LEGISLATIVE ASSEMBLY OF MANITOBA Thursday, 30 April, 1987. Time - 1:30 p.m. OPENING PRAYER by Madam Speaker. MADAM SPEAK ER, Hon. M. Phillips: Presenting Petitions . . . Reading and Receiving Petitions . . . Presenting Reports by Standing and Special Comm ittees . . . MINISTERIAL STATEMENTS AND TABLING OF REPORTS MADAM SPEAKER : The Honourable Mini ster of Education. HON. J.

STORIE: It's my privilege, Madam Speaker, to table the 1986 Annual Report of the Public Schools Finance Board; the 1985-86 Report of the Universities Grants Commission; the 1986 Annual Report of the University of Manitoba; the 1985-86 Annual Report of the Office of the Provincial Auditor on the Brandon University Retirement Plan; and th e 1986 Annua l Financial Report from the University of Brandon. MADAM SPEAKER: Not ices of Mo tion . Introduction of Bills ..

INTRODUCTION OF GUESTS MADAM SPEAKER: Before moving to Oral Questions, may I direct the attention of honourable members to the gal lery, where we have 25 students from Grade 9 from the Pierre Radisson School, under the di rection of Mr. Doug Senchuk. The school is located in the constitue ncy of the Ho nourable Mi nister of the Environment, Workplace Safety and Health. We have 18 students of Grades 1 to 6 from the King School, under the di rection of Mr. Jack Booth. The school is located in the constituency of the Honourable Minister of Tourism.

On behalf of all the members, I welcome you to the Legislature this afternoon. ORAL QUESTIONS CEDF - safeguarding of funds MADAM SPEAKER: The Honourable Member for Arthur. MR. J. DOWNEY: Thank you, Madam Speaker. I have a question for the Minister of Northern Affairs. To the Mini ster of Northern Affairs, Madam Speaker: Has the Minister taken appropriate action, on behalf of the taxpayers, to safeguard the interests of taxpayers on any and all questionable loans made by the Communities Economic Development Fund, even those loans made to his friend, Mr. Gunn, and to Yellow Thunder, which is owned by Mr.

Dillen, a former Member of the Legislature for the New Democratic Party from Thompson. MADAM SPEAKER: The Honourable Min ister of Northern Affairs. HON. E. HARPER: Yes, Madam Speaker, those are being proceeded with now at this time and at which time the actions have been taken, and we will report once those things have been finalized, and all the assets and other things have been done with. Gunn, N.D.- residency of MR. J. DOWNEY: Madam Speaker, to the Minister of Northern Affairs.

I would ask the Minister of Northern Affairs why, yesterday, in his answer to the Legislature, he did not tell us the total facts, Madam Speaker - and I'll refer to yesterday's Hansard - "ask the Minister why he would tell the House and the people of Manitoba" - and I'll quote directly from Hansard referring to Mr. Gunn and his place of business, and I'll quote. This is Mr. Harper: "Madam Speaker, the person in question," meaning Mr. Gunn, "was a resident of Norway House and he's got a business address in Norway House. " Madam Speaker, why did the Minister not tell us that Mr. Gunn has not had a business address?

In fact, his post office box was closed out over a year ago, and the Postmaster said there hadn't been any mail flow through it. Madam Speaker, why didn't the Minister fully disclose this situation as it was? HON. E. HARPER: I believe when the loan was made Mr. Gunn had a business address there, his family was there, his equipment was there, his parents were there, the family has been living there for many decades, and he operates a business out of there, his equipment is there. When the loan was made there, his business address was there. MR. J. DOWNEY: Madam Speaker, he didn't hear me.

He said yesterday that he had an address there as of yesterday. He hasn't had one for over a year. A further question to the Minister of Northern Affairs, Madam Speaker: Why did the Mi nister not tell the House and the people of Manitoba that Mr. Gunn has lived in Winnipeg since 1980, at 519 Rosedale; 1981, 23 Stinson; 1982, 23 Stinson; 1983, Fleetwood Bay; 1984, Driftwood Bay; 31 Driftwood Bay in 1985, and 1986 still at Driftwood Bay? Madam Speaker, as well, those were his business offices, as well as 41 Higgins Avenue. Madam Speaker, why did the Minister try to make this House believe that Mr.

Gunn had a legitima te address and operating business out of Norway House when, in fact, he didn't? HON. E. HARPER: Yes, I was answering the question in terms of where his business was. His business addr ess was Norway House at the time when the loan was made. 1487

Thursday, 30 April, 1987 In terms of a residency, the act doesn't specifically refer to anything about residency. I think the act says, the objectives to the act say that the financial assistance rendered should be to the communi ties, remo te communities, and isolated communities. Basically, those objectives have been made, and they provide the assistance to northern and Native communities, the individual northern Native people. I might say that the policy of the government before us was that they excluded many of the Treaty Indians. We changed that, we include Treaty Indians now. MR. J.

DOWNEY: Madam Speaker, I would ask the Minis ter of North ern Affairs if he would check his answers very closely. They are somewhat . . . MADAM SPEAKER: Does the honourable member have a question? Gunn, N.D.- knowledge of Min. of Northern Affairs re business address of MR. J. DOWNEY: Madam Speak er, the question is: Does the Minister know that these were business add resses where the corporate files came back to, not his residence, but they were corporate business files which were filed in the Corpora tions Branch? Does the Minis ter have knowledge of that? HON. E.

HARPER: The act specifically refers to the objectives of the act which is, "the work should be done in the North and also the economic benefits should go to northern Native people," which was best. MR. J. DOWNEY: Madam Speaker, is that why Mr. Gunn was allowed to carry out work at the University of Manitoba? MADAM SPEAKER: Would the honourable member please like to rephrase his question so it's in the admi nistrative competence of the government? Gunn, N.D.- work at University of Manitoba MADAM SPEAKER: The Honourable Mem ber for Arthur. MR. J.

DOWNEY: Madam Speaker, why did the Minister pro vide some $350,000 in loan funds under the Communities Economic Development Fund to Mr. Gunn for the carrying out of work at the Univers ity of Manitoba? HON. E. HARPER: I believe the loan was made for work to be done in the North. The work was done in the North, and I can give you an example at Sundance where it was successful. Gunn, N.D.- contractor re Limestone Training Program MADAM SPEAKER: The Honourable Mi nis ter of Energy and Mines. HON. W. PARASIUK: Thank you, Madam Speaker.

Yesterday I took as notice a question from the Member for Minnedosa and I have that inform ation regarding the leasing of equipment by the Limestone Training and Employment Agency, which I would like to provide that informatio n to the member on. The Limestone Training and Employment Agency entered into a contract with N.D. Gunn on April 1, 1986 for the period April, 1986 to March 31, 1987.

The contract priced at $25,000 a month for the lease of the following pieces of equipment: 2 - three-quarter ton pick-up trucks; 1 - five-ton high cab complete with a picker; 1 - 10-cylinder tandem dump; 1 - semi-trailer low bed; 1 - HD-11 crawler; 1 - 645B rubber-tired loader, a 3.5 cubic yards; 1 - loader hoe; 1 - high hoe, one cylinder bucket; 1 - Hitachi hoe two-yard bucket with M pads. This equipment was required for the Limestone Training and Employment Agency for training purposes.

The Limestone Training and Employment Agency staff examined the equipment and compared costs with other pote ntial suppl iers before recommen di ng the arrangement to the Limestone Training and Employment Agency Management Committee. This commi ttee is comprised of senior civil servants from a number of departme nts, including the Treasury Board . The management committee approved the arrangement, and a co ntract was approved by the Attorney-General's Department. This contract expired on March 31, 1987 and the equipment has now been returned.

Gunn, N.D.- repayment re Limestone Training Centre MADAM SPEAKER: The Honourable Memb er for Minnedosa. MR. D. BLAKE: I thank the Minister for that answer, Madam Speaker. That appears to be substantially more than one or two pieces of equipment that the Minis ter told us they may have rented yesterday. I wonder if the Minister could inform the House why these revenues have not been di rected to the fund to repay the advances that were made to Mr. Gunn. HON. W. PARASIUK: I would be very pleased to, in fact, show that the member's question is wrong.

The payments were in fact assigned to the creditors, including the Communities Economic Development Fund and the rental payments have, in fact, flowed to CEDF. MR. D. BLAKE: Yes, we may require some clarif ication on that, Madam Speaker, to see how much of the money actually flowed back to the fund in repayment of those loans. Gunn, N.D.- cost of repainting equipment rented MR. D. BLAKE: The Minister may have to take this question as notice, also. I wonder if he might give us some idea of the cost of repainting all of the equipment when it was leased to the training fund.

I understand the equipment was all painted when it was leased to the training fund. 1488

Thursday, 30 April, 1987 HON. W. PARASIUK: Madam Speaker, I'll certainly take that question as notice, but it should be noted in the context that the Limestone Training and Emplo yment Agency has also purchased and leased a great deal of equipment from Powell Equipment. I've heard no question from Opp ositio n about those types of leases, or those types of equipment rentals, Madam Speak er. They seem very concerned that this government may have entered into a lease with a Native company to achive the objective that we've always had of Native development, Native spinoffs.

The Conservatives are against that, Madam Speaker, and that's why they are sunk in the mire, trying to intimida te Native people from going into business. MR. D. BLAKE: It's very obvious on that side of the House, Madam Speaker, . . . MADAM SPEAKER: Order please, order. MR. D. BLAKE: . . . when their argument is weak and the facts are not there, they shout and yell like hell, and hope that will cover it up. MADAM SPEAKER: Order please, on both sides of the House. CEDF - action to recover funds owing MADAM SPEAKER: The Honourable Memb er for Minnedosa with a question. MR. D.

BLAKE: Yes, Madam Speaker, my question is to the Mi ni ster respo nsible for th e Com muni ties Economic Development Fund. Could he tell this House what steps have been taken, or what di rection . . . SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. MR. D. BLAKE: Could he tell this House what steps he has taken or what direction he has given the fund and the board of directors to collect or to make attempts to recover taxpayers funds from all of the delinquent accounts with the CEDF? MADAM SPEAKER: The Honourable Mi nis ter of Nort hern Affairs. HON. E.

HARPER: Yes, I believe actions have been taken into some of the delinquent accounts, and I believe that the two that have been mentioned here are already in process. If I elaborate in detail, I might jeopard ize the legal proceedings that are taking place at this time. Gunn, N.D.- CEDF loan approved by consultant MADAM SPEAKER: The Honourable Leader of the Opposition. MR. G. FILMON: Thank you, Madam Speaker. My question is for the Minister of North ern Affairs.

In view of the fact that CEDF loan applic ations normally require a review and recommendatio n by a consultant prior to approval, can the Minister indicate whether or not the CEDF loan of $350,000 to N.D. Gunn, a company which has since fai led , was recommended by the board's consultant who reviewed the application? HON. E. HARPER: As I mentioned before, the normal proceedings took place and the course of action was taken and those would have been taken into account in terms of analysing the loans and brought forward to the board. Gunn, N.D.- tabling of consultant's report re CEDF loan MR. G.

FILMON: Would the Minister be willing to table the consulta nt's review and analysis on the loa n appl ication for N.D . Gunn? HON. E. HARPER: Well, I belie ve some of that information is confidential because it relates to the individual's personal finances, or maybe personal affairs. But we did indicate to the members opposite that we were going to write the minutes of the board meetings, the proceedings of those things, under certain conditions. Gunn, N.D.- CEDF loan approved by consultant MR. G.

FILMON: Madam Speaker, in view of the fact that loan required Cabinet approval, would the Minister be prepared to tell us whether or not the consultant recommended the approval of that loan. MADAM SPEAKER: The Honourable Government House Leader. HON. J. COWAN: Yes, Madam Speaker. The members opposite are shouting from their seats: Have we shredded the documents? Are we trying to fix the situation?

Madam Speaker, what we're trying to do, as we have done successfully in the past, is provide full and factual informatio n that is within the responsibility of the government to provide so that they can get the details that they require to be an effective Opposit ion and, Lord knows, they need all the help they can get in that regard. Madam Speaker, these matters were add ressed in comm ittee. We indicated that there would be certain materials that we made available to the Oppositio n based on the . . . SOME HONOURABLE MEMBERS: Oh, oh! HON. J. COWAN: Madam Speaker, I hear them yelling, "not on a point of order.

" I did not rise on a point of order, I did not indicate I was on a point of order, and only a fool would think that I was on a point of order. I'm answering the question that was add ressed in respect to the provision of information, which I do quite often when those questions are in areas where I have 1489

Thursday, 30 April, 1987 given an indication, in committee, that informa tion would be provided. I have a responsibility to clarif y that to the Leader of the Oppos ition who may not be in all the committees because of other activities that he has scheduled. At committee, we indicated that we would provide informa tion based on the practices tha t we ha d established with them in, I believe, fairly much a cooperative fashion for the provision of information. Some of it can be provided, some of it can't be provided because of certain requirements.

It involves third-p arty interests where we would need release; it is corporate confidentiality; it is a Cabinet document, and he's now asking, he references his question in respect to what might have been said or reported in Cabin et.­ (l nterjection)- He says he's not doing that, so I appr eciate that he's clarified that. MR. D. ORCHARD: The recommendation was made to the board. HON. J. COWAN: Well he mentioned Cabinet in his

preamble, and I want it to be clear, so there's no misinterp retation inadvertently or otherwise, that we don't talk about what happens in Cabinet in this Legi slature or in committee. We never have, they never have, and that type of inform ation has never been provi ded. But I believe, and I noted the Leader of the Opposition was nodding his head in agreement when I said it before, we have been able to work out arrangements for providing infor mation in the past that were mutually satisfacto ry. We will attempt to do so in every instance.

If that is not possible then we will have to make the decision as to what information can and cannot be provi ded. MR. G. FILMON: I hop e th at means tha t the consultant's recommendation to the board will be provided for us, and we'll eagerly await the next commit tee meeting to ascertain whether or not that's the case. Yellow Thunder Holdings Ltd.­ CEDF loan approved by Cabinet MR. G.

FILMON: Madam Speaker, my further question to the Minister of Northern Affairs is, I wonder if he can indicate whether or not Cabinet approved the $1 50,000 loan assistance to Yellow Thunder Holdings Limited, a Saskatchewa n-based company, owned by former NOP MLA Ken Dillen which has also since failed? HON. E. HARPER: I can indicate that the loan was not approved by Cabinet but rather was approved by the board. Yellow Thunder Holdings Ltd.­ Min. of Northern Affairs aware of MR. G.

FILMON: Madam Speaker, in his responsibilities for CEDF, I wonder if the Minister could indicate whether or not he was informed that the only reason that Yellow Thunder Holdings Limited registered their company in Manitoba - they were a Sask atchewan-ba sed company - was, and I'll quote from the affida vit which has been signed by Mr. Dillen in this matter. It's an affi davit that is lodged with the Corpora tion's Branch of the Province of Manitoba.

It says: "I, Kenneth Dillen, of the City of Moose Jaw in the Province of Saskatchewan, businessman, make oath and say tha t I am making applica tion for continuance of Yellow Thunder Holdings Limited from Sask atchewan to Manitoba , to satisfy the terms of a financing agreement made with the Commu nities Economic Development Fund." Was he informed of that in his responsibility for CEDF when the loan was made? SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. The Honourable Minister of Northern Affai rs. HON. E. HARPER: As I mentioned before -I c.an't hear myself, Madam Speaker.

As I mentioned before, the act refers to economic benefits should be flowing from the Commu nities Economic Development Act, and certainly Mr. Dillen's loan was based to provide that opportunity for northern and Native communities to benefit from the project. As indi cated by the Leader of the Opposition, Mr. Dillen resided, not in this province, but he did make appl ication to the fund for a project that was to be done in the North and also to employ northern and Native people, which was done. CEDF loans - requirements re business address MR. G.

FILMON: Madam Speaker, my further question to the Minister responsible for CEDF is: Given that in one case the N.D. Gunn Company, according to the Corpora tions Branch, has provided as its add ress Winnipeg, a Winnipeg address since 1980; in the other case, Mr. Dillen's corporation provides as its place of business, Moose Jaw, Saskatchewan, when were the terms of reference for CEDF loans changed so that people in Winnipeg and people in Saskatch ewan are now being given loans from CEDF, contrary to their requirements under the act? HON. E.

HARPER: As I mentioned before, in terms of residency, I think that's not parti cularly relevant. I think what is relevant is the act itself providing the assista nce of northern and remote communities, which is being done. MR. G. FILMON: Moose Jaw? HON. E. HARPER: I might say the business address of Mr. Dillen was in Gypsumvi lle, so the work that Mr. Dillen has provided in the North was done primarily with the northern Native people. But I must say, again , that the issue of residency is not particularly relevant. Dauphin Crisis Centre - funding delay MADAM SPEAKER: The Honourable Member for River Heights. 1490

Thursday, 30 April, 1987 MRS. S. CARSTAIRS: Thank you, Madam Speak er. My questio n is to the Mi ni ster respo nsible for Community Services. Family vio lence erupted yet again in Ma nitob a yesterd ay, le av ing a woma n dead and child ren motherless. Yet, Madam Speaker, the Dauphin Crisis Centre, which exists to provide help to women in crisis, has yet to receive assurances from this government that their funding for this fiscal year will be granted. Can the Minister account for this delay in that the fiscal year of the Crisis Centre ended on March 31?

MADAM SPE AKER: The Ho nourable Mi nis ter of Community Services. HON. M. SMITH: Madam Speaker, the practice with notifying recipients of gra nts is that the listing of grants has to be finalized here in the House as part of the Budget process. In extraordinary circumstances, we can sometimes get permis sion to give earlier notice but, in this case, I think the centres have known - they're in ongoing negotiations with our staff people - that if the need level has maintained the same, their funding will continue.

It's only if their caseload has been showing a downward trend that we might consider a reduction, but formally I have to wait until the certain budgetary procedures are complete. MRS. S. CARS TAIRS: Madam Speaker, with a supplementary question to the same Minis ter. Can the Minister explain why there have been a number of Order s-in-Council passed for Community Services, based on this year's Estimates figures, which in fact provides funding to other child and family support agencies, but none has so far surfaced with regard to the Dauphi n Crisis Centre? HON. M.

SMITH: Madam Speak er, withi n our department, the Family Dispute Services now will appear under the Community Social Service grouping, rather tha n the Child and Family Servi ces. An d it was considered - in a sense, we're purchasing a service from them, rather than giving them core granting - their need for earlier notificatio n was particularly high, also because their need to plan, in context of increasing volumes, was greater. But the other recipients of grants - I mean there are many hundreds who receive grants from our department - will be notified very shor tly, Madam Speaker.

Dept. of Community Services - spending priorities MRS. S. CARSTAIRS: Madam Speak er, with a final supplementary to the same Minister. How does the Minister explain a 40.8 percent increase in funding for External Agencies and a 12 percent increase in salaries for her own staff, and yet a crisis centr e, like the Dauphin Crisis Centre, has been informed that they should look at a zero percent increase for their staff and service during this year? HON. M. SMITH: Madam Speak er, I think that these types of detailed questions are better dealt with in Estima tes.

There are varying ways that the Department 1491 of Community Services funds age ncies, and that accounts for the variations. As I say, the main differential is in the volume increase, and I suppose you would say the degree of obli gation that the department has assumed for covering their funding. In the case of crisis centres, we've been building a system that has required cooperation between volunteer groups and departmental staff, and we have been trying to develop a province-wide system, and we're only gradually building that system, Madam Speaker.

Again , I would be happy to give those particular figu res though, and the expla na tion , during my Estimates. I want to leave no confusion though. The Dauphin Crisis Centre will receive their funding for the next year. Sugar beet industry - tripartite agreement MADAM SPEAKER: The Honourable Member for La Verendrye. MR. H. PANKRATZ: Thank you, Madam Speaker. My question is to the Minis ter of Agriculture. Would the Minister of Agriculture give this House an upda te as to the negotiatio ns with the Federal Government in respect to sugar beets?

Also, could he indicate when possibly these negotiations could be completed? MADAM SPEAKER: The Honourable Minis ter of Agriculture. HON. B. URUSKI: Madam Speaker, those negotiations are still ongoing. It was my hope that they could have been completed by today. Ottawa has not responded to, in fact, two proposals that we di scussed over the weekend and, until such a time as their position is known, I am unable to say as to when they will in fact get back to us on the positions that we've given them. Gunn, N.D.- cost of repainting equipment rented MADAM SPEAKER: The Honourable Mi nis ter of Energy and Mines. HON.

W. PARASIUK: Madam Speak er, earlier in question period , I took as notice a question from the Member for Minnedosa as to whether in fact any of the equipment was repainted before it was returned, and I have that informatio n. I have been informed that one truck was repainted. It was rolled in an accident. It cost the Limestone Training and Employment Agency $200, which is the Autopac deductible. I will check to ascertain if there was any other equipment that was repainted and, if that is the case, I will provide that informa tion to the House.

Economic forecast - Royal Bank MADAM SPEAKER: The Honourable Memb er for Morris.

Thursday, 30 April, 1987 MR. C. MANNESS: Thank you, Madam Speaker. I di rect my question to the Minister of Finance. Yesterday, Madam Speaker, the Royal Bank put out another forecast of Manito ba's economy and the members opposite, of course, are wanting, in most cases, to quote the Royal Bank these days. This renewed forecast, Madam Speaker, said that the pace of economic growth in Manitoba will probably fall short of our earlier forecast. I ask my question directly to the Minis ter, Madam Speaker.

This information, which is becoming more and more generally accepted, is it being reflected in government decisions to begin to reduce some of the estimated expenditures, given that forecasted revenues may fall seriously short of that provided by the Minister during the Budget? MADAM SPEAKER: The Honourable Minis ter of Finance. HON. E. KOSTYRA: Thank you, Madam Speaker. The member knows full well that he did not deal with the major points that were contained in the release that was provided to members opposite about a week ago by the Royal Bank, and it talks about the overall economic situation in the province.

And let me just quote the opening statement that the member failed to comment on when he asked his question, Madam Speaker. The opening statement says: "Our long-term economic outlook for Manitoba remains on track. We continue to see the Manitoba economy growing at an average rate, moderately above that for the nation, for the decade ending in 1995". And it gets better, Madam Speak er. The Member for Sturgeon Creek says it gets worse.

It talks about, ". . . contributing to the overall strength of the Manitoba economy are the various major investment projects in mining, manufacturing and utilities sector." It talks about the growth in Manitoba's real GDP, ". . . is expected to grow at an average annual rate of close to 3.3 percent in the coming years to 1995, compa red to a national average, the average for all of Canada of 3 percent." So here we are well above the national average, Madam Speaker.

It also talks about our near-term economic outlook for Manitoba to 1988, continues to call for above national average growth in the province's real output reflecting largely direct and indi rect effects of the Li mestone Project. So, Madam Speaker, if you look at the report from the Royal Bank, it indica tes that they see the Manitoba economy continuing on the track that they talked about previously for continued growth at rates that are at or above the national average for our country. Deficit reduction - long-range planning MR. C.

MANNESS: Madam Speaker, given that this document has a decidedly more negative tone than one previously put out by the Royal Bank; and given that the Minister of Finance deli berately left out in his selective reading the fact that there will be less room for further tax increases since tax burdens are already above the average for all provinces; and given that the Public Utili ty Board has ruled that Manitoba Hydro provide a five-year financial forecast of Manitoba Hydro, will the Minister of Finance lay before Manitobans a long-range plan, a multiyear budget as to how the debt and the deficits of this province are going to be reduced over the next series of years?

HON. E. KOSTYRA: I fail to see how any of the statements that I read out, and unfortunately I wasn't able comple te all of them, are negative statements about the economy in the Province of Manitoba. There is some negative comment in the Royal Bank report. The member made mention of one, and let me read another one that he failed to mention that I thought he would have, in all honesty, if he wants to talk about the negative side of the report.

That's where the Royal Bank talks about the situation that the Province of Manitoba has been faced with with respect to its finances and its revenues where it comments: "Further deficit reduction will also be made difficult as the share of federal transfers in total budgetary revenues is expected to continue to decline." Why didn't the member opposite talk about that, like his colleague in the Province of New Brunswick talked about the situation that's been forced on the Province of New Brunswick by Federal Government actions?

And this is a provincial Conservative Minis ter of Finance, Madam Speaker, not an NOP Minister of Finance. Because any time I mention anything about the Federal Government and its lack of support to the Province of Manitoba, I'm fedbashing, but this is a Conservative Minis ter of Finance in the Province of New Brunswick who talked about his increased deficit in his budget. He said, and I quote: "The main culprit for the increased deficit in the Province of New Brunswick" - main culprit, Madam Speaker, the main culprit is his federal counterpart, Michael Wilson. Taxation Bill, 1987 - debate of MR. C.

MANNESS: A final supplementary, Madam Speaker, and it'll be a little different question, because the Minister of Finance can't seem to respond without a newspaper

article in his hand. My question to the Minister of Finance, Madam Speaker, on May 4, the sales tax in this province is going to increase from 6 percent to 7 percent. Will the Minister, will he bring forward a taxation bill 1987? Will he introduce it to the House at an earlier date so that members of this House may have the opportunity to debate the taxation measures that have been brought forward in the Budget over a longer period of time than just a few hours at the very close of the Session?

Will the Minister have the courage to bring forward that taxatio n bill and give members of this House some two months to debate it? HON. E. KOSTYRA: This Minister of Finance and this government has the courage to deal with the financial and the economic and the social and health and education concerns of Mani toba ns, unlike their colleagues in the Province of Saskatch ewan who are afraid to go their Legislature, and they're not even talking about going until the month of June to face 1492

Thursday, 30 April, 1987 their Legislative Assemb ly. Is that what the member opposite would call courage and responsibi lity? Would he call courage and responsibili ty the positio n the Conservative Governments in the Provinces of New Brunwsick and Nova Scotia have taken in election years in those provinces, where they increased their deficits? The Province of New Brunswick, a province with smaller resources than the Province of Manitoba, has increased their deficit at rates that are higher than what we have in the Province of Manitoba.

Or would he suggest that we do what Conservative Go vernments in Saskatche wan and Al berta would do , by cutting spending and reducing support for health and education in the province? Is that what he would suggest? MADAM SPEAKER: Order please. HON. E. KOSTYRA: Is that what he calls courage, Madam Speaker? Port of Churchill Development Board - withdrawal of support by Saskatchewan MADAM SPEAKER: The Honourable Memb er for Thomp son. MR. S. ASHTON: Madam Speaker, a question for the Mi ni ster of Transp ortation .

It follo ws from the announcement that the Saskatchewan Government has withd rawn its fundi ng from the Port of Chur chill Development Board. In view of the fact that the board does represent the interests of the thr ee prairie provinces, including Manitoba, and it also has provided excellent lobbying support for the port, I'd like to ask the Minister what actions he will be taking to urge the Saskatch ewan Government to reconsider its elimi nation of funding to the Port of Churchill Development Board. MADAM SPEAKER: The Honourable Minis ter of Hig hways and Transportation. HON. J.

PLOHMAN: Madam Speaker, this is another kind of example of Tory efficiencies. I want to thank the Member for Thomps on, who has been constantly vigi lant on the Port of Churchill, and other northern members, like the Member for Churchill, who have stood up over the years to support the port. And now we see the main beneficiaries, Madam Speaker, of the Port of Churchill, the farm ers of Saskatche wan , and a Go vernment of Saskatc hewan in this case, not looking after their producers and cutting back completely the support for the Churchill Development Board, which they have provided for the last 15 years.

That is a shameful act. We cannot continue to allow that kind of thing to happen. We will be making our views known to the Go vernment of Saskatche wan in the strongest terms. Im mediately, after hearing of this informatio n, which I have indicated, Madam Speak er, seems to be the kind of efficiencies that the members opposite talk about here when they talk about reducing deficits. If this is the way they would do it in Manitoba, then we can only hope that they never expose the people of Manitoba to this kind of a government that's sitting across here. 1493 Madam Speaker, $37,000 is .

SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. MR. S. ASHTON: I thank the Minister for the assurance in regard to the Port of Churchill Development Board. Northern Youth Corps - jobs MR. S. ASHTON: I have a further question, Madam Speaker, to the Minister of Employment Services on a different subject matter. I'd like to ask the Minister if he could indicate whether the North ern Youth Corps will be offered again this year; and if so, what level of emplo yment Northerners, particularly north ern youth, can expect from this program?

MADAM SPEAKER: The Honourable Minis ter of Emplo yment Services briefly. HON. L. EVANS: I'm very pleased to advise the member, and indeed the whole Assemb ly, that we will be carrying out a North ern Youth Job Program again this summer. We'll be inviting applica tion from non­ profit organization s, northern communities and Indian Bands and, yes, it is joint funding with the Federal Government. But the most im portant thing is, Madam Speaker, the Manitoba Government has taken this initiative.

We're taking this initiative and we expect that we'll have over 125 projects, employing over 500 northern youth and students. Indeed, this is higher than last year's figu res. So I think all Manitobans should be very pleased that we're proceeding with this type of program to provide needed jobs in Northern Manitoba. Manitoba Hydro - requirement by Public Utilities Board for 5-year forecast MADAM SPEAKER: The Honourable Member for Lakeside. MR. H. ENNS: Tha nk you , Madam Speaker. My question is to the Minister responsible for Manitoba Hydro.

Madam Speaker, the Public Utilities Board recently brought down a ruling calling on Manitoba Hydro to provide that public body with an in-depth, five-year study as to its projected rates and costs. I simply ask of the Minister: Does he concur with that decision? MADAM SPEAKER: Or der please. Could the honourable member please rephrase the last part of his question so as not to seek a personal opinion. The Honourable Member for Lakeside. MR. H.

ENNS: Madam Speaker, I suppose what I'm asking the Minister is: What position did he use in his minis terial capacity , as Mi nis ter respo nsi ble for Manitoba Hydro, in suggesting to Manitoba Hydro that

Thursday, 30 April, 1987 they concur with that request, that they should oppose that request made by council at that public hearing? MADAM SPEAKER: The Honourable Mi nister of Energy and Mines. HON. W. PARASIUK: Yes, Madam Speak er. I'm very pleased to answer that question from the Honourable Member for Lakeside. There were groups that came before the Public Utilities Board asking that there be 10-year forecasts, and possibly forecasts beyond that. Manitoba Hydro argued at that time that the Public Utilities Board should deal with the specific rate increase.

The Public Utilities Board assessed the position of some people who had made this type of application. They assessed the positio n of Manitoba Hydro, and they have a rule that Manitoba Hydro should provide five-year forecasts. As has been indicated publicly already, the Manitoba Hydro spokesper son said that they deemed that to be a reason able comp rom ise, Madam Spe aker , and I certainly concur with that. Manitoba Hydro - provide 5-year forecast to PU and NR Standing Committee MR. H. ENNS: Thank you, Madam Speaker, for that informa tion.

I know that my colleague, the Member for Morris, would appreciate it if the Minister of Finance took the same reasonable attitude towards a five-year projection with respect to the overall financial situation of our province. MADAM SPEAKER: Does the honourable member have a question? MR. H.

ENNS: My second and final supplementary question to the same Mini ster, Madam Speaker, is simply this: While I'm aware that the transcripts, documents of that Public Utilities Commit tee hearing are, of course, on the public record, would he consider as a courtesy to the members of the Natural Resources Legislative Comm ittee, who have asked for simi lar informa tion - by the way, Madam Speaker, we would certainly be interested in having a copy of presentations, documentation made by Hydro in meeting this request from the Public Utilities Board. HON. W. PARASIUK: Certain ly.

When the Manitoba Hydro goes before the Public Utili ties Board - and I don't think the date has been fixed - that informatio n will be pulled together, and I will send a copy of that material to the Honourable Member for Lakeside as a courtesy. I expect that material will indeed contain the information that has been provided to the Public Utilities Board this year, last year, three years ago, four years ago, five years ago.

There may be further questions asked by the Public Utilities Board, and Manitoba Hydro may, in fact, provide additio nal informa tion, just as members opposite have asked for the informa tion from Manitoba Hydro and indeed, Madam Speaker, have been provided with that informa tion. MADAM SPEAKER: The time for Oral Questions has expired. MATTER OF URGENT PUBLIC IMPO RTANCE MADAM SPEAKER: The Honourable Member for Arthur. MR. J. DOWNEY: Thank you, Madam Speaker. I rise on a matter of extreme public im portance, and I will conclude my comments with a su bstantive motion.

Madam Speaker, we've seen over the last few days the di sclosure of the activities within the economic . MADAM SPEAKER: Order please. MR. J. DOWNEY: Okay, Madam Speaker, I'm prepared to move the motion. Madam Speaker, I move, seconded by the Member for Fort Gar ry, that the ordinary business of the House be set aside to discuss a matter of urgent public im portance, namely, the disbursement of funds from the Communities Economic Development Corporation. MOTION presented. MADAM SPEAKER: The Honourable Member for Arthur has five minutes to make his case for urgency of debate. MR. J.

DOWNEY: I rise, Madam Speaker, to put before this Assembly a matter of extreme public im portance, that namely - and it's the first opportunity that I've had to do so, having received yesterday's Hansard in which the Minis ter responsible for Northern Affairs had not fully provided us with the kind of informatio n that we would have expected, and that was the total factual informa tion which would have helped to clear the air.

Madam Speaker, we do not have the opportunity, and I'm not casting any aspersions at the House Leader, we did not have the opportunity to go into Economic Comm ittee this morning to debate or to find out some of the answers, because the informatio n was not av ailable. Again , I think tha t toda y is the only opportunity, and now is the only opportunity, because there are Estimates of other departments and we will not have another opportunity to debate this issue.

The first, Madam Speaker, that I want to deal with, and that is the providing of accurate information when it comes to the handling of the Communities Economic Development Fund. And I believe, for this Assembly and for the public to clearly understand what is going on, we have to have the full and factual truth, and I think it's extremely urgent that we deal with that today to make sure we get all the factual informatio n so that we can have clear and honest and open understanding of it when the Communities Economic Development Comm ittee meets again to discuss this issue.

It is a matter, Madam Speaker, I think that the Minister who is responsible for should pay particular attention to because there is, whether he likes it or not, somewhat of a shadow over his activities in the handling of funds which flowed to, not only a friend of his, a close personal friend where he had a political campaign headquarters a month before the approval of a loan, but now we find that a former New Democratic member, the Member for Thomp son as well, has received funds from this 1494

Thursday , 30 April, 1987 fund with only the accommoda tion of an address in Manitoba under which he should app ly, and living in another province. It truly countervenes the act, and I will just spell out very briefly, and again the reason fur urgency is we cannot have a government continue to countervene

an act of the Legislature, and that, I think, is another main reason for this emergency debate. It clearly states in the act, Madam Sp eake r, and I'll read it for the mem bers : "The ob jectives of the Fund are to encourage the optimum economic development of remote and isolated communities within the provinces and to that end" - and I'll go next, Madam Speaker, to (

b) of that same clause and it clearly spells out - "to emphasize and encourage the expansion and strengthening of small- to medium-sized economic enterprises and note which are locally owned and operated ." It doesn't say "may be"; it says, which are locally owned and operated, Madam Speaker, very clear in the act, locally owned and operated. The evidence, Madam Speaker, that we have been given is that they are not locally owned and operated. They are operated out of the City of Winnipeg and out of the City of Moose Jaw.

Madam Speaker, it is urgent that we have the truth brought to this Assemb ly, and we bring it to this Assembly today because it's important for the taxpayers to know precisely that the act of the Legislature is not being lived up to as it was intended to. Madam Speaker, it is the reputation of the Cabinet Minister involved and I think, for his sake, that today now would be a time to clear the air and let him express to us precisely how the funds flowed to his friend and how the decisions were made on what is a questionable loan . His involvement, Madam Speaker, that is the urgency. Let him clear the air.

Let us debate and clear the air today. Let's not leave it on into the future to leave a question about how the Minister's activities were carried out. Let's solve it today, Madam Speaker, and it is another major reason for urgency, and I would think that the Government House Leader would take that into consideration in his comments. Madam Speaker, I as well want to bring the point before this Assembly, that if they are continuing to make decisions, this govern ment is continuing to make decisions and, yes, there may be a Cabinet decision made today that affects the Limestone funds which have flowed to Mr.

Gunn and whether or not they are getting sufficient funds. This may be the last day that they have, Madam Speaker, a chance to get their hands on some of th ose mon ies tha t are flowing from Limestone. Today might be the last day, and that's why it's imperative we debate it today, Madam Speaker, and give direction to the government to protect the interests of the taxpayers. As I understand it as well, Madam Speaker, I would be hard-pr essed to find any consultant who would recom mend to a Cabi net, with the questio nab le econ omic backgr ound of Mr.

Gunn, th at recommendation would in fact be given to a Cabinet or a commit tee of Cabinet to recommend that loan. I think there's the reputation of the consultants and all the staff of the Communities Economic Development Fund. I think, before any more work is done by this Cabi net Minister and this government dealing with the Economic Development Fund, it should be cleared up today before any more decisions are made that could put at risk the taxpayers' money, Madam Speaker.

I thin k it's extremely im portant when we the Oppositio n ask particularly for this kind of debate when we are going into Estimates that have no relationship, Madam Speaker, that we deal with it today and deal with it to clear the air. Thank you, Madam Speaker. MADAM SPEAKER: The Honourable Government House Leader has five minutes to make his case on this matter. HON. J. COWAN: The Honourable Member for Brandon West says, can't the Minister of Northern Affairs answer for him self?

I'm certain that he will agree that the Minster of Northern Affairs showed in the question period today that he's been very capable of answering. I appreciate the opportunity to help the Member for Brandon West along in his education about the House Rules. It is normally the House Leader who answers requests for debates on matters of urgent public importance, so perhaps he can bear that in mind in future so he doesn't make quite such a fool of himself on other occassions. MADAM SPEAKER: Order please.

I'm sure the Honourable Government House Leader would like to withd raw those remarks and that all members of this House are honourable members. The Honourable Government House Leader. HON. J. COWAN: Madam Speaker, I did not in any way intend to reflect upon whether or not he is an honourable member and did not want to do so and, if he takes offence at those words, I certainly withdraw them. He is an honourab le mem ber, and we do appreciate the chance in helping him become an even better honourable member by learning the rules as much as possible.

To deal with the last argument first, for the Member for Arthur, whether or not the Estimates are relevant to the matter before the House that is being suggested be dealt with by a public urgent debate is not relevant. There have been many rulings in the past, Madam Speaker, I'm certain you're aware of them and members opposite will become aware of them in time, where the mere fact that Estimates were proceeding and before the House was sufficient opportunity for debates to take place, and it was not in any way connected to the relevancy of the issue at hand.

So he's wrong in that presupposition, that the fact that we don't have Estimates before the House that deal with this means that we don't have other opportunities. Those two connections have never been made in the past. The fact is, Madam Speaker, that this is also a matter before another body and, if we had followed the traditio n of members opposite when they were in government, we wouldn't even have allowed questions in the question period or questions during the Estimates of the Minister of No rth ern Affairs on CDF because, whe n the Honourable Member for Swan River, Mr.

Gourlay at the time, was Minister responsible for CDF and we asked him questions in the Estimates under Minister's Salary on CDF, he refused to answer them. When we 1495

Thursday, 30 April, 1987 brought questions in this House to ask during the question period when matters were before standing commit tee, they refused to answer them because they were before the standing comm ittee. Madam Speaker , this government does not believe tha t we should attempt to circumvent the legislative process in the way that they obviously tried to do when they were in government. But the fact is, Madam Speaker, that this matter is before the standing comm ittee.

Let's reflect upon that for a moment because the Member for Arthur says, what we have to do is clear up the reputation of the Member for Rupertsland, the Minister of Northern Affairs. Well, Madam Speaker, that reputation is sound, it was sound. The only ones in this Chamber who are in any way damaging their own reputation are members opposite for their inquisition, for their treatment of this particular issue, for all the mistakes that the members have put on the record alrea dy, and we'll go through those in standing comm ittee where they have made allegations that are totally unfounded in either fact or intent.

Madam Speaker, they are the ones who are besmirching their own reputations, and they don't need an emergency debate to take care of that. They need to get some research done that's proper and adequate. They are the ones who are casting the shadow, and there is mention today as to why are they casting the shadow over businesses that are Native-owned when they don't do the same thing over other types of businesses, Madam Speaker. That is a question that need be addressed, because they have always stood against Native economic development in this province.

When they were responsible for CDF, they cut off Treaty India ns from that program. The histor y of th at government very clearly substantia tes the suggestions today that they have stood foursquare against Native economic development throughout their history as a government and an Opposition. MR. G. MERCIER: Madam Speaker, would you please enforce the rules against the go vernme nt. Those comments are clearly out of order .

The comments are supposed to be di rected towards the urgency of the matter, and I would ask that you apply the rules to the government in the same way that you try to apply them to the Opposition. Thank you. MADAM SPEAKER: The Honourable Government House Leader has half a minute left to make his case on this matter. HON. J. COW AN: Madam Speaker, if they want the rules applied, then let them look at the rules, because they have viola ted them in every instance on every time they have asked for a debate . . . MADAM SPEAKER: Order please, order please. MR. H.

ENNS: That's for her to decide, that's not for you to decide. A MEMBER: You're not the judge here. MR. H. ENNS: And we are not in Moscow . SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. The Honourable Government House Leader. HON. J. COWAN: Madam Speaker, the record speaks for itself, for anyone who wants to review it. In respect to this particular matter, we have very clear ly, at the standing commit tee, and the standing commit tee has not reported to the House, and this matter is before the standing commi ttee . . . MADAM SPEAKER: Order please. The honourable member's time has expired.

SPEAKER'S RULING MADAM SPEAKER: There are two conditions to be satisfied for this matter to proceed. The first condition has been met in that I received the proper notice from the honourable member of his motion. The second condition is that debate on the matter is urgent, and tha t there is no other rea sonable opportunity to raise the matter.

Our Rule 27.(5Xd) states, in part, that "The motion shall not antici pate a matter that has previously been appointed for consideration by the Ho use." On Frida y, April 24, 19 87, the Honourable Government House Leader announced that the Standing Comm ittee on Economic Development would meet on Tuesday, April 28 to review the Annual Report of the Communities Economic Development Fund. The comm ittee has not yet reported and the matter is still, therefore, before the commit tee.

There are other opportunities as well to debate this matter, either Private Member's Resolution, Gr ievance, or the Estima tes of the Department of Northern Affairs. I, therefore, rule the motion out of order. The Honourable Opposition House Leader. MR. G. MERCIER: Madam Speaker, I would challenge your ruling. MADAM SPEAKER: The ruling of the Chair has been challenged. All those in favour of sustaining the ruling of the Chair , say aye. All those opposed, say nay. In my opinion, the ayes have it. The motion is therefore carried.

ORDERS OF THE DAY HOUSE BUSINESS MADAM SPEAKER: The Honourable Government House Leader. HON. J. COWAN: Madam Speaker, on a matter of House Business, in our truly and typical cooperative fashion, the Opposition House Leader and I have agreed that the Standing Committee on Economic Development will meet next Tuesday, May 5, 1987 and, if necessary, on Thursday, May 7, 1987 at 10:00 a.m. to consider the report of MDC. We've indicated, Madam Speaker, that we will first deal with McKenzie Seeds to try to complete it on Tuesday, if possible, and then the other matters under review under the report of MDC. 1496

Thursday, 30 April, 1987 So that's next Tuesday and next Thursday, if required, at 10:00 a.m. And I thank the Honourable Oppositio n Hous e Leader for his conti nuing cooperation in arranging the affairs of the standing comm ittee. Madam Speaker, as well I would like to indicate that the Commit tee of Supply will be considering, for the first time this year, the Department of Hig hways and Transportatio n Estima tes in the commit tee room, and we'll be continuing on with Natural Resources.

And by leave, Madam Speaker, I believe there is a disp ositio n not to have Private Members' Hour today, but to continue on with the consideration of the Estima tes until six o'clock, the time of adjournment. I move, Madam Speaker, seconded by the Minister of Municipal Affairs, that Madam Speaker do now leave the Chair and the House resolve itself into a Commit tee to consider of the Supply to be granted to Her Majesty .

MOT ION presented and carried and the Ho use resolved itself into a Commit tee to consider of the Supply to be gra nted to Her Ma jes ty, with the Honourable Member for Burrows in the Chair for the Department of Natural Resources, and the Honourable Member for Lac du Bonnet in the Chair for the Department of Hig hways and Transportation . CONCURRENT COMMITTEES OF SUPPLY SUPPLY - HIGHWAYS AND TRANSPO RTATION MR. CHAIRMAN, C. Baker: Comm ittee, come to order. We will start with the Highw ays and Transportatio n with a statement by the Minister. Mr. Minis ter. HON. J. PLOHMAN: Tha nk you very much, Mr. Chairma n.

I have a rather lengthy statement. It covers the major priority areas of the department, I believe, that it covered in the Estimates for the 1987-88 fiscal year. But before I start into that statement, I just want to, once again , express my appreciatio n to the staff who are present here today and also who will be participating later on, once we get into the line-by-line discussion of the Estimates. I want to thank the senior staff who are here for their support and assistance over the last year, which I have been very impr essed with and very pleased with, over the last couple of years actually.

But there have been some changes and certainly all of the staff are worthy of the ... MR. CHAIRMAN: The Member for Ellice. MR. H. SMITH: Mr. Chairman, I think we have a rule here of no smoking. I just noticed the member opposite, and it does bother my lungs. MR. H. ENNS: Put that out, Dave, and you're sitting right beside me too. MR. CHAIRMAN: If the Member for Minnedosa wishes to smoke, I'd appreciate it if he'd move to the back of the room. 1497 MR. D. BLAKE: ... I'm not going to butt it out, they are $3.50 a package now. MR. CHAIRMAN: Just go to the back of the room. Thank you very much. MR. D.

BLAKE: Can I hear back there all right? MR. CHAIRMAN: Yes. MR. D. BLAKE: Ok ay, I'll just follow along. MR. CHAIRMAN: Thank you. Mr. Minister. HON. J. PLOHMAN: Yes, Mr. Chairman, to the staff, this is no reflection that cigarette smoking takes priority over the complime nts to the staff. I'm sure that you will have apologies from the Member for Ellice later on for getting his priorities out of order, but I do support him on the smoking rule. Mr. Chairma n, the Department of Hig hways and Transportation spending Estimates are increased for the 1987-88 fiscal year by approximately $6.2 mill ion over last year.

The bulk of this increase shows up in our construct ion budg et. In fact, spe ndi ng for construction projects on Manitoba's roads and highw ays will jump by approximately $4.9 milli on this year over the print-over-print for the last fiscal year. I'm sure many of my colleagues seated around this table are critically aware, as I am, of the key role that highw ay construction plays in the continued growth of our province. This growth is not only ill ustrated through the development and maintenance of our highway infrastructure but also shows itself through job creation and economic development.

I think it's worthy of pointing out that, for every millio n dollars worth of construction, there are nearly 32 person years of employment created. This years of employment created. This year's construction budget of $87.9 millio n will translate into thousands of jobs for Manitobans.

This year's total budget is approxima tely $203.52 millio n and, although I'm ve ry pleased th at our government has cho sen to increase its fina ncia l commitme nt to the programs and projects carried out by the Department of Highways and Transportatio n , I do want to express a slightly different sentiment towards the Federal Government, as it applies to Highway funding. I think it is certainly worthy of dealing with this subject. This year, as I said, our government will spend nearly $88 mill ion for hig hway construction projects.

This year, the Federal Government will contribute $2 millio n to carry out construction work on portions of the Yell owhead in Manitoba. That's the extent of it. In previous years, it was zero. It is becoming increasingly evident that the Federal Government will have to find more money to fund highw ay construction. Naturally, I welcome the federal contribution to the Yellowhead high way, but that is only a drop in the bucket and a piecemeal approach at that. I strongly believe that there must be a comprehensive undertaking on the part of the Federal Government for hig hway construction funding in this country.

I have expressed those se nt ime nts at several speaking

Thursday, 30 April, 1987 engagements and in the Legislature with the support of my Cabinet colleagues. If we look to other developed countries around the globe, we see that in almost every nation, federal governments have assumed responsibility for a principal hig hway network. These governments recognize the imp ortance tha t roads an d highways pla y in the economic and social well-being of the nation. Just to the south, the U.S. Federal Government funds account for 25 percent to 35 percent of all state annual hig hway constructio n programs; that's an average figure.

Manitoba's border state, North Dakota, received 90 percent federal funding for the construction of its 1-29 link with the Interstate system. The United States has established a highway user tax fund, derived primarily from federal fuel taxes, in order to develop major highw ay systems. Of course, the Ca nadia n Government also has a federal fuel tax. However, they do not reciprocate with a fund like the United States does.

In 1985-86, the Canadia n Government collected approxima tely $878.5 million in gasoline taxes and $1. 6 billi on from federal fuel sales tax, so that's about $2.5 billi on across the nation collected in gasoline taxes in one year, $11 7 mill ion last year from the Province of Manitoba. We firmly believe that pressure must be placed on our Federal Government to examine a process which will enable them to begin funding major highw ays in our nation. I would suggest that a logical area to examine would be funding through federal gasoline taxes.

Just as an example, if the Federal Government were to create a national hig hway fund with a 1 cent a litre increase in the federal gasoli ne tax, this would generate an estima ted .5 bil lion dollars a year, based on current fuel consump tio n. If this were di stribu ted to the provinces on a per capita basis, Manitoba's share would be approxima tely $20 mill ion a year or one-twenty-fifth on a per capita basis. I would urge the Oppositio n members to support us in this endeavour to have the Federal Government get involved in a national highw ays fund.

Clearly, the province, over the years, has showed a very definite comm itment to funding of highw ays as all of our revenues related to hig hways are expended and more on highw ay-related expenditures. Most of the principle routes in the Maritime provinces have been substantially supported by federal initiatives. I want to just say, Mr. Chairman, as I indicated earli er, there has been an erratic method with regard to federal funding for various provinces in this country, a very inequitable method and this is what concerns me. And I think members of the Opp ositio n should be very concerned about this as well.

For example, the Federal Government just recently entered into a cost- sharing agreement, 63 percent federal, 37 percent provincial with Newfoundland. The five-year $180 mill ion highw ay im provement program, $18 0 mill ion for one province, is primarily di rected towards upgrading the Trans-Canada Highway in that province. For most jurisdictions, funds for upgrading the Trans-Canada Hig hway, for all intents and purposes, have been purely derived from provincial tax dollars.

Federal dollars must be found and the issue must be add ressed quickly in order to ensure the adequa te main tenance of this country's highway system and, as I say, in an equitable way. The Maritime provinces have received substantial funding for their hig hway systems. Quebec has also received substantial funding, and the Western provinces have not received a fair share at all. I'm not alone in this request.

Recently the Min ister for Hig hways and Transportatio n from British Columbia expressed stro ngly at the RTAC Conference Symposium, Roads Ahead in Edmonton, last week, the need for federal policy towards hig hway funding. As well recently, Ontario Government Min ister, Ja mes Bradley, who is the Minister responsible, I believe, for the Environment in Ontario stated that the Federal Government must join with provinces and municipalities in paying for the renewal of Canada's infrastructure.

Federal funding of the Yello whead hi ghwa y in Man itoba will be $10 mil lio n over three years, a reduction from the initial federal proposal of $12 .5 million. And I wish at this time to table the $20 mill ion Yellowhead program. Members are aware that this program was developed with a number of Oppositio n members, and I do have it here as proposed.

With regard to the comment made by the Member for Minnedosa, I think it's clear, with regard to losi ng another one, that the Manitoba Government has done reasonably well in negotiations for this $50 million that was thrown our way with regard to the Yellowhead, thrown the way of the western provinces. Because although we only have 12 percent of the mileage of the Yellowhead hig hway located in Manitoba, we are receiving 20 percent of the money, the federal dollars that have been allocated.

So we have actually a $21 mill ion program, almo st, which is shared: $10 milli on by the feds and almo st $1 1 mill ion by the province. And we will have an opportunity to dis cuss that further, I'm sure, later on insofar as the specific projects that we have outlined here. I might mention that this program has not been approved by the Federal Government as yet, although we don't expect any particular problems with that. This has been approved by the Manitoba Government and been submitted to the Federal Minister for approval, and then we would sign the agreement as well.

I want to mention the LGD roads policy, because I know that it will be of some interest to the members opposite. One portion of the construction budget that has been reduc ed is the road funding for local government di stricts. The 50-50 cost-sharing program has been reduced by some $250,000, or about 20 percent of the 50-50 program. That is to say the cost­ sh ared program will dr op from $1. 2 mill ion to $950,000.00.

In terms of overall fundi ng by my department for LGD's, taking into account the Main Market Road Program, the provincial contribution will drop by less than 8 percent, from $3.2 mill ion to about $2.95 million. It must be pointed out that the R.M.'s receive none of this support; this is only the 11 LGD's that get this support. In additio n to having higher reserves than some - and it is not a cheap shot, Mr. Chairma n - the fact is that there are some municipalities who probably need assistance in funding more than some of the LGD's because of their financial situation, but they do not receive it.

Some, of course, do not need it at all; they are much better off than others. The fact is that, on average, the LGD's have larger reserves and, in many 1498

Thursday, 30 April, 1987 cases, they have a lower mill rate than the municipalities in the surrounding area, and that has to be considered. But I have contacted local government districts thr oughout the province to ind icate my personal willingn ess to meet with them further on this issue to di scuss a more equitable means of funding. Rather than maintain a grant system based on per capita grants which, as the members know, will discriminate against thinly populated areas like LGD's are in many cases, I have indicated to LGD representatives that I would like to explore a fairer system of municipal tax sharing.

Even though this is under the jurisdiction of the Minister of Finance and the Minister of Municipal Affairs, I think it is appropriate for us to examine this whole area of per capita funding, because it is not necessarily a fair way of providing funding to the poorer municipalities. I would like to explore this further with them. I believe funding to local governments should be aboveboard, instead of the rather hidden method through road grants that we have at the present time.

I've also indicated to the LGD's in letters that we would be willing, the department officials, to meet with them to discuss the possibility of trading off some of the cost-shared roads for main market roads, so that they would more accurately reflect the needs of a particular area. I am hopeful that we will arrive at a better method of assisting LGD's so that we may continue to provide the services communities want and deserve. I want to highlight another program, the 4-H Highway Cleanup Program, which will take place on Saturday with good weather - this Saturda y, the day after tom orrow.

A program which we budgeted for last year but which could not be carried out because of poor weather conditions is th e 4-H Hig hway Cleanup Campaign. I am particularly pleased to be able to implement this program this year, because it not only represents efforts to beaut ify areas surr oundin g highw ays in the province, but it is an excellent fund raiser for a worthwhile community organiza tion, which bases its membership throughout rural Manitoba. Several thousand young Manitobans will participate for the first time in the cleanup campaign, carried out by their respective 4-H clubs.

An established funding formula allows each club to be paid for every kil ometre of roadside litter collected. This program represents a major fund-raising event this year for Manitoba's 4-H clubs. In the area of driver and vehicle licensing, I mentioned the comme rcial vehicle inspect ion program. The adminis trative preparation has now been completed for the inspection of commercial vehicles, and this program will be in operation May 1, which is tomor row.

The Comme rcial Vehicle Inspection Program will have inspections carried out by appointed vehicle inspection stations and self-certified shops, which have been sanctioned by the Provincial Government. This program has been introduced in accordance with a Canada-wide agreement, and will serve to enhance safe operation of larger vehicles on our hig hways. The truck tractors will be required to be inspected every 6 months, while semi-trailers once a year.

Recognizing that heavy vehicles travel more frequently and longer distances than cars and light trucks, we have implemented this program in order to minimi ze the risk of serious injuries. The objective of this program is to ensure that these heavier vehicles operate within specific mechanical standards. This program is being adminis tered through the Driver and Vehicle Licensing Division of the department. Another area that should be highlighted is the dri ver and vehicle licensing fee increases.

The Driver and Vehicle Licensing Division will be implementing a series of fee increases this year in an effort to equate services more evenly with costs. The major items which will be affected by the fee increases are driver licence fees and vehicle registration fees. The registration increases are calculated on a sliding scale; the bigger the vehicle, the bigger the inc rease. For 76 percent of the passenger vehicles registered in the province, the registration fee increase will be $18 or less.

I should point out as well that both Alberta and British Columbia have dramatically increased registration fees in this year's Budget. I haven't seen Saskatchewa n's yet. As we know, they haven't brought their Budget down. These increases are expected to generate an additional $9.3 million in revenue. The vehicle registration fee increases will take effect March 1, 1988, while the driver licence increases will be phased in over the next year, beginning in July.

I would like to emphasize that, according to a 1985 comp arison of passenger car reg istration fees, Manitoba enjoys the second-lowest rates in the country. The average fee for passenger cars range from $2 1.60 in Manitoba to $57. 10 in Quebec. The latest revenue statistics available from'83-84 also show Manitoba's registration fees generate the second-lowest revenue per motor vehicle of any province. The average revenue per motor vehicle registration was $44.38, far below the average provincial revenue of $75. 79.

I would like to point out that the estima ted revenues related to Hi ghw ays and Transportation activities continue to fall below departmental expenditures. I know that members opposite will use different figures to justify an argument that would attempt to show otherwise, but that's not the case. The information that I have with regard to revenues will show that we are - while the gap is closing - we are still spending about $19 2 million and taking in revenue of about $1 87 million, with these latest incr eases.

So there is still more money, although marginally more, now being spent in Hig hways-related expenditures than is taken in on Highwa ys-related taxes thr ough registration fees, li cences and fuel tax, provincia lly. Another area that I want to highlight is the single licence plates issue. My department has plans to proceed with changes with respect to the issuance of licence plates. Currently , two lic ence pla tes are displa yed on most vehicles, as everyone knows, with the exception of motorcycles, mopeds and trailers.

Manitoba intends to adopt the policy of issuing single licence plates representing a $2 10,000 reduction in annual expenditures. We also will be able to save an additiona l approxima tely $1 .6 million when it comes time to replace the licence plates, once every 7, 8, or 10 years. So that will be a major saving in that area as well. The single licence plates policy has already been established in the Provinces of Quebec and Prince Edward Island. We realize that we may receive some 1499

Thursday, 30 April, 1987 opposition to this from law enforcement groups, agencies, who are the RCMP, the City of Winnipeg Police, and others who would prefer to see two plates on a vehicle. However, we have no information that would indicate to us that there is an enforcement problem with one plate in those jurisdictions where it is currently in place, which is two as I indicated, the Provinces of Quebec and Prince Edward Island in Canada, and also in about 20 states in the United States. Insofar as the transfer of safety programs, I want to highlight this one.

Three safety programs have been admi nistered by the Department of Hig hways and Transportation and will now and have been, as of April 1, transferred to the Mani toba Public Insurance Corporation. MP IC has become responsible for the Driver Education Program, for which they were funding the majority of the dollars previously; the Snowmobile and Bike Safety Program and a portion of the Vehicle Inspection Programs related to passenger cars and light trucks - that's the random call-up for in spections for cars and light trucks.

Since the Driver Education Program receives most of its funding from MP IC, this is a logical admin istrative shift. As well, the activities of the corporation are closely tied to the mandate of safety promotion for the other two programs. The transfer of these safety programs will result in a net expend itur e reduction of approximately $739,000 for the Department of Highwa ys and Transportation. Consultations have been carried out with the Ma nitoba Govern ment Emplo yees' Association and Civil Service Commission, to ensure that employees involved in this transfer are treated fairly.

Approximately 26. 12 staff years - I think it's exactly 26. 12 staff years - are affected by this transfer. In the area of Transportation Policy, Programs and Research, I want to first of all highlight the transportation of the mobility di sadvantaged. This year we will be expendin g $4 16 ,900.00. Mo st of the commun ities involved with the program are operating transportation services using handi- vans. These vans are used, as members know, by rural residents requiring special transportation services, including senior citizens and handicapped people.

The communiti es which are not yet operating handi- vans in that program - here are 30 affiliated with it - are in the process of obtaining vehicles for use in their area. As a matter of fact, tomorrow I'm going to be at Grunthal, involved in a key-turning ceremony for the new handi- van at Grunthal, Ma nitoba, in the constituency of the Honourable Member for Emerson. Since the introduction of this program late in 198 1, the participation rate has grown tremendously from four communities to 30 communities. In the area of regulatory reform, I want to mention some major points.

Transportation is an integral part of our economic base in this province, as our members know and, in view of this, the Manitoba Government has played an active role concerning federal legislative measures to deregulate the transportation environment in our country. Most recently, I attended a Council of Ministers meeting in Ottawa at which I and other Provincial Ministers were able to secure federal agreement to some significant changes in their legislation concerning the trucking industry, particul arly, in order to ensure Canadian trucking inter ests are protected.

We did not gain the kinds of things that we wanted to but we did make, within the framework we were working in, some substantial changes that will benefit, I believe, Manitoba. However, we are very concerned with the dir ection and the speed with which the Federal Government has been moving there, and we can discuss that more, I'm sure, as we go through the Estimates. Also at the meeting in Ottawa late last month, I was pleased to have been involved in the development of a Memorandum of Understanding which was signed to adopt a National Safety Code for motor carriers.

This understanding provides for fair sharing of funding from the Federal Government for the implementation of the safety code. We have continuously said that safety should not be impa cted negatively by the deregulatory moves of the Federal Government, and I believe that the safety code, when implemented, will ensure that. The funding for the code is essential, naturally, to make it work.

We had consistently said that the Federal Government, since they are taking the initia tive if we can call it that in this area, should be responsible for a substantial part of the funding, and we will continue to push that issue. We did have a substantial movement in that area, and we may have agreement from the province's point of view. Some provinces have agreed with the proposal by the Federal Government for funding, but they have moved substantially from their initial position that they should simply share one-twelfth of the costs of the National Safety Code.

The transportation industry is vital to our economic livelihood. The Manitoba Government believes that the retention of certain protective regulations will always be necessary and, therefore, our concern with regard to what the Federal Government has been doing there. Another major area deals with th e rail line abandonment question. We have to move towards, I think, a system of transportation rationalization from one of rail line ab andonment.

The dere gula ted environment has created a sizeable threat to many rail lines in our country and, because the new federal legislation will make the proced ure for rail line abandonment easier and faster, Manitoba will continue to work toward establishing a fair process of determining a lower-cost system of transportation in this country. We have repeatedly called for a system that would ensure compensation at hearings. We don't believe that a carte blanche elimination of lesser-used rail lines is the answer .

Ins tead we proposed the Federal Government should look to transportation system rationalization in which all parties involved, in effect, could work together to reach a rational resolution. In some cases this would represent rail line abandonment, in certain ins tances, and the need for federal compensation to those negatively affected by such action. And we all know at the present time that kind of compensation is not avai lable. In other cases it will become clear that costs for rail line maintenance would be the least costly alternative, and so therefore it should be retained.

While seeking the least-cost solution, there must be due regard for the social and rural economic development impacts of the decisions. On April 10 of this year, the Canadian Tranpsort Commis sion handed down a decision to approve CN's 1500

Thursday, 30 April, 1987 application for selective grain rate reductions. The decision was most disheartening to us and I think will have a major negative imp act in certain areas of our province, for small farmers in those areas who cannot benefit from this discriminating policy. The scenario which we may develop and which we envisage because of this decision is one in which farmers are forced to transport their grain by truck longer distances in order to receive the benefit of the lower rates. The losses in some cases however will far outweigh the benefits. It will prejudice the need for certain rail lines.

It would serve to wipe out many grain elevators which, by the way, would detrimentally affect the tax base in many communities. It would create greater wear and tear on our roads and highw ays at the expense of Provincial and Municipal Governments. These factors must be sensitively considered under any new process to replace the current adversarial system, which is one where we appear at hearings and denounce the railways for what they're doing and the railways attempt to justify what they're doing by saying that it costs too much to operate a particular line. That system isn't working and it shouldn't continue.

Freight rate reductions must be uniform and benefit all shippers. This represents one of our greatest challenges in the coming year in my opinion. I want to briefly mention the Churchill agreement. On a positive note, Manitoba's continued faith in the Port of Churchill has begun to take shape in substantive terms over the last year. Our government and many staff members of the department have worked diligently to ensure that the interests of Churchill remain at the forefront.

And that is why we are particularly dis mayed with the recent news out of Saskatchewan that they intend not to support the Churchill Development Board, and we will continue to ma ke repres entation to Saskatche wan to have that reversed, hopefully, in the next short while. I want to mention the marine insurance issue very briefly. When I last appeared before members to submit the departmental Estimates, I indicated that I was hopeful marine insurance rates for shipments out of Churchill would be reduced; in fact, they have been reduced substantial ly.

Also, when I last appeared, I indicated optimism for a series of federal provincial studies which had not yet been released. Those studies are now avai la ble, released last fall to the public, and they show that Churchill can be a viable and thriving port, gi ven adequate support. Insofar as the hydro line, last year at this time, I indicated that development of a hydro line from Gillam to Churchill was under way. This facility is now virtually complete, and will represent reduced energy costs for northern residents in the Churchill area and eventually will result in lower costs for the port itself.

Grain shipments, we are confident th at, gi ven adequate support, the Port of Churchill will have another profitable season this year. The Canadian Wheat Board was instrumental in last year's successful throughput of 596,000 tonnes of grain. Unfortunately, CN Rail's car supply was not adequate and therefore the port had to rely on the support of CP to provide railca rs through an interchange agreemen t which was a breakthrough in that area. And we were involved in the di scussions with CP to have them work 1501 cooperatively with CN insofar as an inte rchange agreement, which was achieved.

In an effort to avoid a repeat of the situation that developed last year with the shortage of cars, the Federal Minister John Crosbie and I have agreed to an $18 million program to refurbish 950 cars. It's under way now, in order to meet the shipping needs of the 1987 season. We realize that this is still only a stopgap measure, short term, and does not meet the long-term requirements of the port. The development of a fleet of ligh tweight grain cars is one possible option which merits serious consideration. The prototype has already been built and the results from testing conducted to date have been positive.

Further testing of this car will be carried out. Another alternative is the matter of the roadbed stabilization. Agreement is immi nent with the Federal Government to implement the second phase of the roadbed stabilization program at a cost of $2.3 million. Phase 1 showed that installation of heat pipes along the railway roadbeds serves to reduce the effects of permafrost on the rail line and roadbed with an 80 percent -90 percent certainty. Phase 2 will involve more intensive testing over longer continuous stretches of rail.

This testing is necessary to determine precisely if the method is far enough advanced to stabil ize the line to the extent that standard hopper cars can be used on the line. Based on the prelimina ry test results, this is a distin ct possibil ity. As well, under the Churchill sub-agreement, the construction of the 2,400 horsepower tug has been completed in the past year and, in addition, a dredging of the harbour has been carried out. The completion of these projects will serve to enhance th e port operations. One mention on the Transportation Sub-Agreement.

The Transportation Institute, because of Manitoba's strong orientation towards transportation, the provision of educational programs for this sector have been identified as necessary. As a result, the Governments of Canada and Manitoba commit ted funding through the Transportation Development Agreement for a Transportation Institute at the University of Manitoba. It is now nearing completion. A number of major seminars have already been held by the institute on major issues, such as the future of the St. Lawrence Seaway and Churchill. And I want to compliment Dr.

Tyrchniewicz, who is the di rector of the institute, for the fine work that they have undertaken to this point in time on behalf of all Manitobans. There are a number of other issues. The rail bus issue is one I'd like to discuss later and many others, dealing with a specific high way program.

However, I will stop at this point and just conclude, with expressing to members that I feel generally pleased with the program that we have through the department's Expenditure Estimates this year, and we will I think be able to continue to op erate and offer a good service to Manitobans to a reasonable extent, although I know that everyone would like to have more funds to achieve even mo re, particularly in the area of hig hway construct ion.

We are pleased that we do have a movement upward this year and that we do have some agre ement with the Federal Go vernment on the Yell owhead , but we do need more in that area, as I have indicated.

Thursday, 30 April, 1987 Thank you, Mr. Chairman. MR. CHAIRMAN: Thank you, Mr. Minister. Do you want to bring your people up and introduce them at this time? HON. J. PLOHMAN: I imagine the mem bers may have some comments. MR. CHAIRMAN: Okay. Any comments as to the statement made by the Minis ter? The Member for Ste. Rose. MR. G. CUMMINGS: Yes, Mr. Chairman. I would like to respond to the Minis ter's statement, and I thank him for providing us with a printed version of it.

I notice that, early on in his statement, he referred to the fact that he anticipated us using his figur es to show that in fact the Hig hways funding for this province is being pillaged and plundered and not given the funding that we feel that is justified . At the same time, he went on to show that Highways, using his figures, has virtually become a self -supporting industry.

I find that a disturbing condition that we have gradually crept into in the last five years th rough the NDP admi nistration, and it would seem to me that about the only conclusion that can be sanely drawn is that, if the Government of the Day is not going to admit that the High ways are a revenue-bearing - and the Highwa ys Department is a revenue-bearing department - then they have clearly set out to make it so that it is a user pay and a self-supporting department.

I think the Minister did touch on one fact that there has to be some concern about, and that is the ongoing dis agreement over how taxes should be levied on fuel and whether or not the Federal Government should become involved in long-term funding through joint shared roads. I suggest to the Minister that, Mr. Chairman, through you, it doesn't matter in the bottom line to the consumer whether the tax is put on by the Federal Government or by the province. It will be the same consumer of that litre of fuel who will be putting forward that tax doll ar.

And certainly somewhere along the way, someone has got to make the recognition of the tax dollars being put into the highw ay system of this province to stop what has become a rather dramatic slide in the priority of the Hig hways Department to this government. I know that there are arguments that can be made that other provinces have run into similar difficulties, that their budgets do not reflect the rate of growth of the provincial budgets, but it seems to me from any figures that I've looked at that Manitoba has a lot more at stake than many provinces.

I, in fact, specifically was disturbed by the Minister's comment about funds going into Newfoundland. I don't subscribe to the theory that you cut the ropes and shove out Newfoundland offshore, because I believe that there are times when we have to recognize that there are parts of this country that are worse off than we are. Mr. Chairman, if we look at some of the figures, and the Minister, intentionally or otherwise, I think challenged me to show that the Department of Highways is a revenue-bearing department.

If he wants to talk about it in terms of hig hway expenditures only, or if he wants to talk ab out it in terms of total departmental expenditures and total revenues that are related to transportation, either way, it seems to me that a case can be very easily made that the Treasury of this province is doing rather well by the transportation industry and by transportation-related incomes.

I could go on at a considerable length about the comparison of some figures, but I will try and distill my thoughts down to a few comments that I think show what is happening rather clearly in terms of revenue and expenditu res in this province. And first of all, we could look at the total budgetary expenditures of this province in the last four years, including the present Estima tes that are in front of us.

We have seen a growth in the provincial expenditures and provincial revenue coming into this province of 26.8 percent while, at the same time, we have seen expenditures on highw ays reduced to a paltry 2.8 percent increase over that same period of time. Mr. Chairman, I think that indicates the relative impo rtance that this department has been relegated to in the eyes of this government.

I find that, when you look at capital expenditures which is really where we are getting into problems in this province, I'm reminded of the plight of many farmers who we have in this province and many businesses that have suffered difficulties over the years. It becomes very easy to avoid putting money into capital when times get tight. It becomes very easy to avoid making a payment on a loan, as we have witnessed with freezes on federal farm debts. It becomes very easy to make do for another year without making that payment. All of a sudden, it becomes a lot less painful if you don't have to make that payment.

But sooner or later, the principle that you either pay now or pay later comes into play. And when we look at the condition of the hig hways, I have to say that we are now rapidly approaching the pay­ later part of that coroll ary. Mr. Chairman, we can look at the growth of revenue, and I know that the Minister is going to challenge these figures, but the area that I'm sure he'll be challenging them in is whether or not motive fuels, the total revenue for mot ive fuel tax should be attri buted to th e Department of Hig hways. He talked about the amount of money that was taken out of Manitoba on fuel taxes.

Motive fuel taxes are also creating a large revenue for the treasury of this province. And we can see that in gasoline tax alone in the last four years there's been a 21 percent growth in revenue, even though the last three years have been static because of the efficiency of the newer motors that are in many of the vehicles today. We've seen that the motive fuel tax has grown a staggering 89, almo st 90 percent. License plate fees have gone up 45 percent; and we've seen 132 percent increase in drivers' licence fees.

Now, we can't ignore these kinds of increases without expecting some return from the industry that it's being taken from. Manitoba prides itself in being a transportation central. A MEMBER: Tell Mulroney that. A MEMBER: We're dealing with Manitoba. 1502

Thursday, 30 April, 1987 MR. CHAIRMAN: Order. MR. G. CUMMINGS: I resent the fact that, every time we talk provincial expenditures with this government, all we hear about is why the Federal Government isn't putting enough money up. If we spent the time worrying about provincial expenditures . . . SOME HONOURABLE MEMBERS: Oh, oh! MR. CHAIRMAN: Order please. Add ress your questions to the Chair, please. MR. G. CUMMINGS: . . . then we would be doing an awful lot more service to the public of this province. A MEMBER: Throw him out, Mr. Chairman. MR. CHAIRMAN: Order please. Continue, the Member for Ste. Rose. MR. G.

CUMMINGS: The member would like to, I'm sure, listen to the comparisons, because he is very anxious to continually talk about that horrendous population of Conservative people who live to the west of us. They, at least, have taken a little bit better care of the budget of their Highways. When we look at total expenditures there in the last eight years, Mr. Chairman - in fact we only need to look at the last five years - we've seen a growth in the expenditures in the Province of Manitoba of over 60 percent; and Highw ays expenditure's growth has been 15 percent.

When we look at Saskatchewan, they've had an expenditure growth of 48 percent, and their Highw ay expenditures have gone up 25 percent. It seems to me that the percentage of the bud get that th ey're pr epared to apply is go ing to stand the infrastructure of their province in good stead. Well we talk about embarrassment, and the Member for Minnedosa talks about the people who now laugh at our roads, I think that we have a major problem building in the tourism industry.

The major problem that the Minister opposite doesn't want to talk about, the fact that we're losing tourism revenues because we refuse to put money into the roads to attract people to this province. But perhaps it's the same as the Empire Loyalists who are in the back benches on the opposite side, who would like to make that a toll road and let the Americans pay.

That's what we continually hear from that side every time we want to have a discussion on it.- (Interjection)- Well, the Empire Loyalists seem to have a certain resentment to the American buck, and it seems to me that that's typical of the problems that are building in this province. The problem that I think we should be addressing throughout the Estimates, Mr.

Chairman, is the fact that, while there are a lot of programs that have been put forward and some areas are a lot more excited than others about the action that they're going to see, I think we have to be concerned about whether or not a lot of the programs that are previously program med, but not completed, how long they have been sitting on that list as well. There are a few of those that I think the Minister is well aware of, and certainly has caused some problems in assessing what is truly going on in the Transportation Department. I hope also that we can look at the Estimates in the next couple of days, Mr.

Chairman, with an eye to lookin g at th e whole department and not just as a Highw ays Department. There are issues as well as highways that I hope we can discuss, but we have one major concern being hig hways, because the condition of our hig hways has to be a major concern when we like to call ourselves a trucking central, a transportation central of Manitoba.

I would remind the Mi nister that traffic and the impor tance of traffic to our trucking industry and to our tourism industry and to the citizens of this province is east-west and north-south, and that we shouldn't see a recurrence of a debate that says that the north­ south arteries of this province are not as important as some of the east-west ones. When we see that Tourism manages to overlook Hig hway No. 10, I really wonder if it's incompetence or it's an overlooking of the reality of the operations of this province that motivates those kinds of situations. Mr.

Chairman, in the Minister's comments, I would like to respond to some of the things that he has referred to, certainly when he talks about the amount of spinoff that comes from the construction industry and refers to the fact that we have this year's budget of $87.9 million translating into tho usands of jobs for Manitobans.

Certainly, we need those jobs and we must translate those jobs, but that is the exact reason, that is the precise reason why additional construction of roads and interchanging arteries in this province will generate employment, will generate tax revenues and, in the long run, will generate income to this province that will far and away offset the costs of construction. Certainly, we put off construction, we increase the costs in many ways. It can be argued either way on the inflationary scale, whether something is cheaper to construct after it has been allowed to deteriorate or before. But, Mr.

Chairman, if I could quote from the TRIP Canada Report and the statistics that they've put together, which I think the Minister cannot argue with - and I believe he is on record as saying that they have done their research well - but when we look at the situation that they see in our province - and I want to preface my remarks by saying that I don't imagine the authors of this report or myself and my colleagues expect that the amount of dollars that are being put forward here will be able to be met in totality .

But I think it has to be put on the record that the anticipated costs of repairing our prima ry and secondary highways are reaching stunning proportions. I can't look for a word, Mr. Chairman, that would address these figures. Having been a quiet-living, lowly financed farmer, when I see figures such as $160 million for resurfacing, at an averaqe cost of $100,000 a kilometre, I have to wonder where are we going to get some of these funds from if we continue to defer.

Because if we look back, it was only four years ago that the resurfacing cost of primary highways would have been $2 1 million and the reconstruction costs would have been $14 million, as compared to $67 million that is projected now. I think that we have to recognize that it costs possibly three, four or even five times as much to reconstruct a road as it does to resurface. I think that we have to, in the High ways Department, be cognizant of that fact 1503

Thursday, 30 April, 1987 and rem em ber th e adage that, if we allo w it to deteriorate too far, the cost will increase to the taxpa yer, not to mention the cost to the user, not to mention the cost of the damage and the possibilty of dangerous situations being developed. I have received copies of letters that the Minister, I am sure, is aware of, where da ngerous situations have been outlined to him, and I think people have a legitimate right to be concerned. If we want to talk about dedicated funding, Mr. Minister, I think that there is common ground that can be made for dedica ted funding to Hig hways.

But I don't think th at he can pers uade me or persuade the taxpa yers of this province that dedicated funding is the only problem tha t we ha ve with funding the transportation system that we have in this province. Frankly, Mr. Minister, it seems to me that somewhere along the way the Hig hways Department and the people in the financial arm of his department were able to look thro ugh, knowing that th ere needed to be additional expenditures in their department, came up with an additional $12 million which is dir ectly out of revenues th at accrue to the Hi g hways and Transportation Department.

Frankly, I feel sorry for the Mini ster. It seems to me that he was left holding the bag after he came out of the Cabinet meeting, because the increases that are being spent in his department do not reflect the increase in revenue. I think that he has been a patsy by his fellow Cabi net members. They've left him to try and defend, as he had to last year and the year before, a situation that he knows full well in his own mind is not a situation that the Manitoba transportation system should be put into.

A look at the total budget that is allocated for Bridges and Structures - and I really have concern that four or five years do wn the road , Mr. Cha irman , this department will have trouble finding the funds to repair and replace the bridges that will need to be brought on stream.

It would appear that the department again has been put in a position - and this is no reflection on the departmental staff, but it's a reflection on the reality of their funding - where some of the expensive bridges, with the exception of the well-known one north of Selkirk have been put on hold, and the maintenance and repair and the construction of the less expensive projects have been the ones that have gone forward. I do not intend to drag my remarks out much further, Mr.

Chairman, but I certainly have a considerable concern for the future of the -(Interjection)- Well, the mem bers opposite say they'v e been dragged out already. I think probably the dragging is that they are emba rrassed by the figures that are being brought forward and the expenditures of this province regarding hig hways. A MEMBER: We heard this speech four years ago. MR. G. CUMMINGS: Now we hear the member saying, well, we heard this speech four years ago. That's proof that nothing has changed in this department.

This government still continues to rape, pillage and plunder the revenues out of highw ays and put them into other programs that they have a higher priority for, leaving the construction industry to flounder on its own. Let the hig hways turn into a sea of potholes. Is that what the member wants? A MEMBER: That's what he wants. MR. G. CUMMINGS: Thank you. Well, my research is simply driving down the highw ays of this province, if you want to talk about the condition of the hig hways.- (lnterjection)- Mr. Chairman, I think maybe we better get back to the topic.

Speaking of business problems that this government has skilfully avoided discussing, it seems to me that, because we talk about Manitoba being a transportation capital or major transportation central for Canada, our policy department and the policies of the government regarding deregulation and the future of transportation across this country are critical, are very imp ortant.

I hope that we can spend some time discussing that aspect of the Department of Hig hways and Transportation, which leads me to a concern that I would assume the Mi nister is well aware of, and that is the fact that the CPR has gone through a reorganization, as I underst and it, or is about to go through reorganization of its system. Manitoba may very well soon be recipient of the loss of a great many jobs in the transportation area again.

I think that, while the Minister is anxious to take credit for everything that comes to this province of a beneficial nature and into transportation, I wonder if at some point during these Estimates he'd be prepared to shar e with us what efforts he has made to talk to the railway companies and what their future considerations will be for keeping Manitoba as a transportation central, because I think that is critical. While we are important in trucking, we have an international airport on the outskirts of the city.

We have to maintain the infrastructure and the importance of this province as a transportation central. I hope that the Minster will be able to show that his department is hot on the heels of anything that would be possible to im prove Manitoba's position as a spoke, if you will, of the transportation system of possibly North America, but certainly of Canada. Mr. Chairman, I'd be prepared to move on at this point. HON. J. PLOHMAN: Mr. Chairman, I just briefly wanted to draw to the member's attention some facts I think that are relevant to his comments. We can go on like this as long as he would like.

I don't intend to rebut everything, but I do want to just mention a couple of things. With regard to the need for a national highways policy - and I bel ieve th at the memb er was somewhat apologetic for the Federal Government or making excuses and saying that funding in some of the other areas of the country should not be begrudged by us. Certainly we don't begrudge Newfoundland, a poor province, from receiving federal funding for hig hways.

But it also is true that Manitoba is one of the smaller provinces; Manitoba is one of the have-not provinces in Confederation, typical ly, historical ly.- (lnterjection)­ Well, Saskatchewan has now I think gotten into that area as well, despite the fact of the rich resources that they have been blessed with there. 1504

Thursday, 30 April, 1987 But the fact is that we have an inequitable treatment of the provinces in this country. I think members should be very concerned about that. We shouldn't make any apologies for that as Manitobans. We should be getting our fair share in this province. The fact is we are not in this area, as in many areas. They treat the East di ffer ently than th ey do Ma nitoba. We have to continuously speak up in regard to that. MR. CHAIRMAN: I just want to int errupt th e proce edin gs.

I notice that the Memb er for Turtle Mountain has lit a cigarette, and I want to read to him the Rules of the House.- (Interjection)- Would you just let me read. "Your comm ittee considered the no smoking policy to apply to committee meetings and recommends the foll owing - th at no smoking be permitted at any of the meetings of Comm ittee of the Whole, including the Commit tee of Supply and the Commi ttee of Ways and Means, or at meetings of the Standing and Special Comm ittees of the Assembly ." I would ask the gentleman to please put out his cigarette or move to the back of the room, one or the other. HON. J.

PLOHMAN: Okay, Mr. Chairman, thank you for that reminder - in the middle of a very important issue again. We believe that if we have a national hig hways policy funded and distributed by the feds, that it can only be more equitable than it is now. That funding is already going to those provinces, and yet it's not coming to Manitoba. We don't want to make apologies and we don't think the members of the Opposition should make apologies for the feds for the fact that they are giving money to New Brunswick, Nova Scotia, Quebec and Newfoundland at the present time.

I mean, if he wants to exclude Newfoundland and say it's imp ortant for them to get it, what about all those other provinces that are getting that kind of funding in Eastern Canada, but not Manitoba? So there's all kinds of reasons why we should have an equitable treatment in this country and we have to continue to battle, and we have to do it in a united way across Canada. I want to just mention a couple of other things, very brie fly, insofar as the construction association is concerned, and insofar as the industry.

I've been rather surprised, because we've heard continuously over the la st number of years that they were going to be dissemina ted by the lower budgets in the construction area. They may have a lot of reasons for it, but I was just very pleased to note at the last meeting of the Heavy Construction Association that I attended, they had 12 new members out, and there isn't a wholesale loss of memb ers even though we've had some reductions in funding. Although I appreciate and I expressed my concerns about jobs in this whole area, it hasn't been im pacting on those companies.

We are still getting competitive funding at competitive bids, although it is impa cting on the number of jobs, yes, that are being supplied to Manitobans. I should mention one other thing briefly, Mr. Chairman, and that is the railway issue. We've continuously met with the railway companies, CPR, CNR over the last number of years to im press on them the need to continue to have a growing presence in Manitoba, because they do employ so many Manitobans.

We are a transportation hub, but the fact is that while we are being vigilant in that area, it is precisely because of Federal Conservative Government policies that are impacting on these railways, that are causing us the need to be vigilant on a constant basis, these constant pressures for laying off and cutting back, because they're being told that they have to operate on a commercial basis, as opposed to its Crown corporations in some instances, recognizing their social and regional economic duties. Because of those policies, we are faced with these reductions.

So I draw that to the member's attention that he should make those concerns known to the Federal Minister and federal members as many times as he can, because it is their policies that are negatively impacting on Manitoba. MR. CHAIRMAN: The Member for Lakeside. MR. H. ENNS: Mr. Chairman, I don't want to prolong the discussion on the Minister's statement, but I just wanted to make the one point, using the Minister's own figure on page 2 of his statement with respect to the employment created with highway construction.

If you extrapolate those figures, this year's budget will create some 2, 700 person years of employment. Mr. Chairman, when you put that into context, where this government has put their other priorities, then it's so difficult for some of us to understand why this Minister has not been more successful in at least maintaining his fair share of the provincial Budget for hig hway reconstruction and new construction. The Minister speaks at some length on the statement about the share that he thinks the Federal Government should pay, and I don't take issue with it.

Although there's a long tradition of the Federal Government building roads in the Maritimes, I can assure the Minister that was of concern to other ministries in years gone by as well. But more im portantly, what Mr. Cummings tried to point out to him is the Minister's failure to maintain his fair share when the Budget pie was being sliced up around the Cabi net table. For example, we are now approaching spending close to $70 million a month - a month - on a project that happened to fit the political agenda of this government that we are building two years in advance - I'm referred of course to Limestone.

Now $70 million a month that is now being spent at Limestone is creating roughly, in fact, fewer jobs than if applied to hig hways. We are approaching our peak employment there. We don't need the power till 1993, but there was an election coming and we wanted the project under way and we have hopes of selling it to the Americans.

Well, the Americans are suggesting to us right now that maybe coal-produced power may be cheaper, and more frightening is we have no assurances that even that power we're selling to the States which is, after all, based not on our cost or what it costs us to produce the power, but on a comp licated formula having to do with American coal prices, whether or not we will ever get our money back out of it. I just bring that into the debate, in this one comment saying - and using the Minister's own figure - for every million dolla rs worth of construction, there will be 32 person years of employment created.

I certainly want to indicate to the Minister, I know that every member 1505

Thursday, 30 April, 1987 of the committee from our side of the House - indeed, Mr. Chairman, the Department of Hig hways is probably the one area where it can be approached in a very non-partisan way. We will argue where a road is to be built and how long a bridge ought to be over rivers that don't get wider from year to year. We can argue the amount of maintenance and so forth, but the Conservative Party or the Conservative Opposition lends its full support to the Ministry of Hig hways in obtaining its fair share.

I only wish the Minister would make his argument more eloquently and poignantly with his Cab inet colleagues that the jobs created by these funds, the fact that it is all in-house, all in Manitoba, and the fact that historically the Department of Highway's share has reduced, from what I can recall, being close to 11 and 12 percent of the total Budget to now below 5 percent - or what is it? - 4 percent, 4.5 percent of the total Budget.

It's less than that, probably closer to 3 percent of the Budget, when you consider the total revenues of the government are in excess of $4 billion, $203 million that we're talking about that you have been left with shows a remarkable slide. So that, I think, is the message that we want to leave the Minister with, and, quite frankly, we solicit his advice in this instance as to how can we make him more successful when negotiating around the Cabinet table for a fair share of highw ays monies.

You might also say and we, of course, would be the first ones to acknowledge it that, in many instances, because most of our members are representing rural areas of the province, we probably are better equipped to do daily surveys of the conditions of our hig hways as we travel back and forth from our constituents and our constituency homes.

I simply say to the Minister, he's lost out again, because the inc rease that he speaks of in his budget is not even at the rate of inflation and, when put against the decreases that he presided over a year ago - the decreases that a predecessor of his, the Honourable Sam Uskiw, presided over. As the Member for Ste. Rose indicated, when you take the last four years into consideration of what has taken place in the Department of Hig hways, it is small wonder that is beginning to appear rapidly on the provincial roads and our trunk hig hway systems throughout Manitoba. MR. CHAIRMAN: The Member for Ste. Rose. MR. G.

CUMMINGS: Mr. Chairman, I think the Member for Lakeside touched very well on the fact that the dedicated funding the Minister has spoken of on several occasions does not meet with strong objections on this side, but truly dedicated funding has to be the case, because the motoring public of this province has understood for many years, rightly or wrongly, that the taxes they were paying were going as a dedicated income which would be used for the upkeep of the roads that they were driving on.

There have been many times when so-cal led dedicated funds have been put forward, and we see the payroll tax which is supposedly a health and education tax, and we all know how highly we hold the principle of dedication in that area. The monies end up in general revenues, and the result is not necessarily what the original intent would have been.

I would ask the Minister to consider one thing, however, about his remarks regarding involvement of the Federal Government and federal funds - and I do not, for one minute, reject that the Federal Government has responsibility - but what I do want to remind the Minister and the government is that the United States, which he points to as an example where the federal funding has been involved, there's also an element of, "he who pays the piper calls the tune," and the provinces of this country have taken a very strong position for independence.

It seems to me that we are like a bunch of teenagers who look at the sign on the refrigerator door that says, "If you're being harr assed by your parents and you feel you're being mistreated, leave home." On the other hand, as soon as you get away from home, you find out you can't afford to live. This country and this province, in particular, has got itself a dilemma. We want independence and the right to admin ister every buck that crosses the border from any source, and we have fought and wrestled, and rightly so, for the taxation points.

But I would ask the Minister and the government to bear in mind that what happened in the States recently is an example of what can ha ppen when federal responsibility is exercised beyond what some people would consider good taste when the Federal Government of the Unit ed States, the Central Government of the United States, told the states that, if they didn't raise the legal age for alcohol consumption, they would cut off their hig hway funding. That is the kind of reality that you have to remember you will be faced with, not necessarily on that issue but with other issues.

If you wish to continually tap onto federal funds, then remember that there comes a time when there comes a responsibility by he who pays, that they wish to exercise certain controls using those funds. I'm not advocating an American system; I'm not advocating that our system should be anything like the American system.

I'm simply saying that let's remember two things: first ly, the person who pays the tax on the gas, be it dedicated provincially or federally, is the same person; and, secondly, as we kick and scream for the right to admin ister all the federal funds that cross our borders or to tax in our own right, we then have to accept the responsibility that goes with that position. HON. J. PLOHMAN: Mr.

Chairman, just on that briefly, certainly the same consumer is identified in both cases, whether it's federal or provincial, although the share that Manitoba gets right now is essentially zero and our motorists are - well, not this year. It's not zero, because we're getting a little bit for the Yellowhead. But the fact is it is essentially zero and, at the same time, Manitoba motorists then are contributing through federal gasoline taxes to roads in Newfoundland, New Brunswick, Quebec and Nova Scotia, and that's what I'm saying we have to address. We can only go up in our share.

Insofar as the concern about who pays the bill or calls the tune or whatever it is, the fact is there is some problem with that in the U.S. system at the present time. I understand that it isn't equitable in all cases, that there are those with the most clout who are getting more money than those states that don't have the clout. 1506

Thursday, 30 April, 1987 Of course, that could be very similar here in Canada, and we would have to obviously see an equitable kind of formula. It's happening al ready, as I indicated, with certain provinces getting those benefits and Manitoba not. So again, it can't be worse or perhaps it could worse, but we don't have an equitable situation at the present time. I think we can point to the Yellowhead situation to demonstrate that there does not need to be a big fight over how the do llars are spent.

If the Federal Government wants to establish a national hig hways program that deals with major routes, there can be, I think quite easi ly, an agreement reached on what kind of work has to be done on those routes. So I don't think that has to be distorted, and I don't think that risk is too great for us to take in promoting this kind of a poli cy. I want to just say one thing about the dedicated funding. I used that as one example as where the Federal Government could get money for a national highw ays policy. Dedicated funding is not a policy of the Government of Manitoba nor, I don't think, most governments.

There's been a problem, an aversion to dedicated funding, because of the question of where you stop with it. I have to say that is still an issue that hasn't been resolved, but it's one example where the Federal Government could - it's one way that they could establish a national highw ays policy through dedicated funding. Mr. Chairman, are we ready to start? MR. CHAIRMAN: Bring up your staff. HON. J. PLOHMAN: The staff are at the back of the room and can come forward. I just want to introduce the Deputy Minister, Boris Hryhorczuk. Bill Dyck, Director of Admi nistration is also going to participate at this time.

MR. CHAIRMAN: We will begin by revie wing 1. Admi nistration and Finance; (

b) Executive Support, item ( 1) Salaries. HON. J. PLOHMAN: I was wondering, Mr. Chairman, if we couldn't get some agreement that we could discuss all of the hig hways program on Monday, so that we don't have people coming back and forth and asking questions about the same project as has happened in the past. Is that agreed? MR. G. CUMMINGS: Mr. Chairman, I was going to propose that to the Minister. It would be the wish of our caucus that a large part of Monda y could be taken up with specific individual concerns that various members might have, and then we all know where we're going. MR. CHAIRMAN: Yes. MR. G.

CUMMINGS: If I could also, Mr. Chairman, at this point, there's one statement the Minister made that I don't intend to let go on the record unchallenged, and that is the fact that he said we now have more construction companies in this province. HON. J. PLOHMAN: No, more members - could I correct, on a point of order, that more members - the Manitoba Heavy Construction Association has indicated to me that they have additional members, 12 new members this year. MR. G. CUMMINGS: Mr. Chairman, that is not