election in the near future would be a pretty pretty cl ose-run thing.

The party would, however, benefit from further developme nts with respect to the mega projects, a favourable Supreme Court ruling, or any amelior ation in the economy such as a de cline in the interest rates." So what happened after this conclusion was reached in a poll that the party would benefit from further devel opments with respect to the mega projects? Did they indeed sign the agree ments? Did they sign the agree ments, bring them forward to the general public and say, here. we are running on the record of our signed agreements?

That's what we seek election for; we have said that this isvirtually our total and com­ plete thrust with respect to the future. They're signe d; they're sealed; they're here. Judge us on them now. That's not what they did. No. Boom, Mr . Speaker. We had the mega projects advertising paper through­ out the month of September. Wha t did we do at that time, Mr . Speaker? The whole approach was to raise expectat ions with respect to projects that were not signed. sealed, and del ivered and spend public money to do so, Mr. Speaker.

They had the shame, the audac­ ity - they wouldn't even use their own party money to do that. If you can recal l at that time, we had this strange situation of government ads running and then we had the Premier. at the time, com ing on television saying virtually the same thing. Remem ber? They were pul­ ling these things together. and the interesting thing is that the advertisement, interrupting MASH - sitting on a gold mine - that whole approach of raising the expecta tions.

You know, the sad thing is that, as the Mini ster of Energy and Mi nes, I had to pick up the Special Warrants to pay for all that advertising that was done by those people. The thing that I find so interesting, for this total of $1 44,000 in advertising, is that somehow the Depart­ ment of Ener gy and Min es signed a con tract with a com pany called Scott and With row Incorpor ated. Remember the group from Toronto that used to fly in and out to advise the Premier, write his speeches? But somehow this group - because they don't have any hacks, Mr.

Speaker; they don't do anything like that - this group went out and comm issioned a series of ads that cost the taxpayers of Manitoba $144,000 and, Mr. Speaker, contri buted very dir ectly - that's the min­ imum cost - I suggest, to their defeat because the people saw that as a very cyn ical approac h. But the interesting thing is that it had some negative effects, had some terrible , negative effects.

If this advertising ca mpaign was taking place, gee, something might be happening and some people went out, and I had the situation in Bal moral when I went there where I talked to the people and somebody said, I've started a subdi vision in Balmoral. Another person said, I thought I'd get my store working better. I said, well, what's happened. They said, well, you know, over the cou rse of the last four years, our econ­ omy came virtually to a standstill. I said, well, did you have anything happening before that period of time? They said, yes, there was steady growth in that area.

It's interesting; this was at a public meeting. I cou ld appreciate their con cerns. Imagine having your expe ctations raised like that with a whole set of gov­ ernment advertising, publi cly paid for, paid for by the taxpayers, raising a number of expectat ions very prematurely and getting people, some people, think­ ing that desp ite the fact that things were very bad over a four-year period, that somehow mega projects that weren't signed, sealed and del ivered would somehow be everyone's salvation. That was the approach of that government in its dyi ng days.

You know, there's this whole debate that's taken place through this Session that somehow the NOP snuc k the elec tion, stole the elec tion. People rant and rave; they want to fight the elec tion over and over and over again. Let me tell you when you could tell a good sign that they were losing the elec tion. It was when, in 19 79 in the Federal campaign, the NOP went from 2 seats to 5 seats. Then in the 19 80 Federal ca mpaign, the NOP went from 5 seats to 7 seats. We had -(I nterjec tion)- good for us, that's right. But let me tell you. they weren't saying 'good for you' then.

They were scared; they were terrified, running terribly scared . We sensed this when we went out to the gener al public and we went throughout Manitoba and talked to the people and consu lted with them di rectly. We sensed that there was most defin itely a di ssatisfaction with a government that had developed a state-of-seige mentality, a bunker mentality; that wouldn't go out and talk to the people. They really had decided that they already were losers. 3489 The interesting thing is that they did n't go out and talk to the peo ple. I get told that I screwed up my cour age and went out to Bal moral.

Let me tell you, I went out to Bal moral - I didn't send out ads - I went out di rectly to Bal moral to speak to the peo ple, just as the Premier of Manitoba went out to Leaf Rapids and Lynn Lake, just as I went out to The Pas. I wasn't putting out ads; I wasn't raising those false expectat ions. We went

22 June, 1982 out to the people and we talked about the ec onomic and social reality of what we have before us and we told the truth. We did not hype up advertising: we did not hype up the impression that somehow something, some nirvana, was going to happen tomorrow. So when we say, if you were so certain, why didn' t you take the time? Why spend government money on advertising? Wh y hype it all up ahead of time? - (Interjec tion)- taxpayers' money, that's right. Why do that if you were so certain? Surely, that defies logic.

Granted, there were efforts of a very sinc ere nature undertaken by the previous administration. These things weren't just manufactured and I will say that there were sinc ere attempts, but we are living in very very, dif ficult. unpredictable times and there wasn't the cer tainty about that. But they were very nervous at election time and that poll is rather interest­ ing because of the polls from my predecessor, the person who was handling the mega projects, the per­ son who commis sioned all the advertising.

Now, we have those expect ations out there and the Conserva­ tives are desperately trying fulfil! that notion they were crea ting through the government advertising, through taxpayers' paid advertising, when in fact the eco­ nomic reality around us is dic tating that other events will oc cur . Tell me where in North America, at least in Canada and I think in North America, do we have any mega projects taking place. There is an eco nomic reality out there that we, as peopie in this Assembly, have to recog nize and understand. That doesn't mean that we turn our back on them.

That means that we still pursue them; we try to acc omplish them. But it certainly doesn't mean that go out into The Pas, say, and raise a whole set of ex pectations out there. We sat down with the Mayor: we sat down with the workers: we sat down with the Community Council there. We sat down with those people and we talked about eco nomic reality and the fact that we would, over the cour se of the next year. try and develop this investment to try and stabil­ ize that plant over the long run. We were very open with the people there.

We indeed have said that we would negotiate any of these things in good faith within the context of the reality that we live in, the ec onomic reality. I almost sense this sense of glee on the side of the people opposite when eco nomic reality dic tates that certa in things may be postponed without any defin ite date as to when they might resume. I find virtual gloat­ ing on tile other side.

Yet, we have had the Alsands Project not happen; we've had the Ala ska Hi ghway Project not happen: we've had the Cold Lake heavy oil devel opment not happen: we've had even the devel­ opme nt on the West Coast not happen and cer tain ones on the East Coast. We are in a very severe time of economic rece ssion.

We aren't trying to mislead the public in any way, shape or form, but the thing that I fi nd interesting is that somehow the Op position wants to relight that elec tion over and over and over agai n, rather than pointing out and trying to relate to the reality of the fact that a lot of these projects are, indeed. in a dif ficult state. Now I want to talk about what the Leader of the Op position tabled today. This was a letter from Bob Monk er to Marc Elie sen. with a copy to Bob Steel, who is the Alberta staff lead-person with respect to the negotiation team.

Having tabled that letter, he then read it out and proceeded to launch, as I said, a char ­ acter assassination. On the staff, he talked about the team and espec ially the Deputy. Why? Why would he do that? Ob viously to score the cheap politic al points and, again, the cheap politic al hack, the soc ialist friend, implying that everything that was put in that letter was somehow grew out of his head, only out of his head -(I nterjection)- that's right, say it agai n. But let me tell you.

I want to table some docu ments in this respect because I think it's important to try and provide the balance, because what we've had here is the Leader of the Op position table a letter - I'll be coming along to the cour ts as I go - and take the position of the writer with his editorial comme nts at the same time. Now what we did, we've had ec onomists do a reviews: lawyers do reviews. but I just want to focus in on one major one and the letters that relate to it. It's a letter from Mr. Blachford, President and Ch ief Execu­ tive Officer of Manitoba Hydro to Mr.

Mark El iesen, Deputy Min ister of Energy and Mi nes. Februar y 8th, 19 82: "Fol lowing tile January 26th Regional Me eting, I agreed to have prepared further data to assist in Manitoba's approach. Enclo sed are the following data:

(1) Limestone Es timates, a letter from D.S. Duncan to L.D. Blach ford and attachments. We will be discussing early next week the advisabili ty of perform­ ing a risk analysis of the Estimates and (2)" - this is the

part I'll table here - "Outst anding Conc erns: a sum­ mary of issues in priority as seen by management. includ ing an estimated benefit of revisions to Mani­ toba, plus two pages of explana tion of these. Staff are now prepari ng drafts of how Manitoba Hydro sug­ gests the paragraphs of the draft Interim Agreement might be worded and we'll talk to you further next week on this. "Su mmary, Outstanding Concerns.

Issue in order of prior ity: Li mestone costs; resolution, change wording of Clause 1.1. 5 to tighten sharing of risks between all parties: estimated benefit of revisions to Manitoba 19 80 - millions of dollars, reduces risks of additional costs over $928 million plus 10 percent in March 1s t, 19 81 ." Wha t had happened there is that this is a valid con cern on the part of Hydro. It's what was sent on to Saskatchewan and Alberta. Thi s is the con­ cern that we just heard the Leader of the Op position mock and rid icule, a particular soc ialist tact. Isn't that interesting?

You know, the point about that is, why would they bring it forward? Was it a fair and reason­ able note that if there were any overruns - and, you know, who can pred ic t what'll take place with respect to construction costs between now and 19 88 or 19 89 that Mani toba would be left holding the bag, 10 0 per­ cent. That's what you agreed to. Limestone output was the second item of con cern in the order of priority - by some socialis t act or by the management of Hydro?

"Re solution, change claus e to reflect net change in power production attrib utable to Li mestone or incr ease payment to greater than Lime stone cost, estimated benefit revisions to Manitoba $65 million or greater." 3490 Now, Mr. Speaker, I have these valid concerns being raised and people are saying, these are things that you should close your eyes to and I'll get into this a bit later as to what the meaning of this is.

Tuesday, 22 June, 1982 The third item is sharing of benefits limited to 1. 5 times Manitoba's costs and Hydro says that the reso­ lution here should be that there should be a 50-50 split and this should automatically occur after recovery period, rather than require or request to party to change price. The estimate there, because we're talk­ ing about the future which is hard to predict, the esti­ mate by Hydro, and they have a range, is $30 million to $500 million. It's a real number, obviou sly, it should be looked at. The fourth area was reliabil ity benefits, put forward again by Ma nitoba Hydro.

Some reference to these should be includ ed in this agreement and a method of applic ation is suggested, estimated benefit of revi­ sions to Manitoba, up to $220 million. Now, those are points put forward by tec hnic al people, put forward realistically through the negotia­ tion team -(Int erjec tion)- yes, I'm going to table it. I'm prepared to table that -(I nterjecti on)- yes, it is fair. I think that's fair in that sense and I think it's interesting to see what-y ou know, if you knew all that -(I nterjection)- that's right.

I'll file this because (Interjection)- he said he knew that when he made that silly speec h. He in fact says now, yes, that he knew all these things when he in fact made his speech cond emning Manitoba. Now, I am going to read into the record two letters that really, Mr. Speak er, are based on that docu menta­ tion that indeed was provided to us by the manage­ ment of Manitoba Hydro, who I think had integr ity when they put that forward. The letter is dated March 4th to Mr . Ro bert Moncur , President of Saskatchewan Power Corporation, 2025 Vic toria Avenue, Re gina, Saskatc hewan. "Dear Mr.

Moncur ," and I'll read the letter because I think this is important to deal with the particular item that was tabled today by the Leader of the Op position. There were, I think, a lot of ch aracter assassinations. In a sense, the position of Saskatche­ wan was taken -(I nterjec tion)- fair, and that's understandable and I guess di sappoi nting, but not unexp ected from the Leader of the Op position.

Now, the statement says, "At the last meeting of the Western Provinc es Ele ctric Inter-Tie, some issues were raised that require further di scus sion, prior to the schedu led meeting of Min isters on March 15 th, 19 82, in Calgary. It is hoped that this letter will cla rify the Government of Manitoba's position on these issues. "Fi rst, it is important to emphasize that Manitoba wishe s to proceed to a finalized Interim Agreement on the Inter-Tie as quickl y as possible.

We bel ieve an Interim Agreement would resolve certain parameters on the project as well as establish a mechanism for dealing with other equally important factors in a future time schedu le. However, it is important that this Interim Agreement provide for a fair and equitable sharing of the bene fits and costs of all three provi n­ ces. To achie ve this objective, we belie ve that a small number of modifica tions to the draft Interim Agree­ ment are necessa ry.

Moreover, we bel ieve that these cha nges all fall within the intent and the spirit of Cl:.iuse 2 of the draft agreement, which intends a favourable impact on power rates in all of the provinc es. "The modifications we propose are the following:­ Li mestone cost. The single largest item in the Inter­ Tie project is the capital cost of the Li mestone Gener - 3491 ating Station. We believe the costs includ ed here must be the actual and reasonable costs of construc tion.

The base cost of Limestone at $928 million plus 10 percent," - that's 19 80, which really has a price well over $2 billion by the time you have the actual expen­ diture ac cumula ted by 19 88, "may be subject" - (Interjection)- that's right. There was another thing about the mistakes and this is a mistake that was just an amazing mistake. The base price was put in as of 19 81 and that was a mistake by the previous Chairman of Hydro, who, frankly I think, should have been the tec hnic al person involved in those negotiations and that's why Mr. Blachford has been involved.

But there is the figure put in of 928, 19 81 costs. We've sought to have that reflected as 928, 19 80 costs, which we felt was the real cost and this is what was confi rmed to us. "These may be subject to cost incr eases, other than those caused by inflation and interest allowanc es. "In particul ar, we feel that factors such as the avail­ abil ity of trade workers in the Western provinces, unusual river condi tions, or unforeseen foundation problems may result in incr eases in site construction costs. The base costs of $928 million is primarily de­ veloped from the 19 80 co sting information.

Already, due to factors such as construction camp acc ommo­ dation, regulation, and revised construction details, the 19 80 base cost has increased to $947 million. "Manit oba proposes, therefore, that capital costs remitted to the Li mestone Gen erating Station be put on the same basis as transmission line costs, that is, actual, fair and reasonable, and further proposes that a Multi provinc e Mo nitoring Committee be establis hed in order to assure that all costs reflect this princi ple." Is that unreasonable, unfair?

"It is thus reco mmended that Clause 1.1. 5 be revised as follows: the cap ital costs for the Li mestone Gene rating Station shall be the actual costs. A com­ mittee with equal representation from each provinc e shall be established to monitor the Li mestone Ge ner­ ating Project." Moving out to Li mestone Output: "As you are aware, Li mestone Station can not itself generate an average of 7,2 80 gigawatt hours over the life of the proposed agreement.

At the initiation of this project, some increase in the tail water level of the upstream station at Long Spruce is contem plated, thus red uc­ ing the output of that station and, in effect, transfer­ ring the output to the Li mestone Gener ating Station at the expens e of Long Spruce." So there's a benefit to Li mestone at the expens e of Long Sp ruce, which is part of the remaining Manitoba system. "A simi lar effect occur s when the next station downstream is cons tructed, reducing the output at Li mestone. Mani­ toba proposes that this be taken into acc ount in the cost-of -service analysis.

It is necessar y that the agreement includ e provision for either reducing the amount of energy in the sale transaction or properly reflec ting its cost to Manitoba. "Thus, the following cha nges are recomm ended: revise fourth "Wher eas" cla use as follows: Alberta, Saskatchewan and Manitoba agree that the approp­ riate proced ure for commencing to obtain such bene­ fits would be through the sale from the Provinc e of Manitoba to the Provinc es of Saskatchewan and Alberta equivalent to the net increase in the actual power production of the Nelson Ri ver attributable to

the Li mestone Generating Station." Again. we're saying that one provinc e shouldn't be subsidizing another province and there's a loss to the Mani toba generating system from this. Is it a fair and reasonable request to make that type of request for modificat ion? Now. "Sale of power is the amount of power equi­ valent to the net incr eases in the actual power produc ­ tion in the Nelson Riv er in any year attributable to the Lime stone Ge nerating Station. Two-thirds of the Sale Power will be sold to Alberta and one-third to Saskat­ che wan.

Co nversion and transmission losses will be prorated to each prod uc er at points of deliv ery. The sale of the "Sale of Power" at 40 percent of capa bil ity on comp letion will comme nce December 1s t. 19 88, rising to 60 percent by Aug ust 19 89. and 10 0 percent by September 19 90. and will terminate March 31 st. 2023." And 2023. I mean. that's a sign ificant number. So the interesting thing is when you put this thing forward, what you have are statements from the Leader of the Opp osition. When you put the facts on here. who are you trying to kid? "Be nefit sharing " -(Int erjec tion)- which is Doug Duncan?

Which Doug Duncan are you referring to? That is the interesting thing_ You see the char acter assassination that takes place under the Conservative Gove rnment? Some time in August of 19 81, I belie ve, a new Gen eral Manager of construction was hired whose name is D.S. Dunc an and when I raised that, what did he say? Who in the hell are you trying to kid, Doug Dunc an. your hack, your _ If we have ever had a conc rete exam ple HON. S. LYON: Mr. Speaker, on the point of order, I am quite happy to ack nowledge that the D.S. Duncan he refers to is the intelligent D.S. Duncan. Thank you. MR.

SPEAKER: I doubt that was a point of order. The Hono urable Min ister of Energy and Min es. HON. W. PARASI UK: What we have just witnessed is the instant char acter assassination. the slander. that is the con crete example of the Mc Carthyism that is so much the char acter of the Leader of the Conservative Party. It's so sad that when you are bri nging this for­ ward. the first thing this person can do is viciou sly attack the ch aracter of a person because the person's last name happens to be Duncan. So don't talk about the agreement. but cast doub t upon it by attacking the indi vidual.

We had a classic case of that, again, a classic case of foot-in-mouth di sease that is so ch ar­ acteristic of that person over there. They also talk about benefit-sharing in that letter. "Sect ion 4.0 to 4.3, which deal with pric e chan ges during the cou rse of the agreement are unneces sarily restrictive. The major objective of these provisions is to ensure that there is a sufficiently long period of time for the buyers to recover any extra costs whic h they might incur in the early years of the agreement.

This is particula rly important given the "front-ended" nature of hydro-electric cost of service. as opposed to the buyers' thermal alternatives.

The 25-year period, prior to which new pric ing arrangements cannot be imple­ mented. presumably reflects cur rent estimates of approxima tely when full buyer recovery is exp ected to take place. 22 June, 1982 "However, while the princip le of no change in the pricing arrangements prior to full recovery is com­ plete acceptab le" - they should recover all of their costs - "there is no need to presume in the agreement exactly when this recovery will take place. because you can' t tell.

Hydro versus thermal plant cons truc ­ tion costs. coal costs, and labour costs can never be predi cted with precision yet, they a major bearing on when recovery will take place. Recovery can be earlier or later than what is cu rrently antici pated. Thus, rather than specify precise dates when new pricing arrangements can be consi dered and implemented, it would be more prudent to establish the basis upon which prices can change and then leave future events to determine when that might take place.

"Man itoba do es recog nize that costs above replacement power costs will be borne by the pur­ chasing province in the early years of an agreement and that a substantial period of time may elapse before these are recovered. However, onc e this rec­ overy is acc omplished, the princip le of sharing the benefits requires that purch asers and seller benefit equally without limit." Again reflect ing our general principle that there should be a fair sharing of risk and benefit. "In

summary, the Provinc e of Manitoba would fail to share equitably in benefits in the latter years of the agreement, in that the draft Interim Agreement has Manitoba Hydro sharing in the benefits on a 50-50 basis but commencing no earlier than the 25th year and limiting the total payment to us to 15 0 percent of the pric e determined on a cost of service basis.

Bene­ fits should be shared on a 50-50 basis be ginning whenever they occu r but without limiting the share of any party." Then there are particular pieces that people can read in there with respect to specific mechan ic al implementation of, again, a request that I think is reasonable , that is, fair and equitable shari ng of bene­ fits once the other parties have recovered their full cost Now the last point that we had raised at that time was reliabil ity benefits.

If you can rec all, that's the fourth point that was raised by the management of Manitoba Hydro to the negotiating team. 3492 "From the beg inning of this project, one of the lar­ gely unquantified benefits of the lntertie is its abil ity to ultimately act as a true electrical "grid." Thi s has advantages for utilities in all three provinces. For example. studies have ind icated that the capacity reserve in the prairie region could be reduced as a result of the proposed lntertie and system reliabili ty in creased.

Manitoba proposes that the Interim Agreement contain a clause whic h recogn izes these benefits and obli gates the parties to pursue and share these reliabil ity benefits. "T hus, we would propose that the Interim Agree­ ment contain a cla use which recogn izes these bene­ fits and obli gates the parties to pursue and share these reliabi lity benefits. The parties will recog nize the benefits of improved system reliabil ity in the prairie region resulting from the lntertie and through reduction and reserve capacity in the region. The sharing of these bene fits will be defi ned in the final agreement. "In

summary, if the above limited modifications can be ac comm odated, then it is hoped that the Min isters

Tuesday, 22 June, 1982 will be able to finali ze the draft Interim Agreement at their meeting in Calg ary on March 15 th for submis­ sion to their respective Cabi net col leag ues for approval. "I look forward to seeing you then." Now, what we then got was the Leader of the Op po­ sition referring to the response letter from Mr.

Mon­ cur, the President of Saskatchewan Power Corp ora­ tion, where they put forward Saskatchewan's position saying, wel l, although it may be that these positions are fair and reasonable, etc., they really in a sense had been enc apsulated prior to Oc tober, 19 81 , by the pre­ vious negotiating team. All we said is that these are fair and reasonable things: that Manitoba should not have to subsidi ze the other provinc es: and that there should be a fair and equitable sharing of risk and benefit. But the most important position that we had taken was that Manitoba should not be subsidizing the other provi nces.

The reason why we did that is that we belie ve very strongly in the lntertie, but it's important that the lntertie be developed on a solid foundation, so that you just don't go through your building stage and then move on to your long-term phase and find your­ self with a whole set of misunderstandi ngs or claus es that you wished you had corrected. Then you get the type of squabbl ing that has exis ted between Que bec and Newfoundland with respect to the Churchill Falls Syndr ome, as we cal l it, where one party claims that the other party is getting some $600 million.

Tha t has soured the relations between those two provinc es and I think ma kes it very di fficult for any type of Gr id or I ntertie devel opments to take place there in the future.

We belie ve that, since we have the potential for many more hydro-elec tric projects up north; since there is a possibil ity, and I would say a probabability, that there would be further lntertie develop ments, either to the east of us in the future or to the south of us, it is important that we establish a good foundation to start off from that is fair and equitable to all parties: and that we can build from that exis ting and proven, fair and equitable lntertie ex ample into others.

We have talked about the long-term possibil ity of conne c ting in, probably through displa cement, through to California wtTere I think the price dif feren­ tial is high. We have the people laughi ng, but I have the California people extremely interested. They were extremely interested and they found that the Premi­ er's statements in this respect were a cause for them to show very concentr ated interest. We hope to be pur­ suing that.

We admit that we won't have that pulling together instantly, but I see finally- and I can see that I see a smile on the face of the Memb er for Sturgeon Creek - but we will try that over the long run. We've only been in for seven months. Not only are we pur suing these possibili ties, we were looking at the California possibil ities or a tie-in with the western area provinc es, a power agreement, or a tie-in with Wis co nsin, and we are working on a study there. Tomorrow I will be meeting with the Lie utenant-Governor of Wisc onsin, Mr. Olson. We'll be meeting, discussing this tomorrow.

I'll be going up through Northern Manitoba taking a tour of the Hydr o fac ilities with him on Thursday. I bel ieve that this is an important possibil ity. These are things that we are pursui ng. I find that he's giggling when the Lieutenant-Governor from Wisco nsin is coming here. Now, we are prepared to look at all these particular options. -(Int erje ction) - No, Olson isn't the Gover­ nor. -(I nterjection)- No. not of Wisc onsin. There's an Olson who is the Governor of North Dakota, but the fellow from Wis co nsin is the Li eutenant-Governor cind his name is Olson as well.

So, then we have said that we were indeed prepared to pursue these. Wha t we then said is that the letter came forward from Mr. Moncur and Mr . Eliesen, copie s to the Alberta people. There was a crossover of letters at that time. One was dated April 6th, but it was handed to our people. Ours was sent out on April 2nd, 19 82, and again I'll read through it quic kly, but I think it's important to make sure that we have the balanc ed truth in this respect and the facts on the table. So, this letter is dated April 2nd, "Dear Mr.

Moncur:- Further to our telephone discussion, the following material has been prepared regard ing the next meet­ ing of the Steering Committee of the Western Provin­ ces Electric lntertie in Calgary on Wednesday, April 7th, 19 82 at 10 :00 a.m. at the Chateau Airport Hotel. "The last meeting in Regina showed representatives of the three provinc es willing to seek compromise positions on the several outstanding issues." So there was some feel ing that we should attempt to ach ieve compr omise and we were doing so in good faith.

"Cer­ tainly Manitoba representatives came away with a feeling that a common ground was entirely possible. We co ntinue to look forward to an early comple tion of the Interim Agreement to the satisfaction of all sides. "The following are the remaining issues to be resolved on the Interim Agreement: Lime stone costs: 3493 It would appear that the manner in which Lime stone capital costs are specifie d is the most straightforward. Partici pants at the previous meeting generally indi ­ cated the three-part approach which would be based on the followi ng elements:

(1) The cu rrent most up­ to-date estimate of the Lime stone capital cost identi­ fied in the Interim Agreement: (2) the actual cost of the project would be the actual and reasonable capital costs incu rred ; and (3) there would be a process for reviewing and controlling the costs incur red under No. 2." Now, that was put forward. We are here to comprom ise on it, reasonable approach. "Relating to the foregoing is the con cept of a "force majeure" clause which the Min isters discus sed at the last meeting." There was no force majeure cl ause in what they had put forward.

"We sugge st that such a clause be inc luded in the agreement for the protection of all parties involved. Attached is a slightly mo dified version of the wording of such a clause, as was includ ed Volume IV of the Western Ele ctric Power Grid Study." But it wasn't includ ed in the agreement. "Li mestone output: Manitoba continue s to be con­ cerned over the nature of the comm itment to the amount of energy involved in this sale.

As you are aware, we have ind icated that Li mestone Station can­ not itself generate an average of 7,2 80 gigawatt hours over the life of the proposed agreement - both because of a reduction of the output at the upstream station at Long Sp ruce and a simi lar devel opment reducing the output at Lime stone when the next station, Conow­ apa, downstream is constructed. "Tha t is why we recom mended the agreement include a provision for either red ucing the amount of energy to the 'net incr ease in the actual power produc -

--·-----·---- !ion of the Nelson River attributable to the Limestone Gener ating Station," ' which comes out to 6,600 giga­ watt hours and that's a substantial decrease of some­ thing in the order of 1 O perce nt. So, after Conowapa is built, somehow the Manitoba electrical system would have had to supply an extra 10 percent of power to the lntertie without com pensation. That's why we raised that point, "i.e. the 6,600 gigawatt hours or alternative ensuring that the additional generation capacity required is taken into acco unt in the costs-of-service analysis." Now, we put that forward and I'll table this.

We said that. "Given the lengthy period of discussions and negotiation in this area, Manitoba is prepared to com­ promise and is willi ng to forego any adjustment due to the downstream develo pment of Conowapa." We were prepared to. We raised it. We said it's important; that we were prepared to. "H owever, it is impe rative that the sale amount then be described as the net increment to system energy due to the construction of Limestone. After acc ounting for lost head at the Long Spruce station. the actual generation increase will average 6.920 gigawatt hours.

Accordingly, it is this amount which Manitoba feels should be iden tified as the actual energy produc tion at Limestone Station. "We appreciate the point raised by Alberta that the per unit cost of delivering energy to Alberta rises when the amount of ene rgy in the sale falls bec ause the transmission line is utilized at a corres ponding ly lower level. We hope this somewhat red uc es that concern.

"Man itoba looks forward to the discussion at the meeting on this subject and hopefully to a com prom­ ise along the lines suggested above." We also then withdrew reliability be nefits because we said that there wasn't sufficient consensus on that. We went on to bene fit-sharing and we asked if we coul d have con­ sideration for 50-50, again because we were inter­ ested in full, fair sharing of risk and be nefit. We were negotiating and we w ere continuing on in, I think, a reasonable process. I think that we had the opportu­ nity of coming forward with something there and I think I'll table these as well.

I will table these. Now. we believe that we had taken a reasonable, rational approach to these negotiations. We had legit­ imate conc erns. These had been raised by Hydr o management; they w ere tec hnical conc erns. We wanted to protect the taxpayer of Manitoba; we wanted to protect the Manitoba Hydro consu mer. We were, however, cog nizant that we were involved in a negotiating process; we were being flexible, but we did not feel that Manitoba should subsidize Alberta and Saskatchewan and that there should be this shar­ ing of risk and benefit. We felt that is a fair basis for developing long-term agreements.

No one was trying to gouge, fair basis, establish a solid foundation, move from there. That's why, when the Leader of the Op position brought in the Saskatchewan letter which pointed out these items and then the Leader of the Op position ridiculed these items, said that somehow they were the fabrication of the soc ialists in the Government of Manitoba, he was just so - here we were. getting tech­ nical infor mation from Hydro staff. One of the names he sees on it is Doug Dunc an, an imme diate reflex action to assassinate the person's char acter.

That's 22 June, 1982 how we lose track of certain facts; that's how we lose track of what I would call a balanced perspe ctive. We felt that those points were legitimate concerns; we were prepared to pursue them, but pursue them with flexibility. We say that the Western Grid is a good concept. We believe it's good for Manitoba; we believe it's good for Alberta; we believe it's good for Saskat­ che wan. We think also that the notion of an lntertie between provinces with respect to a renewable form of energy would be a great break through. We believe that's why we have that conce ntration on that.

We concentr ated on that more so than looking to the south, even though the south may in fact provide some greater price diffe rentials because we think that this is where the breakthrough Will take place. So when the Alberta Go vernment says that there is a slowdown; that they are going to look at the Slave River Project, we still say that it is our intention to pursue Western lnterties rigorously, vigorously, and fairly. I think it's im portant to insure that we do develop these breakthroughs, and that we do establish the solid foundation, so that it lasts.

We don't want a situation where, if there are cost overruns, it's Mani­ toba that pays, only Manitoba. We don't want a situa­ tion where, if there is reduc ed output in a system. we are the ones who lose. We don't want a system where there isn' t a fair sharing of the bene fits over the life­ time of that agree ment. Again, we put those forward; we say, we can develop that approach without having to go to courts and squabb les in the future; we believe that this one - and we think, you know, we can't predict the timing of it - will establish a base for future devel­ opments. That is our intention.

We can't predict the timing of it. We certainly aren't in a position to deal with the impact of, say, the Alsands Project being can celled . 3494 I might note that the Slave River Project is in the same geographi c area as the Alsands Project, which was going to be a big employment creator in Alberta. Now, that is can celled and there are a whole set of people there who are already livi ng there; who were expect ing to work on the Alsands Project. Mayb e, from Alberta's perspective. it makes sense for them to be looking at the Slave River Project.

But, at the same time, we do believe that the long-term future of a Western lntertie still makes sense. We intend to pursue it, as we said, we intend to pursue it in a fair way. Now, I think we can do that without trying to jeo­ pardize the negotiations, without attacking another province, or without attacking in dividuals. We haven't done any of that. That's the approach we certainly want to take with respect to the Western Power Grid; that's the approach we certainly want to take with respect to the Pulp and Paper Complex at The Pas.

We have a lot of material regarding weaknesses of things that happened in the past. But it's not our intention to dwell on the past, but to rather try and establish a fair system and a good system whereby we can stabilize that plant over the future. That's the approach that we·re taking. I think I would rather have something put together in a constructive way. I think we have worked with the management and the workers to pursue that. We know that there are a range of options that are very dependent upon market con ditions, but we certainly

22 June, 1982 are pursuing that, knowing full well that there are a whole set of market conditions; knowing full well that so much of the forestry ind ustry indeed is operating at idle capacit y right now. So that's the approach we want to take on the pulp and paper complex. Now, the other thing is the Alcan Project that has been referred to and been referred to a number of times. Wha t I find interesting here, you know, - and I don't know if any of the members opposite have read the Alcan Ma nitoba update of June 19 82. We received it today.

We received it from a company that I think we have an ongoing relationship with, indeed, I must say that I am going to be viewing the smelters in Arvida and Grande Baie when the Session ends, some time in July, and I might point out that Mr. Mo rton argued that we should make sure that our timetables were such that he could acc ompany me on that. This is the Pres­ id ent of Alc an Aluminum . I must say that I think that reflects the approach of a company that wants to keep an ongoi ng relationship, just as we do. I think it's a valid appr oach. I commend them for the approach that they have taken.

We in fact have been deal ing with them in a ca ndid way and in a thorough and di scipli ned way. You know, we have the President saying that they have post­ poned the decision and there's a question and answer

part in the update. It's interesting that they put this forward. Wha t I find interesting about their putting it forward is, obviously, they must have heard some of the wai ling that's been coming from the people on the other side who are trying to undermine the ongoing relationship between the Manitoba Government and Alcan Aluminum . I point out that they say that the company came to the decision at this time. This is traced to the present recess ion. They said that Mani­ toba just did n't cancel the project because it is an attractive loca tion.

They also respond to a question, "A number of people are saying the postponement was really the result of the present government's elec­ tion and polic ies?" That's the question. You know, who said that? We ll, I think generally, it has been Conservative members who have said that and this is Alcan's answer. It's in writing - June, 19 82, Mr. Morton says, "That cou ldn't be further from the truth." Now, when I raise that, we have people then saying, well, is that a lie on the part of Alcan? I don't think so. They're bei ng straightforward. "Our decision was based only on ec onomic consid erations.

I want to make that crystal clear. The govern ment understands that. I think you have only to look at the world's pres­ ent ec onomic situation to understand that. Our West­ ern World leaders are most conc erne d about the state of the global economy and their recent meeting in Versai lles outlines some of the financial problems we are undergoing." This is the other point that I find interesting. Is Manitoba really that much of a priority for Alcan when you are comm itted to expansion in Que bec and Brit­ ish Columbia?

Morton: "It was well-known before we embarked on our studies in Manitoba that the moder­ nization of reb uilding of our facili ties in Quebec and the expansion of our B.C. operation were priorities for us. This was no secret." So, what we have is Alcan saying one thing and the Conservative Party saying exactly the opposite thing with agai n, I guess, the innuendos against us. I cer­ tainly hope that they are casting no innuendos against Alcan because we are not making these statements; it is Al can who is making these statements.

Why did you take the decision not to exercise your options on the land in the Roc kwood area, is the question raised here? And the answer is, "Our timeframe for reas­ sessment in the final decision on Manioba was too far down the road to exercise the options. You can't expect landowners, mostly farmers, to suspend major decisions in capital expenditu res related to their farm­ ing activity for a long period of time. That wouldn't be fair," says Alcan. So that is the position that they take and we have their word on it.

We are still working together; we are still con tinuing the joint review; we will be taking a look at their smel ters. We will in fact be trying to develop an understandin g so that, if and when - and when is when, not if - ec onomic conditions improve, we can be in a position to move quickly. You know, on that basis, they have said that they are interested in that site still. It's a valid position for them to take. -(Int erjec tion)- no, it's not a matter of starting all over agai n. I think it's important that the Mem ber for Sturgeon Creek understand that Alcan has been in New York and Mr.

Culver has just been talkin g to the Fi nancia l Analyst there and he had made it cl ear that it was important for them to cut their sales and to trim their sales in the light of the extreme cu rrent reces­ sion. Tha t is indeed what they are doing. When we have Alcan making those types of state­ ments but the Conservative Party not willing to look at these facts, but rather trying somehow to cast doubt upon all this; that is the approach that they take. If I say this is what Alcan says, I'm called a liar and that's why I was pleased actually to see this update come out.

It's not my words; these are the words of Al can. I find again, the ch aracter assassination whenever one refers to any of this. As I said, I think that political approach has to stop. Now, when we come onto potash, we've dealt with IMC. Through the cour se of the last few months we've worked with them; we've shared costs that had been inc urred in the past for drilling. Mani toba has paid its fair share of those. There have been meetings between my negotiating team and IM C; there has been con­ stant commun ciation.

As I said before, I have been trying for a perio d of time now to arrange a meeting with senior officials of IMC. That has been confirmed for, I bel ieve, it's July 9th. I am hopeful that we can sit down and talk about what the options might be for the future, espec ially in the light of the cu rrent, very severe situation in Saskatchewan, where you have five mines clo sed down; where you have well over 1, 200 people laid off and where there is comp lete unc er­ tainly as to what the future might hold with respect to those mines. 3495 So that's the approach that we are taking th ere.

Agai n, in all these instances we are pursuing what we consider to be legiti mate concerns that have been developed by staff who have been involved in this, sometimes for some time, who have put forward these conc erns in a legitimate matter. Some of these people are people who were part of the previous administra­ tion group of advis ers. We have asked them for their comments. They have provided us with com ments

that do entail con cerns and it's not my intention to bring those con cerns here and to table them, because it would be rather my intention to sit down with these other parties and say, these are our conc erns; what are your con cerns? Is there any way in which we can be flexib le enough to acco mmodate each other's con­ cerns and satisfactory arra ngements that will have long-term benefits? We hope to do this. Thi s is the approac h that we have been taking. Thi s is the approach that, given the unc ertainties of t11e econ omic times, is a slow moving approach.

Often people are far more caught up - and I'm not talking about future developme nts over the last while - but rather these people have been far more caught up with mine layoffs. plant layoffs, smelter layoffs, potash plant layoffs. That's what's been occu pying so much of the de cision-making time of many of the people in the ind ustry that we've been deal ing with. They have to talk to their financ ers; they have to talk about res­ tructuring their debt; they have to talk about their future cred it ratings, and that's why that process does indeed take some time.

As I said, these will be di fficul t tasks in these tre­ mendously severe economic times but, as I said, we will pursue them. We are pursuing them seriously and rigo rously, but we ackno wledge and I think it's impor­ tant for all of us in this Leg islature and for the public of Manitoba to ack nowledge that we have an econ omic reality out there; that we can't put all of our eggs into a mega basket; that if we look around at the world, none of the mega projects are taking place. Why? You have world-wide rece ssion; you have low demand; and you have tremendously increased interest rates.

So that means that none of the mega projects are going. That doesn't mean that they're not good; that doesn't mean that people shouldn't pursue them and sort out the fairest possible deal, and that indeed is what we are doing. But we have to always come back to what Man itoba is. Man itoba is an eco nomy that is ch aracterized by small and mediu m-size businesses. It is important that we do not turn our back on that group; it is important that we work fully to ensure the fullest development of all aspects of our economy.

That's why, when we talk about an Interest Rate Rel ief Program relating to business groups or to farmers; or when we talk about a Beef Stabilization Program, we are talking about groups that, if you start adding them all up, they themselves constitute ind us­ tries which indeed are mega projects. We should look very cl osely at our indig enous mega projects. One of the areas where we do have some devel opment taking place now, and I say that this has been an improve­ ment over past years, is the whole area of, say, Flyer buses.

You know, people might talk about mega pro­ jects, but Flyer buses employs 570 people, so it's important that we not turn our backs on that type of ind ustry. It's important that we realize it is that ind us­ try that is indi genous, that is here. that we have to relate to, but that we do see that is the ec onomic base we should build from, that we will relate to the mega projects, that we will harness them in the best way. We want to be constructive on this side of the Ho use; we do not want to attack individ uals.

We do not intend to leave -(I naudib le)- Wha t we want is to understand our economy; we want to understand its reality and we want to improve our lot within it. We do have a four- 22 June, 1982 year mandate. We are working in those di fficult eco­ nomic times. We intend to pursue that mandate, to build and improve our ec onomic lot, and we certainly will be prepared in three-and-a-half or four years to go before the people and be judged on what we are doing. MR. SPEAKER: Order please. Are you ready for the question? Order please. MATTER OF GRIEVANCE MR. SPEAKER: The Honour able Memb er for Stur­ geon Creek. MR.

F. JOHN STON: Yes, Mr. Speaker. I have not spoken on a grie vance this Session. I won't be more than a few minutes, Mr. Speaker, at the most. I don't request the privilege of being designated or anything of that nature. Mr. Speaker, I just want to say that the Min ister has given us a very detailed outline of some of the negotia­ tions that went on over the last three or four years. Mr . Speaker, the negotiations that he speaks about were made very plain in the letter that was tabled by my Leader today. As a matter of fact, the items that he read from, Mr.

Speaker, were about Febru ary 8th and the letter that we were speaking of is about April 6th. Mr. Speaker, really the situation that is involved is that the Minis ter was basically saying he could n't handle the negotiations.

Very very simp ly it came back that the letter from Saskatchewan said that all of these things had been di scu ssed before, all of these items had been in nego­ tiation before, had been thoroughly put before the three Mini sters, had been probably put before the three go vernments, and the Min ister do esn't ack nowledge the fact that the Chairman of Hydr o of Saskatchewan wrote back and said, we have been through all of this before. We've been through all of this before and we canno t accept it. Mr.

Speaker, the Min ister reminds me and he is akin to what really goes on in a western bar; he goes run­ ning through the swingin g doors with his id eas; he gets thrown out on his butt; he packs up his bags and goes back in agai n and he gets thrown out again. Mr. Speaker, the Min ister has gone into these negotia­ tions fully aware of the negotiations that went on pre­ viously, fully aware of the fact that the other govern­ ments had dis cus sed them, but he was going to ch ange the whole situation, and he was going to make the negotiations be exactly what he wanted. Now. Mr.

Speaker, the Min ister went into the nego­ tiations on the basis that he was going to change them and he talks about the election campaign. I don't intend to talk about that except I know during the election campaign their party said they wouldn't buy any of these negotiations, and they di dn't. They did n't buy Alcan. You know, he talks about Alcan; he reads from an

article involved with Alcan, he reads very clearly from it, and he also says, you know, this is the ec onomic situation, and Alc an is presenting an eco­ nomic situation. 3496 Really, I like to sort of read between the lines. and I can tell you this, Mr. Speaker, that Alcan had nego­ tiated for three- and-a- half years. They then started to

Tuesday, 22 June, 1982 deal with a gover nment that was not favourable to what their plans were for Mani toba. They dealt with a government that was not agreei ng they should loca te where they wanted to locate. They dealt with a gov­ ernment that said, we cannot tolerate. or will not think about a minority interest in a power plant. and I say to you this, Mr. Speaker, if you, or any of you, if the Min ister was in Alca n's position, what would he have done? He would have said, now, it's all very fine for the gentleman on the other side to stand up and say that the negotiations are still going on. Mr .

Speaker, I said in this House awhile ago, when we fi rst started to deal with Alcan within my depar tment, they said the win­ dow was open for Manitoba and they would investi­ gate it now. The win dow is now cl osed for Manitoba. The y are going to expand - Mr. Speaker, I wish Andy would be quiet, or the Memb er for Springfield. -(l nterjection)­ Well maybe I will and maybe I won't. But the Mi nister goes on, and he says that the negotiations will be carrie d on in Manitoba. Alcan is goin g to expand their Arvida Re fi nery, and you know what they're going to do after that?

They're going to look all over the coun­ try as to where they go after that, and if the negotia­ tions had been properly handled by that government over there they wouldn't be looking, they would be com ing to Manitoba. That's what they did. The y blew it. On the Power Gr id, Mr . Speaker, there is absolutely no evidenc e that the Power Gr id was put to rest because of econ omy. The Power Grid at the begin­ ning of it was margi nal.

It was decided after long negotiations, after information from the Hydr o and after the information of the utility operators in Alberta, with the information they gave their government, with the information that Sask Power gave their govern­ ment, with the information which the Minis ter read out tonight, which was given to our govern ment; all of this information was put together. Wh at was happening as far as the Western lntertie was concerned? Basica lly that there were three peo­ ple who were interested in the devel opment of West­ ern Canada.

Three Min isters and govern ments that knew that if Western Canada had the lntertie it would be in a position to have oil, coal, all of the gas and all of the hydro it needed to attract all of the ind ustry that could come to Western Canada. You had three Govern ments that were interested, without any Fed­ eral Gover nment involvement working towards hav­ ing Western Canada and the Prairie Provinc es the most desirable place to have investment in the world.

And now I say to you that this Min ister, as far as I'm concerned, can go down in the history of Manitoba and this government as ruining, at least putting back the potential of Western Canada at least 20 years, and that is fact. Mr. Speaker, I hear from that yapping little voic e over there again and he knows very well that in Com­ mittee the Hydr o people said it can't be done. He knows very well that in Committee the Hydr o people said without the Inter-tie, without Alcan, it can't be done; he knows all of these things.

What he doesn't really care about, as far as I'm concerned, and what this Govern ment doesn't seem to care about is the fact that they have set the economy or helped to set the economy of Western Canada back at least 20 years. We ll, Mr. Speaker, I would like one of them to stand up over t here and tell me in their five-year project what they have to replace $3 billi on worth of investment in Manitoba. We have proven in all our Estimates dis cus ­ sions that the potential was there.

We have proven that we have put all of the facts before you that the negotia­ tions had been going on for years, and all I know is that the Minis ter of Energy, basically, if you want to boil it down to that, was ki cked out of the negotiations. That's really what happened.

If he has to go back, he has to go back with hat in hand, because they had some negotiations that were going to make Western Canad a the best place to invest in the whole of the world, and I say that sinc erely, because tell me where anybody could have had hydro, could have had oil, could have had gas, and cou ld have had coal; tell me where they could have had it?

The three Minis ters and the three Govern ments were working towards doing that and because, as my Leader has said, of an ideo­ logi cal situation where they went through an election saying, we knew better than anybody else, we were going to put the whole thing back in perspective, and really at the end of his speech he started to talk about the small business people of the Provi nce of Mani toba and building on. 3497 I say, Mr . Speaker, the small businessmen of Mani­ toba will build.

They will build towards looking at Western Canada, but they needed sinc erely to have those projects in the Provinc e of Manitoba for them to build around and build on. The re is nothing for them to build on at the present time. There isn't even the hydro projects that went on during the Schr eyer regime. They're not there; they won't be there. So he talks about building on the small busin ess. Wh ere is the small business going to sell their product? Let's put it that way.

He als o talks genuinely, sincerely, about se lling power to United States, so that United States can build its industry, instead of building the industry in the Provinc e of Manitoba. Instead of using our power resource to create jobs within this province, the Min is­ ter gets up and stands there and is proud of the fact that he's going to sell our power to the United States when it cou ld be used to create jobs within this pro­ vinc e, when it cou ld be used to create a situation in Western Canada that could help us be the best eco­ nomical bet in the world.

Thi s Min ister, as far as I'm con cerned, can go down in history as ruining that whole thing, and regardle ss of what he tables, he botched it, he got kicked out of negotiations, he basi­ cally can't go into negotiations with the others any­ more without going hat-in-hand, and he had the abil­ ity, he had the opportunity I should say, to be able to negotiate and bring this thing to fruition. He did n't do it, Mr . Speaker, and it doesn't take long to say that this Go vernment and that Min ister blew it very sincerely. MR. DEPUTY SPEAKER, Jerry T. Storie: Are you ready for the question?

The question before us it the proposed motion that the Honourable Go vernment House Leader that the Speaker do now leave the Chair and the Ho use resolve itself into a Committee to con­ sider of the Supply to be granted to Her Majesty. MOTION presented and carried and the Ho use resolved itself into a Committee of Supp lementary

22 June, 1982 Supply to consid er of the Supply to be granted to Her Majesty with the Honourable Member for Ri ver East in the Chair. COM MITTE E OF THE WHOLE BILL NO. 59 -SUPPLE MENTARY SUP PLY MR. CHAIRMAN, P. Eyler: Committee come to order. In accordanc e with Ru le 64(9) (a.1) and 64(10 ), the first items before the Committee are formal votes requested on two resolutions dealt with after 10 :00 p.m. last night.

The question before the Ho use is: RESOLVED THA T THERE BE GRANTED to Her Majesty a further sum not exceed ing $100,000 for Labour and Manpower, Gen eral Admin istration, for the fiscal year ending the 31s t day of March , 19 83. QUESTION put, MOTION carried. MR. CHAIRMAN: I'd like to make it cle ar that the members do not want a count out on this resolution. Second Re solution - RESOLVED THA T THERE BE GRANTED to Her Majesty a further sum not exceed­ ing $910,4 00 for Community Services and Correc­ tions, Rehabilit ative Services, for the fiscal year end­ ing 31 st March, 19 83. MOTION presented and carried.

RES. NO. 12 -HE AL TH MR. CHAIRMAN: The next item for di scussion is Health. Does the Mini ster wish to make some prelimi­ nary statements? Resol ution No. 12 , RESOLVED THAT THERE BE GR ANTED to Her Majesty a further sum not exceed­ ing $758,900 for He alth, Community Health Services, Dental Services: for the fiscal year ending 31 st March, 19 83. The Mem ber for Fort Garry. MR. L. SH ER MAN: Mr.

Chai rman, this item was first looked at last night and deferred until today because some questions that I put to the Mi nister of Fi nanc e required reference to the Honour able Minis ter of Health and I'd like to explor e them with him for a minute or two. My main question to the Min ister of Fi nance, of cou rse, was what is the $758, 900 for? He explained in his answer that appr oxi mately $40 0,0 00 of it, $400, 000- plus, is for age expansion in the Childr en's Dental Health Program.

I do n't belie ve that he con­ firmed that there was any geograp hic expansion and I would ask the Min ister for a comment on that point. Certainly if it's to acco mmodate age expansion it's ex plai nable and justifiable in those terms. But that left an amount in excess of some $300,000 which the Min ­ ister of Finance said was goi ng to resurrect the Dental Nurse Bursary Program at Wascana Colle gi ate and to fund some dental nurses in that bursary program.

I don't rec all any ind ic ation from the Min ister during discussion of his Estimates that he was headed back into a resumption of that arrangement with Wascana Col lege, or a restoration of the Dental Nurse Bursary Program. Ho wever, it may have been noted during his Estimates and it may have slipped my mind, but I don't recall any detailed exa mination of it.

I was not aware that he'd had di scussions either with his departmental personnel, or with the Manitoba Dental Association, which satisfactorily resolved the longstanding dis­ agreement between govern ment and the dental pro­ fession as to the utilization of the dental nurses. So my questions to the Min ister of Fina nce were targeted to those two areas, Mr. Chairman, and I'm happy that the Min ister of He alth is available to respond to them at this time. MR. CHAIRMAN: The Honourable Min ister of Health. HON. L. DESJAR DINS: Yes, Mr. Chairman, the hon­ ourable member is absolutely right.

During the Esti­ mates I think I mentioned that we were ex ploring the possibili ty of having to see what direc tion we were going with the Manitoba Dental Association and I coul dn't give too much information at that time. I said that I would, probably during the Supp lementary Estimates, because I did announc e during that time that there would be some money that we would request through Supplementary Estimates. I might say that I don't have too much to report at this time except that the di scussions are going on very well. There's been good co-opera tion and there hasn't been any decision as yet.

At the request of the Dental Associati on, they asked if they cou ld submit a plan, they did this. There has been quite a bit, or very good co-operat ion, I couldn 't ask for any more. I visited some of their faci lities also and they asked for more time and we're still going at it with an open mind. Now the ec onomic situation the way it is, there's no expansion geogr aphically, the member's right on that also, it is just the question of age because we feel that this is number one because we want to comp lete the program, those that started.

I think it would be a mis­ take if we started somewhere else and abandoned these people. We want to see them until they graduate and every year there' ll be another year. So that is number one. That will be done this year. Tile other thing, they asked for time, and I told them that the most di fficult time was the situation of the dental nurses because in di scussions with Saskatch­ ewan it was felt that we had to make reservations fairly soon, so that is understood. The Dental Assoc iation has been apprised of this information, this decision, there's no objec tion there at all.

The situation is that we will need dental nurses to con tinue the plan the way it is. If we decide to go with strictly dental nurses or maybe a kind of mixed program, we would need the dental nurses and then I'm assured that the dentists themselves feel that- I think many many more of them now feel the value of these people, so that is no indi ca­ tion at this time that we accept any plan or that we're going defi nitely to strictly dental nurses at all, and that is the understanding that we have with the Dental Associa tion. So all I can report is that we're progress­ ing.

Because of the ec onomic situation we are not going to do much more than that. We will do, as I say, the question of age, we did request - we're requesting through the Department of Educ ation - to place nurses in Was cana and then we will continue. We' ll have more time to conti nue and give the Dental Asso­ ciation a fair chanc e to really put forth their program - 3498

that has been di scus sed with staff - and there is no decision at all and we're going at it with an open mind. MR. L. SHERMAN: Mr. Chairman, the Mini ster says the dental profession is now much more accepti ng of the dental nurses than it was some five, six, seven years ago, or words to that effect. I hope I'm not quoting him out of context or misquoting him. That's the impression I got from his remarks. Is the Min ister saying tha t the Dental Association is consi deri ng changing their own bylaws in their profession, which has prohi bited certa in proced ural performances and activities by dental nurses? HON.

L. DESJARDI NS: I want to make it cl ear, I'm not suggesting that they're in favour, they're changing their mind, that they are favouring a program like we had where we went to dental nurses, that's not what I'm saying. I'm saying that the Dental Association see the value of the dental nurses and they realize that we can't keep on while we're in di scussion with them and doing nothing, and take a chanc e that we have no programs at all. They realize that if we go to the former plan or if we go to a mixed plan, we'll need them.

But what I meant by that is, if they themselves see the value of them - and many like to work with dental nurses - now it is true, I'm aware of what their bylaw says, officially the Association doesn't rec ognize the dental nurses but they are looking at that with an open mind. It 's an open mind on both sid es, I think that they're co-operat ing, it's not just the government side, and that is something. They've agreed that this is one of the fi rst things that we would resolve. They realize and they've been informed that we want to apply for places to go ahead with the dental nurses.

They see no problem with this at this time. MR. L. SHERMAN: Mr. Chairman, I'd appreciate the opportunity for just half a minute to make it perfectly clear that I have no quarrel with the qualific ations of the dental nurses and never have had. I think they're extremely highly qualified and in most areas in which they have served, if not indeed in all areas, the public whom they have served' has offered ongoing testim­ ony to the exc ellenc e of their qualifica tions.

As the Min ister readil y ackno wledges, there has always been that professional stumbling block where the Manitoba Dental Association is conc erned and where their bylaws are concerned. I refer, as he knows, specifica lly to the bylaws, which state that, "Uns upervised work in the mouth for certa in dental proced ures can only be performed by graduates of a rec ognized dental col lege," in other words, a col lege equivalent to the Mani toba Dental College with a graduate degree of Doctor of Dentistry.

So that stumbling block has always been there and .it's prevented the cl ose alliance and liaison of the two professions, the two discipli nes, the dentist and the dental nurse in many respects, and it has prevented a wides pread of utilization of the dental nurse up to his or her full capac ity alongside professional dentists in del ivery of the plan. I would hope the barrier can be breached and there can be a common meeting of minds on the value of the dental nurse.

So I'll await further reports from the Min ister on that objective, with interest. 22 June, 1982 I would like to ask him, Sir, with respect to the amount in this appropriation that we' re voting, $758, 900, as I've said, it's my understanding that some $300,000 or $350,000 of that is designa ted for the Dental Nurse Bursary Program.

Is he telling the Committee that a number of applic ants for the Dental Nurses cou rse have already had their applic ations processed and been accepted, and that spaces have been reserved for them at Wascana Col lege, and that the money is already designated to be defi nitely spent for that purpose in 19 82-83? HON. L. DESJAR DINS: No, this isn't the case. I should say that during the Estimate time, I thought that by this time I could announce the program that we were going with. I think it's no secret when we were in office before the kind of program that we favoured.

When there was a change of government I had di scussion with the medical profession and I should say that we were leaning towards a mixed program, but not the way it is now, not two di fferent programs, but try to marry them with di fferent responsibili ties, but having people work together. My ambition was to see the people work together instead of as adversaries and change every time there is a change of government. Now the relationship establ ished with the Dental Association was very good, much better than we had in the past. I'm talking about ourselves now, not the former government.

They requested, well, cou ld they have a say before we did anything, and I told them that they could - with an open mind. They came a long way and compr omised and so did we. Now it is at the level that the staff is meeting. Of cou rse, the factors will be standard- I'm not worried about standards either way, I think their standards have been good.

Another thing, of cou rse, will be the utilization and the cost, and this is what they're addre ssing themselves to. 3499 Now I want to be quite cle ar, I'm not saying that officially I've been informed that all of sudden they feel that the dental nurses are wonder ful. This is not the case, but it'll take awhile to finish the program of the government. Even then we would need some more when we go up by eight for one thing. Secondly, if we go directly back to the former pro­ gram, we definitely would need dental nurses; and if we have a mix, it would be dental nurses.

Besides that it was felt that there are enough, even if we went 10 0 percent with the program with the Dental Association. Wh at I'm saying is that they are satisfied that these people cou ld be very well oc cu pied. One of the things I'd like to have resolved - and I've passed that information on to the Dental Associa tion, they're very much aware of that - but I hope that we cou ld recog nize the dental nurses. We might get down together to see what their duties are.

I would hope that we cou ld do it that way, that it doesn't have to be imposed on government, but I think I wanted to make it quite cle ar that there is room for paramedicals in this field of Health, if we're going to at least try to plateau somewhere with the cost. I think that this is what we're saying. So the point I'm saying is, that they are aware of that, and it is not crea ting a di ffi cu lty, or it is not di rect ing the program in one dir ection or the other at this time. This is one of the reasons why we did that at

this time. This is why we felt we must go ahead and then we'll go on with age and I cou ld say that as of this moment. everybody is satisfied that we're co-opera ting. I hope it stays like that. Mind you, it won't always be that easy; decisions will have to be made by both sides. I hope that we can arrive with some kind of compr omise that will be the best program for the peo­ ple of Manitoba and the cost will be com parable to what the people of Manitoba can afford. MR. DEPU TY CHAIRMAN, J. Storie: The Memb er for Fort Garry. MR. L. SHERMAN: So half of this vote, Mr.

Chairman, is essentially a contin gency vote. is that correct? If you look at the Main Supply appropriation for Dental Services for 19 82-83, it's $4,577, 000.00. The cred it actual for 19 81- 82 was $4,257 ,000, so the requested incr ease in Main Supply is only $220,000 which is minimal, negligible in that program, Mr . Chairman, and I'm the first one to ack nowledg e that. That doesn't even allow for the necessary cost-price increase or keep pace with inflation. So the Min ister quite leg iti­ mately has come back into the House and asked for an additiona l $758,9 00.00. So far, so good.

Approxi­ mately half of that is to go to pay for the age expansion in the program. That's fine; that's accepta ble. Now the other half of that is to go to restore the Dental Nurse Bursary Program, if needed, so can we leave it at this juncture, that $350,000 approximately is really a contin genc y amount. The Min ister is asking for it. The Committee certainly is not going to refuse it, and if he deci des to send some dental nurses to Was­ cana College, that's what the money will be used for. If he deci des not to, presumably it'll lapse. Is that correct? HON. L. DESJAR DINS : Not quite.

I guess I haven't made myself cl ear. The decision to send these people has been made and this is what I say, but even if they go ahead, we feel that they will be needed and occu­ pied either to work with some modified program, or a compromis ed program, or a mixed program, or even a program of the dental profession. I feel confident and they didn' t seem to think that I was wrong. When we decided to give them more time instead of deci ding on a program now, we said okay, we can wait.

Because of the situation, we're not going to enlarge it that much, just on the age busi ness, but we must decide now on the dental nurses because it takes a while to train them. Now the decision has been made; how success­ ful will we be? First of all, I don't think the Mi nister of Educ ation has had a decision yet from Saskatchewan. Now we've been told, I think, that we have to take 30 at this time. That's going to cost money and I know that it's been incr eased, but the decision has been made.

I don't think we need the approbation of the Manitoba Dental Associ aton, but because of the close relationship and the co-operat ion that we have, they've been informed and they have no object ion to that at all. I am saying that we're succes sful in finding the people to meet this contract to be able to go ahead with Saskatche wan, that they can be used in any pro­ gram, that's what I'm saying. They won't influence the program one way or another, but we could not wait to 22 June, 1982 3500 give more time to the Dental Assoc iation and do nothing. We would have lost next year also; so that is the decision.

I told them that I cou ld gi ve them more time providing we made a decision on that and that doesn't seem to worry them at all at this time. MR. L. SH ERMAN: Okay, Mr. Chairman. Well then I would ask the Mini ster, does this sum then provide for sending 30 dental nurses to Wascana College, has he received applica tions from 30 applic ants and is Sas­ katchewan di ctating that they'll only take them if they get as many as 30? Is he saying that Saskatchewan wouldn't take 10 or wouldn't take 15 , it's got to be 30 or none at all? HON. L.

DESJARDI NS: It's been a while now, but if my reco llect ion is correct, that's exactly the case. Of cou rse. we're still negotiating. We haven't sign ed any­ thing with Saskatchewan but that is what I've been doing. Now the amount- I don't really pay that much atten­ tion to the exact amount to be ho nest with you. We tried to see what we thought we would need this year and I must be very honest, this was before we had contacted Saskatc hewan. There was a change of gov­ ernment and I think there's a new policy there, as this was something that we hadn't been informed of before.

It might be all that money won't be spent; it's not more than an edu cated guess at this time. There has been cha nges to acc ommodate the Dental Asso­ ciation and to keep this good relationship going, espec ially in vie w of the fact that we weren't going to del iver more than that this year anyway. So therefore, it could be that we might be asking for too much money or even a little less, so I want to make that quite clear. At this time, I couldn' t say more.

If onc e we know, first of all, if we have an agreement with Saskatche­ wan, we'll see what kind of an agreement, we'll see what the cost will be, then we will have to rec ruit. We haven't passed that yet. We've got to be ready for September but we waited so long to give the Dental Association more time, so this will have to be done very fast and if we do - I don't know - we might be able to rec ruit only 25 and we might have an agreement to send 25 or 20, but right now, from what I've been told as it stands now, we must have 30.

I'm sorry, the information - I was phoned yesterday - I didn't realize that we would be in the House. I told the Min ister of Finance where the inforr'1ation was and he left with it. So I'm sorry, I haven't anything in front of me, but the information that I'm giving I think is quite factual. MR. DEPUT Y CHAIRMAN: Are there any more questions?

BE IT RESOLVED that there by granted to Her Majesty a further sum not exceed ing $758,9 00 for Health, Community Health Services, for the fiscal year ending the 31s t day of March, 19 83-pass. RES. NO. 18 -EMP LOYM ENT CREATION MR. DEPU TY CHAI RMAN: Continuing with the last item, Re solution 18 , the Em ployment Creation Program. The Ho nourable Memb er for St. Norbert.

22 June, 1982 MR. G. MERCIER: Mr. Chairman, I wonde r if the Mi n­ ister of Labour could just break down the $1 O million figur e. As I understand it. $4 million of this $10 million is bei ng added to the Career Re lated Employment Program. I wonde r if - he's nodding in the affirmative, Mr. Chairman. I wonde r if he could explain the alloca­ tion of the $6 million that's left over. MR. DEPUTY CHAIR MAN: The Honourable Min ister. HON. V. SCH ROEDER: Yes, Mr . Chairman. They have not as yet been allocated, this will be in addition.

In the Main Estimates, there is some money - I belie ve it's $1. 2 million approxi mately for a Wi nter Employ­ ment Program - this will be in supp lement to that. We expect to have some of it go for Youth Win ter Employment and the balanc e to go just generally for Wi nter Employment Programs. The programs them­ selves have not been specifi cally approved as yet through the Department or into Treasury Board or Cabi net. MR. G. MERCIER: Mr. Chairman, I wonder if the Min ­ ister could indic ate when he antici pates he will be in a position to announce those programs and the time period that they will cover. HON.

V. SCHROEDER: I would expect that the announceme nts would be made some time before the middle of September. That would be the time lapse agreeme nts we'd be looking at right now. MR. G. MERC IER: Mr. Chairman, I wonder if the Min ­ ister could indic ate the status of the Career Rela ted Employment Progra m. How many app lications have been approved? How many jobs have been approved to date? HON. V. SCHROEDER: I don't have it up to date, but as of four days ago, there were approx imately 2, 19 5 applica tions ap proved, jo bs approved. It is moving ahead quite well now.

There was an additional mail­ out by the department to employers who would not have qualified for the program before the chan ges were announced a week ago. Those mail-outs were made on Thursday and Frida y. MR. G. MERC IER: Mr. Chairman, the Min ister has ind icated there have been 2, 10 0 jobs ap proved up to four days ago. In announcing this program, he chang ed the criteria so that the program is open to municipali ­ ties. nonprofit groups and the private sector and has now ch anged the private sector criteria so that it's open to emp loyers with 50 or fewer employees.

I wonder if he has any figu res on the allocation of those 2, 10 0 jobs in those three di fferent sectors; municip ali­ ties, nonprofit organizations and the private sector. HON. V. SCHROEDER: I don't have an allocation as between municip alities and nonprofit, but as between municip alities and nonprofits are taking up about just better than one-third of the jobs, the private sector is taking up a little better than 60 percent of the jobs. MR. G. MERC IER: Mr. Cha irman, as I understand it, the criteria of the Youth Employment Program will provide jobs up until early fall.

I wonder, in view of the tact that only 2, 10 0 jo bs have been created to date, does the Min ister expect to spend the full allotment of monies towards this program which would be, I belie ve, $2.4 million plus another $4 million? HON. V. SCHROEDER: I think that question I would be able to answer a little better a week from now or 10 days from now. We are expect ing that there will be a sign ifi cant number of applications approved within that period of time. Up until the end of last week, we were approving in the area of 10 0 a day.

We added on some staff and expect that number will increase dur­ ing this period of time. MR. CHAIR MAN: The Memb er for Fort Garry. MR. L. SHERMAN: Mr. Chairman, I'd like to ask the Mi nister of Labour whether the 1. 5 perce nt payroll tax will apply to jobs created under these Employment Creation Programs? MR. CHAIR MAN: The Honourable Min ister. 3501 HON. V. SCHROEDER: Yes, Mr. Chairman, the tax will apply to all payrolls that are paid out after July 1, 19 82.

The fir st time for payment will be on October 15 , 19 82, and I would point out to those who are howling in the backgr ound that last year the payment was $1 .50 an hour; this year it's $2 and hour. Even if you're calcula ting the 1. 5 percent on $4 an hour, that's 6 cents an hour that comes back. MR. L. SHERMAN: Mr . Chairman, has the Min ister had the opportunity to evaluate the impact that add i­ tional tax imposition may have on the take-up of the program?

Has he experienced any evidenc e that it's a disi ncentiv e to employers to take up the opportunity under the program or to take up opportunities under the Career Rela ted Job Creation Program? HON. V. SCHROEDER: No, Mr. Chairman. I have no evidence that employers aren't taking this up. Because if they did n't take it up, wanted to create employment, they would nevertheless be required to pay the He alth and Post-Secondary Edu cation Tax. If they take this program up, they get $2 an hour for those people. MR. L. SHERMAN: Mr.

Chairman, it's my understand­ ing that in ex amination of the whole Work Activity Project sphere of government programming that obviously the request by the Minis ter of Community Services for additional Supplementary spending on Work Activity Projects, as with any other request, had to be worked through Cabi net. That's a request that we consider ed last night and, in fact, voted on tonight.

As the record will show, the Op position was not in favour of advancing that additional spending oppor­ tunity to the Min ister in that project area for reasons cited, reasons on the record and reasons which I won't repeat now. But, Mr . Chairman, Cabi net obviously did approve that additional funding for Work Activity Pro­ jects up to the amount of $91 0,360 for the cu rrent fiscal year, that bei ng the amount which is in the Supplementary Estimates that we're consi deri ng. But it's also my understanding, Sir, that Cabi net rejected

administration proposals for employment creation. I wonder if the Min ister of Labour could elaborate on that subject to the Committee and enlighten me as to what was proposed by the admin istration of the Employment Services Division and the Com munity Services Department in the way of employment crea­ tion activitie s or initiatives for which a request for Supplementary spending was rejected by Cabi net. Mr . Chairman, I think the Min ister's attention was occu pied by another matter at the time that I asked my question, so perhaps I could rephrase it.

Committee has been asked to vote $910, 360 in Supplementary spending for the Department of Community Services to expand activitie s in the Work Activity Project field, and I noted for the record that the Opp osition voted agai nst that proposal because we're not in favour of it in the light of circu mstances that have been debated and which I'm not going to repeat.

But it's my unde r­ standing, Sir, at the same time as the Department of Community Services and the Employment Services Division of that department went forward to Cabi net and asked for approval to come into the Ho use in the Supplementary spending request and seek that addi­ tional $910,0 00 for which obviously they got Cabine t approval. The Emp loyment Servi ces Division of Community Services asked Cabi net at the same time for appr oval for some Supp lementary spending appropriations for employment creat ion, and that request was rejected by Cabi net. My question, Mr.

Chairman, to the Mi nister of Labour is, can he enlighten the Committee as to what employment creat ion initia­ tives were proposed to him and his Cab inet col­ leagues by the Employment Services Division and rejected? HON. V. SCHROEDER: Mr. Chairman, maybe I should answer it in another way. The amount that was approved was an amount that we approved, partially on the basis that there was an indic ation that it could be used in the Work Activity Projects, and that we were also getting 50 cents on the dollar from the Fed­ eral Government on that spending.

We were then on the understanding between ourselves that there would be additional funding for job creation. Therefore, any additional job creat ion would be taken out of that $10 million, so that there would not be a logical necessity for a further sum to be put into a specific department. The balance of the $10 million which is unallocated at this time, the $6 million, is being looked at in terms of a number of options that are available, including any options which may come forward from that particular department. MR. L. SHER MAN: Mr.

Chairman, is the Mi nister say­ ing that any employment crea tion initiatives launche d under the aegis of Work Activity Projects and con­ nected to Work Activity Projects would not have been financi ble on the basis of 50-cent dollars? Is that what he's saying? I am asking for information. If you attach an emp loyment creat ion initiative to the Work Activity Projects which come under the Community Services Division and which qualify for 50-cent dollars, wou ld they not qualify for 50-cent dollars the same as Work Activity Projects do? HON. V.

SCHROEDER: I think I'll answer that again in 22 June, 1982 a di fferent way. I do not believe that we turned down any proposals for spending that would have been 50- cent dollars. If there were proposals for spending from a department with respect to job crea tion measures that were based on 50-cent dolla rs, I belie ve all of those have been approved. The ones that were not approved, and of cou rse every department brought something forward prac tically, were not involved with 50-cent dollars. MR. CHAIR MAN: The Honourable Memb er for St. Norbert. MR. G. MERCIER: Mr.

Chairman, in the last fiscal year, the Min ister signed a report to this effect, that some 5, 000 job s were created under our Priv ate Sec­ tor Youth Employment Program. He su bsdquently stated in the Hou se that he received the Auditor's Repor t later on, after signin g the Department of Labour Re port, and then observed in the Audi tor's Repor t the Auditor's statement to the effect that he coul dn't vouch that the program ac tually created that number of jobs because they may have been jobs that the private sector would have proceeded with in any event.

I would calcu late-the Minis ter can correct me if he thinks I'm wrong - that for some $2.4 million, plus another $4 million, there will be about 3,0 00 to 3,500 job s created under his program. Could the Min ister ind icate how he intends to demonstrate to the Audi tor that these jobs would not have been created were it not for his program? HON. V. SCHROEDER: Mr . Chairman, I would refer the member to the Manitoba Private Sector Youth Employment Program, 19 80 Program Assessment, which was done by the Re searc h Branch of the Department of Labour and Manpo wer which did a survey during the fall of 19 80.

It was a random sample group of the partici pating employers to colle ct infor­ mation. They state, "Some of the highligh ts of the survey analysis follow. One of them is, about 51 per­ cent app lied to the program to meet normal require­ ments of their operation." Now, the question the member raises is a very good one.

How do I know that this year, notwithstanding the wrink les put into the program, why is it that this year the Auditor might not say the same thing? 3502 I think the answer to that is that this year, when the Audi tor looks at the program, he will see that there were specific criteria; tt->at is, it had to be a job that provided some training-related experienc e. I am sure the member has seen the appli cation forms. How do I put this?

Last year and this year, there are statements on the application forms having an employer state - it was in fairly small print- that they would not have had that job open ing had it not been for the program. Now, you have that statement. Yet, on the other hand, I don't bel ieve the employers were di shonest. I believe that there's advertising that says that you can get a summer student and people - in fact the assumption, as shown in the survey, was that it was to assist in getting normal employment requirements through.

There's advertising of the program and governments want to make sure that as many employers take it up as possible and people are in a hurry. The y don't sit there and read a lot of it. This year- what can I say? - I

Tuesday, 22 June, 1982 -------------- can say that we have made the criteria such that an employer will be required to pay a little more attention to how he sets up the job. There is a requirement for some training-related experienc e for the student. It may wel l be that at the end of the year the Audi tor will come back and say, even that is not good enough. I believe that we have done something further than -(I nterjection)- I missed that. Al and I were practis­ ing for the ball game earlier on. I think he's tired. Maybe we cou ld get a pair for him. To the Me mber for St.

Norbert, I think that's all I can say, that there is what I believe to be a signi ficant di fference and we'll have to see. MR. CHAIRM AN: The Hon our able Mem ber for Pembi na. MR. D. ORCHARD: The Min ister has just rece ntly modified one of the criterion of his program. in that firms of emp loyers of 50 can now qualify. Are the jobs which receive approval still career related or training related? Have there been any employer applications rejected because the jobs they were proposing to employ students in are not career related or training related? HON. V. SCHROEDER: Yes. MR. D.

ORCHARD: How many applica tions would have been turned down involving how many jo bs? HON. V. SCHROEDER: There's only one that I can think of offhand that was brought to my attention; that was a case where a farmer wanted to hire a student for the purpose of strictly babysitting. There was corres­ pondence back and forth. If there would have been any indi cation that the student who wanted indeed later on to go into farming -(I nterject ion)- not bab­ ysitting. If the student would have been given any opportunity to be involved in the farming ope rations, that job would have . MR. D. ORCHARD: So then, Mr.

Chairman, the Min is­ ter knows of one applic ation that has been rejected because the job for which student employment was bei ng offered was not career related. All the other 2, 19 4 or 2, 19 3 jobs created are cer tifiable , career related and training related, then I take it? HON. V. SCHROEDER: I didn' t say that all of the others were "cer tifiable." I think that's a very good word. There may well have been others rejected and there may be some that were approved that are not to a great deg ree career orie nted. MR. D.

ORCHARD: Then the Min ister is not con­ cerned, sinc e he's only had one application he's had to reject, that his program is limiting employment of any students in the provinc e? HON. V. SCHROEDER: Mr. Chairman, I should just say with respect to that one student, one of the prob­ lems that we've had as well was, because it was a suggested babysitting service, that service doesn't qualify and will not, even though we're passing some legislation this Session for minimum wage standards or any other standards.

We were not in a position where we were prepared to get into, even if we felt that it was career oriented, a position where we could take the time and trouble to get into the kind of contracts that the Federal Govern ment has developed with respect to household workers. MR. D.

OR CHARD: So the Min ister cannot assure us that no students are unemployed because of the res­ tric tive criterion - not restrictive criteri on, I'll be less obtuse with him - because of the criteri on he's imposed, he's confident that no students are going without a job under his program because of the res­ triction of job training and career-related employment? HON. V. SCHROEDER: Mr.

Chairman, it may well be that we have more students working as a result of this program, because as I indic ated in response to a pre­ vious question, there's more than half of the emplo y­ ers responding to the survey with respect to the 19 80 program. which was identical to the 19 81 program, indic ated that they thought the purpose of the pro­ gram was for re gular seasonal hiring, regular hiring.

That bei ng the case, and if the cr iteria we have set up are such as to di scour age people from using this ser­ vic e for regular hiring, then it stands to reason that we may well be getting additional jobs that are very spe­ cifically geared toward those who wou ld not other­ wise have had job opportunities at all. I think, cer­ tainly, it's easy to say that under that program there were 5,0 00 job s and under this program there may not be 5,000 jobs, whatever the numbers are, but I don't think that ends the matter because of that very percep­ tion of that former program.

The percep tion was by a majority of employers that it was there for regular employment. MR. D. ORCHARD: Then I take it the Min ister can assure us that, I bel ieve, 51 percent of the 81 applic a­ tions which were re gular job s - if I can use his terms - are those students still bei ng hired by those employ­ ers who now are not applying through his program? Are those jobs still availab le to those students, those 51 percent of the employers? HON. V. SCHROEDER: There are cer tainly no res­ trictions against the employers who answered in that fashion. In fact.

I don't bel ieve that we have any ind ica­ tion as to which those 51 percent are. What we're looking at is the applications as they are coming in and determining whether we have career-oriented jobs. 3503 MR. CHAIRMAN: The Mem ber for St. Norbert. MR. G. MERCIER: Mr. Chairman, in view of the state of the ec onomy which appears to everyone to be get­ ting worse, has the Min ister's department done any researc h. as I bel ieve they used to have, which would give them some overview on the expected state of unemployment in this province over the next months and particul arly fall and winter months? MR.

CHAIRMAN: The Honourable Min ister. HON. V. SCHROEDER: I'm sorry, I missed the last

part of that question, the last few sentences. MR. G. MERCIER: I was asking the Mi nister if his depar tment - I bel ieve they have in the past done research based on cu rrent ec onomic indic ators which appear to be getting worse and worse. Ha s his department done any review of that and does he have any information on the expected state of unemploy­ ment in this province over coming months, particu­ larly the fall and winter? HON. V. SCHROEDER: Mr .

Chairman, all we have is the ind ic ations and various forecasts that have been coming forth nationally and internationally and they've been such as to not put us in a position to rely too heavily on them, quite frankly. Just for exa mple, a year ago the previous government was bei ng told that the turnaround was coming this spring. We were told last December that it might be this spring, might be just a little bit later. There was some material tabled just this afternoon by the Premier; some of that material is rather interest­ ing.

Over the last couple of years, Chase Econo met­ rics has been giving Al can pred ictions as to where the market is going to go and although the market is going down like that during that two-year period , that Chase pred ictions kept going down a little ways, then way up like ch eck marks and yet the real situation was that things kept going down. The point is that I'm not too sure how valid any of those forecasts are right now. As the member knows. we're fac ing a new federal Budget in a few days which might have some impact on employment in the province and in the cou ntry.

As well. the Department of Fi nance has various forecasts. The federal-provincial relations group gets the various predictions that come out from the various forecas ting organizations, the Conference Board in Canada, etc. MR. G. MERCIE R: Mr. Chairman, has the Mi nister received notice of any pending layoffs recently? HON. V. SCHROEDER: Yes, Mr. Chairman, there have been numerous notices of important layoffs, unfortunately. I don't have them with me, but cer tainly the notices one sees in the newspaper, gene rally one gets a notice of that in the Depar tment of Labour office before they're made public. MR. G.

MERCIER: Mr. Chairman. can the Mi nister ind ic ate the number of persons who have been laid off or lost their jobs sinc e last November 30th? HON. V. SCHROEDER: No. MR. G. MERCIER: Mr. Chairman, I wonder what sta­ tistic s does the Min ister have available to him in that regard sinc e last November 30th. HON. V. SCHROEDER: Mr. Chairman, the statistics are there for all to see. There are no sec ret hidden statistic s that the department has. We issue monthly reports-a nd I'm sure that he gets them.

We put him or one of the members on his side on the mailing list for some of our national research material and there are no other numbers. 3504 MR. CHAIRMAN: The Memb er for Fort Garry. MR. L. SHERMAN: Mr. Chairman, can the Min ister confirm or advise the Committee whether all of the employment creation initiatives which come under this total umbrella of Employment Creation are tem­ porary employment creation initiatives and can he provide the Committee with an average life span of that employment? Are we looking here at an average of 12 weeks employment, 16 , 20 weeks or what would the median be? HON. V.

SCHROEDER: First of all, on the Summer Employment I would expect the average would be clo ser to nine weeks or so, although you can go longer, but that's the experienc e. On the Wi nter Em ployment we don't have any finalizaticr1 yet on what the program will be. I would say though that it's not envisioned to be permanent employment. It is envisioned to be short-term employment over what may well be a very di fficult winter. MR. CHAIRM AN: If there are no further questions,

BE IT RESOLVED that there be granted to Her Majesty a further sum not exceed ing $10 million for the Employment Creation Program for the fisc al year ending the 31s t day of March, 19 83-pass. RES. N0. 2- GENERAL SALA RY I NCREASES MR. CHAIR MAN: Continuing with the Supplemen­ tary Supply, No. 2, the estimated cost of general salary incr eases in the several departments of governme nt, $9,000,000.00. The Honourable Memb er for St. Norbert. MR. G. MERCIER: Mr. Cha irman, I asked the Attorney-General a question last Frida y and putting his response politely, I think he thought the question was premature.

It would appear now, Mr. Cha irman, that there is to be a settlement of the wage negotia­ tions between the City of Winnip eg Police and the Ci ty. I don't recal l the exact year, but I belie ve in around 19 75/76, in that area, the former NOP Gov­ ernment amended The Labour Relations Act to give the polic e the right to strike.

Does the Mi nister of Labour - the year doesn't mat­ ter. it's in the Statute - intend to introduc e legislation at this Session of the Legislature to withdraw the right of the police to strike in Manitoba or in the City of Winnip eg and introduce legislation which would involve bindin g arbitration? MR. CHAIR MAN: The Ho nourable Attorney-General. HON. R. PENNER: Yes, just two points, Mr. Chair ­ man. The first statement is much more in sorrow than in anger. I'd like to say this to the Member for St. Norbert.

On Thursday last, acti ng what I thought to be in a responsible way and as I imagined things should take place in this Ho use, I aoproached the Memb er for St. Norbert and I said, I want to speak to you in con fi­ dence. There's this situation with respect to the police strike. I've had commun ications which indic ate there's a basis for settlement that would involve a request that would come in from both parties for such legislation

and I think you should know about it, so that if in fact that's what happens and legislation is introduced, you should know about it. I said. I'm taking you into my confidence on that. The following day, he rose in question period and breached that confidence. I don't think that should happen and I'm sorry that it did and having learned that lesson, I will not MR. CHAIR MAN: Order please. The Honour able Memb er for St. Norbert on a point of order. MR. G. MERCIER: Mr . Chairman, the Attorney­ Gen eral is quite correct in his statement to the Ho use, that he spoke to me on Thursday. When I asked the question of him on Friday, I ind icated clearly in the

preamble to the question that based on the news reports which were on the radio, which were in the newspaper. asked him the question about his inten­ tions for the House. HON. R. PENNER: I've made the point I had to make. It was cle arly based on the com munic ation from myself to the member and the way in which (Interjection)- no. the thing is, the way in whic h MR. CHAIRMAN: Order please. I would just ask whether this debate is relevant to the item before us. Perhaps that would be the best way to proceed. HON. R. PENNER: Ok ay.

To proceed with the spe­ cific question then, havi ng made the point I wanted to make MR. CHAIRMAN: The Honourable Memb er for Turtle Mountain on a point of order. MR. B. RANSOM: Yes, Mr. Chairman, it's been the practice in the Ho use that when a member says that something is so. then that is accepted by the Hous e; and the member has said that his question was based upon news reports. The Government House Leader then proceed s to say that he has demo nstrated to his satisfact ion that it was not based upon those reports. I think he should withdraw those remarks. Mr. Chairman. MR.

CHAIRMAN: The Honour able the Attorney­ General on the same point of order. HON. R. PENNER: Yes, on the same point of order. The Mem ber for St. Norbert has not denied that I spoke to him the day before and said I want to tell you something in confidenc e. He has not den ied that. MR. CHAIRM AN: The Honour able Memb er for St. Norbert on the same point of order. MR. G. MERC IER: On the same point, Mr.

Chairman. indic ated quite cle arly and I thank the Min ister for taking me into his confidence and I would respect that confiden ce, but when a matter subsequently becomes a matter of public record through the media in the city, surely then the Attorney-General wouldn't expect me to retain that confidence forever when it becomes a matter of public record. Surely I can then stand up and ask the Min ister of his intentions. 22 June, 1982 MR. CHAIRMAN: The item before us, I bel ieve, is removed from the original question asked by the Honour able Memb er for St. Norbert and indeed from the reply.

I would just ask that further questions be directed to the item before us. The Honourable Attorney-General. HON. R. PENNER: Replying to the question which was asked, I thought that the legislation in question had been introduced earlier. but as the Memb er for St. Norbert says, that is not the particular point. I want to make it clear. as I thought I had, to the Mem ber for St. Norbert on Thursday last and as I'm sure I did in my reply to his question on Friday last, that we would not impose bindin g arbitration legislation on an unwilling group.

In the di scussions that were held with the Mayor and Deputy Mayor first and then in sequenc e with the solici tor for the Polic e Assoc iation made it abundantly clear that only if there was explicit word-for-word agreement between the Association and the City of Wi