Manitoba Committee Hansard — Public Utilities Committee, Sitting 10 (36th Legislature, 2nd Session)

36-2-pu10

Manitoba — Debates (Hansard)

Second Session - Thirty-Sixth Legislature of the Legislative Assembly of Manitoba Standing Committee on Public Utilities and Natural Resources Chairperson Mr. Jack Penner Constituency of Emerson Vol. XLVI No. 10- 9 a.m., Saturday, November 2, 1996 ISSN 0713-9454

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Sixth Legislature Members, Constituencies and Political Affiliation Name Constit uenq Pad)' ASHTON, Steve Thompson N.D.P. BARRETT, Becky Wellington N.D P. CERILLI, Marianne Radisson N.D.P. CHOMIAK, Dave Kildonan N.D.P. CUMMINGS, Glen, Hon. Ste. Rose P.C. DACQUA Y, Louise, Hon. Seine River P.C. DERKACH, Leonard, Hon. Roblin-Russell P.C. DEWAR, Gregory Selkirk N.D.P. DOER, Gary Concordia N.D P. DOWNEY, James, Hon. Arthur-Virden P.C. DRIEDGER, Albert, Hon. Steinbach P.C. DYCK, Peter Pembina P.C. ENNS, Harry, Hon. Lakeside P.C. ERNST, Jim, Hon. Charleswood P.C.

EVANS, Clif Interlake N.D.P. - EVANS, Leonard S. Brandon East N.D.P. FILMON, Gary, Hon. Tuxedo P.C. FINDLAY, Glen, Hon. Springfield P.C. FRIESEN, Jean Wolseley N.D.P. GAUDRY, Neil St. Boniface Lib. GILLESHAMMER, Harold, Hon. Minnedosa P.C. HELWER, Edward Gimli P.C. HICKES, George Point Douglas N.D.P. JENNISSEN, Gerard Flin Flon N.D.P. KOWALSKI, Gary The Maples Lib. LAMOUREUX, Kevin Inkster Lib. LATHLIN, Oscar The Pas N.D.P. LAURENDEAU, Marcel St. Norbert P.C. MACKINTOSH, Gord St. Johns N.D.P. MALOWA Y, Jim Elmwood N.D.P. MARTINDALE, Doug Burrows N.D.P. McALPINE, Gerry Sturgeon Creek P.C. McCRAE, James, Hon.

Brandon West P.C. McGIFFORD, Diane Osborne N.D.P. MciNTOSH, Linda, Hon. Assiniboia P.C. MIHYCHUK, MaryAnn N.D.P. - St. James MITCHELSON, Bonnie, Hon. River East P.C. NEWMAN, David Riel P.C. PALLISTER, Brian, Hon. Portage Ia Prairie P.C. PENNER, Jack Emerson P.C. PITURA, Frank Morris P.C. PRAZNIK, Darren, Hon. Lac du Bonnet P.C. RADCLIFFE, Mike River Heights P.C. REID, Daryl Transcona N.D.P. REIMER, Jack, Hon. Niakwa PC. RENDER, Shirley St. Vital P.C. ROBINSON, Eric Rupertsland NDP ROC AN, Denis Gladstone PC SALE, Tim Crescent wood NDP SANTOS, Conrad Broadway NDP STEFANSON, Eric, Hon.

Kirkfield Park PC STRUTHERS, Stan Dauphin NDP SVEINSON, Ben La Verendrye PC TOEWS, Vic, Hon. Rossmere P.C. TWEED, Mervin Turtle Mountain PC. VODREY, Rosemary, Hon. Fort Garry PC WOWCHUK, Rosann Swan River N.D.P.

461 LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON PUBLIC UTILITIES AND NATURAL RESOURCES Saturday, November 2, 1996 TIME-9 a.m. LOCATION -Winnipeg, Manitoba CHAIRPERSON -Mr. Jack Penner (Emerson) VICE-CHAIRPERSON - Mr. Mar cel Laurendeau (St. Norbert) ATTENDANCE -tO-QUORUM- 6 Members of the Committee present: Hon. Messrs. C umm ings, Driedger, Findlay, McCrae, Praznik Messrs. Ashton, Dewar, Kowalski, Laurendeau, Penner Substitutions: Mr. Martindale for Mr. Ashton Mr. Doer for Mr. Dewar APPEARING: Ms. Becky Barrett, MLA for Welli ngton Mr. Daryl Reid, MLA for Transcona Mr.

Comad Santos, MLA for Broadway WITNESSES: Ms. Katherine Clune, Private Citizen Mr. Arnie Amason, Private Citizen Ms. Teresa Coles, Private Citizen Mr. Ben Sokoloff, Private Citizen Ms. Elizabeth Carlyle, Private Citizen Ms. Carol Stadfeld, Private Citizen Ms. Winnie Grabowski, Private Citizen Mr. Sean Espey, Private Citizen Ms. Edith Byhre, Private Citizen Mr. Brian Lucas, Private Citizen Mr. Don Sull ivan, Private Citizen Mr. Steve Webb, Private Citizen Mr. Thomas Steur, Private Citizen Mr. Roy Roman, Private Citizen Ms. Jesse Vorst, Private Citizen Mr. Shane Nestruck, Private Citizen Mr.

Dave Plumm er, Private Citizen Ms. Louise Simbandumwe, Private Citizen Ms. Marceline Ndayumvire, Private Citizen Ms. Angeline Simbandumwe, Private Citizen Ms. Kristine Barr, Private Citizen Mr. Jerry Keenan, Private Citizen Ms. Marian Yeo, Private Citizen MATTERS UNDER DISCUSSION: Bill 67 - The Manitoba Telephone System Reorganization and Consequential Amendments Act. *** Clerk Assistant (Ms. Judy White): Good morning. Will The Standing Committee on Public Utilities and Natural Resources please come to order. Before proceeding with the business before the committee, a chairperson must be elected.

Are there any nominations? Mr. Marcel Laurendeau (St. Norbert): Mr. Penner. Clerk Assistant: Mr. Penner has been nominated. Any others? Seeing none, Mr. Penner has been elected as Chairperson. Mr. Penner, please take the chair. Mr. Chairperson: Could the committee please come to order. The first order of business is to elect the Vice Chairman. Hon. Glen Cummings (Minister of Environment): I nominate Mr. Laurendeau. Mr. Chairperson: Mr. Laurendeau has been nominated. Any other nominations? Seeing none, Mr. Laurendeau you will be the Vice-Chair.

The business before the committee this morning is the consideration of Bill 67, The Manitoba Telephone System Reorganization and Consequential Amendments Act. At this time, I would

462 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 1996 like to inform the public of the meetings that remain, as had been announced by government House leader (Mr. Ernst) and deputy government House leader (Mr. Praznik)-I will just proceed here- in addition to today's meeting, if necessary, for Monday, November 4, at 9 a.m., in this same room, 254. The notice of the meetings is posted on the outside board. There are committee changes? *

(0910) Committee Substitution Mr. Gregory Dewar (Selkirk): I move, with leave of the committee, that the honourable member for Burrows (Mr. Martindale) replace the honourable member for Thompson (Mr. Ashton) as a member of The Standing Committee on Public Utilities and Natural Resources eff ective November 2, 1996, with the understanding that the same substitution will also be moved in the House to be properly recorded in the official records of the House. Motion agreed to. * * * Mr. Doug Mar tindale (Burrows): Mr.

Chairperson, I wonder ifyou could clariJY for me and for members of the public the process in terms of people's names being called. I have had complaints from members of the public that people were phoned by the Clerk's Office on Thursday and told that they would be appearing on Saturday, but in fa ct their names were dropped from the list on Friday if they were read a second time, and also people that might have been here on Friday and were not, had their names called that were dropped from the list because of lack of people due to the mixup over whether peopl e were supposed to be here on Friday or Saturday.

We object to anyone's name being dropped due to an error or a mixup or confusion or fa ulty communication, and I am in an awkward position here, because I do not want to blame staff and also I was not here yesterday, but I am just passing on concerns that I have heard from the public and I wonder if you could clarity what has happened and what is happening and what is going to happen. Thank you. Mr . Chai rperson: Mr. Martindale, I appreciate the question, and I think there needs to be some clarification.

We started out this committee with an agreement that when people would be called and not appear, they would be dropped to the bottom of the list. They would then appear the second time and they would be called again If they were called after midnight, as agreed to in the first instance, they would remain on the list. If they were called before midnight, they would be dropped off the list after being called the second time. There was a process, a change in that direction, whereby people that would be called the second time anytime would be dropped off the list.

However, we had a snowstorm on Thursday, I believ e, and it was agreed that those from outside of Winnipeg being called a second time not able to appear due to the snowstorm would remain on the list and therefore could be calle d a third time. There needs to be, I think, some clarification within the committee today, and I would certainly accept a motion as to how we proceed from here because I think the roads have cl eared up and it would appear that we are now back to, if there is such a thing in committee as normal.

I would certainly accept a recommendation or views fr om the committee at this time as to how we proceed from here. If there is or has been a misunderstanding created because of the changes that were made during committee due to weather or otherwise, I apologize to members public and also to the committee for that mixup. Mr. Cummings: Mr. Chairman , there was every effort made on the part of this committee yesterday, and I hope Mr.

Martindale was not implying that there was somehow an eff ort being made to elimin ate people from the opportunity to present because there was some question about the manner of the message that people were receiving We agreed that while we were dropping names off the list, if those who physically showed up and asked to be heard, would be heard. That is already an agreement of this committee and I do not think needs to be the subject of a motion or anything else at this time. We agreed yesterday and Mr.

Sale and I, both on behalf of our respective parties, said we would stick to that agreement, and it was on the record yesterday. Mr . Chairperson: So just for clarification then, Mr Cummings, and for the rest of the committee and the general public, the agreement then is when people arc read the second time and do not appear, they will be dropped off the list and those that had previously been -

, , November 2, 1996 LEGISLA TIVE ASSEMBLY OF MANITOBA 463 read, if they appeared physically, would be able to appear. That was yesterday. From today on, the normal process occurs, that when people are read the second time, they do not appear, they drop off the list. That was the agreement in committee here yesterday by all parties. Mr. Cummings: Just to clarifY, there were apparently some number of people, not a large number, that we were able to ascertain-but there were a few people who felt that they had-been indicated that they would appear on Saturday and therefore did not appear.

That particularly was the reason why we are following this procedure. I really do encourage the committee to stick by that understa nding. It was reached in good faith and we emphasized that at the time, and I would like us to continue. Mr. Chairperson: Thank you, Mr. Cumm ings. Mr. Martindale: Well, Mr. Chairperson, I had a motion to introduce since you asked for a motion, but since I have been informed that there was an agreement with our party, I will not introduce the motion, pending talking to Mr. Sale and confirming what he agreed to.

However, if it is different than the understanding that was put forward this morning, I will introduce the motion at a later point. Thank you. Mr. Chairperson: Thank you, Mr. Martindale. I have some information for the committee regarding, too, the discussion that emanated yesterday. There are three people that have been identified that wanted to appear that are here today for presentation. If it is the wish of the committee, I will allow those three people to present. Their names had been dropped off the list, but I will allow those people to present. Then there is another person. His name is Mr.

Ben Sokoloff who has indicated he wishes to present and he would like to do so today because of health reasons. What is the will of the committee on that case? [agreed) There are three people from out of town. What I will propose to the committee is that we hear those that had indicated and were dropped off the list first, that we hear Mr. Sokoloff and that we then hear the out-of-towners. Are we agreed to that? [agreed] Now, where is the list of the three presenters? I will ask one other thing of the committee, as well as those who are here to present.

We, a number of years ago, when I used to present before committee very regularly, had a protocol within this room, and it was clearly enforced at that time. We have deviated somewhat from this, and I would like to really, as Chairman, ask that we maintain a semblance of decorum and order in committee. So I am going to ask the co-operation of committee members, th'at we try to demonstrate decorum at committee.

I will ask those who sit in the audience and hear presenters, that we extend them the courtesy of listening quietly without applause or intervention, and I would ask that for the sake of an orderly presentation before this committee. That used to be the case. It was enforced rather strictly. I have seen people removed from this committee room under previous government, so I would like to reinstate that sort of order in these committee hearings because it provides presenters the courtesy of hearing them and allowing them to make their presentation in an orderly fashion.

So if that is agreed to, then I would ask that we proceed, and I would remind all presenters that we have a I 0-minute time limit and that we have a five-minute limitation on questions and that we abide by that. I will call then first Katherine Clune. Katherine Clune, have you a written presentation? "'

(0920) Ms. Katherine Clune (Private Citizen): Yes, I do. Mr. Chairperson: For distribution? Ms. Clune: No. Mr. Chairperson: Would you proceed then, please. Ms. Clune: Certainly. Good morning, Mr. Chairman, members of the committee. Thank you for the opportunity to appear before you to voice my opposition to Bill 67, the privatization of the Manitoba Telephone System. I am adamantly opposed to the sale of MTS for two reas ons; firstly, as a Manitoban-it does not appear that I have the full attention of the committee.

464 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 1996 An Honour able Member: I am listening to you, madam. You do not have to worry about that. Ms. Clune: Firstly, as a Manitoban who will be drastically affected by the increase in the telephone rates and the reduction in services which will necessarily flow from privatization; secondly, as an MTS employee with money invested in the MTS pension fund. It is my position that this government does not have a mandate to sell MTS.

It must be obvious to the members of this government through the number of individuals appearing before this committee that there is considerable opposition to privatization. I doubt that there is a single Manitoban who would believe that the Tories leading up to and during the last election campaign were not considering and plotting the sale of MTS. This is a major transaction. It did not happen overnight. It has been in the works for a considerable length of time. You lied to me and to every other Manitoban.

I submit that the Tories intentionally misled the people of Manitoba during the last election by neglecting to bring this issue to the forefront and having the people of Manitoba determine through the democratic process whether or not you had our consent to do this. This is not your asset to dispose of as you see fit. MTS belongs to me and every other individual in this province, and your government has not asked me in a meaningful way, i.e., during an election campaign, whether it is acceptable to me that you sell MTS. The sale of MTS will have a dramatic, negative impact on the majority of Manitobans.

MTS has provided quality, affordable service to Manitobans. The quality of service will decrease, that is a given, and no one here can provide any information or guarantee that this will not occur. The affordability of phone service to all Manito bans will be gone. In particular, our most vulnerable citizens, the disabled, seniors, and other individuals with low incomes will not be able to afford phone service, a service which I would characterize as a basic necessity.

As all of you arc aware, historically the more profitable arms ofMTS have subsidized the telephone rates in areas where the cost of basic service is considerable higher than it is in highly populated areas. This subsidization will be gone under privatization. Individuals in rural and northern Manitoba will not be able to afford the actual cost of provision of service to them. When I say that these individuals will not be able to afford phone service, that is not completely correct. fhey will be able to afford it if they do without food, clothing, health or other basic necessities. We do not want this in Manitoba.

The government knows that we do not want this, and that is why this issue is being dealt with in the manner that it is. Why are there no public hearings being held in rural and northern Manitoba? All of these individuals are going to be more affected by the decrease in the level of service and the increase in the cost of service than individuals living in urban centres. I read in the paper the other day Premier Filmon's statement in response to the question of public hearings, that his government is following procedure.

There is no requirement for you to hold public hearings in the rural and northern areas, and so you are not. I submit that this is no answer. This is an arrogant, unconcerned response. This is avoidance of the real issue, the real issue being accountability to the people who elected you. The advertising that I have seen on the privatization of MTS touts privatization as a benefit to MTS with the impli cit suggestion through the identification which all Manitobans have with MTS as belonging to us that privatization is a benefit to Manitobans.

Privatization may benefit MTS, the corporate entity, however, when MTS ceases to belong to me as a Manitoban, whether the corporate entity benefits is of no value to me; one, because it will benefit at a detriment to me; and two, because any benefit will be a benefit to the private companies who purchase MTS. Turning to the issue of pensions, I conunenced employment with MTS as a part-time telephone operator in 1983. I have contributed to the MTS pension fund which is administered by the Superannuation Board.

To this point, myself and MTS have contributed equally to my pension fund Any annual surplus in the fund has been reinvested in the fund. What this means to me and every other MTS employee is that I have had a level of comfort and confidence that my pension will be there when I retire. Bill 6 7

Section 15(8) states that MTS employees arc deemed to have given consent (

a) to the termination of -

, , November 2, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 465 their participation in the superannuation fund; and {b), to the assignment of assets, liabilities, and agreements from the fund to the new plan. I do not consent. This is my money. Under this new scheme, any annual surplus will not be reinvested in my fund, but rather it will go to the private company to offset their contributions. This is not acceptable to me. I believe that there is approximately $350 million ofMTS employee contributions currently in the superannuation fund. I do not give you permission to loot my pension fund.

I started working when I was I 5. I am now a lawyer in private practice. Contrary to popular belief, I do not make wads of money. I have not to this point made sufficient income to start putting away for my retirement. I am 34 years old, and even assuming that I stay healthy and productive until I am 65, I do not have much time left to start saving for my retirement. This causes me great concern. Up until a few years ago, I knew that as a worst-case scenario I would not starve. I would have CPP which I have paid into all my working life.

I now have no reason to believe that CPP will exist by the time I reach 65, and I lay the blame for this directly at the feet of the federal Tories for their years of mismanagement of this country. As my really worst- case scenario, I had my MTS pension with some indexing for inflation. Now you dare to take from me that last vestige of security. This is not acceptable to me. There is not one member of this government who can stand up or will stand up and give me a personal guarantee that I will be able to afford basic phone service under privatization.

There is not one member of this government who will stand up and give me a personal guarantee, that when I go to access my pension in 30 years time, that there will be anything of value left for me. Before any of you start to rise to give me that personal guarantee, please do not add insult to injury by showing me that you are even more of a fool than even I take you all to be. There is no benefit to individual Manitobans under privatization, and each and every member of this government knows this, and yet you continue to lie to us and attempt to deceive us.

Manitobans, and that will be a good thing for the democratic process. Thank you, Mr. Chairman. Mr . Chairperson: Thank you very much, Ms. Clune. Are there any questions or comments? Mr. Dewar: I thank the presenter. I clearly agree with you on all your points. You mentioned the cross subsid ization. I live out in Selkirk and several of my collea gues represent communities outside of the city of Winnipeg in rural and northern Manitoba. We know that their rates are subsidized by long distance revenues to keep the subscriber rates the second lowest in the country.

You mentioned that you are currently an MTS employee? Ms. Clune: Yes. Mr. Dewar: Has anyone consulted you as an employee regarding the sale? Ms. Clune: No. Mr . Dewar: Has anyone consulted you since it was announced? Ms. Clune: No. Mr. Dewar: Has anyone from the government consulted you regarding the-and this was something that was raised in the media-opportunity for employees to purchase shares in the telephone company, in the privately owned company? Ms. Clune: I am sorry, I missed the first part of that. Mr.

Dewar: As an employee, has anyone contacted you to purchase shares in the new telephone company, as an employee? Ms. Clune: No. Mr. Reid: Thank you for your presentation. If there are two among you who have the moral courage to oppose the sale ofMTS, this bill will be defeated. On Ms. Clune: Actually it is Clune. behalf of myself and all Manitobans, I ask that you stand up and be counted. That will be a good thing for Mr. Reid: Clune?

466 LEGISLATI VE ASSEMBLY OF MANITOBA November 2, 1996 Ms. Clune: Yes. Mr . Reid: Thank you for your presentation. Sorry for my mispronunciation. While I am not allowed to say it as a member of this committee or a member of the Legislature, you mentioned in your presentation that this government lied to Manitobans. I take it that you made that comment as a result of during the 1995 election campaign. Is that accurate? Ms. Clune: It was a lie of omission, yes, by not bringing it up as an issue. *

(0930) Mr. Reid: So then you say in your comments then that because the governm ent lied by omission during the 1995 election campaign, and I believe you referenced in your comments here today that you believe that this government should take these committee hearing s throughout the province to allow Manitobans the opportunity to have a say in this process. Would you also be in favour of a referendum or some other process that will allow Manitobans to have this say in what the future of our Manitoba Telephone System should be? Ms. Clune: Most definitely. Mr . Reid: Are you aware, Ms.

Clune, that yesterday there was a poll that came out that said that at least two thi rds of Manitobans do not support this government's action to sell our Manitoba Telephone System? Ms. Clune: Yes, I am aware of that. I thought it was higher than two-thirds, though. Mr. Reid: Wetl, you could be correct. I do not have the numbers here in front of me, but I thank you for that correc tion.

I think it gives a clear indication that this government is on the wrong track and that they are not listening to Manitobans, and that is why they want to keep the committee hearings confmed to this building and not take it out to all rural Manitobans, northern Manitobans. You referenced the fact that this government has essentially tied your hands with respect to your pension funds and the pension funds of current employees and ret ired employees. What would be your advice to this government with respect to this bill overall?

What do you think they should be saying to Manitobans to explain why it is that they are dealing in such a harsh way with the employees of MTS? Ms. Oune: I do not think there is anything that they can say to justifY that. I think that this bill should not be passed, and that it should be put to the people of Manitoba during an election as an issue as to whether or not we want this to go through and whether we want MTS to be sold. There is nothing they can say to justifY how they are approaching this now. Mr. Chairperson: Are there any other comments? Mr. Martindale. Mr. Martindale, before you continue, Mr.

Reid made a comment as a member of the committee. I want to remind Mr. Reid that he is not officially a member of the commi ttee. I would accept an amendment to the list, if it is the opposition's wishes to appoint Mr. Reid as a member of the committee. Just for clari fication, should there be a vote, I want it clearly understood who the members of the committee are. Point of Order Mr . Reid: Mr. Chairperson, on a point of order, believe that my Whip, on Thursday, in the House, stood up on committee changes and entered my name into the records for the committee. That was my understanding at that time.

I was in the House at the time. Mr . Chairperson: For clarification, I will read, as published, aU the comm ittee members, and they are: Mr. Ashton- An Honourable Member: Martindale, now. Mr. Chairperson: -and we made the change this morning, which v.itl be ratified in the House on Monday, and that has been changed to Martindale, but as published it was: Mr. Ashton; the Honourable Mr Cumm ings; Mr. Dewar; the Honourable Mr. Driedger; the Honourable Mr. Findlay; Messrs Kowalski, Laurendeau; the Honourable Mr McCrae; Mr. Penner; the Honourable Mr. Praznik; and Mr. Sale.

That is the published list as of this morning I acc epted an amendment to that for change of Ashton to Martindale, and if it is the will of the committee, I will -

, November 2, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 467 accept further changes at this time. Just for clarification, I just want it clearly understood who is identified as the committee members. * * * Mr. Chairperson: Are there any further questions? Mr. Martindale: Yes, I would like to ask the presenter if she is aware that under the balanced budget legislation of this government that it allows for referendums on tax issues? Were you aware of that? Ms. Clune: Y cs, I was. Mr .

Martindale: Do you think that another way that this government could have consulted Manitobans about the privatization of MTS was to have a plebiscite? Ms. Clune: Most definitely. Mr. Martindale: So you would encourage or urge this government to do that as another way of consulting people? Ms. Clune: Yes, I would. Mr.

Chairperson: The reason I ask presenters to wait for the Chairman to identify them is not for courtesy to us, but it is for the courtesy of the recorders back here that they ensure that we get the right people answering the right questions and that the right comments are recorded correctly for Hansard's sake, that people in the future can see who said what-just to clarifY that. Are there any further questions? If not, thank you for your presentation, Ms. Clune. The next presenter will be Mr. Ami Amason. Mr. Ami Amason. Mr. Amason, have you a written presentation for the committee? Mr.

Arnie Amason (Private Citizen): I have got a few notes that I might refer to. Mr. Chairperson: For distribution? Mr. Amason: No. Mr. Chairperson: Thank you, you may proceed. Mr . Amason: I appreciate the committee giving me permission to stand before them. Since I have difficulty standing for any length of time, I wonder if it would be possible for me to sit? Mr. Chairperson: By all means. You may take a chair there. We will move a mike over and you may sit for your presentation. Mr. Amason, you may proceed. Mr . Amason: Thank you.

When I started wondering what I should do about a presentation, it was starting to snow outside, and I know people are starting to do their Christmas shopping. I was wondering, how can I put together the few ideas and the few bits of information I have regarding this situation? Into my mind popped the notion of the Christmas Carol, of the ghost of Christmas past, Chrisbnas present and Christmas future. So I took the limited information I have and my sometimes overactive imagination and put it into a little scenario sort of based on that. The first

part is the origins ofMTS. I understand that the MTS was formed originally in 1908, and it was done so with the understanding of the population of Manitoba whose duly elected representatives following the precepts of parliamentary democracy had more or less mandated them to it, so they set up this corporation, public corporation, to serve the best interests of Manitobans in terms of their needs for communication. That is the past, the ghost of Chrisbnas past.

Ei ghty-eight years later, according to whatever information I have, MTS has an enviable record, expanding and improving services, particularly in rural and northern areas, where sometimes cost considerations are a problem. They have provided this service, and continue to provide this service, at affordable rates. MTS employs about 4,000 employees. These people have been working for them for years, and the money for their sal aries goes back into our economy and enriches our economy.

As far as I know, the profits from MTS generally remain in the province and can be used to increase MTS's viability through research and other means, et cetera. These figures, I am not sure of, and lacking certain information, I will not, sort of, argue these. I understand the profits of MTS since 1990 were in the neighbourhood of $1 00 million. I understand that the profits ofMTS from January to June of this year arc in the neighbourhood of $15 million.

468 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 19 96 * (0940) �ow, the ghost of Christmas future, this is pure con Jecture, and I certainly do not insist that any of these thin� s �e going to happen. I do not know that anybody can ms1st that they are not going to happen. So I just off er them for your consider ation. I have got sort of a side label for these. I call them zingers. As I understand it, without a mandate, the elected repr esentatives are going to sell off MTS at, I assume, what would be bargain-basement prices, much less than the dollar or resource value.

This, as I understand, is ref erred to as privatizing. The buyers , whoever they may be, will likely sell to a conglom erate at a large windf all profit. This is called congl omeratizing. I made that word up myself. I have not sort of got my tongue around it yet. The multin ationals, I guess, Sprint or AT&T, will probably merge MTS into an increasingly larger global giant. This is known as globalizing. The new private owner will likely sell off or cut out nonpr ofitable services particularly in the rural or northern areas. This is kno � as rationalizing.

There will be, in all likelihood, in order to increase the bottom line, considerable layoffs of employees who have been faithful employees for a number of years. This is known as downsizing. The money realized from the sale will probably show up as a plus in the next showcase budget, but the much larger losses, monetary and human , will not. This is known as prioritizing. I had some unders tanding, when they mentioned questions, that I would get to ask questions, not that you would ask me, but-how is my time? Mr . Chairperson: You have four and a half minutes left. Mr. Amason: Okay.

Well, I will just ask these questions, just to sort of focus on some of my concerns and consider it part of my present ation. The first one is, what is the current worth of MTS? I do not know that. What will the sell-off price be? 1 would like to be able to compare them. Who are the prospective buyers ? I would not thin k that we would enter into such a serious enterprise without having some notion as to who would be buying it, and in talking about special interes ts, in this situation will the special interest be regarded as the citizens of Manitoba or out-of province or country buyers?

What percentage of the monies generated by MTS will remain in and sustain the Manit oba economy? What perce ntage of the profits from a privatized MTS will remain in the economy? What will be the name of MTS when it is privatized? I do not know, Sprint Manitoba or AT&T Manitoba? These are some possible names. One came to my mind and it is STOP, which stands for Sell To Outside Privateers. Thank you. Mr. Chairperson: Thank you very much, Mr. Amason, for your present ation. Mr . Daryl Reid (Transcona): Thank you, Mr. Amason, for your present ation and for coming out this morning.

I want to ask you, sir, if you are aware-because the government has said that they are going to sell the shares of a company that we already own as Mani tobans and that they are going to limit the number of shares that any one indi vidual can 0"11, I think it is to 15 percent, and that they are going to keep the headquarters in Manit oba even though it may be just a shell of a building, four walls, a desk , a chair, and a telephone with call forwarding to some other location-that the fe deral government, when they sold CN Rail last year, made the same commitments to the people of Canada much similar to what this government of Manitoba is doing here with MTS and that CN Rail is now considering moving its headq uarters out of the city of Montreal where it was mandated to be through legislation and that they are just going to leave potentially a shell there and that at the same time, while the shares were supposed to have been limited to the same percentage that this government is talking about, the shares of CN Rail are now owned 65 percent by citizens of the United States of America?

Do you see that there can be simil ar circumstances or comparisons made between what happened with CN and the future of MTS? Mr. Amason: That is totally consistent with my prediction as to what the Christmas future for Manit oba is going to look like. -

November 2, 19 96 LEGISLATIVE ASSEMBLY OF MANITOBA 469 Mr. Reid: You asked several questions with respect to current worth, the selling price of the shares, who the prospective buyers will be, special interests of Manito bans or foreigners owning the shares, about whether or not the profits would stay in Manitoba, and the name of the company, and you referenced STOP as a likely name for the new company.

This week, we asked questions of this government with respect to whether or not they had done due diligence to determine whether or not they had taken into consideration the tax implications and had received a ruling from the federal revenue department from the federal government, and, of course, they were unable to answer that question or unwilling to answer that question which leaves us to wonder very much about the worth of the company.

So in answer to your question, even while we were attempting to ask and have answers to those questions, the government either did not want to answer or did not know the answer and had not done the due diligence portion of that research so that Manitobans would have a clear understanding, which would also lead us to conclude that there is no information with respect to what the selling price is going to be, although we suspect that what they are going to do is undervalue the share price at the beginning, knowing full well that those shares will be flipped in some time, probably a short time, for those that are in it just to make a pure profit and not for the investment to stay in Manitoba and that quite likely it will end up in New Jersey at AT&T headquarters or some Bell enterprise somewhere else or some other major telco that is privately owned, and that is where we suspect that future ownership of MTS will occur.

What advice would you give to this government as far as the future of Manitoba Telephone System's employees, because they have not given the opportunity for MTS employees past and current to have any say in the future of their own pension funds. How does that make you feel as a Manitoban that our current government here refuses to allow its employees of a Crown corporation to have that type of say when they attempt to sell off our own Manitoba Telephone System? Mr .

Arna son: I think I dealt with that quickly in passing when I raised the question about who are the special interests from the point of view of this government, and it seems like the employees of MTS and Manitoba citizens generally are the special interest whose interests can be ignored,

whereas the interests of the, I use the term-see, we are talking about privatizing I like to use the word "privateers" because I think that sort of relates to the same sort of concept. Although that is a word that has been out of use for some time, I think it applies very much to what we are talking about here. Mr. Chairpe�on: Thank you very much, Mr. Amason. That brings to a conclusion the questions on Mr. Amason. Thank you very much for your presentation. Mr. Martindale: The presenter asked some very good questions which I think are policy issues, and I wonder if Mr.

Findlay, the Minister responsible for MTS, would like to respond. If he does, we would give leave to answer the questions. Point of Order Mr . Gary Kowalski (The Maples): On a point of order, I just wanted to inform the committee, I have not been taking

part in the hearings, though I am a member of this committee, have not been taking

part in the presen tations or this committee as I have a conflict of inte rest in this matter in that my wife is an employee of MTS. I wanted to put that on the record, and I want it put on the record that I have not been present for the presentations, taken

part in any votes or proceedings on this matter. I just wanted to put that on the record. Mr . Chairperson: Thank you very much, Mr. Kowalski. That will be taken as information. * * * *

(0950) Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Very quickly, when we came into government in 19 88, MTS had a debt-to-equity ratio of 91 percent. That means 91 percent debt, 9 percent equity, a significant debt burden on the corporation. The pension fund was $13 4 million underfunded and in '86 and '87 they just lost $48 million. That is money lost to Manitoba, lost to the MTS. Since that time the corporation has made $16 0 million which has gone back into the corporation. The pension fund is now fully funded to the tune of some $350 million, so the security is there for the retirees, and

470 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, I 996 the debt-to-equity ratio IS 78 percent, so it has significantly improved. But in this competitive industry today the majority of telecom companies across Canada are in the range of around 45 percent debt, and in the process of this privatization the debt comes down to around the 45 percent, makes them on a level playing field and the ability to compete.

We are going to be offering the shares after the prospectus is filed and accepted by a securities commission to Manitobans first and foremost in a window of a few weeks to give them preferential opportunity to purchase, plus employees will have an opportun ity to purchase them through some kind of employee deduction plan that I am sure will be attractive to empl oyees, and that the bill currently authorizes that no one person or group of people can own more than I5 percent and no amount exceeding 25 percent can be foreign owned.

So that gives a complete window for Manitobans to own it and continue to own it in the future. The idea of foreign ownership or the head office leaving Manitoba or the board of directors being anything other than the majority of Manitobans, all of that is covered in the bill, the security of Manitobans. It will leave MTS more able to compete, freer to compete, and take the debt, currently around $840 million, off the books of the government guarantee. Along the way also I think there is some really good news of what MTS has done.

When we carne into government the debt was I believe I remember right around $780 million-[ interjection) Mr. Chairperson: Can I interject for just-1 asked at the outset of the committee for committee members to demonstrate decorum, and if we are going to expect decorum from those that are presenting, then I would ask committee members to extend the courtesy to the people speaking to allow members in the audience to hear what is being said at the table. So I would ask that respect of the committee members. Mr.

Findlay: When we carne into government in I988 the debt was around $780 million and since then the ILS program to put private lines in all rural homes and digitalize all the switches cost some $620 million. As I said earlier, the profit of $160 million recorded by the company, and the pension fund funding has gone from $60 million to $350 million, and the debt only went up $60 million. So it has funded itself very well over the course of time, but along the way the competition has come in and the new technology and the need for further investments are very high.

We are in a wireless society today and everybody knows about cellular phones, but CRTC has just licensed what is called PCS technology and then LMCS tec hnology. These are new, innovative, fast, efficient, high-quality communications systems that if we are going to have the best telecom company in the future as we have today the company has got to be able to invest. It has got to be able to source the funds, and I think it is quite possible that outside of government is the best way. I am sure you all also know there are nine telephone companies in Canada.

Currently seven of them are privately owned, like BCTel, Bell Canada, privately owned by shareholders, and all the Maritime tels, and everybody is regulated by CRTC. They approve the rates regardless of who the ownership is, for any request of a telephone company. So I think the best way to describe my understanding of what happened to MTS through what we are doing is it is business as usual at the end of the day, and the customer will have the same high-quality service, affordable rates, and an opportunity for all the new technologies of the future to be at their doorstep. Mr. Chairperson: Thank you very much.

I call the next person, Teresa Coles. Is Teresa Coles here? Would you come forward, please? Welcome to the committee this morni ng. Have you a written presentation for distribution? Ms. Teresa Coles (Private Citizen): Yes, I do, in fact, and it has been updated as I have been here several days. Mr . Chai rperson: Would you pr ocee d, please, Ms. Coles? Ms. Coles: Thank you very much. I appreciate the Chairman's comments this morning, although it docs strike at the zeal at which I had intended on presenting Yesterday was quite exciting at certain-for the lack of decorum. -

, November 2, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 471 I am an independent consultant, and I deal in film, video, television and some areas of telecommunications on an international level. I have clients in Australia, Nepal, Iceland, Finland, Argentina, Switzerland, the United Kingdom, and I am negotiating for Norway. So I do need my telephone every single day. I object to Bill 67 for three grounds: First, the stated aims are not achieved.

If the principal aim is to finance the technologies based on the experiences of telcos in the U.S. and elsewhere, the taxpayer still pays the fundamental load for research, development, and implementation, and that is the taxpayer, not merely, as the minister has just stated, the consumer paying the freight. So that is my first objection. If the province is seriously interested in moving forward with the extremely expensive technological investments, I suggest that we get an 800 line in here, and this would solve a lot of your problems.

Ev eryone in the province, and you are the largest consumer of MTS services, could be able to just dial in with their responses, could fax in. I find it quite appalling that this committee is meeting without using telecommunication services of the corporation it plans on selling to its fullest.

If the province wants to improve telecommunications, it is within the minister's mandate to enforce or recommend strategic partnerships, which will bring in the private sector in areas where they will provide excellent efficiencies to the organization without getting rid of the essential infrastructure services that telecommunications provides. I also object, and you have heard this again, so I will not belabour the point, that the public good is not an outmoded concept.

The issues of governments have been brought up very eloquently by previous speakers today, yesterday and, I am sure, on Thursday and on Wednesday, and the issue of infrastructure is one, I feel, because I have so many clients who have no access to telecommunication services in other countries, that perhaps, as Manitobans, we are a bit complacent about the level of services that we get. We have one for all the problems-and there is probably not someone who has not wanted to rip their hair out in dealing with MTS. It is a fabulous service and fundamental to people who work at the level I do.

I spend hours a day using the Internet services that are possible because we are one of the highest wired countries in the world. I believe we are more wired than the U.S., and I think slightly less wired than Australia. That is basically all I have to say. I will just keep it short.

When the province wishes to shift the ball to Manitobans who will still be shareholders, I respectfully bring up the issues brought that the lessons that have been learned· by pension funds in other organizations, particularly in the U.S., who sold off their infrastructures and took a shareholder position, they were not able to sustain the issues of public good. They were not able to maintain jobs. In some cases, the pension funds find themselves sitting on boards agreeing to cut loose economic sectors.

This has happened particularly in the transportation industry in the U.S., where the pension fund members are losing their job because the pension fund, while sitting at the board room, made a good economic decision for the corporation. Thank you, very much. Mr . Ch airperson: Thank you very much, Ms. Coles, for your presentation. Mr. Dewar: Thank you, Ms. Coles. You mention in the United States the taxpayer pays. Could you explain that, or give us examples of that, please? *

(1000) Ms. Coles: I surfed the net the other day to look for that information, and it came from state participation in the baby Bells in the U.S, in Florida and Washington state, where the corporations went to the state legislatures to get additional tax breaks, deferrals and used university resources that were state funded in order to make the technological developments that they needed.

In some places, there are a few states in the U.S. where that is the reverse, the baby Bells, have been able to provide infrastructure service for the provision of sate llites for broadcasting, which small states had not been able to access. I would suggest that, given our declining population, this committee look at the developments in similar states in the U.S. South and such as South Dakota, which radically changed their position, and saw a decline in the skill level of the people in the state.

472 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 1996 Mr. Dewar: Do you have, can you inform us as to the rates that subscribers pay-you mention that you deal with customers in Europe and the United States-and how those rates compare to the current rate structure here in Manitoba? Ms. Coles: I will give you-my client in Norway finds it almost cost prohibitive to deal with me by telephone because it can cost her up to four Canadian dollars a minute to talk to me. So we use the Internet and e-mail services to do our primary.

For my part, because I am dealing in time shift, I am able to talk to her for $1. 58 a minute, which is really nice. Mr. Dewar: Do you have any examples, American examples? Ms. Coles: The American rates overall are somewhat lower than ours. Clients of mine in Minnesota talk to me for 16 cents a minute U.S. I talk to them for 26 cents a minute U.S. Mr. Dewar: That would be long distance. What about the base subscriber rates? Ms. Coles: I am sorry. I do not have that information. Hon. Darren Praznik (Minister of Northern Affairs): Yes, Ms. Coles, just a couple of questions.

Are you aware who owns the telephone system in Norway? Is it publicly or privately held? Ms. Coles: To the best of my knowledge, it is publicly held, though there are some-every country everywhere is going through this same issue. Mr. Praznik: Ms. Coles, the only reason I make the point is, you have pointed to some examples of high rates which are publicly owned systems. You have pointed to some examples of low rates which are privately owned companies. The fact of the matter is, it is how the system is regulated that makes the difference.

I just want to ask you, you are aware that the telephones in Canada are regulated by the CRTC? Ms. Coles: I make petitions regularly, and I think to a certain extent, yes, we arc dealing with, but underneath the telephone system, whoever regulates it, who 1s making the investment in that next step? The publicly held telephone systems are going back to the same person, the consumer and the taxpayer, that the privately held systems are going to to raise the money for that telecommunications. Mr.

Pramik: Mr Chair, because my point obviously is, the cost is reflective of the regulatory regime, but you left the impression in your remarks that only in Manitoba arc you able to operate your business to the world, and I just wondered, if you lived in Ontario, Quebec, the Atlantic provinces, Alberta or British Columbia, would you not be able to operate your system? I mean, is the fact that MTS is publicly held as opposed to privately held, living under the same regulatory scheme as other telcos in Canada, has that really, honestly, has that made a big advantage in the cost ofrurming your business? Ms.

Coles: It is not an issue about the cost ofrurming my business. It is an issue about the lifestyle of the Manitobans who are here. Where my colleagues are using privately held systems they do not have the access to the kinds of development structures that I have been able to access here Mr . Chairperson: I am going to allow two more questions, one of Mr. Praznik and one of Mr. Reid. Mr. Pramik: Ms. Coles, are you telling this committee that if you lived and operated your business in Toronto or Montreal or Vancouver, you would have any significant difference in the services that are available to you in Manitoba?

Ms. Coles: Okay, and I will give an example, because it is an example that I am working on in a project with Japan, with some film makers in Japan, to deliver some art using the telephone in what is referred to in the industry as third-wave teleconferencing. That service is not offered to me through Bell Canada in Toronto, because I wanted originally to do the project there. They are not interested. It is not offered to a similar group in Vancou ver through BCfcl, because they too wanted to do the same kind of project.

It is only-if this project happens, because it is at the edge of the technology. it is going to happen here Mr. Reid: It is very interesting that you raised the point that our Manitoba Telephone System is able to prondc that service to you and to your customers and that the -

November 2, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 473 other, private Bell systems in Canada are not. But I want to reference the fact that the minister asked if you were aware of the regulatory body, which is the CRTC. You said that you were. I take it then that you are aware that the CRTC, as one of the criteria that they use for determining rate of return, will be the ability of the shar eholders, the private shareholders, under a private company to generate a reasonable level of return on investment.

Are you aware that that is one of the criteria and that profit will be part of the motive in setting rates for Manitoba telephone users? Ms. Coles: I am more familiar with how the CRTC regulates the broadcasters than I am with the specifics of how they regulate the telecommunications side. My interest in the CRTC is how they have been enabling telcos to deliver Filmon video services to clients. That means largely watching what is going on with BCTel. Mr . Chair person: Thank you, Ms. Cole, for your presentation. I will now revert to the list of presenters from out of town, and I call Ian Robson.

Is Ian Robson here? I want to remind everybody at the table that these people are now going to drop off the list if they are not here. Ian Robson. I call the spokesperson named for the Keystone Ag Producers. Keystone Ag Producers. They will be dropped off the list. Those are the outside-of town presenters that I have before me. There is Drew Caldwell. Is Drew Caldwell here? Drew Caldwell will be dropped off the list. Tnere is AI Neath. Is AI Neath here? (interjection] I am sorry. I made a mistake here.

The clerk informs me that, for Ian Robson, Drew Caldwell and AI Neath, it was the first time that they had been identified as presenters, as out-of-town presenters, so I apologize for that. They will be dropped to the bottom of the list and be called again when we revert back to the list. The next person that I am going to call is Ben Sokoloff, who, as earlier indicated, is here and requests that he be heard today because of health reasons. Mr. Ben Sokoloff. Would you come forward, please? Am I pronouncing your name correctly, sir? "'

(1010) Mr. Ben Sokoloff (Private Citizen): No, you are not. For the record, my name is Sokoloff The last two letters are pronounced as in Frank, and since my remarks are very brief, I would like to take the time to digress for a minute and make a comment about my name. Naturally, get quite a few really exotic mispr onunciations. This one was good, but when you pronounced my name, by a random association I have thought of the most dramatic event in my life which-this is a digression-was being arrested by the KGB in the Leningrad Airport in 1979 in the spring, and I was interrogated for six hours.

I was not told that this was the KGB, but I understood it was. I was not told I was arrested, but, at one point in the interrogation, my interrogator, whose name was Eu gene, said: You know, Sokoloff is a very good Russian name. I said, yes, I know. I did not tell him I was born in the U.S.A., not very far from Bruce Springstein, his name place. I �ant to mention also that his command of En glish was excellent. It was fluent; it was better than 99 percent of the students I taught in university as an En glish teacher. So the KGB had an excellent, probably still does, language school.

He also spoke French very well. He made one mistake which the committee probably would be interested in. The only mistake he made, he ass ured me that the Gulag was an adventure of the western mind. So I had to correct him, being a teacher, I said, oh, I think you mean fantasy. So he said, right, that is right, you are right. He also assured me that the reason the Russian hockey team beat the Canadians sometime around that year was because they had the collective spirit and we had the superstar or star system.

So I shall be very brief I think the primary purpose of any state is to guarantee the safety and welfare of its citizens. I sincerely believe that Bill 67 will most definitely work against the welfare of the majority of the citizens of Manitoba in that an unreasonable increase in phone rates is inevitable in short order, if it is passed. Is the MTS broke? I think not. Just the opposite is true. The MTS is a Manitoba treasure, just as Pharmacare was. In one quick knife thrust, Pharmacare was murdered. Will the same death overcome the MTS?

The MTS has consistently been profitable in spite of sterling, reasonable rates. Above all, it belongs to the people of Manitoba. Will it be stolen from them? Thank you. Mr. Chairperson: Thank you very much, Mr. Sokoloff.

474 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 19 96 Mr. Reid: Thank you, sir, for coming out this morning to make a presentation. It is interesting your thoughts and your experiences dealing with the KGB as you referenced. I take it that you were here this morning when the Minister responsible for the Manitoba Telephone System (Mr. Findlay) answered the questions that had been posed by a previous presenter- Mr. Sokoloff: Yes. Mr.

Reid: -and that the minister referenced that we as Manitobans, through our own Manitoba Telephone System, have been able to eliminate the unfunded portion of the pension fund for the employees who are there, to eliminate that, and that we have, I think the minister referenced, $1 60 million in profit generated by the Manitoba Telephone System, and I think it has been since 19 88, he said. So you can see that there has been a significant level of return to the people of Manitoba and to our telephone system .

The minister also referenced that we have as a people through our Manitoba Telephone System significantly lowered our debt-to-equity ratio and that there has obvio usly been significant improvements in our Manitoba Telephone System over a number of years.

With all of these good features that we have been able to build on through public ownership of the Manitoba Telephone System, as a Manitoban, do you see any reason why, since we seem to be moving in such a strong direction with our Manitoba Telephone System, there is a need to sell it considering all of the things that the minister has referenced here which I have also raised again for you? Mr. Sokoloff: I certainly do not see any reason why the MTS should be sold to anybody, to any corporation. Mr .

Reid: Perhaps you can share with us, with this committee, your thoughts on what you see for the future employment prospects for Manitobans, should this government continue with this Bill 67 and sell Manitoba Telephone System to private shareholders. What do you see as the future employment prospects? Mr. Sokoloff: Do you mean in general or for MTS employees? Mr. Reid: For MTS employ ees, Mr. Chairperson. Mr . Sokoloff: I would imagine that probably some downsizing would take place and that X number of employees might lose their joos, but that is speculation. Mr .

Reid: In your impression of the way things could possibly go and your thoughts about the future prospects for MTS , what do you see will happen or what do you think will happen with the shares, the control, and the ownership of Manitoba Telephone System once this government sells shares? Do you think that they will continue to have control, as the minister likes to pretend here, once those shares are in private hands, or do you see that those shares can be flipped to other shareholders and that profits will be taken in the future and that quite likely that those shares could even move outside of Canada? Mr .

Sokoloff: Well, I think that an educated guess or specu lation on my part would be that the shares would go on the market and that there would be flipping or res elling, and it would be a matter of normal market procedure that the largest amount of profit would be attempted to be realized by the people who would buy these shares. Mr. Reid: Then do you see that in the future for decision making that is now being done by Manitobans through our own Manitoba Telephone System where we have some control as a people through our government- Mr. Chairperson: Mr. Sokoloff. I am sorry. Were you fmished with your question?

Mr. Reid: No. Mr. Chairperson: I am sorry for inter je cting. Mr. Reid: Okay, I accept your apology. Do you see that the MTS decision making, as it is currently in place, now will remain that way, or do you see MTS in the future as the shares are flipped, as you have indicated, will be anything more than just a shell. four walls, a desk, a chair, and a phone with call forwarding? Do you sec that MTS's future of decision making will be anything more than what I have just referen ced, or do you see that the decision making Will remain here?

November 2, 19 96 LEGISLATIVE ASSEMBLY OF MANITOBA 475 Mr. Sokoloff: Well, I think probably it would go to foreign places and sources like the United States. While you were speaking, I thought of a joke, and that is that I could foresee a Candice Bergen determining what is happening with MTS. Mr. Martindale: Mr. Chairperson, when you made your presentation, you talked about an interesting experience you had, probably a frightening experience you had in the former Soviet Union.

During presentations on bills during this session, some presenters have said that the power given to ministers and to this government is communistic by which I think they mean totalitarian. Do you think there is anything in this Bill 67 to privatize MTS that is totalitarian; for example, there was no consultation with the public? Mr. Sokoloff: I am glad you asked that question because I thought about that before I came here today, and so another idea I had was that there was some indirect connection between Bill 67 and my experience in 19 79.

There is also another joke that I thought of which is not original, but I thought that Mr. Filmon's ideology was to the right of Genghis Khan and Attila the Hun, so that is history. But yes, I think very definitely that this decision on the part of government smacks of totalitarian decisions in a generic way. Yes. I am sorry. *

(1020) Mr. Chairperson: I want to thank Mr. Sokoloff for his presentation. Your time has expired. As a matter of fact I have been mthcr lenient with questions and I appreciate your presentation and coming today. I have now reached the end of the list that we discussed at the beginning of the presentations this morning. We have dealt with the four additional and we have dealt with the out of town.

Now, I have since then received requests from the back of the room for four more people that had been dropped off the list-three more that had been dropped off the list and one person that has come to present this morning and she says she has to leave by I 0:30 . She has to go to work. I ask for the indulgence of the committee and the direction from the committee. What are your wishes in re�ard to these four people that I have indicated? Leave? [agreed] Mr . Findl ay: Let the lady who has to go to work present first. Mr. Chairperson: I will then call Elizabeth Carlyle.

She is No. 64 on the list, for your information. Ms. Carlyle, have you a written presentation for the committee? Ms. Elizabeth Carlyle (Private Citizen): No, I do not. Mr. Chairperson: Thank you. Would you proceed, please. Ms. Carlyle: Thank you. Thanks for the opportunity to speak to Bill 67. I do thank you for letting me speak before going to work. As the Chair said, my name is Elizabeth Carlyle and I am a student at the University of Winnipeg. I come with some particular concerns about that. A lot of students, as you may know, live on very fixed incomes with student loans and limited opportunities for income.

I think that Bill 67 has a lot of prospects that arc concerning for students. I think that from my own experience as a student I know that the rates that we have now in Manitoba are fairly reasonable. I mean, they are sometimes still expensive for students. People who are living on $500 a month or less cannot even afford the $2 increases that have been happening. I think that when we look to Alberta and the $6 increases that they have had it is certainly a cause for concern.

I think that what has come up here at this committee in a number of different ways is this question of, will MTS being public or private make a difference? I think that it will make a difference and I think that it will make a negative difference for all the reasons that people before me have stated but especially in talking about the rates. We have no reason to believe that rates will be maintained at their current reasonable levels, and we certainly have no reason to believe that they will not go up drastically. I am just thinking of my own experience. I am a citizen of Manitoba.

My mom is an English national and I would say she is actually quite a moderate person. She would not come to present to this committee. I think she would feel out of place here but she certainly has concerns about the sale of MTS.

476 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 1996 She knows from her experience with some of the things that Thatcher has done in England that there are certain public services and goods that do not lend themselves well to a market kind of model. What happens in England, for example, this is a different kind of service, but I think the example is still a good one, that with the bus system in England, they privatized the bus system. Now what they have is a wonderful array of so-called choices for the consumer of bus services but what actually happens is that rates are very confusing.

You might have four bus stops in a row all to take you to the same place, and I do not think that is the kind of confusion and the kind of model that we need for public services. There are certain kinds of services that simply need to have public control so that people can have these kinds of opportun ities that do not exist with private systems to speak to issues, to allow certain kinds of what the market considers to be unfairness but which are actually for the consumers a fair amount of fairness.

Things like reduced rates or subsidized rates for northern and rural areas are really crucial because, if we do not have that, then we have a situation where people in areas that are less populated do not have access to the same kinds of basic services. I would submit that phone services are indeed basic services in terms of safety, in terms of communication. I think that no one in this room would want to see rural and northern Manitoba further cut off from what is going on and have further difficulties in communicating. I think that I will leave it at that, and, hopefully, there will be some questions. Mr.

Chairperson: Thank you very much, Ms. Carlyle. The first indicating to question is Ms. Barrett. Ms . Becky Barrett (Wellington): Your point about there being public serv ices that do not lend themselves to privatization or that should remain in the public and your mother's experience in Britain, I think, arc very well taken. It occurred to me that the sale of MTS is not the only example of where the government is not following that dictum, and that is in their wish which was not completely followed through on to privatize the home care serv1ces. Do you see a connection there?

Do you see a trend developing perhaps? Ms. Carlyle: I definitely do. I think that the curr ent government does not have a mandate, first of all, to take these public services and flip them over into the private sector. I think that this government has, notwithstanding that it does not have that mandate, gone ahead and done this in a number of areas. The health care area is one major area that has happened, and I think that is of real concern . I think that something like the McKe nzie Seeds company is another example.

The question I have is, these companies are doing well, so why do we want to sell off companies that are doing reasonab ly well or well enough that we can maintain them and with substantial benefit to Manitobans? So I think that is a question that really has not been answered.

The other concern is that, without the mandate to do the things that it is doing, I think that this government has a real responsibility to get out to rural and northern Manitoba to consult with people, to have meaningful consultations that are much more accessible than the ones that have been held recently that are going till late at night and starting early in the morning and these kinds of things. So I think that, if this has been in the works for a number of months, even years, then I think that a corresponding amount of eff ort should be put into finding out what Manitobans think about the sale ofMTS.

I do not think that has happened yet. We have not had anything resembling a full-scale public discussion on this. I think that needs to happen still. Mr. Martindale: I would like to ask the presenter, since you said that you are a student and you work and my son is a student and works and gets called for extra shifts occasion ally, how many students do you think at your university, which, I think, is the University of Winnipeg, what percentage of students do you think have part-time jobs while going to university, and how many of them would be living on their own as opposed to living with their parents? Ms.

Carlyle: I used to work at the students association In fact, I was an elected representative there last year We did a number of different surveys to UJ to better find out who our student population is. and what we -

November 2, 19 96 LEGIS LATIVE ASSEMBL Y OF MANITOBA 477 discovered that, at the University of Winnipeg, through a couple of different surveys, the average income of students at the University of Winnipeg was well below $1 3, 000. It was in the range of $9,000 to $1 0,000 a year. We also found that approximately 70 percent of students at the University of Winnipeg had some kind of part-time job. Often people have, like myself, had two part-time jobs or even three as well as taking full-course loads.

I think that a little over about 60 percent of our students were living away from home, so that is 60 percent of students who are, in most cases, not in all cases but in most cases, paying for their own rent, their own food, their own necessities-all those things including phone. * (10 30) Mr . Chairperson: We have one more minute left in your question time. You have one more minute before the time expires. You indicated you wanted to leave here. According to my watch you have four minutes. Mr. Martindale, for one last question. Mr. Dewar, instead of Mr. Martindale. Mr. Dewar: Thank you, Mr. Martindale and Mr.

Chairperson. You mentioned in your presentation holding hearings outside of this building in rural and northern Manitoba. Are you aware that when the hearings started, I think it was Wednesday night, that a motion was put forward b): the opposition members and was defeated by the government, a motion that would have called for hearings outside of this building into rural and northern Manitoba? Ms. Carlyle: No, I was not aware of that. Mr. Chairperson: Thank you very much, Ms. Carlyle, for your presentation. I will next call Carol Stadfeld. Have you a written presentation for distribution? Ms.

Carol Stadfeld (Private Citizen): Yes, I do, Sir. Thank you, Mr. Chairperson. I am here today speaking against Bill 67, the bill that will allow the sale ofMTS. I want to keep the Manitoba in Manitoba Telephone System. Before 1906, a private company, Bell Telephones, was in charge. Prime Minister Sir Wilfrid Laurier formed a select committee to investigate the telephone industry in Canada. The reason: There was much dissatisfaction with Bell because of high rates and the reluctance of Bell to extend service to less lucrative areas. In 19 08, the Conservative government of R.P.

Roblin established Manitoba Government Telephones. It was purchased from Bell Telephones for $3,300,000 and became the first publicly owned system in North America, with around 14 ,000 subscribers. I want to keep the Manitoba in Manitoba Telephone System. Change is a constant feature of the telecommunications world. In 1917 , Brandon became the first city in Manitoba to receive dial telephones. In 19 26, Winnipeg became the largest city in North America to have completely automatic dial equipment. In 19 49, the opening of radio telephone facilities brought service to northern communities and outposts.

In 19 56, a portion of the TransCanada microwave network opened serving Winnipeg and eastern Canada. In 19 58, MTS played a

part in the completion of a 4,000 mile microwave link, the longest single microwave link in the world. MTS continues to change. This is only a brief

summary of a history that all Manitobans can be proud of. I want to keep the Manitoba in Manitoba Telephone System. As a Crown corporation, MTS is already owned by Manitobans. MTS holds assets worth over $1 billion, debt of approximately $800 million and consequently has a net asset value of over $200 million. This represents wealth now owned by all Manitobans in equal shares on a per capita basis. MTS also provides more than 4,000 direct jobs as well as many private business spin-offs that profit all Manitobans. I want to keep the Manitoba in Manitoba Telephone System.

The MTS mission statement reads, and I quote, to meet the telecommunication needs of all Manitobans with the right solutions, outstanding service and superior product.

478 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 19 96 MTS is competitive in the long distance market even though it has to provide the same level of service to rural areas that are overlooked by private companies. As well, MTS has the second lowest residential rates after SaskTel. I want to keep the Manitoba in Manitoba Telephone System. Mr. Filmon first denied discussing privatization with anyone. Three brokerage firms were hired: CIBC Wood Gundy, Richard Greenshields and RBC Dominion Securities. He then denied that the brokerage firms were investigating privatization.

After six months the only option they recommended was privatization of MTS. On October 23, 19 96, Frances Russell wrote a column for the Winnipeg Free Press, and I will quote it: If the government had no preconceived agenda, how could it have managed to get a report April 30, make a decision on a $700-million share issue May l and be ready with all the paraphernalia for a full-dress news conference on May 2? I want to keep the Manitoba in Manitoba Telephone System. In the recent provincial election, Mr. Filmon made no mention in his campaign literature that MTS would be private.

The only opinion he consulted was that of brokerage firms. Manitobans were left out of this very important decision-making process, but has the goal of business changed in 88 years? Stock investors stiil look for dividend income and a profitable return on investment. Does this encourage the undertaking risks or having the patience to commit funds for the long term that may be required? I want to keep the Manitoba in Manitoba Telephone System. Please remember that telephones in Manitoba began with a private company. In 1908, R.P .

Roblin said, MTS is a good commercial proposition and whatever profit there is in this operation of the telephone system fr om this time on will belong to the people of Manitoba rather than to a private company. History teaches us that if we do not learn from the mistakes of the past, then we are doomed to repeat them. Let us learn from the mistakes of the past. I want to keep the Manitoba in Manitoba Telephone System.

I would like to just end the remarks that I have by saying that I am an MTS employee of over 19 years I began in operator services and through technological change I was redeployed and am now working as a clerical worker, which is why I was unable to be here when I was called on Friday or a Thursday or a Friday, and I thank the committee for allowing me the opportunity to speak today. Thank you. Mr. Chairperson: Thank you very much, Ms. Stadfeld. Ms. Barrett: This was a very good, succinct presentation that covers much of the concerns that have been raised by hundreds of Manitobans in these hearings.

Thank you very much. I wanted to just ask you a question. I do not know if you were here earlier when the minister spoke about some of the things that MTS has done in the recent past, but he did say that it spent $620 million getting rid of the party lines in rural and northern Manitoba so that now virtually all Manitobans have their own private lines. You talk in your second paragraph about the dissatisfaction in 1908 with Bell was because of the high rates and the reluctance of Bell to extend services to less lucrative areas.

Do you think that if MTS had been in private hands bef ore the $620 million was spent on increasing the service to rural and northern Manitobans that that would have taken place? Ms. Stadfeld: No, I do not believe it has, and I believe very often that people think Manitoba ends perhaps at Gimli and that very often the most northern areas Churchill, Thompson areas like that get left out of the picture altogether I notice today that the meetings ar c held in Winnipeg How available arc they for people in the northern most areas like Churchill to come dmm to Winnipeg to make a presentation?

They arc left out of the process, and a private company with a mandate for profit will not have a profit in a less-populated northern area. -

, November 2, 19 96 LEGISLATIVE ASSEMBLY OF MANITOBA 479 Mr . Dewar: Thank you. I mentioned to the previous presenter regarding a motion that we put forward here on this side of the House to have hearings outside of this building, and it was defeated. But I would like you to speak directly tcr-we have the minister responsible here and we have several ministers of the government and all the members of the government right here at the table-I would like you to speak directly to them and make your point as to why you think hearings should be held outside of this building. * (1 040) Ms.

Stadfeld: I believe that hearings should be held outside of this building because Manitoba as a Crown corporation represents all Manitobans. Having hearings only in this building represents the areas that can get to this building or have ready access to it. The northern areas that do not have access or easy access to this building are left out of the process.

A few years ago, we had a meeting where video conferencing was used to reach all areas of Manitoba Telephone System during a very important presentation, and I was wondering if the same sort of things could be used here to voice the opinions of northern Manitobans. Mr. Chairperson: Are there any further questions? Ms. Barrett: Just one final question following along on your concerns. Do you have any idea, can you speculate and it is really only speculation, I suppose-as to why the government has not allowed all Manitobans access to the discussion of this by holding hearings outside the city of Winnipeg? Ms.

Stadfeld: It is only speculation, but I believe that they do want MTS to privatize and the less opposition, the less controversy, the fewer opinions from anyone else who disagrees with that. When I spoke earlier, the consultants they spoke of were the three brokerage firms whose only decision was to privatize MTS. There was no other decision. While it is only speculation, I am wondering if that is what they really want. Ms.

Barrett: Are you aware, as well, that those three brokerage firms are now the brokerage firms that will be selling the shares, should Bill 67 pass, with an estimated profit to themselves of $25 million, and does this concern you? Ms. Stadfeld: No, I was not aware of that and, yes, that does very much concern me. It seems that their interests would not correspond with all of Manitobans as a Crown corporation mandate would be that all Manitobans participate. Mr. Chairperson: Mr. Dewar, one final question. Mr .

Dewar; Would you agree that the reason the government will not hold hearings outside of this building is simply the fact that there is no public support or very, very little public support for the privatization of this telephone system? Ms. Stadfeld: I believe that there is support and if they were to hold a referendum vote or to ask Manitobans in the northern areas, there would be support. Mr . Chairperson: Thank you very much for your presentation, Ms. Stadfeld. Ms. Stadfeld: Thank you. Mr. Chairperson: The next presenter that we agreed to hear this morning was Winnie Grabowski. Ms.

Grabowski, would you come forward, please. Have you a written presentation that you wish to distribute? Ms. Winnie Grabowski (Private Citizen): No, I do not. I will be reading from some brief notes that I brought with me. Mr. Chairperson: Thank you, Ms. Grabowski. Would you continue please. Ms. Grabowski: Thank you. When MTS first opened its doors, it had only one goal. That goal was to provide every Manitoban with quality and affordable service. Since then, Manitoba Telephone System has achieved that goal successfully. We enjoy calling capabilities that many of us take for granted.

I myself, while travelling, realized how fortunate I was to have the Manitoba Telephone System. We were out of the country and we tried to call ahead to our next destination to make a reservation at a hotel. We got a recording on the line that said, you cannot complete this call from your present location. If it had been in Manitoba I do not believe that would have been the case. I believe we would have been able to complete our call.

480 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 19 96 A more recent situation developed this past week, again giving me a sense of how proud I was to be employed by the Manitoba Telephone System. There was a family having financial difficulties. They have an ill, newborn infant, and they had their service disconnected. I was asked if I could somehow find out if we could have their service charge for reconnection waived so that they could have their service for their ill child.

Within a few moments the collection manager at MTS notified me and said the service was reconnected and these people had their service back because friends and family had gotten together and cleared the bill. Again I do not believe that private industry would provide that service. These two incidents that I have related to you are personal They are not big money, but they are important to Manitobans. I believe that Manitoba Telephone System considers that when they do business on a daily basis. In privatizing, that will not be a consideration.

The main consideration will be bottom line profits, and I am concerned that this decision is going to be made without giving all Manitobans the right for their input. I am curious as to why this government, who fully trusts Manitobans to go to the polls and have an election, cannot or will not give them the same right in deciding on the privatization of Manitoba Telephone System. Thank you. Mr. Reid: Thank you very much for coming out this morning to make a presentation.

You raised an interesting point, and it sort of has jogged my memory about some of the things that I have been able to help my own constituents with, and that is the fact that as elected representa tive, and I am proud to serve my community, I have the ability to, when my constituents call and they have some difficulty with the level of service or the bill paying ability of my constituents in hardship cases, I have the ability to call up the representatives of the Crown corporations, whether it be Manitoba Hydro, Manitoba Telephone System or others, and speak directly to those people on behalf of my constituents who are having some difficulties.

So in other words, as an elected person I have the ability to influence arrangements that can be made to ease the burden on people that perhaps are on social assistance for example. I have that power now. Do you see that I or any other elected representative coming to this Manitoba Legislature would be able to exercise that same control and same ability to influence the decisions of a private company as I have been able to do under the Crown corporation? Ms. Grabowski: I must say that I would have to consider, and I do not mean this personally to you, sir, the member themselves.

But I do believe that if we do have some input into what is happening, yes, things can be changed,

whereas in a totally private environment I do not believe that is possible. Ms. Barrett: You are an employee of MTS. Have you discussed the potential privatization with your co workers and, if you have, can you share with us some of their concerns if they have any? Ms. Grabowski: 1be discussion of privatization occurs daily in our workplace because we are aware, we are hearing the media talking about it. We are all running scared at this point. We are worried about our pensions, we are worried about our job futures, we are worried about what is going to happen to our customers.

Early in the first few years that I worked for the system there was a very small grant of a service, sort of a benefit for working at MTS. I myself did not quality but after so many years service you were given an employee discount on your long distance rates. The public was outraged. We were there as a public utility. How dare us take from them. That was totally removed from the picture. No one was ever allowed to have a discount. Yet if you work at Wai-Mart, Eaton's, anyplace like that, you are allowed to have. The public views us as a public service not as a money-profit industry.

Aside from that, MTS has always made money. We have never been in the hole or debtridden to the point where we can turn around and say, we are not worth having. We have always made money. * (1 050) Mr. Reid: The government references, one of the reasons they reference is that MTS cannot keep up with the technological changes that are coming. As an MTS employee, I take it you would either know directly or be in consultation with other employees of MTS.

Have you in your experience or knowledge ever seen circumstances where MTS has been unable to keep up with the tech nological changes that are occurring in the telecommunications industry ? - -

,. , November 2, 19 96 LEGIS LATIVE ASSEMBLY OF MANITOBA 48 1 Ms. Grabowski: In answer to your question, sir, yes, I have been involved in many conversations at meetings where the topic has come up. MTS had grand plans to be part of globalization. They always have had. Their technological moving into the future has always been based on the revenue coming in. In other words, we tried not to spend beyond our means. Unfortunately, all the people at MTS did not have total control over the decisions that were made with regard to how our money was spent.

We did have to put forth dollars at a faster rate than maybe what we wanted, but the dollars were put forth for a good purpose. We now have one of the best networks across Canada. So we did it at a costly price and it was not done maybe at the time that we wanted it done, but it was done, and I think maybe had things been done a little differently, we would not be here today. Mr. Chairperson: Thank you, Ms. Grabowski, for your presentation. Ms. Grabowski: Thank you for your time. Mr.

Chairperson: Now I am going to discuss with the committee two other requests here, and I think we are beginning to walk upon relatively thin ice when we make considemtions of the next presenters because we have had people that have indulged for a long time that are on the list and that have made their views known to be heard for quite some time.

We have a request here from a presenter, who is No. 38 on the list, that he needs to present today or wishes to present today, and then we have another presenter who is taken off the list who has a stand-in for him at this committee today to make that presentation for him, so I am asking committee what their wishes are in this regard. I remind the committee that when you make the decision, take into consideration the many people that have waited since Tuesday, because they were first on the list, to make presentation here. So I ask your indulgence and I ask your consideration for this. Mr . Laurendeau: Mr.

Chairman, you said that Mr. Espey was No. 38. We can guarantee that we will hear Mr. Espey today, but I do not think we should be jumping the list to get there. I think when we get to 38 that is when he will be heard, or when the meeting comes to an end, we can see that we hear anybody who is still here to be heard at that time. Mr . Chairperson: Are there any comments from the opposition in that regard? Mr.

Reid: Well, I am somewhat inclined to agree with that, although if there are considerations with respect to work that individuals may have to leave for today, or health-related reasons which I also think should be criteria that this committee considers, I think we are prepared to accept some movement of public presenters. Mr . Chairperson: I can indicate to you what the note says that I have before me that he is 38th on the list, has indicated he has to leave in 20 minutes, would like to present today. Mr. Reid: If it is work-related or health, I- Mr. Chairperson: I have no knowledge of that. Mr.

Reid: Can we ask? Mr . Cha irperson : Could I ask the clerk please to go discuss with Mr. Espey and bring it back to committee. We will deal with the next item as requested and that is that Mr. Mel Christian was on the list, has since been taken off the list and he has asked-or Mr. Ken Emberley wishes to make a presentation on behalf of Mr.Christian. I indicate to the co mmittee that Mr. Emberley has presented before, so what are the wishes of the committee? Mr. Laurendeau: I do believe that, as you have stated, Mr. Ember ley has already presented.

If he is presenting for the other gentleman, it must be a written presentation. I do believe we can take it and have it put on the record? Mr. Chairperson: Yes. Is that agreed? [agreed] Now, Mr. Espey indicates that he has to leave because of medical reasons. Mr. Laurendeau: Okay, let us hear him then. Mr. Chairperson: We will hear Mr. Espey. Will you come forward, please, Mr. Espey? Have you a written presentation to distribute to the committee? Mr. Sean Espey (Private Citi7-en): No, I am just going to yell and finger point and spew out rhetoric.

482 LEGISL ATIVE ASSEMBLY OF MANITOBA November 2, 19 96 Mr. Chairperson: Thank you very much. Mr. Espey, will you proceed, please? Mr . Espey: First of all, I would like to commen t. I would like to thank the committee for their patience and for the leave. I would like to comment on the whole process of regist ering and being put on the list to present to committee. My unders tanding is that under any normal common sense, you register, you put your name down and basically you are set in an agenda forum, and what has happened is it seems the list has been screwed around and resh uffled and there is confu sion.

Frankly that is what my angle is and unf ortunately I had to direct it to the clerk, and I apologize to the clerk. It was not directed to her, it was directed to just the whole proc ess. Mr. Chairperson: I am sure the clerk accepts. Thank you. Mr . Espey: Second of all, I think, I guess I will just start off by saying I do not want you selling my phone system, okay? It does not belong to you. It was brought to you by the people of Manitoba in trust, all right? It is not your asset. It is not an asset of any individual sharehold er.

It was put to us in 19 08 from the government because the private system did not work, and it was quite obvious then and it is quite obvious now. I mean, look at AGT and look at BCTel. We look at south of the border, all the individual states, when they had their own telephone system, and it worked quite well. Then slowly one by one, they were sold off Now people are scrambling. I have been down to the States and I have been in affluent parts of America and I have been in poor parts of America, the division between the rich and the poor is quite great.

I will not say that America is a ter rible country to live in. It is a great country to live in, and so is Canada. But what I am saying is that th!!y have made some mistakes with their utilities, and we have made mistakes here with our utilities and a lot of the provinces here. Manit oba and Saskatchewan are the only ones left that have had some form of common sense and used a bit of discretion. This government claims that they are doing it because it is to promote free enterpri se and competitio n-fr ankly, I think you are wrong.

Competition is not induced in this type of system, in this utility These are bare bones. This is all part of the core cost of living. When you take a utility, something that people need and you take it and you put it in private hands, the private companies use that as a weapon, as control for the pursuit of profit. Now, if I did not know any better I would think that you guys were almost like hired guns brought in by corporations to take our assets and just hand it over for I 0 cents on the dollar. I want to go back. I want to revert. I am originally from Brandon . I was born in the Brandon area.

Actually, one halfofmy childhood I was raised in Alberta, rural Alberta. As a child, I was raised on a lot of conserva tive lif estyle. My family is from the Cardale-Hamiota area- weU, half my family, the other half from Brandon. So I was raised on a lot of conservative ideals and philosophy. * (1 10 0) I have come to realize over the years that these philoso phies may be in some instances-like in a very simple, simple farm lif estyle, they may work, but on the broad perspective they do not work. I am finding that more and more, because a lot of it is based on isolation, years and years of just general isolation.

But, even when you have, because you fe nd for yourself, you work hard in the fields and you bring the crop in and you get what needs to be done, and they have learned to fe nd for the mselves. So they have developed these attitudes that that is just the way it is and you move on.

But even then, even when times are tough and you have winter winds blowing aaoss the prairie and your food has run out and you have run out of money or your bam has burned, you have lost all your li vestock, you know there are still neighbours that have pulle d together and helped you and made sure you made it through the winter, and that is because of co-oper ative effort s. I fe el that this government is moving away from that, the very roots that you people claim you come from, you are betraying those roots. I find it atrocious As a young pcrson-1 mean, I am politically active. I will be the first to admit it.

Some of you may reco gnize me, others may not, and so I will be quite honest. I am totally frustrated with the system, and I am frustrated with this government, because as a young person I see you guys stabbing us in the back I look at most of the Conservative caucus and most of them arc of -1 mean, you arc not getting any younger. I am SOTI), I do not mean to offend you, but I fee l likc-fint crJcctionJ

November 2, 19 96 LEGISLA TIVE ASSEMBL Y OF MANITOBA 483 With the exception of Mr. Praznik. You seem older than you, so- An Honourable Member: You are outdated. Mr. Espey: Yes, you are outdated. Mr. Chairperson: Could I ask, please, committee members, that we maintain the decorum that we had started off with this morning? I will allow for questions and responses. Mr. Praznik, I will allow for questions and responses. I ask Mr. Martindale to give that same consideration, as soon as we finish hearing Mr. Christian. Would you please- An Honourable Member: Mr. Espey. Mr. Chairperson: I am sorry, Mr. Espey. Mr.

Espey: I would like to revert to McKenzie Seeds. I know there is one member of the committee in here who comes from and represents that area. I am sure most are aware that McKenzie Seeds is a very profitable and very, very vibrant company that is in western Manitoba. It has provided a lot of jobs and infrastructure, and it was publicly owned and the returns were going back to the people of Manitoba. Now I do not know what the actual share structure has been � ough the sale of McKenzie Seeds. Frankly, I do not care.

The point of the matter is that back when McKenzie Seeds was put in government hands-it was will ed from A. E. McKenzie, given to the province of Manitoba as a gift to the people. Once again, it was sold off 10 cents on the dollar, whatever you want to do, we can dicker around with numbers. The point is that the people have lost a very vibrant asset and infrastructure. Maybe, sitting now, still here, today, but who knows a year or so down the road. If it is in government hands, it is guaranteed to stay in here and the flow of the monies continues to stay in the province. The same with MTS.

Again, I would like to just say that as a young person I am a little bit concerned, a little bit frustrated, a little bit angry that I feel that you guys are cutting us out from our knees, okay? We have no, like the majority of the people, young people today, they have total apathy for government and democracy. They feel democracy no longer exists in this country and this province. Maybe five years ago it did. I would hate to think that the government members are responsible for this. I just hope that you guys can sleep at night.

When you think about it, when you go home to your families, that you can sleep at night knowing that you have screwed us all, because congratulations. You have reached the level of the former Devine government, as far as corruption and backstabbing of the people. Thank you. Mr . Chairp�rson: Thank you very much for your presentation, Mr. Espey. I am sorry, I had asked at the outset of the meeting that there not be any disruptions or applause. I have seen, under previous administration, people removed from the committee, and I will not hesitate.

I ask for your kind consideration, because all of this takes time and we want to hear as many people as we can in this process. So, I ask you very kindly to allow for decorum to remain. We have had a very orderly process this morning. I would like to see that continued. Ms. Barrett: I found your comment about betraying the roots of where the Progressive Conservatives have come from very interesting.

I do not know if you were in the room when a worker at MTS made the point about the history, the genesis ofthe Manitoba Telephone System, which was under a Progressive Conservative-I do not know if that was the title-but a Conservative government of Rodmond Roblin in 19 08, and I think that is an interesting juxtaposition. Mr . Chairperson: Mr. Reid, I had asked before for decorum in the committee, and I ask that that continue. Mr. Rei d: On a point of order, Mr. Chairperson. Point of Order Mr .

Reid: Can you tell me, Sir, that when you are sitting in the Chair and you are a member of this committee sitting on the opposite side of the table, you have a different set of rules than what you are displaying here today? Mr . Chairperson: I am just asking that we maintain order- Mr. Reid: I am asking you, Sir, the question. Mr . Chairperson: -and decorum. Mr. Espey, would you continue. Ms. Barrett? There is no p�int of order.

484 LEGISL ATIVE ASSEMBLY OF MANITOBA November 2, 19 96 * * * Ms. Barrett: Thank you, Mr. Chair. You have talked about McKenzie Seeds and others have talked about McKenzie Seeds. Were you aware that we, at one point, had a Crown corporation called Manitoba Data Services which had held virtually all the inf ormation about the citizens of Mani toba, and several years ago it was sold, it was privatized, supposedly staying in the hands of Mani tobans? It has flipped a couple of times and now I believe is owned largely by a corporation you may be famil iar with whose roots are not in Manitoba called IBM.

Do you see a potential for that happening here with the potential privatization of the telephone system? Mr . Espey: Absolutely. I was not aware of-1 vaguely have heard of the name, but I was not aware that it was a Crown corporation. It would make a lot of sense. I mean , all the inf ormation of all our personal lives in the hands of a few people frankly scares me, which is probably interesting on why, how people can somehow get a hold of my phone number and know exactly about certain inf ormation that they have no right of knowing. I mean, it frankly is fascist architecture.

I mean, I just feel that there is a trend happening here, and it is a radical swing. Excuse the rhetoric. It is a radical swing to the right. Again, you are living up to your name , the Tories. If I may, I would like to refer briefly back to a bit of Scottish hist ory, and that is that the actual name Tory refers to sheep stealers, where it used to be people who worked for the Crown or people that had money stole from the poor farmers, and they grudgingly referred to them as the Tories. It tripped over into the monarchists, people who supported the monarchists.

Again, you are living up to your name and unf ortunately-1 do not know, I am rambling on, sorry. Mr . Chai rperson: Are there any further questions or comments? If not, thank you very much, Mr. Espey, for your presentation. For the benefit of the committee, Mr. Emberley has indicated that he decided to submit Mr. Christian's presentation as a written submission. I ask that this be recorded in Hansard. (agreed) We have Ms. or Mrs. Edith Byhre, who is a stroke victim, has arrived and wishes to speak. She has never been on the list before. What is the wish of the members of the committee? (agreed) Thank you.

Have you a written presentation for the committee? If not, would you like to sit for the presentation? We will use mike No. 3. Am I pronouncing your name right, Ms. Byhre? * (I ll 0) Ms. Edith Byhre (Private Citizen): Byhre. Mr . Chairperson: Byhre. Thank you. Ms. Byhre, would you proceed? Ms. Byhr e: Why are you wanting to privatize the telephone system? And another thing, with the privatizing of home care, as you can see, my husband is with me. He has Alzheimer's; he is in a nursing home. I am living by my self All the help I get is the Thursday. How come some people can get a lot more help?

In fact, when they were on strike, I phoned and said to your secretary, Mr. McCrae, could you not come out and give me a bath rather than going weeks on end? It seems when you privatize these things, the working people cannot afford it, the average person. But my only way of communicating is if someone picks me up and takes me out, or my telephone, and I am paying a fair amount now. Will it be doubled in a year? Because then I cannot afford a phone. Does it have to be privatized? I cannot write. I have no way of getting out unless I get picked up.

I do go to seniors at Concordia when my son takes me to my sister's, and then the van picks me up. Why are you picking on the helpless people? Is it not possible for you people to-I have always been a PC. I have always had a sign on my property for years and years, but, believe you me, unless you people show a concern for us, no more. lbat is about all I have- I have a lot of other complaints-but this is about the telephone Mr . Chairperson: Arc there any questions of Ms Byhre? Ms. Byhre: Why do you have to privatize it? I have had Manitoba Telephone for over 50 years I have been happy with the service.

I would not even mind paying a -

, November 2, 1996 LEGISLA TIVE ASSEMBLY OF MANITOBA 485 few dolla rs more. If you check with the ones that have been privatized, I could not afford it. I do not think it is fair that I should sit by myself in my home without anybody being able to check on how I am doing. That is about it. I would like to see it stay as it has been, but, because once it is privatized, we certainly will not be getting the services we had. I had more help before, but since the strike, one person comes on the Thursday to give me a bath. I do need my phone. I do not think any one of you would like to be in my shoes.

My husband, I cannot look after him. They upped his daycare. I was paying $29.50. I am paying $41 now because they give me a supplement on my Old Age Pension. That is the only income I have. This is going to happen with everything else, if it is all privatized. I say to any one of you, would you like to be in our shoes? They give me a little bit of pension in one hand and take it away in the other. I pay for my house cleaning because I cannot do it. They sent me a lady for an hour. How much can you do in an hour in a home every two weeks? And when they are privatized, then you phone one of the firms.

I get an Old Age Pension and a supplement, and if it were not for my husband's pensions, I would be on welfare. That is about all I have to say, but please stop and think about the seniors and people that have not got your income. I would love to trade places with any one of you. Thank you. Mr. Chairperson: Thank you very much, Ms. Byhre, for your presentation and thank you very much for taking the time to come before this committee. Are there any questions for Ms. Byhre? Thank you very much.

I have one further request here and, as I indicated before, I think we were walking on thin ice, and I maintain that we still are. We have missed presenter No. 19 , as indicated on the list, Mr. Steve Webb, who is here and requests that he be heard by 12 :30. What is the wish of the committee? An Honourable Member: What is the reason? Mr. Chairperson: I have no reason why he is here. An Honourable Member: Call the list. Mr . Chai rperson: Okay. Thank you. We will then proceed to call the list Floor Comment: What was the decision of the committee? I did not hear it. I am the person in question. Mr .

Chair person: I am sorry, for the benefit of the committee, the committee decided that we would revert back to the list and that we would call names on the list until we reach No. 19, and we will then hear No. 19 , unless there is any medical reason or other- Floor Comment: It is a business reason. I have to go out and make a living. I have been here since nine o'clock waiting, and people have gone ahead of me. I am just making a simple request. I have to go by about 12: 45. That gives you an hour and a half I do not think that is unreasonable at all. Mr . Chairperson: I am sorry.

I am not going to hear further arguments from the crowd. I just want to indicate that this is the kind of unfairness that is created by giving precedent to those that are either, by unfortunate circumstance, requesting that they appear before others anytime, and I accept the criticism that was presented by a previous presenter, indicating that the list is all mixed up. He is correct, but it is done out of sympathy and out of trying to accommodate.

Once you start doing that, once a committee starts being lenient, you create a disruption, and I think you also create an unfairness for those that have waited a long time, and I respect that. However, it was the committee's decision and I, as Chair, will abide by that decision. We will try and call then Keystone Ag Producers or a representative thereof Keystone Agricultural Producers, they will be dropped off the list. Mr. Harry Schellenberg, private citizen. Mr. Harry Schellenberg, he is not here. Has he been called before? He has not been called before. Okay, he will be dropped to the bottom of the list.

Esyllt Jones. Esyllt Jones, he will be dropped to the bottom of the list. Brian Lucas. Brian Lucas, would you come forward, please. Have you a presentation to be distributed to the committee? Mr. Brian Lucas (Private Citizen): No, I do not. Mr. Chairperson: Thank you. Would you proceed, please.

486 LEGIS LATIVE ASSEMBLY OF MANITOBA November 2, 19 96 Mr. Lucas: Mr. Chairman, members of the committee, my name is Brian Lucas. I am a small-business operator and my business is the Internet I guess I am an example of a new trend in our society, entrepreneur in a high-tech field. I do business across Canada, the U.S. and around the world. All of my regular customers are in the United States. Most of them I have never even met. I deal with them through telephone, fax and so on, and I have busin ess arrangements with Poland and Thailand, working on the Internet.

The reason that I exist in my business, the reason that my in dustry exists at all, is because of the basic infr astructure of basic telephone lines. I hate the phrase inf ormation superhighway, but I am going to use it, because the analogy is somewhat applicable. Concrete highways are essential to Manit oba's economy. Farmers move their products on the highways, manuf acturers move their products, forestry and mining and resource extraction companies move their products on the concrete highways . For me and the people providing Internet services in Manitoba, telephone lines are our highways.

Telephone li nes enable us to move our products, whether it be for the home user surfing the Net or business customers checking e-mail, corporate EDI and Internets and what have you. Teleph one lines are the essential, basic infrastructure which is used by the entire Internet industry. Although we as Internet service providers are actually in competition with Manitoba Telephone System, we are also some of their best customers. We buy dozens and hundreds of telephone lines in order to provide services to our customers. Now, services like telephone servict; are natural monopolies.

They are areas in which competition is not really practical. It is impossible or inconce ivable, I would say, that multiple companies will lay overlapping networks of water pipes, of sewer pipes, overla pping roadway networ ks, electrical grids or telephone services running the basic wires into houses. We have seen, of course, that certain areas of service arc very applicable to competition, cell phone service and things like that, long distance services. But the basic wires into houses is an area that competition is very hard to conce ive of there .

Such natural monopo lies are, of course, heavily regulated for the public good, and it seems to me, though, that public O\\nersh ip is the strongest form, the strongest guarantee of public control in these kinds of areas.

As I said today, I am actually in compet ition with MTS for providing web programm ing services, and that is not going to change no matter who owns it I am going to be in competition with them, I am going to be in compet ition with Sprint and AT&T and a hundred other operators worldwide. * (1 12 0) There was a report on the radio a fe w days ago about a fe llow in Russia with two Ph.D.s who is out offering his services for $15 0 a month. These are the kinds of people worldwide that are competing through the global Internet, and the owners hip of MTS is not going to change that for me.

I am going to be still in competition with all these people, but I do see the basic telephone infrastructure as contributing to a stable foundation on which I and other Manit obans working in this new field can build. It provides a stable environment in which we can operate, and I see it as essential to the industry that I work in. (Mr.

Vice-Chairperson in the Chair) So I urge the committee to think of the Manitoba Telephone System as providing the same sort of basic infrastructure utility similar to concrete highways or any of the other public utilities that exist, and to think of it as esse ntial not only to my industry but to the Manitoba economy as a whole. I also urge the committee to consider that the strongest form of control of a system like that would be direct owner ship.

Anyth ing less is weaker control , and in the case of somet hing so integral to our economy, especially the way that we are moving into the future these days, I believe that we should maintain strong control of the system through public ownersh ip. Thank you. Mr . Vice-Chairpenon: Thank you, Mr. Lucas Arc there any questions of the presenter at this time? Mr . Reid: Thank you very much for coming out th1s morning and sorry for the delay in getting to you. but I think it was necessa ry to allow other presenters that had health reasons for coming forward

, , November 2, 1996 LEGIS LATIVE ASSEMBLY OF MANITOBA 487 In your business I take it that you have been successful in competing with MTS for some of the services that MTS offers, and that you say you want MTS to remain as a Crown corporation and that you feel it provides you with an adequate level of service to allow you to do your job. What changes do you see, what impact do you see would occur as a result of MTS's change into private hands? Do you see that there would be for example a degradation of service, and that perhaps some of the rules would be changed to disadvantage you in your business activities?

Perhaps you can share some of your thoughts with us on that. Mr . Lucas: think that, well certainly I am in competition with MTS for customers in certain areas and with MTS. Now, under a change of ownership, there may be no particular difference in the way MTS operates. The new owners may or may not require the company to behave differently. However, MTS provides the sort of background, the environment in which we all operate, just as anybody in the computer industry has to keep a very close eye on what IBM and Microsoft are doing because they are not just the competition.

They are the environment, the background. So we in the Internet industry have to be careful of what AT&T and the telcos, all the giants, are doing. As I say, I do not know what will happen, but I personally view the kind of infrastructure that MTS provides for data interchange as a basic infrastructure need very similar to sewer and water services that industries also require, and I see maintaining that as an infrastructure for the public good as being very important. I think the surest way to achieve that would be to maintain public ownership of the system. Mr . Dewar: Thank you Mr. Lucas.

How sensitive is your business to fluctuations in rates? Mr. Lucas: My own business personally is in computer programm ing and World Wide Web services, which are not particularly sensitive to telephone rates because I do not use a lot of telephone lines. I only require one line to do my own work.

However, a company which I founded and which I am not part of right now, but is still doing business here, and many other companies that are in a slightly different line of providing Internet services to the home user are very affected by basic telephone rates because what they have to do is subscribe to dozens or even hundreds of telephone lines in order to allow their customers to reach them without receiving busy signals and so on. So there are compan1es which subscribe to 100 telephone lines, each costing $35 or so a month just for basic services.

Fluctuations in those can have a very, very strong impact on the company's bottom line. Mr . Chairperson: Thank you very much for your presentation, Mr. Lucas. At this time we will call Mr. Dave Roberts. Mr. Roberts will drop to the bottom of the list. Dood Bayney. Dood Bayney. Not being present, he will drop to the bottom of the list. Russ Wyatt. Russ Wyatt. Not being present, he will drop to the bottom of the list. Jim Still. Jim Still. Jim Still. Not being present, he will drop to the bottom of the list. Magnus Eliason. Magnus Eli ason.

I can tell Magnus is not here, so Magnus will drop to the bottom of the list. John Cardoso. John Cardoso. Not being present, he will drop to the bottom of the list. Mr. Don Sullivan. Don, do you have a written presentation? Mr. Sullivan, I am sorry. * (1 130) Mr. Don Sullivan (Private Citizen): No, I do not. Mr . Chairperson: Okay, just go ahead then, Mr. Sullivan. Mr. Sullivan: Good morning. I would like to thank you for allowing me the chance to make a presentation on Bill 67. I am just going to speak from some briefing notes.

I would like to start off by stating that in 1995 the intentions of this government were not known to Manitobans when you were seeking a mandate for re election, and I think had it been known, maybe things would have been different. So on the basis of that there is at least a moral and ethical obligation upon the government who is entrusted with the responsibility to protect Manitoba's interests to at least consult with all Manitobans. I find it somewhat offensive that this government has not been willing to hold public hearings outside of

488 LEGISLATIVE ASSEMBLY OF MANITOBA November 2, 1996 Winnipeg. I particularly view the sale or privatization of MTS as having severe impacts, but we do not know this because this government has not chosen to do, at least, a minimum cost-benefit analysis in terms of the benefits and costs of the sale of privatization and their impacts on Manitobans.

I particularly refer to northern Manitobans who, on a large part, are already disenfranchised and are probably, for the largest part, those people who rely on a solid infrastructure, communication infrastructure, to fulfill their basic needs and who are probably, on the whole, the lowest, probably the lowest income earners in the province, by and large. I find the unwillingness of this government to consult with those folks a lack of responsibility, morally and ethically.

So based on that, I think that, just based on the moral and ethical reasons, there probably should occur at least regional consultations as to privatizing a public asset in which you have the responsibility to consult with essentially the shareholders I think on a more solid grounding. Certainly this argument will come up. Not only do you morally and ethically have a responsibility to consult with Manitobans when you privatize, I think you have a fiduciary responsibility, and I think as a fiduciary responsibility, you can go to court with that.

I think you have failed in your fiduciary responsibility to consult with Manitobans when you are about to privatize MTS. Based on some fiduciary responsibility, had you at least fulfilled those obl igations, you could have conducted Public Utilities Board hearings on the privatization of MTS. You have chosen not to. I think that is one strike against you for your fiduciary responsibilities. I think that there is a case that can be made on fiduciary responsibilities. Maybe it might not win, but it certainly would be an interesting argument to put before a court as to what your fiduciary responsibilities are.

So I would suggest that at least in the interim, as an interim measure, that you could withdraw this bill and fulfill not only your moral and ethical obligations but, more importantly, your fiduciary responsibilities and hold Public Utilities Board hearings regionally to consult with Manitobans, the shareholders, as to the costs and benefits of selling MTS. I think that you have told Manitobans, or you have given the responsibility to MTS to tell Manitobans that the sale and privatization of MTS is a good thing.

Yet you have not given the corresponding obligation to Manitobans to tell you whether it is a good or bad thing. I have seen probably in the last month a lot of ads coming out trying to convince me that this is a good thing, yet you have failed fiduciary to prove that. I have yet to see a document from the governm ent of Manitoba that clearly spells out the costs and benefits of selling MTS. I think that, given other jurisdictions, a will ingness to privatize Crown corporations, the experience in England is coming back to haunt that particular government on privatization of various public assets.

I think Alberta is a good example in terms of the telephones, of what happened when they privatized. We saw an increase in rates for basic telephone use. (Mr.

Chairperson in the Chair) I find it particularly interesting that, on one hand, when the shareholders or Manitobans have spent over-I do not know, 19 08 was when this particular company carne to fruition-that we spent literally mil lions and milli ons and mill ions and millions of dollars building public assets up to a standard that is obviously world class, and that that money has been spent propping up essentially the ability for a private corporation and, in fact, if you are going to put it on the market, new sharehold

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Collection	Manitoba — Debates (Hansard)
Citation	36-2-pu10
Type	hansard
Volume / chapter	36th 2nd hansardpdf pu10.pdf
Language	en
Format	pdf
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