THE LEGISLATIVE ASSEMBLY OF MANITOBA 8:00 o'clock, Friday, April 19th, 1963 MR. EVANS: Madam Speaker, this being government business, may I ask you to call the second readings of public Bills. MADAM SPEAKER: Second reading of Bill No. 72. The Honourable the Member for Swan River. MR. BILTON presented Bill No. 72,

an Act to amend

an Act for the Relief of the Estate of Charlie Young, deceased, for second reading. Madam Speaker presented the motion. MR. BILTON: Madam Speaker, in 1961 this Legislature enacted Statute 72. It was as­ sented to in April 15th, 1961. The enacting sections provided as follows -"Notwithstanding any provision of The Liquor Control Act, Flin Flon Hotel Company Limited may sell the Northland Hotel Limited and the Northland Hotel Limited may purchase from the FUn Flon Hotel Company Limited, the Flin Flon Hotel and the land described in the

preamble to this Act upon which the Flin Flon Hotel is situated. ,Notwithstanding The Li quor Control Act the Liquor Control Com­ mission may issue licences to the Northland Hotel Limited." Following the enactment of the above statute in 1961, Northland Hotel Limited purchased from the Flin Flon Hotel Company Limited. Subsequent to the purchase of the Liquor Control Commission the Liquor Control Commission issued two licences under the Liquor Control Act to the Northland Hotel Limited in respect to the Flin Flon Hotel, and the hotel was operated by the Northland Hotel Limited.

On June 9th, 1962, a fire occurred in the Flin Flon Hotel which caused substantial damage. I might add, Madam Speaker, that in Flin Flon itself now it has been reduced to one hotel for the entire community. Subsequently the Northland Hotel Limited applied to the Liquor Commission for the re­ quired authority to rebuild the hotel so destroyed. The Liquor Commission considered that it did not have the necessary authority pursuant to

Section 71, Item 3 of The Liquor Control Act, as that

section applied to persons who had owned the hotel on coming into force of this Act in 1956, Northland Hotel Limited, of course, did not become the owner of the Flin Flon Hotel un­ til after the Legislature enacted

Chapter 72 in 1961. The Liquor Control Commission obtained the advice of the Attorney-General following which it wrote to the representative of the North­ land Hotel Limited under the date of October 1962 and stated, in effect, that it granted permis­ sion for the rebuilding of the Flin Flon Hotel, provided Northland Hotel Limited sought an ap­ propriate amendment to the statute which was passed in 1961. This is the amendment which is now before the Legislature.

It's purpose is to remedy a technical. objection which·now exists so that the Northland Hotel Limited may have the necessary authority to proceed with the re­ building of the Flin: Flon Hotel. MR . MOLGAT: Madam Speaker, I don't rise to object to the Bill at all. I agree with its passage. I wonder, however, why this should be a Public Bill rather than a Private Bill. It seems to me to be a Private Bill in nature and if someone could give me an explanation that would be fine. I have no objection to the passage of the Bill on second reading. MR .

BILTON: I appreciate the question given, Madam Speaker, Unfortunately I am not able to give that particular answer at this time but I would ask that it go to committee and I am sure that information will be provided for the Leader of the Opposition. Madam Speaker put the question and after a voice vote declared the motion carried. MR. GUTTORMSON presented Bill 77,

an Act respecting The Rural Municipality of Coldwell, for second reading. Madam Speaker presented the motion. MR. GUTTOR MSON: Madam Speaker, this Bill if it's passed will permit the Munici­ pality of Coldwell to hold a vote in the municipality prior to the regular --prior to when the re­ gular elections are held. Madam Speaker put the question and after a voice vote declared the motion carried. MADAM SPEAKER: Second reading of Bill No. 82. The Honourable the Member for Elm wood. MR . S, PETERS (Elmwood): Madam Speaker, I fully anticipated that we'd be going @!;lctly into Estimates when we came in this evening, and I've taken all my Q.Otes and April 19th, 1963 Page 1407

(Mr. Peters, cont'd. ) ••• everything home with me. I haven't got my material with me and I beg the indulgence of the House to have this matter stand. MADAM SPEAKER: Second reading of Bill No. 84. The Honourable the Member for Portage la Prairie. MR. ROBLIN: The Honourable Member is not present Madam Speaker. I don't know whether anyone else would care to move this Bill. MR. s. PATRICK (Assiniboia) presented Bill No. 84,

An Act to amend The Portage la Prairie Charter, for second reading. Madam Speaker ptesented the motion. MR. PATRICK: Madam Speaker, I'm afraid that I can't explain at this time . Madam Speaker put the question and after a voice vote declared the motion carried. MR. B. P. STRICKLAND (Hamiota) presented Bill No. 12,

An Act to amend The St. James Charter, for second reading. Madam Speaker presented the motion. MR . STRICKLAND: Madam Speaker, I find myself somewhat in the same position as the Honourable Member for Assiniboia. However, I think it is pretty well self-explanatory except for one line which says that the aldermen's indemnity will be raised from $18, 000 per year to $2, 400. 00. I think that's probably an error and it should be $1, 800. 00. MR . CAMPBELL: Would the Honourable Member who sponsored the Bill mention to the committee just what By-law No. 7377 is, please? MR.

STRICKLAND: .•.• we must allow this to go to second--to the committee and I'm sure that we'll get a sufficient explanation from the members of the council of the City of St. James, Madam Speaker put the question and after a voice vote declared the motion carried. MR. COW AN presented Bill No. 80,

An Act to amend

An Act to incorporate The Sink­ ing Fund Trustees of The Winnipeg School Division No. 1, for second reading. Madam Speaker presented the motion. MR. COWAN: Madam Speaker, this simply provides that documents of the School Di­ vision may be executed by any one of the trustees and the Secretary-Treasurer, or in the ab­ sence of the Secretary-Treasurer by the Assistant Secretary-Treasurer. Madam Speaker put the question and after a voice vote declared the motion carried. MR. D. M. McGREGOR (Virden) presented Bill No. 97,

An Act to amend The Virden and District Elderly Persons Housing Corporation Act, for second reading. Madam Speaker presented the motion. MR . McGREGOR: Madam Chairman, one of the most important developments that has taken place in rural Manitoba in recent years has been the establishment of homes for our senior citizens who are more than worthy of this development.

There is, I think, a great deal of merit in having these homes decentraiized so as to allow the senior citizens to spend their latter days among their relatives and friends with whom they have associated all their lives, and in the same area where they have all made some contribution to their respective communi­ ties as a whole.

When the government brought in the Elderly Persons Housing Act it encour­ aged many communities to plan and make arrangements so as to make the most out of this Act, and I can't compliment too highly the community of Virden and the surrounding municipalities, especially Reeve Odell and ex-mayor Cliff Cory and all the other mayors and councillors and reeves. The original bill enabled Virden to go ahead with the elderly citizens home at Virden. The contract is in excess of one quarter of a million dollars. I had the privilege only last Sat­ urday of taking

part in a program and associating with the turning of the first sod. With this very good legislation there are still two areas which did not --while the vote was over 50 percent, it wasn't high enough to qualify, and one of these is the very fine town of Elkhorn and this bill would allow Elkhorn to vote in now. The other area is my own municipal­ ity which I'm very familiar with. We're in rather an unfortunate position. To the north edge of our municipality we have the very good elderly citizens home in Hamiota.

To the south edge we have the --which will be equally as good a home on the south edge --with the result that our municipality, it is very hard to see when they would ever vote either way, and this bill will allow them to split the municipality, and also as the whole project is sort of- if Woodward and Elkhorn were to vote in there's no need of raising the mill rate, and this is, I think, very Page 1408 April 19th, 1963

(Mr. McGregor, cont1d.) • • • important, but without it, it will definitely have to be raised, and it is my sincere hope that this legislative Assembly will see fit to support this bill. Madam Speaker put the question and after a voice vote declared the motion carried. MR. ROBLIN: Madam Speaker, I think that we now come to the motion of Supply. I move, seconded by the Honourable Minister of Industry· and Commerce, that Madam Speaker do now leave the Chair and the House resolve itself into a Committee to consider of the Supply to be granted to Her Majesty . .

Madam Speaker presented the motion and after a voice vote declared the ,motion carried, and the House resolved. itself into a Committee of Supply with the Honourable Member from St. Matthews in the Chair. MR. CHAIRMAN: Department XIV, Item 1- Administration. MR . ROBLIN: Mr. Chairman, before we begin, I wonder if I could have the indulgence of the Committee to make a suggestion on· a point of order. As the committee knows, we did not debate further today the resolution about the Election Act and it will be debated next Thurs­ day.

May I request that those who intend to speak on the resolution be prepared to do so on Tuesday so that we can, .I hope, dispose of the resolution and send it to a committee so it can be acted upon before long, otherwise I'm afraid time may be a bit pressing, so I solicit the co­ operation of those who are interested in this resolution to ask them to speak on it on Tuesday so we may have the fin!ll disposition and make the other arrangements that are necessary. MR. MOLGAT: Mr.

Chairman, before we start off into the discussion of the estimates at hand, I wonder if the First Minister could indicate whether we will go on the termination of Industry and Commerce into the Labour Department or into the Welfare Department. MR. ROBLIN: We'll keep right on going in the regular order and we'll leave Labour un­ til the Minister's return, if he returns in time. If he doesn't return in time some other drastic measure will have to be taken. MR. PAULLEY: Mr. Chairman, the Honourable the First Minister mentioned proced­ ure insofar as the resolution dealing with the Election Act is concerned.

I just want to make this observation. As the sponsor of the resolution I want to make this reservation. I agree with him that this should go to committee and I'm glad to at least hear by implication from my honourable friend opposite that the resolution is going to be adopted and it will be going to a committee, which was the objective of course in the original resolution, but I want to make this reservation however. I note that the resolution is in the hands of one of the honourable mem­ bers of this House.

There Il)ay be others speaking on the resolution, and I reserve the right to close the debate not on Tuesday, dependent on what they have to say dealing with the resolution. However, I am prepared at the present time, I might say, Mr. Chairman, to close the debate on the resolution providing --providing there is nothing of a controversial nature as it arises that will make me, or place me in the position where as the sponsor of the resolution, I'll have to take a second look at· what they say. MR . ROBLIN: It'll be controversial, you can count on that. MR . EVANS: Mr.

Chairman, I want to thank my honourable friend from Burrows for yielding to me for just a moment. I touched very briefly last night on the representations that had been made to Ottawa about keeping the TCA base here, and I have provided enough copies of the brief that was submitted on behalf of the Manitoba Government by a joint delegation re­ presenting many interests in Manitoba that went to Ottawa. The pages have enough copies for the members and I'm going to ask them to distribute these copies now.

I do so for this reason, that I hope we will keep this subject very much in the front of our mind_s, that we will see that · our point of view is as widely recognized as possible, and that business and government and other interests keep this subject very much alive because it seems to me there's an excellent chance of winning, and I don't want the subject to be forgotten, and so if it's of any interest to the members and of any help in this cause, I'm going to ask that copies of this brief be distri­ buted now. MR. M. G. SMERCHANSKI (Burrows): Mr.

Chairman, I want to say a few words at this time regarding the Department of Industry and Commerce. Although this is my first session in this legislature, as a businessman I am very familiar with the work of this department, the service it provides, and its very enthusiastic staff. From personal experience I believe that I have done a good job in trying to analyze the work of this department in referfilnce to its help to April 19th, 1963 Page 1409

(Mr. Smerchanski, cont'd.) ••• our businessmen and encouraging the establishment of new industries.

As a Manitoban, I am very proud when I read in the papers that recognition has been given to the report which was prepared by this department, and also almost international recognition for its work in this particular field, and for this reason I want to congratulate the Minister of the well- deserved recognition, and through him naturally the members of his staff, because I feel that the report that we have before us today -- and I'm now referring to the Re­ port on the Economic Future of Manitoba -- is one of utmost importance.

I also would like to mention at this time that the civil service is possibly the most important part of the machinery of any government, and without the well- trained and honest civil service, efficient government is impossible and it is upon this service that we depend to see that the government's policies are realized in action, and then in the same manner and under the same conditions, the govern­ ment of the day is to be judged on its merits. This may be assessed by answering three impor­ tant questions. What does it propose to do? How does it intend to do it? And does it live up to its promises?

Now in the tabling of this report, this report again and again says that the number of new jobs needed in this province must be generated by a drastic increase in new jobs, jobs in the manufacturing field, otherwise we're going to have a serious unemployment problem. The report stresses the economic growth must be given much more importance in government poli­ cies. It urges that the government move quickly to do these things, those things needed, and which will act as a stimulus to the other sectors of the economy. I find that the programs which this government has announced are insufficient.

Some of these are good, and some are urgently needed, and some of them do and some of them do not follow the recommendations of the Com­ mittee on Manitoba's Economic Future. However, on an over-a ll approach they are msuffici­ ent to meet the challenge facing us, and indicate to me that the government is not fully aware of the seriousness and the magnitude of the task facing us. Even to just look after our own labour force by 1975 will mean we have to double annually the number of new jobs in manufacturing a­ lone.

The present rate of acknowledged growth in Manitoba is approximately L 1% per year, and in 1975 the labour force is expected to be something in the vicinity of about 422,000 and yet at the rate we're going, the work force will be only 347, 000 that can be accommodated.

This leave·s one job in every five that people will be unemployed, and we must face up to the fact that these people are going to be potential candidates who will leave this province; and I almost am certain, and I know that most of us are certain, that these candidates who· are going to be leav­ ing the Province are going to be a better educated, a better equipped people that will leave the province to other parts of the world, and even if the government came forward immediately with a really new and unique program to promote expansion, we have to be fair and admit that it will take a couple of years to show results, and this makes the problem that more urgent.

The government should suspend the playing of the popular tune of economic planning and get down to some real honest-t o-goodness action. One of the really critical problems we have to provide is a great many more jobs in rural Manitoba. I admit this is very difficult, but I also feel that our rural areas have a definite contribution to make to the future of Manitoba. Manitoba is not composed or comprised of Winnipeg or Greater Winnipeg, Portage la Prairie, or Brandon or Selkirk. The rural parts of Manitoba are equally as important -- Gimli included.

RU:ral industrialization is quite honestly getting the short end of the stick, and is not receiving the special attention it needs and it should have. I know some good work has been done but again, I disagree and I find that the government is not aggressive enough in its approach. I think evidence of the importance or lack of importance the government gives to rural industrial development is that I believe that at the present time we've only got two full-time peopl-e em­ ployed by the department in this work, and let us just for a moment look at the comparison of what is being done in other fields.

Take, for instance, the field of Agriculture. We have over 40 people employed as agri­ cultural representation in rural areas of Manitoba. We also have from the Department of Wel­ fare, some 13 employed, in reference to the Indian and Metis problem. I'm sure these people are needed. I'm not being critical of these departments, but I only use this as a comparison and to bring it strongly to your attention, that we also must have representation of people from ·the Department of Industry and Commerce in order to give more effective industrial growth in rural Manitoba.

The people have had enough of more spending and less concrete planning. Page 1410 April 19th, 1963

(Mr. Smerchanski, cont1d.) ••• Let's do away with these fine phrases. Let's do away with all this window-dressing and let us get on with the job and industrialize rural Manitoba. Rural Manitoba development will not expand fast enough without help, and I feel that the Department of Industry and Commerce should be employing special development officers and locating them in key points throughout the province. I agree there has been some growth of industry in our rural points, but the employment generated falls short of the actual need.

Again I repeat, and I say this quite strongly, that in my opinion, government plans show they do not really appreciate the urgency of our plan or problems as spelled out in this Report of Manitoba's Economic Future, and I have full cogni­ zance of it. I was fortunate enough to serve on three committees. We also had possibly the best selection and representation of business and business ability and brains, the selection of which to a large extent, of course, was done by the department; but here again, action must be taken and the-report has to be followed closely or otherwise we're going to fall short of our mark.

Experience has indicated that it may be difficult to convince professionals as well as laymen to think in terms of plimning on a rural basis. Apparently, home town allegiance or other factors tend to serve as a barrier in many instances where the thinking is limited to one zone locality and confined to one's own political thinking. Now, this should not be permitted to hamper the development of our industry in Manitoba. Communication with the public to assure complete understanding is the task of this development board.

The group must understand com­ pletely to what extent the local situation is to be investigated and properly planned for industrial growth and it will be the responsibility of this board to kindle or set afire the enthusiasm in the local groups and make them fully responsible and fully aware that they must assist in the build­ ing and expanding of industry in their community. I now make a further comment ori the observations of research problems, and much has been said in reference to research, and research is a very challenging -- it's a very interest­ ing type of a word.

In rural research, or for that matter in research of any nature, I can tell you this, there is never a shortage of what I would describe as "deadwood engineers", but there is always a shortage of good engineers. Topnotch research engineers are usually promoted to management functions because technical decisions are very much required in order to contri­ bute to the total management of the over-all undertaking, but nevertheless, I cannot help but stress that good proper research is not a salary program, but rather a state of dedicated think­ ing.

There is a very definite impact that an engineer's skill or ability and that his interest will have on a research problem.

Another thing is that the result of any such research prob­ lems at times is completely uncontrollable, because the engineer or the individual, like some of the politicians or members of this committee, can develop statistics to argue for their own conclusion regardless of the situation, and the result of such a research project leads to inter­ nal distortion, misrepresentation, frustration and improper conclusions, because the engineer is still-a human being. ·Some will negotiate well and others will negotiate not so well. The proper impact of a research engineer -- and I want to dwell on this slightly, Mr.

Chairman, because in order to implement the studies of the vast number of business brains and engineers who have contributed to the study of this report, is of prime and utmost impor­ tance, and on this problem is that some of the research personnel will do more than is expec­ ted from them, and in research an engineer should not be paid in relation to how scarce he is, or_ how old he is, but on his ability to perform research.

Top management judgement is con­ stantly required to properly define and evaluate the relative value of research, and this is equally as important as the undertaking of any research problems.

To undertake a research problem is meaningless unless we are prepared to have some senior authority analyze these research problems and put them into actual practice and convert them so that we can live with them with our every day living, and try and benefit the community or the area in which we're working to interpret it filially in terms of jobs, in terms of being able to give somebody the satisfaction of being able to live and belong in a community. And let us not be carried away simply by the saying of research, where it will be done.

This requires, and I say this again, management responsibility of the highest calibre. I am an optimist and I always am going to be one, and when the Honourable Minister of Industry and Commerce, and when the Honourable Minister of Agriculture, tell this comii!ittee -- and I'm April 19th, 1963 Page 1411

(Mr. Smerchanski, cont1d.) .•. not being smart about this remark at all -- they are not just clear or certain as to what type of research will be done in reference to the Interlake area or other rural areas, and I again ask this, who is going to guide this research? This is of vital importance to me. This is of vital importance to our department, to know who is going to di­ rect these people in research. We have at the present time under the Agricultural Research and Experimentation, we have had a feasibility study of the Interlake area.

We have had by the same department the research on the livestock production in Manitoba. We've also had by the same group, the feasibility of p ...•. in the Interlake area, and I want to tell this committee that in this small little booklet, this represents many, many thousands of dollars of work ex­ tended and many, many hundreds of hours of very intelligent, scientific experimentation; scien­ tific experiments in the lab; long hours of evening study and conclusions to draw up a proper conclusion to a proper report.

These are the kind of things that can be put in action; converted into dollars and cents; converted into a rural industry that will help to give employment to our people in Manitoba.

I happen to have been a research fellow in my post-graduate years and I know what I'm talking about when I say that research has to be well guided, but I shudder to think what might happen with some of the present suggestions that have been put forward in this House by this government, in that there is a suggestion -- and I might be wrong on this conclusion; if I am, somebody can correct me -- that some of these research programs are a bit hazy and are some­ what unknown. It is comparable to a city youngster who has never seen a cow and claims that its milk comes continually from a milk bottle.

The government has said a great deal about the plans to help increase exports, and I agree. This holds a tremendous potential, but unless the government is prepared and able to provide specialized aid and services of a very practical nature, most of the plans heard today will only remain to be paper plans. Our Province of Manitoba is not situated in the best of circumstances for primary industries. In order to cre­ ate primary industries in Manitoba, first of all we have the difficult problem of transportation. We again have the difficult problem of being a long way from market.

To service the customers is rather a difficult problem.

But then in the field of secondary industries, this is where we truly can shine, and I would only want to read for the benefit of the committee, the report that was made on the Manufacturing and Community Development in Canada on behalf of the Machin­ ery and Equipment Manufacturers Association of Canada, and this is what they say: "Secon­ dary manufacturing industry has become a vital part of most Canadian towns and cities, and is indeed essential to the very existence that .... potentially which such industry alone affords, for their continued growth and the increased prosperity of Canada is not yet generally under­ stood." And the reason I say that is that times are changing.

At one time it used to be that when you had the industrial revolution in England, to stage one was wherever you had coal and iron, this was the centre of industry. Later on, we got into the second stage of where you might have had electricity, oil, or gas; or chemicals, and you had natural raw materials and then this became the hub of your industrial growth. It seems that since the wartime the entire world over, we've entered into a third and new type of stage of industrial development.

And this is a stage where the ability of any community -- and I think that this applies very well to our Province of Manitoba, being able to improve its own social and economic organization, and that it has the power to initiate through superior ingenuity, new processes, new technical or­ ganizations and productions.

In other words, I want to draw to the attention of the members of this Committee that if we retain the high level of learning, the high learning of brilliant, able, research fellows which originate from ourselves, which originate in our province, if we can keep them at home we can not only outsell, we can do better research, we can out-produce, we can, with efficiency, do a better job than anybody else can do under the same type of circum­ stances.

This matter of active, aggressive planning has been a subject which has been given a great deal of attention in this report, and I consider this report almost being equivalent to the Bible in the household. This is the Bible of our industrial growth in Manitoba, and I think that so much effort has been put into it that we should never lose sight of the fact that this is what it's here to provide for. It is to provide and do a specific function for Manitoba, and I think we should get on with the job and get active on this report.

I know that this is a very thick report and I don't know how many of you have read it from cover to cover. I've had a pretty good Page 1412 April 19th, 1963

(Mr. Smerchanski, cont'd.) . • . appreciation of what's in it from cover to cover. I would only want to read it once more to get a little better acquainted with it.

However, I would like to read to the Committee one of the paragraphs that is of prime importance, and it is this: "Though it is the responsibility of business firms to open up foreign markets by exporting goods, there are areas in which exporters could be assisted; As indicated previously, successful overseas marketing is impossible without adequate information about markets for products, and a government can materially assist by expanding its markets intelligence service. Ade­ quate. marketing research is expensive. Large firms can afford these expenditures but small secondary manufacturing firms cannot.

Identifying markets for specific products is a service that should be provided, Much information is already available from the Federal Department of Trade and Commerce, but more extensive information, oriented to the specific needs of Manitoba's exporters, is needed to encourage greater participation in exports. This informa­ tion must be prepared by specialists familiar with the practical export needs of Manitoba busin­ essmen. The Committee does not know the size of staff needed to carry out an effective export marketing intelligence function.

It can be assumed it must be larger than the existing staff and must include technical marketing experts in forest products, process foods, textiles and cloth­ ing. Such a program will cost money, but failure to provide funds for these purposes would prove to be a short-sighted economy. The Committee therefore recommends that adequate . funds be made available to permit a sustained full.,-scale program to .promote expor.t marketing .. " As far as I can tell, the government is making no provision for trained practical men without whom these plants cannot succeed.

Again, as far as I can tell from what the Minister has said, and by looking at the estimates, the government's program for creating new job op­ portunity lacks a basic sales function, without which any program of economic development simply cannot succeed. The importance of sales aspect of any development program is equal to that of any private company which can only achieve growth through increased sales of goods and services to the consumer or to our industrial markets. Mr. Chairman, I don't simply want to be critical. I don•.t simply want to be drawing som\') conclusions from this report.

I also want to be very specific in what I think and certain­ ly what our Libera.l Party feels should be undertaken in order to help and assist, in addition to what has been done now, to provide the necessary number of jobs in Manitoba, because this is the prime concern of every one of us within this Committee. Today, even a quality product re­ quires a quality sales program, and I would say that the government's program falls down in three important ways. · 1. A quality sales program entails a thorough coverage of proven and potential sales territory.

If Manitoba's going to create more jobs we need more factories, and to get more factories you must develop legitimate industrial prospects. And, in my opin­ ion, this can only be done if -- and what I am about to say, I'm saying this with all sincerity, and I know that the Honourable Minister of Industry and Commerce will agree with me -- only if our DeputY Minister of this ·department spe.nds a great deal more time in other parts cif Can­ ada, the United States, or Europe, in developing new prospects.

This is not a task that can: be done, nor is it a task that can be delegated to assistants, or secondary type of personnel, and I am not being critical that the personnel in this department is being secondary, or anything of that nature, but what I am suggesting is that this has to be done on the highest of levels.

As the Honourable Minister knows, I was a member of the part of the Manitoba Trade Mission, and I think that the Minister will agree with me that in Europe we found Manitoba was not well-known by the businessmen or the investment men of Europe, the reason being that Ottawa has their own departments but Manitoba is not in that same coverage. This job cannot be done by an overseas representative who is not in daily touch with business conditions in the province, or who does not, and in all fairness cannot be expected to know the policy of the government.

I feel we are fortunate in Manitoba in having the type of Deputy Minister who can talk the language of the businessman, and we should be using him more for this purpose. But I would againliketo repeat that I think the government program fails in not providing for suffi­ cient contact work at the proper level with industrial prospects in Canada, United States and Europe. Secondly, I feel a much larger and a more aggressive program of industrial advertising and promotion needs to be provided. Too many people do not think of us as a manufacturing province.

They think of us as a wheat-growing province and this makes it more difficult to get April 19th, 1963 Page 1413

(Mr. Smerchanski, cont1d.) .•• people to become interested in investing in the manufacturing companies in the Province of Manitoba. And I speak with personal experience in this respect. So, I repeat, that I feel the government's program lacks an intensive and a well- directed ad­ vertising program. Thirdly, Mr. Chairman, one of the findings of the Committee on Manitoba's Future was the urgent and immediate need to better integrate action by various government departments on matters relating to economic development. And I would like to use an example in reference to this.

The Honourable Minister last night mentioned the establishment of a design institute.

In this House we have been given certain pamphlets from the Manitoba Institute of Technology in reference to electronics technology, certain phases of engineering, civil engineering, mechan­ ical engineering -- very well, very good; but would it not be better, instead of establishing a design institute, would it not be better if Manitoba is a centre of the soft goods industry -­ which we are -- would it not be better to establish under the Manitoba Insitute of Technology, a design institute that would be called a design technology advisory committee, and we can go on along with a practical application, have 50 or 60 or 70 students enrolled in the courses at the institute, and carry on with the education of these people, with the training of these people from which the industry can draw, and from which we can expand and produce a better product which we can sell on a far better competitive basis in other markets outside Manitoba.

Another thing is, do you realize that in some of our smaller manufacturing industires where the cost of power is almost of vital importance, that we have to pay in rural parts twice the cost of power as compared to other areas of Ontario? And I ask you, members of the Com­ mittee, what incentive is this to industry when our power costs are double compared to what they are in other sections? And this can be eliminated if there is proper co-ordination with one department and another.

When a new industry starts to get established it would be very advisable to have the inspectors, or people who have the final decisions to make in reference to health, sewage, water, sanitation, if they approached the prospective business enterprise with the approach that, "what can I do to help you?" instead of laying down a specific set of conditions and telling them "these are the rules you must abide by." and I tell you that this is not conducive to getting new industry to the province. It is not unlike running your own busin­ ess establishment.

Every customer that comes within your door is a customer, and you treat him with the utmost of respect, and I think if this can be passed down to the lower echelon of our Civil Service, I think we will have gone a long way towards being able to encourage new industry and the establishment of new industry in Manitoba. MR. CHAIRMAN: I would like to tell the Honourable Member he has three minutes left of his 40 minutes. MR. SMERCHANSKI: Thank you, Mr. Chairman. I shan't be too long. I'm getting to the bottom of it. MR . MOLGAT: I'll be quite pleased to let the member speak iil my stead.

He is our official critic in this department. MR. SMERCHANSKI: The first point is that one of the findings of the Committee on Manitoba's Future was the urgent need to better integrate the various government departments on ma:tters reiating to economics development. The program announced by the Minister gives no indication that the government plans to take any action whatsoever along these lines in order to integrate government activities towards the ultimate goal of increased sales with the object of creating new job opportunities through industrial growth.

Other government departments could contri­ bute a great deal more than they're doing at present if the government had a stated policy of all de­ pa rtments encouraging expansion. It would help, for example, if the Utilities Board was required to refer subjects affecting development to the Department of Industry and Commerce before giving a definite decision. I think the Department of Highways should check the needs of the business community to ensure roads are built to strengthen the industrial development position to the community.

There's no sense in putting out a heavy construction or a heavy type of in­ dustry 40 miles out of Winnipeg on some road that cannot carry the weight and is subject to re­ striction, because you hamper the expansion of this industry by virtue of transportion. The Department of Education should be required to consult with the Department of In­ dustry and Commerce on training programs, such as the needle trade, for industrial workers which I understand is not being done at the present time. Another thing is, I honestly question Page 1414 April 19th, 1963

(Mr.

Smerchanski, cont•d.) ..• -- and I know that I'm subject to criticism if I say this --I would have sooner liked to have seen instead of having electronic technology, chemical techno­ logy or chemical engineering, because I want to tell you that we are facing one of the biggest expansion possibilities in the chemical and related chemical fields in this province by being able to break into the chemical market south of the border and they are there is we are willing to put our shoulders to the wheel, develop them and capture these markets on a competitive basis by comparing our ability and talent with the American ability and talent.

I also think that the Manitoba Hydro should be more closely integrated with the Department of Industry and Commerce to establish rates which could attract new industries. Also the Department of La­ bour, for instance, should be required to refer all labour legislation so that its implication from a development standpoint can be properly assessed, and I can give you a prime example of what can be done. There are many marginal industries that can be developed in terms of mines.

Now I realize that maybe the basic rate is $2.50 an hour, but if people are unemployed in the province I think that they would be quite pleased to get a basic rate of $1.75 an hour, and I think that these people working at that rate would be very proud that they can carry their own weight and earn their own wages rather than be receiving some type of welfare.

These are the type of things we have to consider, and it's not a matter that industry or the businessman is being sel­ fish, because in the first instance the businessman has to make his investment and for every one dollar that he spends on capital expense, there's 20 percent of it goes back to the govern­ ment in form of taxes to labour that he has paid, and sales tax, and another 20 percent goes back as a secondary tax rake-off because that money is spent within the community and churns around three or four times; so that it's only 60 cents that the government doesn't get hold of, and I think that the businessman is entitled to some type of a break until he recaptures his capi­ tal and after that I on my own am quite willing to share 50-50 with labour or anybody else that there is to share with, providing they work a 60-hour week like I do.

I would then share it with them. Finally, I would like to say something about the Manitoba Development Fund, and again I speak as a businessma� who is thoroughly acquainted with the Fund and its operation, and Mr. Minister, my criticism is not what it is doing, but rather what it isn't doing. I acknow­ ledge its operation is in accordance with the government policy. I am the first to recognize it has helped development, but it hasn't done nearly enough and in my opinion could be a much more important source of industrial development. At present the Fund is excessively conser­ vative in its lending policies.

Its interest rates are too high and its security requirements are completely out of this world. It operates too much like a bank and not enough like a de,vel­ opment agency, and I speak from experience. And I would make a suggestion that we sell out the Manitoba Development Fund and turn it into a private enterprise and let private enterprise handle it. I think it is a:lso much too restricted in the kinds of business it lends to.

Before I hear these remarks of "oh, oh" I only would want you to put some of your own money into a business enterprise and try and make a go and you'll realize that there are more headaches in labour in itself. MR . CHERNIACK: Is that Liberal policy? MR. SMERCHANSKI: It's a free enterprise policy, my friend. MR . CHERNIACK: Liberal Party policy? MR. SMERCHANSKI: It's a free enterprise policy supported by the Liberal Party.

There are needs in transportation, in construction -- Well, I guess maybe it's just as well. to laugh a little bit because that'll break the tenseness of it. 1 do believe that there are certain trades that are not permitted to get loans from the Manitoba Development Fund at the present time, but I do feel that these industries are equally as capable to provide jobs and provide new jobs in Manitoba, and I think that these should be included in the new industries that should be given the opportunity to take advantage of the lending facilities of the Manitoba Development Fund.

I think the Fund is too passive in its activities. If the government agrees there is some urgency about developing new jobs, I recommend that the Fund be instructed to go out and seek new projects that can be brought to the province with the assistance of the Fund, instead of pro­ spective business developments having to go to the Fund. In this way it will help develop and create new jobs and not just wait for somebody to come knocking at its door . . Mind you this is April 19th, 1963 Page 1415

(Mr. Smerchanski, cont'd.) ••• not completely correct, because it is aggressive, but it is not aggressive enough. I also feel that the interest rates on these loans to rural industries should be reduced in order to give some incentive to rural development. For instance our matter of assessment.

Why should I or why should anyone of us locate in an isolated area and have to pay the same type of taxes as we would pay in a more settled area, and why should we have the inconvenience of having to commute a longer distance and not have all the facilities that a greater developed area like, say, the City of Winnipeg will provide, and unless this is done, you're going to get people leaving rural areas of Manitoba, coming to Winnipeg, and Winnipeg will grow bigger and you're not going to complete the industrialization of rural Manitoba.

I feel that this De­ partment has a key role to play in the future of this province, and as everybody knows, Manit­ oba is facing a tremendous challengE;�, and this is no secret. Read this report and you'll be just as convinced as I am. Well I know this Department has done good work in the past. It appears the government does not realize the seriousness or the urgency of these problems of providing these jobs that are ahead of us. Neither do I feel that the government has come forward with a program of in­ dustrial development which is needed to create jobs at a fast enough rate.

Now -- and I qualify that "at a fast enough rate" --I say let's get along with the work and establish new industry. Some of you may say, "It's fine for you to get up and talk," but I opened up that I was an opti­ mist and I want to tell you this, that in the last five years.

I'm very proud to say that I have been able to create new industries or get associated with new industries that has provided some 200 jobs, and I can tell you this much, that when I lift up pamphlets that describe indus­ trial development in places like Trinidad and Tobago where they give you 90 percent of your capital allowance and charge you four percent on your money, and charge you no income tax, no realty tax, for a period of five years, I tell you that we people in Manitoba had better get out and work, and work mighty hard if we want to realize the fruits that the businessmen and technical men together with the Civil Service help in this Department that has made possible the creation of this report.

I also want to mention that some time back I was misunderstood in this Chamber when I was quoted as doubting the successful development of industry in the Interlake coun­ try.

Nothing could be further from the truth, because as the Department knows, in the last six months I, with some of my associates, have spent close to -- or will have spent close to half a million dollars in establishing the only modern nylon hosiery plant in Canada west of Toronto, and I agai.D. say, I myself am an optimist, and as far as Manitoba is concerned I shall continue to remain one and I shall continue to be a good Manitoban, and I only ask you, Mr.

Chairman, that if we are sincere, if we are honestly endeavouring to make Manitoba a better province to live in -- and we can only do this by increasing our industrial growth be­ cause this is the only way in which we can gain this growth -- all of us, irrespective of our politics, irrespective of our petty feelings, irrespective of our petty jealousies, that we can, we must, and we could develop industries. in rural Manitoba, and I can tell you that it is a challenge, but it can be overcome, and it gives one a great deal of pride, pleasure· and joy in being able to set up an industry; an industry that's successful, that operates at a profit, and being able to say, "Well at least I had a hand in getting it established," and with that, Mr.

Chairman, I thank you ever so much. · MR. CHAffiMAN: • . . . that as we did with the Department of Municipal Affairs and did, I think, very successfully, we'll confine our remarks under Administration to the general statements, and if we have something in mind concerning the other nine items that are under the Department, we will discuss those when we come to them. Shall we do that? I think we'll save a lot of time. We won't be wandering all over the map. Page 1416 April 19th, 1963

MR. PAULLEY: Well, Mr. Chairman, it's rather difficult to do that in a Department of Industry and Commerce because of the broad statement of the Honourable Minister on his intro­ duction and also the comments just recently made by the Honourable Member for Burrows. I'll try not to be specific insofar as the items that appear in the department, but I'm afraid, Mr. Chairman, that in any remarks which I make at this present time, that I may touch on some of the subject matter that is contained in the individual items. I will, howev;er, Mr.

Chairman, try not to be too long in my general criticism or my general remarks concerning the Depart­ ment .of Industry and Commerce. I might say at the offset, Mr. Chairman, having listened to the Honourable Member for Burrows, I wondered whether the names of the prolifical philosophies or parties should be changed, because in listening to my honourable friend from Burrows, I thought I heard the re­ marks of a most reactionary Conservative that has ever sat in this House, at least during the time that I have been here.

I'm somewhat amazed in this day and age to hear remarks from a Liberal, be he a Liberal with a large "L" or small "l", that's advocating a 60-hour week. I wonder what my honourable friend means when he says the 50-50 share with the employ­ er insofar as the profits are concerned. Does he mean 50 percent to him, as the employer, and 50 percent to all of the employees that he might have within his employment?

The honour­ able member did not care to elaborate, or did not elaborate on this philosophy, and while I, as the Leader of the New Democratic Party -- and this might seem somewhat strange to some ears in this House -- do ,agree and believe. that a management and the· investor in management is entitled to a reasonable share of the profits of his endeavour, it seemed to me, listening to my honourable friend, that this was not the case on the 50-50 basis -- which reminds me of the rabbit in beef stew, one rabbit and one cow, is the 50-50 view.

I suggest to my honourable friend that he should reap Hansard on Monday and go over some of the remarks that he made in reference to his philosophy, and I wonder whether or not my honourable friend's statements tonight are compatable with some that I've heard over the last week in reference to profits of industry. My honourable friend, in his· remarks, suggested that the Industrial Development Fund of the Province of Manitoba should be abolished and handed over to private industry. This takes me back, Mr.

Cb,airman, to the early days of me being a member of this Legislature, when I tried my utmost to convinc_e the government of that day that, because of the lack of industrial development in the Province of Manitoba, because of the lack of investment from private sour­ ces, that it was necessary for a public source, namely the Pr_ovince of Manitoba, to establish an Industrial Development Fund. Does my honourable friend :want to return back to those days?

I was very much pleased when in 1958 or '59 the present administration recognized the neces­ sity of incentives to industry in the Province of Manitoba and did establish an Industrial Devel­ opment Fund. I would suggest to my honourable friend from Burrows that if we turned back the clock, as he is suggesting, that the basic concepts of the Report of the Economic Develop­ ment for the Future of Manitoba would not materialize. I wonder whether his remarks are compatable to those of Mr.

Cairn of the Montreal Stock Exchange who, just the other day, said that it is becoming more and more necessary in every field of industrial endeavour to have public participation in the advance of industrials and the industrialization in the Dominion of Canada. My honourable friend from Burrows when he was talking, if I recall correctly, suggested that here in the Province of Manitoba we should go to the same system that they're apparently adopting in Trinidad, where industry don't pay any taxes, they don't take any

part in the community, and pay it's fair share in the development of the community. I also suggest to him that in any reading that I have made, they also don't pay the employees in their industry a reasonable standard of living. Is this what the Liberal Party of the Province of Manitoba want for Manitoba? I wonder if the statements of the Honour­ able Member for Burrows -- are those official statements of the Liberal Party here in the Province of Manitoba? I think, Mr.

Chairman, that they must be, because when you, Sir, sug­ gested to the honourable member that he had reached his 40 minutes that the Leader of the Liberal Party here stood up and he said, "Mr. Chairman, let him go on because he is making the official statement of the Liberal Party of Manitoba. " If this is the official statement of the Liberal Party of Manitoba, I'm happy, more than ever, that the taxpayer of the Province of Manitoba and the elector of the Province of Manitoba saw fit to reject the )Jid of the Liberal April 19th, 1963 Page 1417

(Mr . Paulley cont'd ) ..•.• Party here in the Province of Manit oba. Further to this, Mr . Chair­ man, I would suggest that if the electors of the Dominion of Can ada thought that the Liberal Party, dominion-wi se , had the same philosophy as exhibited here this evening by the Liberal Party of Manitob a, it would have rejected completely the Liberal philosophy in the federal field. But I don't think this is so. I don't think this is so .

So I suggest to my honourable friend from Burrows that he'd better start reading again what is required here in the Province of Manitoba is certainly not to adopt the standards of living of Trinidad, it's not to turn back the clock where industry was attempting to find a few nickels to invest here in the Province of Manitoba without avail. One of the reasons I think , Mr .

Chairman, that we have had much ind ustrial development in the Province of Manitoba in recent years is because .of the fact that the present government saw fit to adopt my proposition which I first introduced into this House back in 1956 or thereabouts, and established an Ind ustrial Development Fund for the Province of Manito ba. My honourable friend from Brandon said "not socialism". Now I don 't know what he means by that, Mr .

Chairman, but I do know this , that during most of the remarks of the Hon­ ourable Member for Burrows , the Honourable Member for Brandon was saying "here,h ere", particularly when the Honourable Member from Burrows was talking of lower income , or so it appeared to me, insofar as the producer here in the Province of Manitoba is concerne d. But Mr. Chairman, let me tell my. honou rable friend from Brandon that I'm not surprised at him saying "here, here", for I've had the opportunity of being in this House ten years with my honourable friend. I know his psychology and to me, Mr .

Chairman , he's just as much of a reactionary Conse rvative as is the Honourable Member from Burrows , so I'm not surpr ised at all. Now then, Mr . Chairman, my honourable friend has mentioned that I was going to men­ tion the question too of the indust rialization of rural Manito ba. I agree that it is desir able that we should lend of our efforts to diversify ind ustry in the Province of Manitob a. But Mr.

Chair­ man, with this basic differen ce , I think , between the psychology of the Members from Brandon and Burrows , that I do not think , that the employee or the worker in rural Manitoba should be asked or required to accept any less favourable working conditions than· those in the urban Manito ba. I know , Sir , that this may be subject to argument by some of the members in this Hou se . I know that this is a matter which we have raised. insofar as these amend ments in connection with The Fair Wage Act is concern ed. But I do say, Mr.

Chairman , that if Manitob a is to go forward unitedly , then rural Manitob a should not have to take a second place in industry to the urban centres of this great provinc e of ours . I appeal to the government and I appeal to industry itself, do not attempt diversification of ind ustry in Manitoba at the expense of individual s in rural Manito ba.

My honourable friend from Burrows when he was speaking on the question of wage rates, mentioned the figure , if I recall correctly, of $2 . 50 an hour -- and then he turned around and he said: "Wouldn 't it be better if they accepted $1 .7 5 an hour rather than relief?" What is the psychology. in statements like that? Is this psychology that we shall force ably attempt to re­ duce the standards of the worker in the Province of Manito ba. Again, Mr .

Chairman , I ask of my honoura ble friend from Burrows to read in Hansard on Monday , or when it is produced the sign ificance of the statements that he has made here in this Chamber this evening. Because I say, Mr.

Chairman , I repeat, that if this Province of Manitoba is ever going to become the great province that it deserves to become , then all of the citizens in our province should be treated with equality; that the fruits of the labourer in the rural areas should be no less than the fruits of the labourer in the urban areas ; and this , Sir , I suggest is the only way in which we will become truly great and truly advanc ed. Yes my friends , 'I suggest to my honourab le friend from Burrows that he check over the remarks that he made.

He spoke with conviction; he spoke with sincerity and I give him credit for this, but I question whether he spoke with an intimate knowledge of the situation as it prevails here in the Province of Manitob a. Now, Mr. Chairman, we have had the pleasure of having received just recent ly, this great volume from the Committee on Manitob a's Economic Future .

I think it is a very compre­ hensive document ; I pay tribute to those on the committee and its chairman -- who incidentally at one time was my great big boss in the Canadian National Railways, and I'm happy to know that the Canadian National Railways , either by association do have such great men as Mr . Page 1418 April 19th, 1963

(Mr. Paulley cont'd ) .•.•. J. R. MacMillan -- but the committee , I think, Mr . Chairman, have attempted to do a good job . I find runn ing throughout the whole of the committee report a plan for the future of Manitob a, but Mr . Chairman , I ask the Minister today and I ask the gov­ ernm ent today, are they going to do exactly the same self -- are they going to go along the same path as the former administ ration in this province did in respect of reports on Manito ba' s Ec­ onomi c Future? I have here in my hand, Mr .

Chairman, two of many documents that were tabled in this House in '54 -'55, I have others in '56 , Arthur D. Little Company Incorpora ted, Caml:)ridge, Massachusetts. We have had many of these reports tabled here in this House and little , if any , advances in Manitob a's economic development have taken place as the result. My honourable friend the present Minister of Ind ustry and Commerce has before us in this Hou se, three or four bills, setting up new organizations to plan and lay out for Manitob a's economic developmen t .

I have suggested already, that within the confine s of the Department of Industry and Commerce over the last numb er of years that they've had the facilities to do the job of the commissions that the Honoura ble Minister is going to set up.

I'm not going to vote against these bills, but I do say to the Minister that un less more is done in respect of the eco­ nomic development of the Province of Manitob a, with this 1, 000 page report, than was done pre­ viously with the reports that I refer to , Manitoba is going to go backwards, because there is in Canada, a competitive spirit at the present time among all of the provinces in the Dominion of Canada. I have before me , Mr .

Chairman, the Budget Speech of the Minister of Ind ustry and Com­ merce in the Province of Saskatchewan. --(i nterje ction) -- Yes , my honour able frierid, the Leader of the Liberal Party, says, "ha, ha", and I might say to him that it was a similar pro­ ject that is being suggested to the Province of Manitob a, and of course , nee dless to say, that the Liberal Party in Saskatchewan, attempted to obstruct there just as much as they are here in the Province of Manitob a, but despite that, I'm sure that that province will advance along the road. But what I want to say, Mr .

Chairman , and the point I'm trying to make at this time is that in every province in the Dominion of Canada exactly the same approach is being made to the ind ustrial development within each and every one of the provin ces. The Honourable the Provincial Treasurer in the Province of Saskatchewan, Mr. Brocklebank , a very fine fellow and a very sincere fellow, as is our Minister and our Provincial Treasurer here in the Pro­ vince of Manitob a. They're deeply concerned with the development of their province as we are here in Manit oba. And this evening , Mr .

Chairman, I find a report or a news item in the Winni­ peg Tribune , insofar as the Province of Ontario is concern ed, headline d "300, 000 new jobs for 1967" and I want to quote a word or two from this report: "A five-year economic plan to create 300, 000 new jobs by 1967 by expanding industry as outlined in the On tario legislature on Thurs­ day. Economics Minister' Macaulay said the plan may include " -- and this I think will be of in­ terest to those who are interested in public utilities .

"Economics Minister Macaulay said the plan may include construction of a $500 million nuclear power plant , capable of generating 1, 800 ,0 00 kilowatts of power ." It's very inte resting, when we here in the Province of Manitoba are considering a development on the Nelson River in hydro power . And then the news items goes on -- and I think this is most vital, Mr . Chairman, because Mr. Macaulay goes on to say in this report, and here's exactly what the report says: "Calling for greater economic co-opera­ tion among the provinces, Mr.

Macaulay said it would be unfortunate if a growth race among the provinces resulted in destructive competition ." I think, Mr . Chairman, that I have raised this question already two or three times in this House this session and I think that unl ess we can get together provincial-wise in the lines of action that we're going to take, if every province in Canada , takes the same line with huge expenditure s provincial-wi se , what Mr. Macaulay intimates here may be the net' result; that it will be destructive for the economy of the individual provinces and no gain for the Dominion of Canada as a whole.

So I say to my friend, the Honourable Minister of Ind ustry and Commerce , that while I think that I'm just as loyal a Manitoban as anyone in this Legislature , I do think that the national interest should also be taken into consideration; I think that we should have close co-operation among all of the provinces in the Dominion of Canada , so that we here in Manitob a are not trying to develop in an area where it will be more economica l for another area, and so on across the broad expanse of our great Dominion. And I trust, Mr.

Chairman, that no one considers because I have made this particular statement that I am any le.ss desirous of April 19th, 1963 Page 1419

(Mr. Paulley cont'd) •• ••• seeing that the objectives of the Committee on Manitoba's Economic Future is fulfilled. Now , Mr. Chairman, I note throughout the whole of the report on Manitoba's Economic Future there runs a vein that there must be co-operation between industry, government and labour.

I note with some satisfaction an announcement the other day that the Acting Minister of Labour said that there will be a Seminar -- I believe in June of this year -- between man­ agement and labour -- and I hope government as well -- to see what can be done to bring about this close association of these three very vital component parts of our province .

But I want to say this, I mentioned it when I was discussing the question of the Throne Speech, I didn •t like the verbiage in the Throne Speech, quite frankly, where it said "that labour has at last" -- or intimated -J 'that labour at last recognized its place in society insofar as Manitoba is concerne d. " I want to say Mr. Chairman , that if we are going to have co-op eration and understanding between labour and industry and government in this province , that we've got to be sincere about it and start from the bottom and start at the grass roots .

And while I should not refer to matters that are before the House , I cannot help, Mr. Chairman , but suggest to the government that insofar as the legislation respecting fair wages was not a good approach to bring about this atmosphere of understanding and appreciation of the problems of these three major factors in the development of our great province. MR. EVANS: .•.•• and farming too. MR. PAULLEY: Yes, farming too. But the only reason , Mr.

Chairman -- I am not for­ getting the farmer, but the reason I'm using those three terms is because those are the terms that are referred to in so many sections of the report. I appreciate , and Pm glad of the inter­ jection of my honourable friend, the Minister of Industry and Commerce , that there has to be a recognition of the place of the farmer in Manitoba as well as these others. So , I want to say, Mr.

Chairman, in these few remarks on the Minister's salary, there are mighty problems for the Province of Manitoba and I say -- and sometimes Pm accused of being just a repre­ sentative of labour -- but I want to say as a loyal Manitoban, that these problems can be met and solutions can be made ; but I want to close on this note , Mr. Chairman, that they cannot be met and they cannot be solved on the policies as advocated by the Honourable Member for Burrows.

This is a job that we must do together and it is necessary in our modern complex in industry .for government participation in such fields as industrial development loans. In such fields if necessary -- and I think this may be more true insofar as rural Manitoba is concerned than in urban Manitoba -- if necessary for the government to produce the funds that are neces­ sary to establish the factories and to provide the machinery so that industry can find it econom­ ically possible to operate in rural Manitoba. It cannot be done , in my opinion, Mr. Chairman, on a basis of tax concessions at the local level.

We found here in the Greater Winnipeg area to the detriment of many of our municipalities , that there was a dog fight among our municipali­ ties in the field of taxation , and commission after commission has recommended that no fur-: ther tax concessions be permitted. I say we don't want a dog fight in Canada as a whole as we've had in the Greater Winnipeg area 41 respect of tax concessi ons . And I say, Mr.

Chair­ man, there is a job to be done for Manitoba and if we of this party that I have the honour to lead, the New Democratic Party of Manitoba, can assist the government and industry and man­ agement and labour in achieving the aims that have been set before us , you will find us most co-operative and most ready to assist. MR. R. 0.

LISSAMAN (Brandon) : Pm not going to attempt to defend the Honourable Mem­ ber for Burrows but I realized as he was speaking that certainly immediately after the Honour ­ able Leader of the NDP would rise to his feet and I would like t() suggest that we have heard probably the two extremes. The extreme view of the socialists as compared to the extreme view of the businessman.

Now , I have always felt that one of the real great pities -- and inci­ dentally when I say that I am not defending the Honourable Member for Burrows , I should also like to say that I'm not speaking for the government, I'm expressing a few views of my own -- I felt that it's one of the great pities always that the facts are as they are in that when manage­ ment arrives at the point of management it has generally come up through the ranks. It under­ stands and realizes all the problems of the labourer, of the worker, but it has thrust upon it a new set of problems, those problems are the problems of management.

And it is most un­ fortunate that labour and the people who speak for labour in this House very often, cannot Page 1420 April 19th, 1963

(Mr. Lissaman cont'd) .•••• realize and understand both sets of problems because they have not experienced the other set of problems.

Now when I say, and I believe the Honourable Member for Burrows probably had this in his mind, although I'm not again defending him , but when. it is expressed that there must be a diff erence in all ways between a highly technicalized industry in a large city , and a small industry starting to grow in a small rural community , then this must go all the way down the line , and anyone that fails to realize this is simply not looking the question in the face ; beca)lse how does a small business start in a small town?

Usually a man,· maybe a relative or two comes in .and helps him in the shop, or whatever the business is; he manages to hire a bit of labour, he can't affor d the capital investment which cuts down the labour component of his product .. Now the only way you can pay high€lr wages is to have ma­ chines doing a greater part of man's work, and for a small growing business in a small town, this just doesn't happen . The Campbell Soup people coming into Po rtage la Prairie is one of things that happens probably imce in a lifetime almost, as far as a small town goes -- an industry planted in there · full bloom.

Businesses don't grow this way. Ford Company started off very sma ll. Now the po int to remember is that those who pioneer -- and this goes as·well for the employer as well as the employee -- those who pioneer never live as well as those who follow them. Businesses must become mechanized; they must have great capital investments before they can cut down the .labour. component of the job • . So that this is one of the things that the Socialist Party in this province does not realize. They think that you can legislate wages and create employment. Nothing, gentlemen, could be farther from the truth -- Mr.

Chairman, I beg your pardon . We must permit a different set of circumstances to prevail in rural Manitoba as compared to the largely industrialized centres such as Winnipeg. MR. PETERS: Nonsense. MR. LISSAMAN: Well, the man says nonsense. Mr . Chairman, you can imagine relating wages to a highly mechanized setup.such as the motor car assembly line of Detroit and then going out to some rural blacksmith and saying now you must pay the same wages as is paid on the assembly line. of the Ford Motor car, for example. This is absolute stupidity because the labour component·

part compared in the two operations bears no relationship whatsoever •. So the relative economy of the smaller centre compared to the larger centre must be looked at, and it must be looked at with a bit of understanding and comprehension. The Honourable Leader of the NDP when he got to his feet immediately jumped upon a statement that the employer might split 50-50 with his employers. Well I would suggest to him that this is quite likely true.

People who don't understand the problems of management assume. that every employer is a scoundrel who is grinding his employees down into the dust to make more money for himself. Such a condition in this day and age just simply can't exist because the worker goes elsewhere . The plain fact of the matter is if you examine the earnings of small businesses you'll likely find that he's making riot much more in fact -- I know in my oWI1 case I'm making not as much as my top foreman -- and -- I hear some amused laughter at the back.

I would suggest that with the capital investment that an employer has at stake, at risk, he should be entitled to more but in many cases he's not receiving anymore than his most highly paid employee . And 50 per­ cent of five or ten percent of the gross proceeds might look pretty small. The Leader of the NDP made great play of this because it appeared to be that it was a wonderful point to make. I would suggest that if we are to develop Manitoba that a Provincial Government should first of all urge upon the Federal Government that some concessions, some real co ncessions be made in the tax setup.

Because, I want you to think of this situation, a review of history, or looking back once in a while can still in this day and age teach us some lessons. In the early development of this country, or this province , it was always possible , and it still is, for a man who ventured his capital to lose big -- this has always been the truth. But in the early days before income tax took such a cut out of the share of the earnings of corporations and in­ dividuals, he could also make big.

It's got now so that the small businessman stands very little chance of creating the capital to create the plant necessary for the expansion , the rapid expan­ sion to create jobs as we need today. And there must be relief , in my opinion , for business because we are living under the free enterprise system and still, yet and always the true incentive to create jobs is to make money. We might as well look it in the face , and the greater concessions that are made for people to make money the greater the number of jobs that will April 19th, 1963 Page 1421

(Mr . Lissaman cont'd) .•••• be created. I know that a worker can look at these loaded, greedy people probably-- in some cases their eyes look upon -- but I know in my own town thereoare examples of two men who probably wouldn't be well loved by many, but nevertheless no matter how self-seeking a man may be, he can't make money, create a business without bringing lots of other men along with him and creating plenty of jobs .

Now, I don't of course, advocate greed -- it's farthest from my thinking -- but the fact remains that the incentive today, and in the past, and will be in the future, is the making of money and if- - I certainly wouldn 't want to return to the old days with complete untrammeled freedom of capital and business -- (inter­ jection) -- yes , I would agree that a 60 hour week is too much , although I worked a 60 hour . week when I started work. -- (interjection) -- In fact, if you want old past history I can re­ member starting lathing during the summers - - lathers were paid 6«; a yard -- a good lather could make $6, 00 even in those days and I had one devil of a job making $1 . 2 5 for quite a while.

However, that's beside the point . Before we ever think that by setting wage rates we can cre­ ate jobs, we've got to take a balanced viewpoint and look at the fact that Manitoba, rural Mani­ toba is a rural, relatively primitive place compared to the larger centres . If industry's going to grow it certainly must start, and will start from small beginn ing.

And certainly, tax relief in my opinion is one of the great incentives to creating employ­ ment because it is obvious in the first case that corporations do not pay taxes -- individuals really pay taxes -- everything a corporation makes is taxed out again through channels and the ultimate consumer pays the tax.

Now I'm going to express maybe an odd viewpoint and mem­ bers may disagree with me, but I would like to suggest this that in the broad picture in my opinion it would be better to have -- granted that.you need revenue to operate a nation -- it would be better to raise personal and private incomes to some degree and lower business taxes, for this reason -- and this is one thing that I'v e always noticed every time some new imposi­ tion is placed on a business by a government -- any charge upon a business must be entered in his books and in the normal course of events become part of the cost of that business , which makes the product cost higher.

Now in the sense that the percentage wouldn 't always be applied, the ultimate cost to the consumer would be lower and the moneys available for purchase of these things would be greater and the private individual would benefit in the long run. Now, Mr. Chairman, I'm sure that the government might not want to fall heir to all the expressions that I have made but I couldn 't let my socialist friends make their expressions with­ out some counterbalancing viewpoint by way of explanation so that other members may have something to balance with it. Thank you . MR. PAULLEY: Mr.

Chairman, I wonder if my honourable friend would just like me to say one thing insofar as I personally am conce rned, that in my daily vocation I am a representa­ tive of management and I'm charged with the responsibility in that position of looking after the interests of management. But I think it's compatible to look after the interests of management and also th� interests oflabour at the same time so that both receives the benefit from industry. MR . PETERS: Mr. Chairman, could we get back to the. Minister's salary and get away from this three-way argument, please? MR.

CHAffiMAN: The Honourable Member for River Heights. MR. STEINKOPF: One of the advantages of being a back bencher in the government is that you have a capable Minister in front of you and it' s not necessary to pose as an expert and spout on almost every matter that comes into your head. "Let's get on with the job of industrial development in rural Manitoba" is a very catchy and a pretty phrase and certainly will make a very pretty headline. But what does it mean? Any industry -- the phrase is in­ dustry not a factory -- worth talking about takes at least a generation to create and can't be done overnight.

The Honourable Leader of the NDP mentioned that we are in a rather compe­ titive position and that every province in Canada is aware of the need of secondary industry as the only solution to its long-range unemployment problem. But only one of the provinces, to the best of my knowledge, has had the courage to step up and provide it for themselves; and of course that was the Province of Saskatchewan. There, almost 20 years ago, they set up a shoe factory, a woolen mill and a tannery, amongst other things. The shoe factory must have been built on quicksand because it's now in New Westminster, B. C.

The tannery is also in B. C. and the woolen mill is probably in hock. I am not belittling the effort of the Saskat­ chewan Government because I give them full credit for having the vision and the backbone to Page 1422 April 19th , 1963

(Mr. Steinkopf cont'd ) •••••• attempt such an ambitious undertaking and program, and you know it may possibly have worked if they hadn't relied on critics and experts that belong to the Liberal Party for their technical and engineering advice . I know something about the de­ velopment of a shoe factory, because in 1939, with very limited borrowed capital, I started the first shoe factory in Manitoba and this industry, after 32 years, has reached its maturity. In Winnipeg the direct payroll in the shoe and allied leather industry, such as gloves and jackets, is around $4 million a year employing 1, 500 people.

The establishment of the Manitoba Development Fund has done more for second ary in­ dustry in all parts of Manitoba than the 40 little men -- the little experts -- running around the province giving elqiert advice to experts. Is the Honourable Member from Burrows wear­ ing shoes that are made in Manitoba? Is he buying "Made in Manitoba" products? Is he selling his manufacturing friends in other parts of the world Manitoba as a location for factories in Manitoba?

Is he investing part of his and his friends• money in untried factories catering to a very limited market, or is he borrowing from the very fund that he is condemning? Now I want to talk about another constructive matter which indirectly assists our industry, both rurally and in the urban areas, and that is the tourist and convention business. Here is a product that can be sold, the income of which amounts to many millions of dollars and must be part of the general income of the Province of Manitoba. Yet the very people who are knock­ ing our indus tries are knocking our tourist and convention business.

It is impossible for us to get the type of convention we require in Manitoba until we have the facilities, and one of the major facilities would be direct air transportation between the southern part of the 'country and Winnipeg and Manitoba. Next week-end I find that I have to go to Mexico, andin order to get there on the week-end, I've got to takea pla.I!_e from here to V:;mcouver, Vancouver to Calgary, from Calgary non-stop to Mexico. We lost a very large convention here a few months ago of the oil workers and atom workers; maybe 1,600 people, bec ause of the facilities of getting to Winnipeg by air.

Most of their members were in the midwestern States and they found that the connections were so bad that they'd lose an extra day in coming up here, so the convention was transferred to Chicago. My friend, and I mean my friend, the Honourable Member for the Constituency of Burrows, seems to think that in taxes there should be a law for the rich and a law for the poor; one for the Persians and one for the Medes. Why there should be a tax differential for people living a few miles outside the City of Winnipeg and those living in the City of Winnipeg I'll never be able to understand.

Many of those living outside in rural areas, and I have many friends in the countr y, wouldn't care to move into parts of Winnipeg where some of us live even if they had to pay no taxes. Taxes is not the beginning and end-all of industry. No one ever went broke paying taxes. It's the fellow who doesn't pay the taxes that one has to worry about, and I have excluded Tuxedo . It's interesting to know that even our Department of Health, as every department of the government as my experience has been, has been very instrumental in trying to get industry for Manitoba.

I was just given a letter today that a vice-president of the Canadian General Electric Company has expressed a desire to see a workshop that has been set up by private enterprise in the Town of Selkirk to look after, or to work in conjunction with, the inmates of the Selkirk Mental Hospital -- those that require the therapy that's required before they leave the area to go back into business -- with the idea of providing sub-contracts for that workshop . Now this has been started on the initiative of the Department of Health.

The factory building that was available was purchased by a gentleman, private enterprise, and as a result of this there will be many, many more factories and contracts. There must be a positive approach to industry in Manitoba, whether it's in Winnipeg or rural Manitoba. This is a big, big subject. A subject that none in this House can solve even in the speeches that run over 40 minutes, but we stand half a chance if every man in this House buys "Made in Manitoba" and really buys "Made in Manitoba" even if the suit doesn •t fit quite so well.

Invest in Manitoba, and really invest his money in Manitoba and doesn't talk about it; and sells Manitoba; and sells Manitoba every day in every speech that he makes; and does everything in his power to eliminate some of those childish Winnipeg newspaper head­ lines that push us back two steps every time we take one step forward in the industrial field. MR. SMERCHANSKI: Mr. Chairman, I shan't be long. Apparently whell you make a reply, April 19th, 1963 Page 1423

(Mr . Smerchanski, cont' d.) ••• the Honourable Leader of the NDP grabs hold of the remark of a 60 -hour week, but he misunderstood because this is the number of hours per week I work .

I think.that if he had read the report, which he obviously has not, and if he had made it his - l;lusfuess to get an intimate knowledge of this problem, he would have realized that labour was _,.-"--'on these committees, that made the study of this report and the publication of this report possi- / ... / ble, and if he had done his homework in this respect he wouldn't be speaking or making remarks about "pure nonsense" as far as labour is concerne d. Cheap labour does not contribute to a good, efficient, well-planned community and far be it for me to say that labour should not be treated fairly .

Labour must be treated fairly and given its proper place in connection with this rural industrialization . When I say the sharing of 50-50 profits I mean by the standard methods of profit-sharing that has been set up by other compa nies and this is a formula that has been worked out, and this is no fly-by-night idea. This is no idea as to what is profit -- what is 50 percent for the owner or 50 percent for labour. I don 't think he even knows what the distinction between profit-sharing and profits really mean.

I did not advocate a 60-hour week, but I do advocate that labour should become partners in this business enterprise and that labour should become shareholders in this business . This is the proper place for labour. When I view cer­ tain examples -- they were only examples -- inasmuch as I mentione d about the Manitoba De­ velopment Fund, it has performed a function; it's performing a good function; but I still say that it should be made and spread and made pos sible that loans could be made easier to obtain .

It's too bad that the Leader of the NDP Party is not in the House , because I would like to take him back to 1959, October 22nd, and when he addressed a letter with copies to the Honour ­ able Minister of Industry and Commerce , the Honourable Minister of Mines and Natural Re­ sources and to the Honourable Minister of Health in this very Chamber, he was completely .and absolutely ignorant of all facts and conditions surrounding the establishment of a chemical plant in this province .

You know it seems to be a popular sport on his part to jump up like a jack-in­ the-box, latch on to some sly remark that somebody has made and say "well this is just what he is saying ." But taken as a whole, what I have tried, or endeavoured to do , is to be contructively critical, based on having reviewed this report very thoroughly; based on having contributed many, many hours of my own private time and energy in contributing something to the study and preparation of this report; being a business man that I have gone out and because I am ambitious, because I want to work hard, because I enjoy working hard, because I enjoy creating things is no reason why I should have to stand up and take nonsense from the Leader of the NDP Party , and I think that -- I only say this in good faith because I do think that there is room for good constructive criticism no matter where it comes from .

We can all get along with the job. I only say this to this committee , and I said this to the Honourable Minister of Industry and Com­ merce when we were on our trip over to England, I would be pleased for one dollar to contribute three mornings from 9 to 12 o' clock on Mondays , Wednesdays and Fridays and give the benefit of my experience to anybody that may want to have the benefit of that experience if they want to establish a new indu stry.

This is what I am prepared to do and I say that this is a constructive method, not merely to jump up and grab hold of one or two words and say "he said this or he said that". Mr. Chairman , I thank you for giving me the opportunity to reply. Thank you! MR. J. M. FROESE (Rhineland) : Mr. Chairman, I listened with a great deal of interest to the members speak here tonight , especially the Member for Burrows and I think it's refresh­ ing to hear a member speak in that way -- being optimistic as he was .

I have several points I'd like to bring to the attention of the minister of this department which concerns more or less the matters that have already been raised regarding the provision of credit for industry, be­ cause as I already stated in my address that I made to the Speech from the Throne and wherein I referred to the farm improvement loans that are being offered through the banks and guaran­ teed by the Federal Government, I think this is the way we in Manitoba and this government should operate .

Rather than be in the business itself, have the proper busines·ses who are , in the kind of business to provide the necessa ry loans and if nece ssary guarantee some of those loans or a certain percentage of those loans so that we wouldn't necessa rily be in the business as a government , but provide the necess ary initiative for these organizations to provide the nece ssary loans . The Farm Improvement Loan Act guarantees 15 percent, if I'm correct, of the total out­ standing, and if this were provided in Maiiitoba I think it would provide the necessary initiative Page 1424 April 19th, 1963

(Mr. Froese, cont'd.) ••• so that the people would go out and get the necessary credit. I think the key to the whole thing is , risk capital . Personally, I believe that if we did the neces­ sary things to provide this capital and to encourage people to invest in risk capital that the problem would be solved to a large degree .

We have in Manitoba, both the Manitoba Credit Corporation, which provides loans to farmers and then we have the Development Fund which provides loans to businesses , and aside from that, I think that the expansion that we have in Manitoba is largely due to such measures as National Housing, whereby funds are secured to build.houses in the bigger centres -- after all that's the only places where they can get these funds -- the farmers are excluded from this .legislation .and if it were not for this capital be­ ing available construction would be considerably lower than it is today.

I notice from the graph in the report on page 5, that even today, industrial and commercial construction is down and it's on a downward trend and I think that it's time that we do something to arrest this trend and to make it go upward again. I think our Development Fund is not fulfilling its proper role. !think they' re. too conserva­ tive in their operations . I have personal knowledge of one case where a group-of businessmen, 'who I feel are topnotch men, tried to extend a local business and were refused the credit. They were willing to sign personally, but that wasn't sufficient.

They asked the owner of the equip­ ment to sign as well and he ref used and therefore, these people had to go elsewheres and they did receive the fund else�h ere than from the Development Fund. I think this is a sorry state of affairs, certainly this is an area where we could improve. I have noticed that as far as rural Manitoba is concerned since the early 40's the rural Manitoba communities more or less went into co-operatives to provide the necessary indus­ tries and newer _and smaller businesses .

People tried to effect savings that way and grouped together and started smaller businesses which they operated succes sfully . Recently , many consolidations and amalgamations have taken place and we now see shopping centres grow up in various areas of the province as well as in the urban centres.

However , I think there is a different trend today, in that individuals will start businesses of their own, we see partner­ ships going up and they go into business ; we have more of the smalle r joint truck companies going into business and I think they should be congratulated for the initiative in doing so and providing secondary industries and busine sses for this province . I know for a fact that the Credit Union in many centres of rural Manitoba have certainJv aided this development , because they , in many cases , have provided the initial risk capital to start off a business or industry .

I know of cases where they provided 25 , 35, 50 and even 100 thousand dollars to businesses to get started. They were unable to get the fund elsewhere in this initial stage, so they came to the credit unions ,and they being governed by local people , naturally they saw the advantage and they were public minded and therefore they provided the funds. They had the confidence in the community and in the people that wanted to start these busiliess ventures and therefore provided the necessary capital.

I feel that even our Develop..: ment Fund is lacking this confidence in some of our key people in rural Manitoba communities who want to go ahead but who lack the finances. We have a number of industries started in various areas ; we also have newer industries . I note one -- the matter of exporting sunflowers to the United States as bird seed. It started in a very small way, but' today, millions of pounds of sunflowers are being exported annually to the United States as bird seed and they derive a good return on this , much better than they do if the same sunflowers are sold for oil.

So that here the people themselves saw fit to ex:­ plore the matter and provide for them�elves a business which is quite healthy today and was done on their own initiati ve. I think the implementation of the CO MEF report depends to a very large extent on the availability of risk capital and I think we should do everything in our power to encourage the making available of this capital . And what can be done in this regard ?

First of all, I feel that the people in Manitoba generally are much too security conscious today and I think this is being brought about because of the insurance advertising and insurance features that are avail­ able from all sides . This is being advertised so widely and so frequently that it is hammered in and therefore they are holding back when it comes to giving out or investing in risk ventures . I think we should encourage people to go into risk ventures.

It' s the initial capital that has to be brought up in any _concern that counts, because once you have a certain amount of capital April 19th, 1963 Page 1425

(Mr . Froese, cont' d.) • • • invested in an organization or company you will be able to secure funds from some source or another; but the initial capital or outlay has to be invested by the individuaJ. and I think this is the key and the secret to succes s. One other thing is that we should assure a supply of operating capital for lines of credit to the smaller businesses and industries.

I know that in most cases normally they will get the necessa ry lines of credit; however, I also know that in 1958 when they had the tight money policy, the banks cut off the lines of credit and many a businessman was in ser ious trouble be­ cause of this. Some even went bankrupt because of it. I feel that this is an area that the government should look into and more or less secure for our smaller industries who are try­ ing to get est ablished. Even farming today takes a lot of capital; it requires a large amount of capital to get started in a farming venture today.

I know the governm ent and the credit corporation which extends credit know this quite fully and that the farmer today very often does not get a proper return on his investment . The return is first of all very insecure; there's a lot of risk because he never knows whether he'll get a crop or not. Secondly , prices today are not of such a kind that he will get large profits because of the cost-price squeeze, and he too is looking for op­ portunities to invest in some venture where he'll have a more assured return on his capital that he invests.

So that I think we have an obligation here and a duty to also see that the prices that the farmer gets for his products bring him a fair return, and that when the time comes that these agreements are be ing re-negotiated that we should be there trying to get a good and a better deal for the farm er. I listened with interest the other night when the Minister made his speech and he also mentioned rail abandonment . I think this is a very serious matt er . It disrupts the communi­ ties where these lines are abandoned.

In my local constituency there is one line that they in­ tend to abandon and I would very strongly urge the Minister to make sure where abandonments do occur that those communities are supplied with an all-weather road before such abandon ­ ment takes place . I think this should be one provision that should be there wherever abandon­ menta occur. MR . T. P. HILLHOUSE , Q.C. (Selkirk) : Mr . Chairman, last December there was a great deal of speculation in the Winnipeg newspapers regarding the establishment of a new in­ dustry in the Town of Selkirk.

I wonder if the Honourable Minister could give me any informa­ tion regarding that industry. What is the type of industry and what his department had to do in connection with its establishment there and how soon it may be established. MR . DESJARDINS: Mr . Chairm an, I rise to do and to say somet hing rather unusual. Some members mig ht feel that it's wasting the time of the Committee , but I hasten to say that it will only take a minute . I think that today the Honourable Member from Brandon gave us one of the best speeches that I have heard in this House during the four or five years that I have been here .

I think that it has been most sincere , down -to-earth devoid of partisan poli ­ tics or selfish reasons and I certainly feel that this is the kind of speech I'd like to make on this department or anything like that. I think that it was a very worthy contribution and !would like to recognize that. We 're not of the same party but I think it should be recognized when somebody tries to do the job, and does the job the Honourable Member froin Bran don did today. MR. COWAN: Mr .

Chairman, there's one small group of men in this province who could greatly increase the production of goods in Manitoba and employment in Manitoba, and that is the architects. Each year millions of dollars are spent in Manitoba on the construction of buildings, a large number of them are public buildings and the architects in their specifica­ tions set out that certain mater ials will be used, made by a certain compa ny.

Now sometimes they say, "or equal" but generally speaking because of the troubles involved the contractors go to the company whose materials are specified and those are the materials that eventually find their way into the buildings. If they specified "made in Manitoba" products, we would have a lot more "ma de in Manitoba" materials going into our buildings in Manitoba and so increase our production of Manitoba goods and the employment in this province . HON. MR . A. W. HARRISON (Rock Lake): Mr . Chairman , I might say that I've had a good deal of experience with businesses , manufacturing in rural Manitoba.

Our company was established in 1878 and we have been in business , manufacturing business ever since that time . It's now in the third generation and I should like to give the Committee the benefit of some of Page 1426 April 19th, 1963

(Mr. Harrison , con t' d.) ••. my experience . I might say that the bulk of the manufacturing industries ar e, of course , located in the cities, particularly in Winnipeg, and there are cer­ tain advant ages to a location in this centre . · The main advantage is , of course , that the mar­ kets are available at their door usually for the products that they produce and they have a large labour pool that they can draw on from time to time as they grow and employ more la­ bour. They also have to face in Winnipeg more rigid labour rules.

In the rural areas some­ times the lab our restrictions are a little more lenient; they are on usually a personal basis and mana gement and labour get along very, very well and they do not have the very bitter la­ bour disputes that sometimes our competitors in the city have to face . In rural areas , of course , there may be some limit to the type and kind of industry that is ava ilable and can be profitably conducted in the rural areas . In the city, of course , there is no limit to the kind of business and we have very well rounded out commercial activity in the City of Winnipeg.

The country businesses usually are not too large of a volume and they are usually family corporations . Their overhead, of course, is less than in the city and they have better labour relations as a rule. They're all friends together and it works out very, very well. The fact that the communities are usually loyal to the businesses that operate there is another factor that is an advant age to a rural manufacturing concern . Their cost is usually less . Their transportation problems used to be much greate r than it is today .

With the con­ struction and maintenance and building of modern highways and the advancement in truck de­ livery, we find that the location of an industry is .not so much of a dis advant age as it used to be a few years ago . We are able to take advantage of the somewhat lower cost in the country and better public relations and the advantage of low-cost trucking and it is much easier to compete with the city business with a well run and managed rural industry than it used to be. Labour is very, very loyal .

They consider themselves to be part of the busin.ess and they do go out of their way to help management and to ease us over the rough spots which oc­ cur in all businesses , whether it's in the city or whether it is in the country , The manage­ ment , of course , are also more friendly and they are all one people with the people that work with them and there's very, very good relationship between labour and management in rural industry. · ·I remember when I was over in England last year I called on some of the management of different companies over there and I inquired how they were getting along with their busineE!­ ses and what their problems were , and the complaint at that time was that sure they had quite a lot of volume and their volume and their turnover was very good; their profits were small , in fact they were losing money in many instanc es .

I spoke to the man agement and I said: "Now, if you're los ing money, why do you operate your plant ?" And the answer I got, they said, "Well , my good man , our employees, their grandfathe rs worked for us , and their fathers worked for us ; and we expect their children will work for us ; and even if we lose some money we're going to keep the pla nts going, and we' re going to keep employment and provide for those people that we feel that we have some respons ibility for.

" Now, that condition exists to some extent in rural industry and it's a question of management co-opera ting with labour and labour co-opera ting with management . They get along very , very well and we don 't have too much labour troubles in rural Manitoba, although the wages that are paid to the employees are cer­ tainly on par with what we obtain in the cities. The problem of rural industry , of course , is somewhat tied up with the sales force . They do not have the efficiency in the selling of their products as the larger .corporations do have .

They have some what of a price advantage and the one counterbalances the other, and they usual­ ly get along very , very well together. It is hard, of course, to hold down expenses and that's what you have to do in any business that is succes sful. You have to alloc ate your money in the proper place and see that your products are produced at the least possible expense .

Some industries do· have some troubles financ ially , particularly in the initial stages of their development and that has been somewhat eased in the last number of years because of the more lenient treatment by the banks , and I think that that is also attributed to the help that the provincial government has ava ilable to finance many of these industries in the country . It also calls for competent management and I believe that that is the key point of any industry, whether it is in rura l Manitoba or whether it is in the City of Winnipeg.

I am sure that you will agree with me that many of the compan ies in the country towns have competent m�agement and are April 19th, 1963 Pag e 1427

(Mr. Harrison, cont'd .) ••• gradually growing and adding to the economy of the Province of Manitob a; and I am sure that the Government of Manitob a will continue to aid these concerns and also help them out and develop many more industries in Manito ba. That is one way where we can make Manitoba strong and it certainly should be done . I might point out that-- I don't like to be pessimistic, but it' s not improbab�e or not improbable that some day we may have to face very different conditions in Manitoba than we do today.

If you could visualize a war like we had in the last Great War and with the means of destruction that is available it might be well and advisable even today to make sure that some of our important indus tries are located away from the larger cities which undoubtedly would be bomb targets in the event of another war . I'm sure that there are people today in po sitions of importance and authority that realize that even more than I do .

The trend I'm sure should be, not to locate all of your ind ustries in one large city but disperse them throughout Manitob a and space them far enough apart that in the event of a bomb raid we won't lose all of our ind us­ try at one go. I'm sure the government is to be complimented on their attitude in helping indu s­ try to locate in rural Manitob a and I know that I, for one , and most of the members of this Legislature, I'm sure , will go along with a move of this kind . MR . CH AIRMAN: The Honourable the Minister ..• MR. EVANS: Mr.

Chairman, if those are most of the remarks that were given as a re­ sult of my address the other ni ght, I'd like to reply to some of them and see if perhaps the time has come when I could have some salary. I'm sorry my honourabl e friend the critic for the Liberal Party isn't in the Chamber, because I would like to address myself to some of his re­ marks . If he does join us I'm sure that he and I will share a good many views and in fact I would say this, that in general I can't quarrel very severely with any of the remarks that the honourable gent leman made tonight . -- the honoura ble gent lemen . .

I would say that on all sides of the House we share the same ambition , that we want to see more ind ustry in the pro­ vin ce ; in fact we recognize it as an imperative thing and in general we agree on the means to be taken . There was a picture of my hands ome and genial friend in the paper tonight, in the Tribune .

On one occasion he came into a committee room and looked arotind and delivered himself of the profound remark of "where are the boys?" Well I wonder where the boys were when he made up his speech, because I wish he'd been around with the boys for a num ber of years past; I wish he'd made that speech in his own caucus last year -- he wasn't a member of the House at that time -- but I wish the views that he has expressed in the main toni ght -- I don't agree on all details -- but I wish those views had prevailed some time in the past , because he has given approva1 I gather to such things as the trade mission, to the COMEF report, the Manitoba Development Fund -- and these things were not approved by his party, in fact they were voted against by his party _..: (Inte rjection) -- Oh, I think we'll find this is true.

I've taken the occasion to look these things up in the Votes and Proceedings which I commend to my honoura ble friend. I think if he will study this he will find what he did say and think on pre­ vious occasions in the Hou se . Nevertheless I don •t want to quarrel .

I want tc welcome what I regard as the first forthright, energetic and far-re aching or far-seeing statement of policy from the Liberal Party on the question of"lef!s get behind the industrial drive and see how far we can go with it." My honourable friend from Burrows paid tribute to the staff of my department and I thank him for it, most particularly because I know he knows what he's talking about. He's dealt with them and he's perfectly right when he says the Civil Service is certainly the most important part of a department and I agree with him in that and I join with him in what he says.

He offered congratulations to the Department on the recognition that it had received -- the in­ ternational recognition -- and I take it he was referring to the award of the Society of Ind ustrial Real tors . I thank him for that reference because it was a most gratifying thing to receive , largely on behalf of the same Civil Service staff that he spoke about it, it was a tribute to them.

Now just how my honourable friend can offer the further criticisms of the department and what it is not doing , after having made that referen ce , I'm not quite aware, because the award was made for the most effective ind ustrial development plan in North America. This award is open to all States of the Unite d States and all provinces of Canada and on this particular occa­ sion Manitoba was chosen and it was great gratification indeed to find that our runner-up was the great state of New York. This was, I think , something that brought us a good deal ofpride Page 1428 April 19t h, 1963

(Mr. Eva11 s, con t'd.) .•• and I hope that Manitobans will view that not so much as simply something to be proud of, but something to inspire them indeed to greater efforts . And he asks us , what are we going to do , how do we propose to do it and are we going to live up to our promises ? He ti1en says that the 'program itself is insuff icient , largely on tHe fact that he claims that the program for rural indus trial development is being put forward by three employees.

I would like to tell him that in this case as in so many others he hasn't had the advantage of some of the inf ormation that he could have asked for before he made his cate­ gorical statement , because there is a very considera ble staff that' s devoted to this work . I could tell him that under the Admini stration side we have pooled the accounting and clerical and secretarial services for the entire department ; and then under two or three different sec­ tions here , including the rural development

section and the busin ess development section, there is a considera ble staff. I would like to tell him, for example , that under the business develop­ ment branch which spends a good deal of its time dealing with rural ind ustry, we have the Assis­ tant Deputy Minister and Director and of course the secretary to the Director, two senior busi­ ness consultan ts, three business development consultan ts, one assistant development consul­ tant . And then under the rural development

section of the department we have a further staff that spends its time on community development work including among others , one senior con­ sultant, two consultan ts, one clerk Grade IV on community development work; largely con­ cerned with busin ess development on such operations as the regional development plan and the Community Development Corporations .

Now I should, I think, draw atten tion to the fact that this program was offered to this House from that side , because in March of 1956 I made a speech from that side , when I occupied much the same position as my honourable friend does , as being the critic on the subject of Industry and Commerce, and I called for a regional development plan in the province which would take the province ,divide it into areas , discover what resources there were both human and material, and try to discover ind ustrial opportuni ties.

And then I went further to say that that wouldn't really be enough because the people themselves, the busine ssmen in those communities would have to do their own developing; they would have to put up their own money and put their own energies into it and for that reason would have to be organized into groups and those groups eventually became the Community Development Corporations which we have today, and at the moment I think there are 27 of them in the province inc orporated unde r the special form of corporation that we have for that purpose , and three others which are private indu strial devel­ opment corporations or orgap.ized in a slightly different way.

Well this was a program of some extent and it has been developed a good deal since that time. My honoura ble friend says that the government is not aware of the magnitude of the job, that we ne ed a real honest to goodne ss action and to drop this window dre ssing, that we are not aggressive enough and that we have only two people, as I mentioned before, on full-time work for rural industrial development . Well my honourable friend has taken a good deal of credit for the COME F report itself. He worked on it and I do thank him for the considera ble effort he did put into it.

He drew attention to the fact, and I'm glad he did , that labour had its part to play also in the COMEF report, and I want to acknowledge these things to o. But I think we're entitled to a little credit over on this side ourselves for the COMEF report. We thought up the idea. We put it into our program 'as a government . I personally brought the estimates before the House , had them passed; answered whatever criticism , withstood whatever attack there was . The government itself put in some $250 ,0 00 over a two-year period into it, and then we did some other things too .

As a government we went out to busin ess and said "we would like you to come into partnersh ip with us and we would like you to put up a considerable part of the mone y. " We did this in the name of the government in the first instance until there was cri­ ticism offered -- and I think perhaps justly so , that the government should not be going out and soliciting funds directly for the committee itself. Well we accepted that critici&m and there was a good deal of criticism in that regard .

We believed that perhaps it would have been better if we had organi zed the financing of the COME F report entirely under the COMEF committee from the beginni ng. Mr. MacMillan and his committee agreed with us and agreed to take over the entire financ ing of it with the government making its contribution of $2 50 ,0 00 in cash and a good deal in the way of services besides . So I think it would be right if I said to my honourable friend over there that this government deserves a good deal of credit for the �dea behind the April 19th, 1963 Page 1429

(Mr . Evans , cont'd .) ••• COMEF report because we realized before the COMEF committee came into being that we were facing a serious situation and that something major had to be done about it. In fact we made these calculations ourselves before the committee was put into being or before the name COMEF was ever heard of. Our first calculation was wrong. We said that by 1965 there would be a shortage of jobs in the province to the extent of 40 , 00 0, and we thought that was shocking enough.

We find that when the COMEF report came in, that the figures and the length of time were somewhat changed and that there would be a requirement for 75, 000 jobs -- a very large increase indeed with only a slightly longer period in view and that is 1975.

So for my honourable friend to say anything as completely unfounded as to say that we don't realize the magnitude ofthe job ahead of us , is really passing understanding, because he knows better; he knows better than that, because I know his views and we have discussed mat­ ters of this kind and I know that he has been in a posi tion to know better than to say what he said in this House tonight. And I say that to him in as friendly way as I can, but I must be em­ phatic about it, because this was our idea and we have received this report.

Now, he doesn't seem to realize that his committee completed its work and presented its report to us, after the start of the present session, so he now appears to blame for not having put into actual operation a good many of the things that are recommended in the COMEF report. Well how silly can you .get? I must say to him that we have anticipated a good many. of the things that have been done,because we have been thinking along these lines now for two years and laying some plans .

And when you read together with the measures that I sp oke of last night , the four pieces of legislation of which notice has been given, I think you will find that thi s is about the most far reaching and practical program of industrial development that has been thought of in Canada, and will prove to be one of the most practically effective bits of machinery for industrial development that has been put together in any part, certainly of this continent, and may we hope rival, some of the effective machinery that has been put into being in other parts of the world, notably ill Europe.

Sb I had to make th ose remarks to my honourable friend because he was unfair to us.

He has been blaming us for things that we have no opportunity to put into force yet and denying us credit for what has been an outstanding development in the industrial development field and that is putting the COME F organization together-:- an absolutely unique undertaking so far as I 'm aware in the industrial development field -- to take all segments of the industrial community, including man agement, labour, government, ' agriculture, university and others and say to them; •This is· going to be a great community effort; this is going to be a major development which has been unparalleled .in its scope nand as I see by the report now that we have it -- "in its effectiveness, in laying a blueprint for the longer future for Manitoba• and I think he was not right in denyin:g the gove rn­ ment credit for putting this piece of work into being. · With regard to research my honourable friend delivered himself of a homily on what re- search should be and that we should not engage "deadwood engineers" and he asked who is going to guide the research.

If my honourable friend would look at his estimates, he would find pro­ vision for a Director of Research here, and he will be a qualified person. But not only that, we have access to a good deal of highly qualified advice in our continuing contract with the Arthur Little Company of Cambridge , Massachusetts , and if my honourable friend sets himself up to criticize this organization, whic h is certainly a leading one in his own field of chemistry and a leading one in a great many other research fields as well , I think he has a good deal of temerity.

In the matter of exports which he says required specialized aid, he asks whether we are going to have some specialized aid in setting up a marketing branch, and I would like to pay at­ tention to that at this time , although we will come to the marketing branch in due course as we go through the estimates. Nevertheless , very practical provision is made for technical assis­ tance in this regard, and I would like to tell my honourable friend something about it. In the re­ organized department, we have a trade development and marketing branch.

This branch will be concerned with all the aspects of trade development and will assist Manitoba industry with the marketing of their products -- and this is the subject my honourable friend raised and he was right to raise it , because salesmanhip and securing markets , of course , is the life lot of any industrial development. As somebody said -- one of these American promoters he said: •Noth­ .ing happens until somebody sells something." And that is perfectly true, and realizing that , we are providing help in this department as well .

It will be responsible for· finding export markets for Manitoba products , part of the effort that my honourable friend and I engaged in together and which he seems to approve, and assist ing provincial producers to sell in the se markets . It Page 1430 April 19th, 1963

(Mr . Evans , con t'd. ) ••• would seek new outlets for products now made in Manitoba, and would provide market intelligence to Manitoba producers as to market conditions , prices and stocks in store and matters of that kind. And to provide a good deal of information to support a program of import replacements and manufacturing under license that I