Manitoba Committee Hansard — 8 June 2011 (Social and Economic Development Committee, Sitting 4, 39th Legislature, 5th Session)

39-5-sed4

Manitoba — Debates (Hansard)

Fifth Session - Thirty-Ninth Legislature of the Legislative Assembly of Manitoba Standing Committee on Social and Economic Development Chairperson Mr. Daryl Reid Constituency of Transcona Vol. LXIII No. 4 - 6 p.m., Wednesday, June 8, 2011 ISSN 1708-6698

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Ninth Legislature Member Constituency Political Affiliation ALLAN, Nancy, Hon. St. Vital N.D.P. ALTEMEYER, Rob Wolseley N.D.P. ASHTON, Steve, Hon. Thompson N.D.P. BJORNSON, Peter, Hon. Gimli N.D.P. BLADY, Sharon Kirkfield Park N.D.P. BLAIKIE, Bill, Hon. Elmwood N.D.P. BOROTSIK, Rick Brandon West P.C. BRAUN, Erna Rossmere N.D.P. BRICK, Marilyn St. Norbert N.D.P. BRIESE, Stuart Ste. Rose P.C. CALDWELL, Drew Brandon East N.D.P. CHOMIAK, Dave, Hon. Kildonan N.D.P. CULLEN, Cliff Turtle Mountain P.C. DERKACH, Leonard Russell P.C. DEWAR, Gregory Selkirk N.D.P.

DRIEDGER, Myrna Charleswood P.C. DYCK, Peter Pembina P.C. EICHLER, Ralph Lakeside P.C. FAURSCHOU, David Portage la Prairie P.C. GERRARD, Jon, Hon. River Heights Lib. GOERTZEN, Kelvin Steinbach P.C. GRAYDON, Cliff Emerson P.C. HICKES, George, Hon. Point Douglas N.D.P. HOWARD, Jennifer, Hon. Fort Rouge N.D.P. IRVIN-ROSS, Kerri, Hon. Fort Garry N.D.P. JENNISSEN, Gerard Flin Flon N.D.P. JHA, Bidhu Radisson N.D.P. KORZENIOWSKI, Bonnie St. James N.D.P. LEMIEUX, Ron, Hon. La Verendrye N.D.P. MACKINTOSH, Gord, Hon. St. Johns N.D.P. MAGUIRE, Larry Arthur-Virden P.C. MARCELINO, Flor, Hon. Wellington N.D.P.

MARTINDALE, Doug Burrows N.D.P. McFADYEN, Hugh Fort Whyte P.C. McGIFFORD, Diane Lord Roberts N.D.P. MELNICK, Christine, Hon. Riel N.D.P. MITCHELSON, Bonnie River East P.C. NEVAKSHONOFF, Tom Interlake N.D.P. OSWALD, Theresa, Hon. Seine River N.D.P. PEDERSEN, Blaine Carman P.C. REID, Daryl Transcona N.D.P. ROBINSON, Eric, Hon. Rupertsland N.D.P. RONDEAU, Jim, Hon. Assiniboia N.D.P. ROWAT, Leanne Minnedosa P.C. SARAN, Mohinder The Maples N.D.P. SCHULER, Ron Springfield P.C. SELBY, Erin, Hon. Southdale N.D.P. SELINGER, Greg, Hon. St. Boniface N.D.P. STEFANSON, Heather Tuxedo P.C. STRUTHERS, Stan, Hon.

Dauphin-Roblin N.D.P. SWAN, Andrew, Hon. Minto N.D.P. TAILLIEU, Mavis Morris P.C. WHITEHEAD, Frank The Pas N.D.P. WIEBE, Matt Concordia N.D.P. WOWCHUK, Rosann, Hon. Swan River N.D.P. Vacant Inkster Vacant Lac du Bonnet

31 LEGISLATIVE ASSEMBLY OF MANITOBA STANDING COMMITTEE ON SOCIAL AND ECONOMIC DEVELOPMENT Wednesday, June 8, 2011 TIME – 6 p.m. LOCATION – Winnipeg, Manitoba CHAIRPERSON – Mr. Daryl Reid (Transcona) VICE-CHAIRPERSON – Ms. Bonnie Korzeniowski (St. James) ATTENDANCE –11 QUORUM – 6 Members of the Committee present: Hon. Messrs. Chomiak, Mackintosh Messrs. Borotsik, Caldwe ll, Mses. Korzeniowski, McGifford, Mrs. Mitchelson, Messrs. Pedersen, Reid, Schuler, Wiebe APPEARING: Hon. Jon Gerrard, MLA for River Heights PUBLIC PRESENTERS: Bill 43–The Real Property Amendment Act Ms.

Wendy Rinella, Title Insurance Industry Association of Canada Mr. Steven Offer, Title Insurance Industry Association of Canada Bill 17–The Cooperatives Amendment Act Ms. Vera Goussaert, Manitoba Cooperative Association Mr. Danny Gendron, CDEM Mr. Russ Rothney, Neechi Foods Co-op Ltd. Bill 35–The Consumer Protection Amendment Act (Cell Phone Contracts) Mr. Kelvin Shepherd, MTS Allstream Ms. Gloria Desorcy, Co nsumers' Association of Canada, Manitoba Branch Bill 40–The Condominium Act and Amendments Respecting Condominium Conversions (Various Acts Amended) Mr. Mel Boisvert, Winnipeg Realtors Mr.

Peter Squire, Winnipeg Realtors Mr. John Petrinka, private citizen Bill 41–The Liquor Control Amendment Act Mr. Lanny McInnes, Retail Council of Canada Mr. Scott Jocelyn, Manitoba Restaurant and Food Services Association Mr. Mo Razik, Independent Specialty Wine Stores of Manitoba Mr. Dwayne Marling, Canadian Restaurant and Food Services Association Mr. Jim Baker, Manitoba Hotel Association Mr. Marty Gold, private citizen Mr.

Fred Curry, private citizen WRITTEN SUBMISSIONS: Bill 35–The Consumer Protection Amendment Act (Cell Phone Contracts) Bernard Lord, Canadian Wireless Telecommuni- cations Association Vanessa Brazil, WIND Mobile Derek Hay, Private Citizen Kenneth G.

Engelhart, Rogers Communication MATTERS UNDER CONSIDERATION: Bill 17–The Cooperatives Amendment Act Bill 30–The Change of Name Amendment Act Bill 35–The Consumer Protection Amendment Act (Cell Phone Contracts) Bill 36–The Adult Abuse Registry Act and Amendments to The Vulnerable Persons Living with a Mental Disability Act Bill 39–The Grieving Families Protection Act (Various Acts Amended) Bill 40–The Condominium Act and Amendments Respecting Condominium Conversions (Various Acts Amended) Bill 41–The Liquor Control Amendment Act Bill 43–The Real Property Amendment Act * * * Clerk Assistant (Ms.

Monique Grenier): Good evening. Will the Standing Committee on Social and Economic Development please come to order. Before the committee can proceed with the business before it, it must elect a new Chairperson. Are there any nominations for this position?

32 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 Mr. Drew Caldwell (Brandon East): I nominate the MLA for Transcona. Clerk Assistant: Mr. Reid has been nominated. Are there any other nominations? Hearing no other nominations, Mr. Reid, can you please take the Chair. Mr. Chairperson: Thank you, folks, good evening. Our next item of business is the election of a Vice-Chairperson. Are there any nominations? Mr. Caldwell: I would nominate the MLA for St. James. Mr. Chairperson: Ms. Korzeniowski has been nominated. Are there any further nominations? Seeing none, Ms.

Korzeniows ki has been elected as Vice-Chairperson for this committee.

This meeting has been called to consider the following bills: Bill 17, The Cooperatives Amendment Act; Bill 30, The Change of Name Amendment Act; Bill 35, The Consumer Protection Amendment Act (Cell Phone Contracts); Bill 36, The Adult Abuse Registry Act and Amendments to The Vulnerable Persons Living with a Mental Disability Act; Bill 39, The Grieving Families Protection Act (Various Acts Amended); Bill 40, The Condominium Act and Amendments Respecting Condominium Conversions (Various Acts Amended); Bill 41, The Liquor Control Amendment Act; and Bill 43, The Real Property Amendment Act.

How late does the committee wish to sit this evening? We have– Mr. Blaine Pedersen (Carman): For time, let's finish the business in hand. Mr. Chairperson: Finish the complete business of the committee? Okay, thank you. We have a number of presenters registered to speak this evening, and I have a list. Registered to speak to Bill 17, The Cooperatives Amendment Act, is Vera Goussaert–I hope I pronounced the name correctly–Danny Gendron and Russ Rothney. We have a complete list of names before committee members.

Do you wish to have the rest of the names read out on the list or will the list suffice for this committee? An Honourable Member: Suffice. Mr. Chairperson: Suffice, and for any members of the public who may be here with us this evening whose names may not be on the list, please see the Clerk at the front of the hall here, and we'll add your name to the list of presenters this evening. Before we proceed with presentations, we do have a number of other items and points of information to consider.

Also, for the informatio n of presenters, while written versions of presentations are not required, if you are going to accompa ny your presentation with written materials, we ask that you provide 20 copies. And if you need assistance with photocopying, please see one of our staff in the room here with us this evening. As well, I would like to inform presenters that in accordance with our rules of this committee, a time limit of 10 minutes has been allotted for presentations with another five minutes allowed for questions from the various committee members with us here this evening.

Also in accordance with our rules, if a presenter is not in attendance when their name is called, they will be dropped to the bottom of the list. If the presenter is not in attendance when their name is called the second name, their name will be struck from the list. Written submissions from the following persons have been received and distributed to committee members, and I believe you have copies in front of you. The first one is Bernard Lord, the Canadian Wireless Telecommunications Association, on Bill 35; Vanessa Brazil, WIND Mobile, on Bill 35; Derek Hay on Bill 35; and Kenneth G.

Engelhart, Rogers Communication, on Bill 35. Does the committee agree to have these documents appear in the Hansard transcript of these proceedings? [Agreed] On the topic of determining the order of public presentations, I will note that we do have out-of-town presenters here with us this evening and they're marked by an asterisk on your list of presenters, and I refer committee members to those names. * (18:10) With this considerations in mind, in what order does the committee wish to proceed to hear presentations? Mr. Rick Borotsik (Brandon West): Yes, Mr. Chairperson, I think it would be agreeable to the

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 33 committee that we hear the out-of-town presenters first. Mr. Chairperson: It's been recommended to committee that we hear out-of-town presenters first. Is that agreed? [Agreed] Thank you. Prior to proceeding with public presentations, I would like to advise members of the public regarding the process for speaking in this committee this evening.

The proceeds of our meeting are recorded in order to provide a verbatim transcript and each time someone wishes to speak to the microphone here at the podium, whether it be a member of the public or a member of this committee, I first, as Chairperson, have to recognize the individual by name, and that's a signal for the good folks sitting behind me, for our Hansard recorder to turn the microphones on and off. Thank you for your patience, and we will now proceed with public presentations. Bill 39–The Grieving Families Protection Act (Various Acts Amended) Mr.

Chairperson: I will first call Joe Coffey, the Canadian College of Funeral Service, on Bill 39, The Grieving Families Protection Act (Various Acts Amended). Joe Coffey? Seeing that Joe Coffey is not here, his name will be dropped to the bottom of the list. Second person out of town on Bill 39 is Gary Carmichael. Is Gary Carmichael here with us this evening–Arbor Memorial Services? Gary Carmichael's name will be dropped to the bottom of the list. Bill 43–The Real Property Amendment Act Mr.

Chairperson: Next out-of-town presenter is, I believe, on Bill 43, Wendy Rinella, the Title Insurance Industry Associa tion of Canada, Bill 43, The Real Property Amendment Act. Good evening, welcome. Do you have a written presentation for committee members? Ms. Wendy Rinella (Title Insurance Industry Association of Canada): And joining me as well, Steven and I have decided that we'll do our presentation jointly, seeing you're quite busy this evening. Mr. Chairperson: Could you introduce yourself, please, sir. Mr. Steven Offer (Title Insurance Industry Association of Canada): Yes, Mr.

Clerk, my name is Steven Offer, senior vice-president, FNF Canada, and I'm marked as the second presenter under Bill 43, and Ms. Rinella and myself have agreed to present together. Mr. Chairperson: It is agreed by committee that we have a joint presentation from the two? [Agreed] Just give us a moment while we distribute the presentations. Please proceed when you're ready, Ms. Rinella. Ms. Rinella: Mr. Chair, the Title Insurance Industry Association of Canada represents the federally regulated title insurers in Canada. We're an industry of about $200 million in premium annually.

We have $7 million in premiums in the province of Manitoba as of last year. We grow every year. We represent about 25 per cent of all documents that are registered on the Land Title Office are title insured. And we had the opportunity to review The Real Property Amendment Act with members of both sides of the House, including Mr. Pedersen as well as Mr. Mackintosh–or Minister Mackintosh, as well as members of the bureaucracy, and as we've been advised, they were amenable to some of the changes that we recommended and are working on legislative amendments to that effect.

So we're really delighted to be able to say thank you and we're very supportive of the changes that are coming forward. Mr. Offer: Well, thank you very much, Mr. Clerk, minister and members of the committee. As I indicated, my name is Steven Offer and I'm senior vice-president of FNF Canada, an associated title insurance company, Chicago Title Insurance Company of Canada. As a member of the TIIAC, Ms. Rinella and myself have decided to make a joint presentation and, as she has indicated, we reviewed Bill 43. We did have a concern and meeting with the minister, his officials.

We're very pleased to indicate that it–we are satisfied and confident that the matter which we brought forward to the minister is going to be addressed, and we look forward to working with the government. And we would like to take this moment to thank the mini ster and congratulate the government on the direction, the principle and the

34 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 objectives of Bill 43, for which we now are fully supportive of. Thank you. Mr. Chairperson: Thank you to both of you. Please hold on a moment just in case there's questions from committee members. Thank you for your presentation. Are there questions of the presenters this evening? Mr.

Blaine Pedersen (Carman): I j u s t w a n t t o thank Wendy and the other two gentlemen who didn't remain, unnamed, at the back of the room there right now for their information that they brought forward, and we look forward to seeing the amendment or whatever it is that the minister is presenting. I think we're al l in agreement that it strengthens the bill. Hon. Gord Mackintosh (Minister of Family Services and Consumer Affairs): Well, thanks for coming out here and sharing your insights today.

It was really valuable to us, and I know the staff are working, I think, as we speak, on just ensuring that there's some flexibility with the necessary checks and balances, of course, that the infrastructure does provide. And I just want to recognize as well, Mr. Offer is a former member of the Ontario Legislature and had a very distinguished career there, and welcome to ours. Mr. Rick Borotsik (Brandon West): Yes, two things. Thank you for being here. First of all, it's nice to know that there's life after politics, so, Mr. Offer, you do give me some hope. Thank you so very much. Mr.

Minister, is it expected that you will bring the amendment to committee when we do clause by clause on the bill? Mr. Mackintosh: Yes, there's an expectation, I think, that something will come later this evening, and if there are any tie-ups or anything, it certainly will be no later than report stage but our expectation is tonight. Mr. Chairperson: Thank you, both of you, for your presentation this evening. Thanks for coming out. Are there any other out-of-town presenters that may wish to make a presentation here this evening on any of the bills before this committee?

Seeing none, then we'll proceed with the folks that are from in town. Bill 17–The Cooperatives Amendment Act Mr. Chairperson: From the Manitoba Cooperative Association, Vera Goussaert. I hope I pronounced your name, and if I messed it up, please correct me. My French is poor. Ms. Vera Goussaert (M anitoba Cooperative Association): It's Vera Goussaert, so very close. I'm impressed. So I'm Vera Goussaert with the Manitoba Cooperative Association.

We are an association of co-operatives in Manitoba, the representative body of co-ops in Manitoba, and I'm here today and very pleased to be here today to speak in favour and in support of Bill 17, the amendments to the Manitoba Cooperatives Act. We've been very pleased with the consultation that government has undertaken in making the amendments to the act. A broad base of the co-operative community has been consulted and their voices have been heard, and we're very pleased with the changes that have been made.

We feel that the amendments really do respect the co-operative identity and help us maintain our co-operative identity while allowing for new innovations in the co-operative model that we've been seeing in other parts of the world. So we're very pleased with that. And we're also pleased with some of the amendments that have been made regarding access to the member register and, in particular, the retail co-ops of Manitoba have–who were unable to be here today, have asked me to certainly speak in favour and in support of the changes that they have seen.

They are very pleased with the progress that has been made on this front, and we've been very pleased working, like I said, with government on this issue. So I want to thank the government and, in particular, Minister Mackintosh, for helping us move this forward, and, hopefully, we will see the changes to the act instituted shortly. So thank you. Questions? Mr. Chairperson: Thank you for your presentation. Are there any questions for the presenter? Mr. Blaine Pedersen (Carman): I j u s t w a n t t o thank you, Ms. Goussaert, for coming out.

I have talked to Barry Gosnell from Federated Co-ops, and he gave me a rundown on this bill back a month or so ago, so I am familiar with it, and it had the endorsement of Federated Co-op also. So thank you for coming out tonight.

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 35 * (18:20) Mr. Chairperson: Any other questions or comments from committee members? Thank you for your presentation this evening. Next presenter on Bill 17, The Cooperatives Amendment Act, is Danny Gendron, CDEM. Floor Comment: CDEM. Mr. Chairperson: CDEM? Floor Comment: CDEM. Mr. Chairperson: CDEM. Okay. Welcome, sir. Do you have a written presentation? Mr. Danny Gendron (CDEM): Yes, I do. Mr. Chairperson: We'll distribute for you. Please, proceed when you're ready, sir. Mr. Gendron: Okay. So my name is Danny Gendron.

I represent the CDEM, which is le Conseil de développement économique des municipalités bilingues du Manitoba. That's a mouthful in French, but in English it's the Economic Development Council of the Bilingual Municipalities of Manitoba. And it's in regards to Bill 17, and the fact that we agree with the bill and we would, obviously, would like it–to see it going forward. I won't take too much of your time. The only thing I wanted to do is to specify why we think, as developers, because my role–sorry–I didn't say what my role was. I'm a co-operative developer.

And pretty much the bill, what it would let us do is create a new model of co-ops which is multi-stakeholder co-ops. And if we base our–if we base, let's say, the new reality of being able to do this structure, if we base it on what Québec has done in–and–in–sorry–in 1997 to 2003, well, the first five years, when they instituted that into their–in their act, it created 255 multi-stakeholder co-operatives which, that by itself, would be for us a huge increase if we could even be close to that.

Another thing, too, is that what we realized in that research that they've done is that 84 per cent of those that were incorporated were still operational after five years, and the survival rate is at 65 or 67 per cent, which–it's higher than the average. And if so, if you look in the back, and the annex that I put, you could see that the multi-stakeholder, which in Québec they call Les coopératifs de solidarité, there–at the bottom there, there's 67.5, the survival rate, which is higher than the average in Québec.

And the reason why I took Québec as an example is that they're the third biggest concentration in co-ops in the world. And so, for us, if you really wanted to, you know, make it happen, then, to really look like, I guess, an international level of co-operative movement, it's good to compare ourselves to Québec. Another thing, too, before I finish, I guess, or two other things.

Most of the multi-stakeholder co-operatives are mostly concentrated in the 'thertiary' sector–sorry, that's my French coming out–tertiary sector, so the services sector of the economy and, actually, of–in that research, the first five years, 87 per cent of them were all concentrated in services. And so, for us, in–when we're thinking of rural Manitoba or even urban Manitoba, it'd be crucial to have more services, obviously, and the multi-stakeholder structure would definitely help our population to be more sustainable and being able to offer different services inst ead of relying.

So pretty much we would help the people get together and create co-ops and take their matters in their own hands, and this is a really good structure to do it. So that's about it. Mr. Chairperson: Thank you, Mr. Gendron, for your presentation this evening. Questions for the presenter from the committee members? Mr. Rick Borotsik (Brandon West): Just one. It's not my deal, but could you explain just what types of tertiary services–just give me a list of maybe four or five examples of the tertiary services. Mr. Gendron: There's, in Québec, they have, for example, rec centres.

They have daycares, youth hostels or hostels in general. They'll have health science centres, well, not centres, but health science co-ops. There's 55-pluses also organized in that way. So, yes, elder care and all that stuff. So, yes. Mr. Chairperson: Any further questions or comments for the presenter? Seeing none, thank you very much for your presentation, Mr. Gendron. Next presenter we have on Bill 17, The Cooperatives Amendment Act, is Russ Rothney, Neechi Foods Co-op Ltd. Good evening, sir. Do you have a written presentation?

36 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 Mr. Russ Rothney (Neechi Foods Co-op Ltd.): No, sorry. Mr. Chairperson: Please proceed when you're ready, then. Mr. Rothney: Okay. Yes. I am, in addition to being the treasurer of Neechi Foods Co-op, I'm also the project manager for a major expansion that's taking place on Main Street which will be known as Neechi Commons Community Business Complex and I also have represented the Canadian Worker Co-operative Federation on the board of the Manitoba Co-op Association for the past decade.

The possibility of this Bill 17 coming into legislation, being enacted, is very timely for us at Neechi Foods Co-op because of our expansion. We've been just a small store, a little corner store, for 21 years on Dufferin, and we'll be expanding our sales and space. Space-wise, we'll be growing up about 10 times and the sales will be going up about nine times, so–and the staff will be jumping from 12 to close to 70. So it's–now, the expansion we're doing is on a part of Main Street just north of the CPR tracks which has been quite rundown for many years, and so there's enormous community interest.

And, in that context, more than ever, we've been approached by peoples who are–people who are not currently eligible for membership because the current membership is restricted to the staff. So this is a classic example of why a multi-stakeholder–that is, more than one class of membership in a co-op–can be very, very useful. So the–when people ask that question, who are often consumers or just interested members of the general public, at this point we have to say, sorry, we don't have a category where you can join. So, as for the suppliers, again, in terms of–I mentioned the commitment.

It's a way of having higher standards. We also have a lot of smaller suppliers, including artisans who provide us with mukluks and moccasins and the like. Those people don't have group purchasing power at all, and they don't have access to group benefits in terms of health and sickness and so on. And so, by having a category that can allow artisans like that become part of the co-op, they can take adva ntage of these collective benefits. The same goes with suppliers.

We have many suppliers that are, particularly, from Aboriginal communities, like the co-op that supplies our wild rice, many Aboriginal fishers, and also non- Aboriginal businesses in Manitoba which we relate to. So to allow a class of suppliers as a third category of membership offers us stability and commitment that can be very advantageous to us.

In terms of the concept of the worker membership, why we went with that in the first place, in a–particularly in an area of the city where there's a lot of transiency, is that the workers, first of all, they have a knowledge of the business that goes beyond what the consumer has in terms of the actual running of the co-op, so the knowledge base is great. There's stability and there's a terrific incentive to productivity, because as owners of the business the staff all are–have an entrepreneurial outlook and–because they have stake in that business.

For the customers or consumers, which would be the second category of members, I've already mentioned that the–how the interest factor–of course, the obvious advantage is that it builds a commitment by the shoppers, but it also gives us a direct line, a bigger opening, to have input in terms of consumer interest in new products and services. It also brings in the possibility of significantly larger capital in the form of member shares which the workers, particularly in the area that we're talking about, cannot bring forth on their own.

And a final issue, which is in terms of the consumer category, is that although we are now a member of Federated Co-operatives, we are in a sort of a funny category that is not what they call retail. So we run a retail store, but because we are not a consumer-owned member co-op, we don't get the full range of services that the more typical consumer- owned co-ops get.

So we are quite optimistic that if we become–if we have a consumer category that we'll then have the full benefit of the membership in Federated Co-op. * (18:30) The only other thing I wanted to mention, sort of putting on my Worker Co-op Federation hat, is that the–one of the things that's in this–in the amendments is a cleaning up of the

section on worker co-ops, and basically what's happened is that the membership category is much–has become much simplified, and the worker co-ops are treated like other co-ops in the sense of being able to define their own businesses,

whereas before the wording had actually restricted the purpose of the business to being–to having workers as members,

whereas for worker co-ops, particularly in Winnipeg, there are

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 37 many other–products and services, of course, is their main reason for existence, and, secondly, a lot of them are very interested in environmental issues and that sort of thing, so it–that's–those changes are also very helpful. Mr. Chairperson: Thank you, Mr. Rothney, for your presentation. Questions for the presenter? Hon. Gord Mackintosh (Minister of Family Services and Consumer Affairs): Well, just for everyone in the room, there's only one place to get blueberries, and it's not in the bush.

It's at Neechi, because anyone–all of us that have been in the bush know I'll pay anything for your blueberries. I look forward to becoming a member when we can expand the nature of co-ops and look forward to being a regular. Along with Pollock's Co-op, we're very proud of co-op development in north Winnipeg now. But, congratulations, it's tremendous to watch the transformation of the old California fruit location there. So best wishes. Mr. Borotsik: Well, I can't let that go. Do you have Saskatoon berries? Because they're substantially better than blueberries. Mr. Rothney: We carry them when we can get them.

If you've got a particular supplier in mind, let us know. Mr. Borotsik: Thank you for being here. Thank you for your presentation. Mr. Chairperson: Any further co mments for the presenter? Seeing none, thank you very much, Mr. Rothney, for your presentation. Are there any additional members of the audience who wish to make a presentation on Bill 17, The Cooperatives Amendment Act? Any further presenters on Bill 17? Bill 35–The Consumer Protection Amendment Act (Cell Phone Contracts) Mr. Chairperson: Seeing none, we'll move on to the next bill, No. 35, The Consumer Protection Amendment Act (Cell Phone Contracts).

Kelvin Shepherd, president, MTS Business Unit, MTS Allstream. Good evening, sir. Do you have a written presentation? Mr. Kelvin Shepherd (MTS Allstream): Good evening. No. Mr. Chairperson: Then please proceed when you're ready. Mr. Shepherd: Thank you. Thank you, committee members, for the chance to appear today. My name is Kelvin Shepherd. I'm the president of MTS, the leading full-service communications provider in Manitoba. MTS is also the leading provider of cellular wireless services to Manitobans. Joining me here today is Teresa Griffin-Muir. Teresa is our vice-president for Regulatory Affairs.

We're here today because MTS believes it's important to give you our views on cellular services and contracts, since the changes, such as those you are now considering in Bill 35, will have implications for MTS customers, our employees here in Manitoba, our local business partners and, indeed, the future business success of MTS. So today I'd like to talk briefly about three things: first, our strong commitment to Manitoba in terms of investment, employment and business development; our strong commitment to serving customers; and, of course, our specific views on Bill 35.

Before I get to those points, however, I'd like to reinforce with you that delivering an excellent customer experience and having satisfied customers is very important to us. MTS is the home team here in Manitoba and Manitoba's our key market. We've worked hard to ensure our policies and our marketing programs are fair and customer friendly, all the while operating within a very competitive industry and marketplace.

For this very reason, MTS already operates in close alignment with the key provisions that Bill 35 calls for, and, by and large, MTS supports the objectives and the intended outcomes of th e measures included in Bill 35. I'd like to talk about our commitment to Manitoba. Our wireless and wire-line broadband networks reach 97 per cent and 85 per cent of Manitobans, respectively, and our next generation services, including our new 4G wireless network, benefit the majority of Manitobans across the province. Over the past 10 years, we've invested over $2 billion on our Manitoba networks and our supporting systems.

Our annual operations include, on average, $200 million per year paid to vendors in Manitoba. We've just launched our new 4G wireless network a couple of months ago at a cost of over $100 million, and today that network provides

38 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 high-speed wireless data access to 97 per cent of the population of Manitoba. MTS is a key part of Manitoba's vibrant economy. MTS is the only telecommunication service provider headquartered in Manitoba, and directly we employ over 3,000 people here, equating to over $200 million in annual employee salaries. We've also partnered wi th local small business, MTS dealers who own and operate our retail MTS Connect stores provide the face to the customer for MTS sales and service.

We estimate another 500 people are employed by our dealer partners, directly supporting MTS services, and a very large part of that business is directly tied to the sale of MTS wireless services and handsets. And our company and our employees are engaged in and committed to Manitoba communities where we live and work.

Whether it's a significant investment we make in local marketing programs, our sponsorship of the MTS Centre, our contributions to charitable organizations or the more than 50,000 volunteer hours that our employees and our retirees donate every year, we're absolutely committed to Manitoba and Manitobans. With respect to our views on Bill 35, there's no question that MTS supports efforts that will further enhance the customer experience.

In terms of doing the right things for our customers, in addition to subscribing to the Canadian Wireless Telecommunications Association code of conduct, MTS is constantly innovating and investing to deliver leading edge services, listening to our customers to meet their needs and anticipate their future needs and continually improving our business practices to make them more customer friendly.

Many of the items in the proposed Bill 35 legislation are already well-established MTS practices, such as we do provide customers with a clear and understandable description of the terms and conditions of their wireless plan, including the term of the contract, termina tion fees, the requirement they provide us with 30 days' notice of termination as well as items that may be subject to change. Primarily, these are optional features such as voice mail. Customers have the option to drop optional features should they determ ine they are not required or to help them manage their monthly bill.

When selling a wireless handset or plan to our customers, our dealers explain the wireless handset manufacturer's warranties as well as their dealer-specific warranties. As part of the sales process, an MTS dealer works with each customer to ensure that they are aware of current MTS market promotions and that they pick a wireless plan and handset that best suits thei r needs. We've taken steps in the past to make our contracts more customer friendly based on feedback we've received from our customers and will continue to do so.

We provide a minimum 30 days' notice to customers on price changes for optional features and price features on other services that are not included in the customer's base plan. On occasion, we do implement changes to elements of our service that we have defined as being optional features, such as web browsing, call display, voice mail and similar features. These changes are often required to improve or introduce new features, to keep pace with competitive and inflationary pressures or to reflect that the services are obtained from third parties who determine the underlying service features and pricing.

From a practical standpoint, it would not be reasonable for the hundreds of optional components and services, which are evolving and rapidly changing in a competitive marketplace, to be managed independently for each customer. As stated, we do provide notice to customers of changes made to optional features along with the ability for them to change their subscription to or use of the optional feature. We believe this is a fair practice and one that needs to be supported going forward. Our wireless services in Manitoba are an extremely important part of our business.

Our wireless business is the single largest line of business in Manitoba. In fact, it's bigger than local telephone service in terms of annual revenues. Wireless is still growing. It is profitable, but it takes a lot of investment in technology and service development to meet customer demands and to compete with larger national wireless carriers. MTS typically has to renew a customer's wireless service agreement every two to three years, basically when their contract expires or when they decide they want to obtain a new wireless device.

The wireless contract is an important part of the wireless business model, allowing customers to obtain a wireless device for little or no upfront investment in return for a commitment from them to obtain a minimum level of wireless services,

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 39 commonly called a wireless plan, from the service provider for the term of the contract. In 2010, MTS invested approximately $50 million in subsidizing the cost of wireless handsets obtained by customers who signed up for MTS wireless plans using a contract. MTS expects that subsidy could approach $60 million in 2011 as more customers sign up for sophisticated but more expensive smart phones.

For these reasons, it's very important that there by a proper balance in terms of the equation between the consumer and the service provider. * (18:40) Yes, absolutely, MTS supports fair and equitable treatment for consumers, but it should be recognized that this is a very competitive, fast-changing and dynamic business. Consumers have significant choice when choosing a service provider. Consumers can change service providers on a reasonably regular basis.

And service providers are making major investments in technology and in new services, and are significantly subsidizing the handsets that are acquired by their customers. Along with other members of the CWTA, we question whether this legislation is truly required. We do think the government has largely approached Bill 35 with the right balance as it's currently written and MTS will take the opportunity to consult on the specific regulations.

As I've indicated, the regulations must also carefully strike a fair balance between setting standards for carriers and not hindering carriers' ability to compete and to invest. We have two specific comments on the bill as it stands, pending, of course, any comments we might have on the regulations. These comments deal with, first, the cancellation notice and, secondly, termination fees for cancellation of service, and they are related. Regarding cancellation notice, in other industries it's customary to require the customer to give 30-days notice to their supplier. We think that's a fair addition to

section 196. It would be to require customers to give carriers such 30-days notice. The change would not be onerous for the customer because the bill already governs the amount a carrier can charge upon cancellation. It would merely reflect a standard notice period. Alternatively, customers–or pardon me, providers could be allowed to charge customers a reasonable termination fee for customer cancellation of service without the 30-day notice. We are pleased that the bill recognizes the carriers' need to recover the handset device cost associated with early termination of a contract.

We are, however, somewhat confused by what seems to be an inconsistency in the bill; the bill allows carriers to charge a reasonable termination fee for service in the case of fixed-term contracts only where there's no hardware subsidy provided. Where there is a hardware subsidy provided, only the pro-rated hardware subsidy amount can be recovered. There's no allowance for termination fee related to the service. In addition, a termination fee for service is not allowed in the case of indeterminate contracts.

In our experience, termination of either kind of contracts, whether a hardware subsidy is provided or not, does lead to real costs for the carrier and, therefore, we're asking the bill be changed to allow carriers to recoup a reasonable termination fee in those cases. Mr. Chairperson: Mr. Shepherd, sir, we're out of time. Mr. Shepherd: Okay. Thank you for the opportunity to speak with you. We're finished our comments. Mr. Chairperson: Questions from committee members to the presenter? Mr. Rick Borotsik (Brandon West): I wonder if I could. I don't know how much time Mr. Shepherd requires.

This is a fairly important point. I wonder if we could allow another five minutes to have him finish his presentation, if he so requires. Mr. Shepherd: Mr. Borotsik, essentially, I was concluding. And I was simply going to say that we look forward to working constructively with the government on the bill and on the regulations, and to move forward with a view to ensure that Manitobans continue to require–acquire world-class service. So that was the conclusion of my comments. Mr. Borotsik: Yes. Thank you, Mr. Shepherd. You talk about a reasonable termination fee. Reasonable is judgmental.

Can you give us some idea as to what maybe a reasonable termination fee may be, that you would consider reasonable? Mr. Shepherd: With respect to the termination fee that might be associated with a cancellation on 30 days, typically it would be the amount of the monthly plan fee, which could range from $25 to $35.

40 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 I believe the bill does provide for a provision of $50 in the case of a termination fee under some circumstances. So there's a range there that I would consider reasonable. Mr. Blaine Pedersen (Carman): Thank you, Mr. Shepherd. As I understand, as I look through this bill, in the regulations that are to be developed, they are supposed to come up with a cancellation fee formula. Do you have concerns about that? Or will you have any input or have you been told you'll have any input into how this fee is calculated? Mr.

Shepherd: Yes, we will have input or provide comment on the formula or the method for doing that. Today's–our current practice today is a flat fee with a maximum amount of $400. The way the bill is structured, we would have to change that. But we believe that there's reasonable ways to put in regulation a termination fee that's appropriate. Mr. Ron Schuler (Springfield): Yes, just on a slightly unrelated topic, we just wanted to know when you're going to start carrying Sun News. Mr. Shepherd: Well, on a serious note, we're in negotiations with the service provider of Sun News.

And providing we can reach reasonable terms and conditions, which is not necessarily a given when you're negotiating with them, we would plan to carry them in the fall time frame. Mr. Chairperson: Any further questions or comments for the presenters? Seeing none, thank you to both of you for coming out this evening and making a presentation. Next presenter I have on Bill 35, The Consumer Protection Amendment Act (Cell Phone Contracts), is Gloria Desorcy, the Consumers Association of Canada, Manitoba branch. Good evening. Welcome. Do you have a written presentation? Ms.

Gloria Desorcy (Consumers' Association of Canada, Manitoba Branch): I do. Mr. Chairperson: Just give us a few moments to circulate to committee members. Then I'll give you the signal to proceed. Please proceed, Ms. Desorcy. Ms. Desorcy: On behalf of the Manitoba branch of the Consumers' Association of Canada, CAC Manitoba, I would like to thank the committee for the opportunity to share some thoughts on Bill 35 this evening.

And I just want to begin by saying that our organization believes that this is an issue of considerable importance to consumers, and that is certainly self-evident with the recognizable number of individual consumers that participated in filling out a consultation document in the government consultation. But we also feel that that is reflected in the number of consumers that we speak to when we go out and do speaking engagements and that we hear from at our consumer info centre. So I just–with that preface, as you are no doubt aware, cellphones are being used more frequently by a wider variety of consumers.

No longer a luxury second phone, cellphones are the only phone used by many consumers, replacing their traditional land-line phone. Our contact with consumers suggest that cellphone use is growing amongst consumers from all walks of life in Manitoba, including newcomers, low-income consumers and youth. CAC Manitoba bases much of its work with consumers on eight consumer rights, which include the right to information, the right to choice and the right to redress.

Timely and accurate prepurchase information, a competitive marketplace and the resolution of disputes all help to keep consumers in balance with business, helping to maintain fairness in the marketplace. Through the programs an d services we offer, CAC Manitoba has between 10,000 and 11,000 contacts with consumers e ach year. Unfortunately, we hear all too often from consumers who are surprised by the size of their cellphone bill or by unexpected additional ch arges. Activation fees, roaming charges and long-distance data fees can make a significant difference in a consumer's total bill.

Consumers are more likely to make sound decisions and choose options they can really afford if they are clearly informed about minimum monthly fees, optional service costs ahead of time and also about the tools available to them to minimize some of those costs. Also, prepurchase or contract information is only useful to a consumer if they can read and understand it, so it becomes very important to use plain language and reasonably sized font. While this is essential for consumers with literacy, language or vision issues, all consumers and providers benefit from a clear,

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 41 readily readable and easily visible explanation of the terms and conditions of their contract. In a competitive marketplace, consumers may have numerous reasons for early cancellation of a contract. CAC Manitoba believes that the rules and consequences of this consumer decision should not be prohibitive. In the same way, our organization believes that our choices as consumers should not be limited by automatic renewal of our contracts without our consent. CAC Manitoba has long opposed the use of negative option for both marketing and contract renewals.

In a perfect world, all transactions between consumers and business would be profitable and satisfying to both parties. In the real world, however, that is not always the case. A written contract can be a tool that provides assurance for both consumer and provider that certain rules will be followed and obligations met by both parties. * (18:50) CAC Manitoba believes that Bill 35 is a positive step towards better protection for consumers signing cellphone contracts and to wards a more fair and equitable marketplace in this province. We urge the Legislative Assembly of Manitoba to pass Bill 35.

Thank you, again, for the opportunity to comment. Mr. Chairperson: Thank you, Ms. Desorcy, for your presentation here this evening. Minister Mackintosh, with questions? Hon.

Gord Mackintosh (Minister of Family Services and Consumer Affairs): Well, just while I have a public forum, I want to thank you for your insights and your powerful determination representing consumers, sometimes, and not rarely, with the government in your sights, but we recognize, especially since the Let's Make a Better Deal strategy wa s launched, that you are a tremendous force and really represent your, you know, the people–the consumers of Manitoba very well.

But, on this particular bill, I thank you for your insights and sharing your thoughts with us, and we look forward to working with you on some other legislative projects that are on the table and lie ahead. Thank you very much, Gloria. Mr. Chairperson: Ms. Desorcy, do you wish to comment? Ms. Desorcy: Yes, thank you, that's all I wanted to say. Mr. Chairperson: Any further questions for the presenter? Seeing none, thank you very much, Ms. Desorcy, for your presentation here this evening.

Are there any other members of the audience here with us this evening that wish to make a presentation to Bill 35, The Consumer Protection Amendment Act (Cell Phone Contracts)? Seeing none, we'll move on with the next bill before us this evening. Bill 39–The Grieving Families Protection Act (Various Acts Amended) (Continued) Mr. Chairperson: Bill 39, and we'll have–this is The Grieving Families Protection Act (Various Acts Amended), and we had previously called Joe Coffey, the Canadian College of Funeral Service. Calling Mr. Coffey for a second time. Mr.

Coffey does not appear to be with us, so his name will be struck from the list. Second call for Gary Carmichael, Arbor Memorial Services. Mr. Carmichael. Seeing that Mr. Carmichael is not with us, his name will also be struck from the list. Are there any additional members of the audience who wish to make a presentation to Bill 39, The Grieving Families Protection Act (Various Acts Amended)? Seeing none, we'll move on to the next bill. Bill 40–The Condominium Act and Amendments Respecting Condominium Conversions (Various Acts Amended) Mr.

Chairperson: We have from the Winnipeg Realtors, Mel Boisvert and Peter Squire. Good evening, gentlemen. Welcome. Do you have a written presentation? Floor Comment: We do, Mr. Chairman, and we haven't got copies for everyone, but we have a copy which you can take copies of. Mr. Chairperson: Okay, give us a few moments, then, please, and then I'll give you the signal to proceed. Floor Comment: Okay.

42 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 Floor Comment: Could we just proceed and get them? Mr. Chairperson: Are you okay with that? Floor Comment: Yes. Mr. Chairperson: Is it the will of the committee to allow the presentation to proceed, and then we'll distribute the written presentations? [Agreed] Okay, please proceed, sir, and introduce yourself first. Mr. Mel Boisvert (Winnipeg Realtors): Thank you. My name is Mel Boisvert and I'm a realtor and a real estate broker in the city of Winnipeg, and I also serve as vice-chair of the Winnipeg realtors Civic and Legislative Committee.

And with me tonight is Peter Squire, and Peter is our director of public affairs and the association's MLS market analyst, so he's here, as well, if there is any questions. And I want to preface our presentation with some insight for you as to why that we are going to ask the questions that we are. I have headed up a important Winnipeg realtors' subcommittee that is determined and resolute in working towards solutions to our current rental housing shortage in the province.

While our purview and sphere of interest as a 108-year-old industry in the province of Manitoba and surrounding municipalities, we are well aware the acute lack of good rental accommodations, and it's a province-wide issue. Moreover, we know other provinces and municipalities are grappling with this same problem. You would be interested to know that we were recently in Ottawa to discuss federal issues with our counterparts across the country, and rental housing was acknowledged as an issue across the country.

And we were able to share our working differences with other provinces, as well, and their experiences and meeting their challenges. We all agreed to work more closely in working together to find a solution.

We know that BC has been quite active in other groups in Saskatchewan, and, in fact, the former real estate board executive officer, Bill Madder, who runs the Association of Saskatchewan Realtors, is currently working on the possibility of bringing the four western provinces together to discuss ways to increase the number of available rental units to address concerns relating to the low vacancy rate and overcrowding and poor living conditions and the lack of housing affordability.

Some questions we need to ask are: what are the deterrents to develop more rental units; what policies and programs are working; what aren't working; what new programs and or actions should be considered; and where are there other opportunities where the four provinces can work together? I believe our province has a lot to offer in that undertaking. We also believe we have had some success with this initiative as it spread across the entire country and it caught the attention of the federal government.

We know that the senior level of government has the unique ability to make changes through its own legislation powers and program delivery mechanisms to spur on more rental units. Earlier this year, our association presented your government a discussion paper highlighting challenges and potential solutions to Manitoba's growing rental shortage. Mr. Squire is holding up a copy of this paper, which is available online for you, and anyone who wishes copies, we will make available to you.

Besides our own MLS market data, Manitoba Bureau of Statistics and CMHC's, we were very careful to use outside relevant research material to end up with what we believe to be a balanced discussion paper. The paper took a year to research and was done with the sole purpose of focusing on solutions to a growing problem affecting the growing segment of Manitobans. We suggest, to advance this effort, that the private and public sector, along with other affected rental housing groups, sit at the table to discuss solutions so that we can adopt policies to better reflect Manitoba's growing rental needs.

Your government has embraced the idea in principle, thanks to the leadership of Housing and Community Development Minister, Kerri Irvin-Ross. We are hopeful a good working group will be brought together soon to come up with a strong term of reference and to set up a–parameters to which the group can look forward to working with to develop solutions from. As I mentioned, our paper is available to any of you or any of your MLAs who wish to have a copy, and it's available online at winnipegrealtors.ca. You may ask why we did such a long

preamble, when we are here today to simply discuss the proposed changes to The Condominium Act and its amendments respecting condominium conversions. It is primarily to do with how the proposed changes respecting condominium conversions can and may

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 43 have an impact on the rental housing issues and the provision of affordable home ownership. First, let me state that I fully understand and appreciate the need to do a major revision of the condo act, since it has not been done for several years. As realtors representing condo buyers, we agree that there can and should be better disclosure requirements, including provisions of a reserve fund study. If it can be avoided, no one wants a big surprise with a large special assessment after they have bought their dream condo. Now, for our concerns.

Do we really believe that we have struck a balance between giving greater protection to consumers and ensuring investors will be encouraged to engage in new construction and upgrade existing housing stock? Where there is evidence of the latter happening, I am not–and we are not in total disagreement with putting more safeguards in place when it comes to doing conversions.

That is not the case. * (19:00) Our discussion paper, as well, speaks to condo conversions, and our research suggests that because of the rental margins that have decreased significantly during the last decade as legislative increases in rent have been consistently lower than the cost-of-living index and expenses keep rising, it then becomes of no surprise that the building investors will turn to conversions as a way to regain those lost margins.

If you have to lock them into a point where converting an older apartment to a condo is not an option, what guarantee do we have of ensuring rental units will remain intact indefinitely? Is this really a long-term solution? Just let me touch on the other side of the coin briefly, that is the fact that condo conversions are offering renters the opportunity to get into affordable home ownership as well. That's a point that we want to make. Let me read you an excerpt from our discussion paper: It is unrealistic to expect that a tight rental market situation can be solved at the expense of home ownership.

In many instances they offset each other, as someone moving into home ownership frees up a rental unit. Further to this point, in other jurisdictions it is common for the individual investors to buy up several condo units and put them up for rental, which helps mitigate some of the rental stock loss. Finally, with respect to home ownership, if we do not think Winnipeg's 0.8, and probably 0.5 vacancy rate, the lowest in the country, is not having an impact on resale housing, we need to think again.

The seventh annual demographic International Housing Affordability Survey released in January of this year shows Winnipeg's ranking, for the first time, dropped from affordable to moderately unaffordable. Two more final points on the condo conversion legislation. What is the rationale for the number 4 in terms of years you have to wait to convert a condo after a whole-building rehabilitation? I know many hockey people, especially Canucks fans, are asking the same question: Why four games in the suspension of the Vancouver Canucks defenseman, Aaron Rome?

Finally, with respect to the proposed changes regarding a tenant-occupied condo in that prior to the owner being able to sell the condo on the open market, he or she must first offer the unit to the tenant and the tenant would have 30 days to exercise this option, this can unduly restrict the rights of the seller to be able to attempt to achieve the highest and best value in the marketplace. The protocol and process in how this right of first refusal is conducted needs to be spelled out more clearly.

In conclusion, we are cognizant of your interest and desire to protect consumers in Bill 40, but there must be recognition of the need to respect all interested parties involved, as government can only go so far with legislation and requirements. There is definitely much more work to be done in addressing our rental shortage. Hopefully, it can happen in a collaborative way with key rental housing stakeholders, so a made-in-Manitoba solution will be the final outcome. All three levels of government have a role to play.

However, the Province should take the lead as the primary level of government responsibility for housing for the citizens of Manitoba. Thank you. That is our presentation. Mr. Chairperson: Thank you for your presentation. Questions from committee members? Mr. Blaine Pedersen (Carman): I just wondered– two questions. First of all, did your organization, Winnipeg Realtors Association, did you have input or consultation into developing this rather large bill?

44 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 Mr. Peter Squire (Winnipeg Realtors): I'm aware our provincial association had some input on the main condo act, but I think in terms of the other piece, the amendments on the condo conversions, I'm not aware of any of our direct members being involved in that piece. And that's really what our focus was today. Like I said, I think we have had some consultation on the major condo act, and we certainly, like we said, agree that it needed to be revamped and updated, given all the time that had lapsed before it had had any major changes to it. Mr.

Pedersen: And so, in your opinion, because you are real estate experts, does this bill address the rental shortage issues that we have, not only in Winnipeg but in–across Manitoba? Mr. Squire: Yes, no, I–like I said, it's just a part–I think what we're trying to say today is that we need to have a much more comprehensive, holistic approach at how we're going to deal with a long-term problem that is becoming worse. And I'm seeing it directly almost every day–well, I do the MLS stat s, that's where–I think that's partly what motivated us to bring–to work on this discussion paper.

And certainly I do discuss with my colleagues across the country and I've seen different options. So that's one of the areas. And then, obviously, at the local level being fa irly active at encouraging the City to adopt the–or to go forth with the new complete direction strategy as part of Our Winnipeg, because we need to identify areas that we could see more multi-family development. And I just think that we have to be really careful that we still need to have the private sector investors. You know, we need a scale up in rental construction.

And I certainly have understanding, and I've heard stories about how some renters, and I certainly have sympathy for some of them, how we have to respect their rights and treat them fairly. And I think there are protections in place. We just have to watch that balance; that's what we're concerned about. Mr. Chairperson: Any further comments or questions? Hon.

Jon Gerrard (River Heights): Thank you for your presentation, and given the fact that you have put a lot of thought into what might be answers in terms of the low vacancy rate and the need for more rental units, maybe I can give you opportunity to expand just a little bit on that. Mr. Squire: Without taking too much of your time, because I know you got a lot of people waiting to present on their bills, our discussion paper really, actually 15 and 16, we do have some–it's a discussion paper, but we do put forward some solutions and certainly it is a three-level government.

It's not one government, though I think the Province really has the lead role. We've said possibly soft er rent controls, not removing them, but ways to look at the system and rules to see how we can make it more palatable for landlords and renters and working together, and I think there are some attempts that way. But one concern we pointed out in our paper was that secondary market, given the lack of new construction, the secondary market, what I mean by secondary market are those smaller lot landlords that are certainly helping provide badly needed rental accommodations in cities like Winnipeg.

We can't discourage them to the point that they're just going to sell off their properties back to home ownership. We need to keep rental–I'm certainly hearing that in neighbourhoods I've been involved in, like the West End. The TIFs, which, again, the government's doing a lot on that area–the tax incremental financing. That's starting to happen downtown, but I think it needs to go beyond the downtown where, again, where I drive by sites, and I say, there's an ideal multi-family. What does it take to get that built?

Because we're all for growth and seeing the excitement that's happening in Winnipeg, in our province but, obviously, we have to have that concomitant with that growth. We need to have a housing plan that would help, you know, facilitate that growth. Mr. Chairperson: Further comments? Questions? Seeing none. Thank you, gentlemen, for your presentation this evening. Thanks for coming in. Next presenter we have listed is John Petrinka, private citizen. Good evening, Mr. Petrinka. Do you have a written presentation, sir? Mr. John Petrinka (P rivate Citizen): I think the clerk handed it out. Mr. Chairperson: Okay.

Just give us a moment. We'll distribute to committee members.

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 45 Please proceed when you're ready, sir. Mr. Petrinka: I'm sorry. Mr. Chairperson: Please proceed when you're ready, Mr. Petrinka. * (19:10) Mr. Petrinka: Okay. My name is John Petrinka. I've been a real estate broker since 1978. I've been a property assessment consultant since 1992. I was on the board of revision from '87 to '92 as chair of all vacant land appeals.

I spent my life working for–as an activist, a lobbyist, an administrative terrorist, working for groups across Manitoba, and this Bill 40 is one that I am personally involved in with the block that I live in. We have had a situation where we had a good owner for 16 years. He was an owner that practised the philosophy of providing housing at a reasonable price. The one that has just bought five years ago doesn't participate in an inclusive philosophy towards the management and operation of her property. In fact, it's one of four properties. The bill that we have before us today is important for two reasons.

One, it–you have before you a capital cost allowance that has been improved by the minister, and I give him credit for that. It's a nice incremental change. It'll help us a bit. But the last move that she made was the replacement of a boiler, and a boiler is a component of the building that it is being put into. The recapture on the installation cost, the capital cost allowance, is limited by the Canada Revenue Agency Act, whereby it states that a CCA cannot be used to adjust a rent increase or influence a rent increase.

It is to be amortized over the period and length of and at the rate of the building that it is put it into. In this particular case, it's a brick building. The amortization rate is 4 per cent a year, and it shall be, whatever you want to call it, recaptured on that basis. So I'm here to suggest to you that

part 1 of this presentation, which deals with that particular issue, be resolved by rescinding and complying with the Canadian revenue agency, the Income Tax Act, by adjusting– by removal of the CCA that you have included in your act, Mr. Minister. The second part, I believe, is equally important because it addresses something that has been happening.

And it's almost a joke on the street amongst property owners that I have talked to, that, regardless of what increase level you're looking for, when you go to the intake side of the tenancy branch, whatever it is that you're seeking in terms of an increase, what you do is you run up the costs, real or otherwise, to be adjusted to a point where the department figures it has done its job in a Solomonesque way by cutting the whatever increase in half.

I've included a page here which addresses that, at 2(c), which shows the difference between the suggested asking percentage of increase and the actual adjusted increase, okay? And I showed the sister block across the street using the guidelines as indexed, what the amount would be after the five-year period, which would be $533.65 versus what she's skylighted the rent to on her building at $707, okay? There's quite a difference there. That's close to $200 a month. She has provided absolutely no exterior or interior improvements other than carpeting in the hallways th is year.

That's the first improvement in five years. I have included on the same page a friend of mine who used to work for the income tax department, who himself is a 50-suite owner. So he has a certain amount of expertise in this field. And he writes at 2(

b) the review of the materials that I provided to him. This is another sore point with me. You can go and copy the material that the landlord offers, okay, in support of the increase, but you can't xerox this stuff. I'm there for three and a half days with a wicked right hand that's ready to fall off, and you can't copy the material. Tell me what the difference is, Mr. Minister. They cite privacy, The Privacy Act. I can't see the difference if you can copy versus–like, hand copy versus a xerox copy. That might be something you might want to look at. The big issue here in the second

part is unsubstantiated expenses. It's a joke. Take a look at–where is it? Is it 2b? Th e page before the review by that CRA retired guy. You talk about global reporting? How is a rent increase supposed to be established from that kind of reporting? And it's almost like a fait accompli that if you go–like, I have a very inquisitive mind. I was brought up to research what ever I did in real estate. I'm in commercial real estate. You can't avoid making mistakes without doing research. I always did that.

And here, again, I went to a couple of–whatever you want to call it–tenants to let them know there was nothing to review, based on this. It's a ready-made man trap, okay? As soon as you do that, she's all of a sudden citing

section 73, 74 and 75, that you're interfering with the management of her block.

46 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 And before you know it, she's got orders for possession. And I was really looking forward to this, because this was a stressful–and I thank you very kindly for improving the length, okay–because I was under the gun for–like, between the crap that we were taking from this House here on the Dauphin exemption and then this, okay, with me being threatened to be removed after living in this place for 27 years. After me and the little lady parted company in '82, I've been there since then. This is my home.

And she's telling me that I am threatening her, which finally was settled at the time of the order of possession when another 84-year-old guy came forward and read her the riot act: Lady, what's wrong with you? Used to be a nice place to live, now like a pack of dogs, okay? We haven't seen her since November of '85 when she bought the building. And yet I was ostensibly always in her face, running the block for her, intercepting her in the hallways, running her down, running her staff down. Well, anyhow, that got straightened out. I was hoping we'd go to Queen's Bench on that one, to be quite honest with you.

Anyhow, I'm here for one very simple discussion paper that I put together he re in

part 3. What I am suggesting is something like the Americans have, checks and balances, okay? When you have a situation where you have constantly been chasing politicians and/or administrators and there's a refusal to stop and listen, okay, then, I think that the Ombudsman–this is clearly past the Ombudsman stage. They will not deal with anything that's remotely political. There needs to be a vehicle where somebody who has spent his life working on projects like the one that I use here in

part 3–because I'm familiar with the material–there has to be something here that allows a person access to the system. Now, when you've got assessors that are continually blocking–and, in fact, I can't believe how the assessors at both levels, both the civic and the provincial, get away with the crap that they get away with. They can change the law without going through the House, and to my understanding, there can be no law changes without going through the House. Is that not right, Mrs. Mitchelson? Anyhow, the point here is this, is that that is happening.

And the last one that happened was the last one that I dealt with a year and a half ago, the leasehold title. One minute. And basically, up until then, because of the people that I was representing–I've been representing all of the veterans' associations in Manitoba, 86.5 per cent of them, okay, a number of cultural clubs, a number of curling clubs, et cetera, et cetera. And when you have a situation where these people, who–they want nothing to do with notoriety, so basically my approach was limited, okay? There was nothing I could do other than now.

It's all over and now I can maybe do a few things that I was hoping that I could have done a few years ago, being as how there's an election year coming up. * (19:20) I just want to read you the last paragraph to get this into Hansard. It talks here about–in today's paper, it talks about the DePape girl that got the notoriety that she got by a wordless, gestureless effort by holding up a simple sign condemning Mr. Harper, the Prime Minister, and I–right in

part 3, the overleaf page, the bottom two paragraphs: So what can we do, these people who avoid notoriety? That's the veterans I'm talking about. Possibly we could talk to the people in charge, that is, to Mayor Murray, Premier Doer, Mayor Katz. Since Murray through Katz, 1998 to now, I have had not one private licence–I mean, private audience. The last private audience that I had with a minister was July 10th, 2000. For somebody who– Mr. Chairperson: Could you conclude your remarks, please, sir. We're two minutes past your time already. Mr.

Petrinka: Okay, maybe somebody will ask the question, and I can finish this off. But I represented close to 50,000 people. I've seen people who represent 12 people with some union get a one-hour meeting with the Premier in no time at all. I represented 50,000 people; not one meeting with the Premier or Mayor Katz or Mayor Murray. Mr. Chairperson: Thank you, Mr. Petrinka, for your presentation here this evening. Are there any questions or comments from committee members. Mrs. Mitchelson? No? Seeing none, thank you for your presentation here this evening, Mr. Petrinka. Mr. Petrinka: All you people can read?

I don't have to read those last two paragraphs for you? Mr. Chairperson: Yes, sir.

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 47 Mr. Petrinka: That's nice to know. It's comforting. Let me just say– Mr. Chairperson: Mr. Petrinka, your time has expired, sir. We have other presenters–a long list of names that I need to proceed with. Thank you for coming out this evening, sir. Are there any other presenters on Bill 40, The Condominium Act and Amendments Respecting Condominium Conversions (Various Acts Amended)? Seeing none, we'll proceed with the next bill. Bill 41–The Liquor Control Amendment Act Mr.

Chairperson: And the next–first name we have on our list is Lanny McInnes, Retail Council of Canada. Good evening, Mr. McInnes. Mr. Lanny McInnes (Ret ail Council of Canada): Good evening. Mr. Chairperson: Welcome. Do you have a written presentation, sir? Mr. McInnes: No, I don't. Mr. Chairperson: Please proceed when you're ready. Mr. McInnes: Thank you to the committee for the opportunity to speak to this important piece of legislation. My name is Lanny McInnes. I'm director of government relations and member services for Retail Council of Canada.

Retail Council of Canada has been the voice of retail in Canada since 1963. We speak for an industry that touches the daily lives of Canadians in every corner of the country by providing jobs, career opportunities and by investing in the communities that we serve. RCC is a not-for-profit, industry-funded association representing more than 45,000 storefronts of all retail formats across Canada, including department, specialty, grocery, discount and independent stores and online merchants. As you know, the retail sector is a vital contributor to Manitoba's economy.

Retail sales in Manitoba topped $15.7 billion in 2010, an increase of 5.6 per cent from the previous year. There are approximately 6,800 retail establishments in Manitoba directly employing over 73,000 Manitobans. This represents over 11 per cent of the province's total employment, making the retail industry Manitoba's seco nd largest employer. In addition, our industry is also a significant economic and employment driver for other sectors like transportation, construction, professional trades and professional services.

The contributions made by Manitoba's retail sector are felt in every corner of the province and affect the lives of all of our residents. As part of the government of Manitoba's new four-pillar strategy to promote new hospitality opportunities within the province, the government is making significant changes to Manitoba's Liquor Control Act. With the exciting new initiatives, such as the Canadian Museum for Human Rights, a new home for our Winnipeg Blue Bombers, and now the NHL returning to Winnipeg, Manitoba will increasingly become a destination for visitors.

Manitoba retailers support promoting greater hospitality opportunities for visitors and Manitobans alike. In fact, retailers have an important role to play in providing greater opportunities and convenience for customers in Manitoba. RCC, on behalf of our members operating in Manitoba, is pleased to provide context and feedback from Manitoba's retail sector on the proposed changes to Manitoba's Liquor Control Act contained in Bill 41.

Specifically, our attention will focus on the two clauses that will directly impact Manitoba retailers by allowing the Manitoba Liquor Control Commission to introduce new, boutique liquor stores into the Manitoba marketplace and to expand the items that they will be allowed to sell in their Liquor Marts across the province.

We must begin by stating that, given the nature of the dynamic and evolving retail landscape and a blurring of the lines between traditional grocery and general merchandise retailers, RCC, as the voice of this sector, is uniquely positioned to provide comment and context to both the Manitoba government and MLCC on this issue. These proposed changes will have a direct and, in some cases, significant impact on Manitoba retailers, and it would have undoubtedly been helpful for consultation to have happened with the industry prior to the introduction of Bill 41.

As such, we feel that MLCC and the minister responsible should work closely with the industry on the specific areas that will impact retail businesses before implementing this bill. RCC is happy to work closely with both MLCC and the government throughout that process.

48 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 Bill 41 will allow the MLCC to establish, maintain and operate boutique liquor stores within grocery store premises or at other locations that the commission considers appropriate. Boutique liquor stores will sell a limited selection of liquor in accordance with this act. When announcing these changes, the minister responsible for MLCC indicated that the commission would be launching a pilot project that would introduce up to five locations to be situated within urban grocery stores.

While RCC has been assured that the process and selection criteria for implementing this pilot project has not yet been determined, we must stress the need for an open and transparent process, based on fair and balanced criteria. To do otherwise would see MLCC begin to pick winners and losers within Manitoba's highly competitive retail environment, creating an unfair competitive advantage for some retailers, while excluding others.

While we also recognize that MLCC has identified the synergy between selling food and drink and the added convenience that this pilot project may create for consumers, the selection criteria used by MLCC must recognize the dynamic nature of the retail sector. Neither the current Liquor Control Act nor Bill 41 provides clarity or a definition of what would be classified as a grocery store.

It is our strong recommendation that any definition of grocery store used by the MLCC reflects the realities of the Manitoba marketplace and recognizes that a wide variety of retailers, both in terms of size and format, sell groceries. Therefore, our members would strongly oppose criteria that are overly prescriptive or that fail to recognize the variety of different retail formats selling groceries.

RCC would be happy to continue to work closely with MLCC and provide the sector's input on developing an open and transparent process, based on fair and balanced criteria that will benefit MLCC, Manitoba retailers and Manitoba consumers.

Bill 41 will also allow MLCC Liquor Marts across the province to sell products such as liquor- related products such as stoppers; openers and glassware; books; magazines dealing with liquor; and gift bags and boxes for products sold at the store; alcoholic beverages containing 1 per cent or less alcohol by volume, such as low-alcohol beer; wine coolers and premixed cocktails; beer; wine and premixed cocktails that do not contain alcohol; tickets; souvenirs and clothing for community-based events; and items that promote the responsible consumption of liquor, such as gift cards and gift certificates for taxis.

This is a significant increase to the type of items MLCC will be allowed to sell in their Liquor Marts, and re presents entrance into a market that is traditionally the sole domain of retailers in Manitoba. While RCC and Manitoba retailers support the corporate social responsibility initiatives outlined in this section, such as taxi certificates and gift cards and supporting community -based events, some retailers do have legitimate concerns regarding MLCC expanding the lines of goods they'll be able to sell in Liquor Marts.

Specifically, there are co ncerns about the impact Liquor Marts selling glassware will have on some Manitoba retailers. Gift and tableware stores in Manitoba, which the vast majority are independently and locally owned and operated, will very likely be negatively impact by MLCC being allowed to sell these items in their stores.

Perhaps a practical approach to address these concerns and measure the impact that these changes may have on Manitoba retailers is for MLCC to implement a pilot project much like the boutique liquor store concept, in up to five urban Liquor Marts, to experiment with the introduction of liquor-re lated products and low non-alcohol beverages into MLCC's business model.

This way, MLCC will be able to gauge the impact that these changes are having on their own business model, as well as on impacted Manitoba retailers before making a final decision whether to move forward. * (19:30) In conclusion, Manitoba retailers support promoting greater hospitality opportunities for visitors to our province and Manitobans alike. Retailers have indicated this position to the government in the past by asking for the removal of restrictions regarding Su nday shopping, to ensure people visiting our province will have a full range of hospitality and retail opportunities seven days a week.

Bill 41 reflects a move to modernize Manitoba's hospitality opportunities, and we feel that our industry has an important role to play in achieving that goal. Manitoba retailers have identified the need for MLCC to take a fair and balanced approach in implementing the proposed changes that will impact Manitoba's highly competitive retail environment. By developing a clear and transparent process, based

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 49 on fair and balanced criteria, MLCC will be able to engage Manitoba retailers in a dialogue on how to best proceed with these changes for the benefit of Manitoba consumers and Manitoba retailers. And thank you very much for your consideration. Mr. Chairperson: Thank you very much for your presentation, Mr. McInnes. Questions or comments for the presenter? Mr. Rick Borotsik (Brandon West): Thank you for the presentation, Mr. McInnes. A couple of questions. You had talked about the fair opportunity of looking at these boutique stores.

I'm told that there would be a request for proposals. Would that suit the purposes of your retailers that you represent? Mr. McInnes: Mr. Chairperson, I think in allowing retailers that would be interested in this possibility to engage MLCC is certainly–approach that we would support. We want to ensure that retailers that are interested and that fit into the dynamic that MLCC is looking at, and that synergy between food and drink are able to engage MLCC in the dialogue, to see if this is a possibility, but we don't want that retailers from the outset are excluded, if they feel this is a fit for them. Mr.

Borotsik: Yes, as I understand it, it wouldn't exclude anyone at this point in time. It would mean, simply, a request for proposals, and at that time, your retailers, if they felt it was a fit and, certainly, it's groceries and liquor, so that shouldn't exclude any of your retail members. One of the things, though, Mr.

McInnes, and I have to admit, I've been talking about this particular opportunity in Manitoba right now, and it seems there's a bit of a misunderstanding out there in the public; most of the people I talked to seem to think that this is going to be an operation not unlike what you would find in the United States, for example, where you do have alcohol on the shelves in grocery stores. You would then be able to purchase it and go through the checkout counter.

Do you see this as being the same kind of operation here, albeit that the boutique liquor stores, in the legislation, does say that the commission may establish, maintain and operate boutique liquor stores. What's your understanding of that particular clause? Mr. McInnes: In discussion with MLCC staff and officials, it's my understanding that it's their plan to have their own boutiques where they're operating those boutique kiosks within a store premises.

So it would not be a–it would not be the case where a customer would be, you know, going down to the aisles of a retailer and simply put a bottle of wine in their cart and then go to the checkout. What this would be is essentially a store-within- a-store concept where they would go into a separate kiosk within that premises, make a separate purchase besides what they're buying on the food shelves. Mr. Borotsik: Yes, actually, Mr. McInnes, that's exactly what the intention is , but are you feeling that the public out there sees it in that fashion, or are they seeing it in a different fa shion?

Have you had any feedback at all from the public, or, for that matter, for your clientele or your members? Mr. McInnes: We have and, certainly, on a personal basis I've had, you know, feedback with people, with the understanding that the format that you've suggested, where you can just, you know, pick up a bottle of wine and go through the checkout, is what they thought was being announced. But I think, you know, the communication's been fairly clear by MLCC and by the government that that's not the case. Mr. Borotsik: Last question, Mr.

McInnes: What would your organization's best-case scenario be for the type of operation that's being proposed? What would you see as being a–the best type of operation for servicing the consumers in Manitoba? Mr. McInnes: Well, I think the consensus from our members on this is their preference would be that the kiosk would be operated by their staff.

They would go through training and certification, or whatever requirements that MLCC would need, in assurance that those staff are well trained, but their preference would be that their staff would be the ones, you know, at the–in the kiosk, not dissimilar to the operations that most Manitobans are used to when they go into a variety of grocery and mass-merchandised stores where there is different kiosks within, you know, those store locations. That would be the pref erence, but, certainly, the industry supports this move. Mr.

Chairperson: Any further comments or question from the committee members for the presenter? Seeing none, thank you very much, Mr. McInnes, for your presentation.

50 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 The next presenter I have on the list for Bill 41, The Liquor Control Amendment Act, is Scott Jocelyn, the Manitoba Restaurant and Food Services Association. Good evening, sir. Welcome. Do you have a written presentation? Mr. Scott Jocelyn (Manitoba Restaurant and Food Services Association): No, I do not. Mr. Chairperson: Then please proceed when you're ready. Mr. Jocelyn: I've got to get a water, though. Mr. Chairperson: Sure, that's fine. Mr. Jocelyn: Good evening, I'm Scott Jocelyn, executive director of the Manitoba Restaurant and Food Services Association.

I'm honoured to appear before the committee tonight and provide feedback from our membership on the items found in Bill 41. Before I review our thoughts, I would like to thank Minister Gord Mackintosh, special assistant to the minister, Pratik Modha, and Ken Hildahl, president and CEO of the Manitoba Liquor Control Commission for the meetings that were arranged as the bill was being formulated. These meetings allowed us to ask many questions, and we appreciated the opportunity to provide feedback.

From these discussions, it was evident that the government was going to try and drastically reduce some of the red tape issues that the operators encounter in running their establishments. We certainly appreciate their efforts and look forward to these changes. We would also like to applaud the government for their increasing concern on items involving social responsibility. Our industry has always embraced the opport unity to partner with the government on these issues, and we look forward to seeing what the future holds.

However, there are five issues addressed in 41 that are concerning for food service operators, and I'd just like to touch on those. The first area of concern, amendment 67.1(1) where licensees may allow patrons to bring in their own bottle of wine to a dining room. We are pleased that the government has given us their assurance that the industry participation on allowing customers to bring in their own wine will be on a voluntary basis and operators would have the ability to set their own service charges. Without these tw o concessions, the industry would have strongly opposed this amendment.

Even with these concessions, some of our operators are still concerned about the impact this may have to our industry. Two reasons for their concerns are–one, the loss of a revenue stream. Most restaurants operate on razor-thin margins, and are very protective of all their revenue streams. To combat rising costs, operators explore every revenue opportunity available to them. Every time an operator adjusts his pricing, he struggles with whether or not it will be accepted by his customers. A miscalculation can produce drastic results. The ability to sell wine to our customers is definitely a revenue opportunity.

There are some who think they can't afford to lose this option. We need restaurants to be profitable, and the fact there are fewer restaurants in the province than at any time over the last 10 years is definitely a concern. Second reason, who is responsible for overservice and what does it look like? Every time one of our employees serves someone a drink, we are responsible. I've worked for over 25 years in the food service industry selling alcohol. During that time, I refused or stopped service to hundreds of people. Sometimes it went well and other times, not so well.

I've often joked that I've heard every possible reason that someone should not be cut off and have dealt with every possible situation involving someone who had been served enough. I just can't imagine what it will look like if someone has purchased the wine from somewhere else and now I was telling them they couldn't drink it. We would hope that government and the MLCC would recognize the new challenges that would follow with this initiative. We recommend that the government take a proactive approach and remind customers that responsible drinking is everyone's responsibility.

We would look for the government to remind the general public that, whether it's purchased at a restaurant or brought in by the customer, the final word always goes to the operator. * (19:40) We are thankful to have trained professionals serving alcohol, and we realize they will have to be even more skilful in handling these situations in the future. We are very pleased that the government didn't follow the lead of some other provinces by allowing customers to bring wine into nonlicensed facilities. This, of course, is an issue that our association would never be in favour of.

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 51 The second issue of concern is 96.3, the emergency closure order; 96.3 deals with increased closure powers for police and liquor inspectors re: closing an establishment for up to a period of 12 hours. We have one major concern with respect to 96.3: Is there a need for this power? We wonder, is there a danger? Is it a danger to allow an inspector or constable this amount of power? Public safety is very important to our operators and, if we play a role, we are happy to do it.

We would ask the question: Is the current system not working and what are we going to benefit by increasing these powers? Have there been instances in the past where these–where not having these powers has hindered the re quired actions from the police and/or the MLCC inspectors? If these powers are deemed necessary, we would stress these powers should only be used in the most extreme circumstances and based on clearly defined criteria. We are confident that all involved would want to make sure anyone who decides to use this power can justify this decision to do so.

Our third issue of concern is clause 18 in the changes in 96(1)(a.2) and (b). This involves operators being responsible for their properties and the vicinity of their properties. We are very concerned about the vagueness of the term "vicinity" in reference to areas around our property. If we allow our employees to leave our buildings–properties, we are uncomfortable with what vicinity of property actually means. Currently our employees operate in a controlled environment. Many operators have spent a great deal of money ensuring that their property is safe for both their staff and customers.

Once your staff leaves our controlled environment, we are concerned about what risk we may be exposing them to. Many of our operators have expressed concern over this issue and we are hoping for some clarity on this definition and how it impacts their responsibility. The fourth issue of concern involves the brew pub licence. When our operators heard about their–this initiative, there was a lot of concern.

We are appreciative that when the wording of the bill was released that 78.1(2) makes reference to the fact that to obtain a brew pub licence a person must have one of the following classes of licence: dining room, cocktail lounge, beverage room or cabaret licence. Our operators don't want their concern of brew pubs to be mistaken for a fear of new competition. Competition is a reality that we face on a daily basis. Their concern involves making sure the requirements placed on the operator of a brew pub don't give them an unfair advantage over other classes of licences.

Some of our members have made significant investments to their properties based on their licence requirements set by the Liquor Commission. We've heard in other provinces where brew pubs are not held to the same requirements as other licence holders, and as a result an unfair advantage has been created. The fifth issue of concern, my last issue, 16(1.1), the boutique liquor stores. One of the realities for us is that our membership has grown where we have a lot of hotels that have restaurants that are also members–members of the Hotel Association that are also members of the Restaurant Association.

I realize that Jim Baker from the Manitoba Hotel Association is here tonight and he'll probably speak on the impact this initiative will have on his membership. I did want to express our concern of 16(1.1) and state how disappointed we were upon seeing that it was included as part of Bill 41. For hotels to be successful, they can't afford to place all their eggs in one basket. Most hotels need all facets of their properties contributing positively to their bottom line. This would include strong liquor and food service and, in many cases , off-sale.

We would hope the government would review the ramification 16(1.1) would have on the industry. Thank you for your time this evening. Mr. Chairperson: Thank you very much for your presentation, Mr. Jocelyn. Questions for the presenter? Mr. Borotsik: Yes, thank you, Mr. Jocelyn, for making the presentation on behalf of the Manitoba Restaurant and Food Services. The brew pubs, you say that you don't–would not like to see any disadvantage or any unfair advantages going to the brew pub, and you said in other jurisdictions this may well have happened.

Can you give me some–a better understanding as to what kind of unfair advantages they may have been giving–given in other jurisdictions? Mr. Jocelyn: I just think the investment in the game where–you know, the capital cost of coming in, the food requirement that an established operator would have to be operating under. We had heard of cases in other provinces where those rules were not the same, and though we would not be opposed to brew pubs, we would just be

52 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 concerned that they would come in and they would be–they would have an advantage. Mr. Borotsik: The other one that has a great amount of validity is the concerns that your operators have with respect to customer control to the vicinity of the property. In talking to your members, is there any kind of a definition of that control from vicinity that they've given you? I recognize that you give a protected environment inside the premise, but is there–have you had any discussion as to how far that vicinity could, in fact, be expanded? Mr.

Jocelyn: I'd think we'd like to make sure that the line was clear, that the responsibility was clear, that operators knew how far they would–how far they have to go to make sure they're responsible. I don't think anyone is–anyone wants to–the days of putting somebody out on the sidewalk and you're on your own, I think, are long gone. Thankfully, people realize that their customers are in their care and there is a responsibility to make sure–they do whatever they can to make sure they arrive safely. But we're just kind of concerned that when you start moving them off your property, where is vicinity?

You lose sight of them. You know, where is that line? And by losing that control, we're concerned about that. Mr. Chairperson: Any further ques tions, comments for the presenter? Seeing none, thank you very much for your presentation, Mr. Jocelyn. Mr. Jocelyn: Thank you very much. Mr. Chairperson: Next presenter on Bill 41, The Liquor Control Amendment Act, is Mo Razik, the Independent Specialty Wine Stores of Manitoba. Good evening, sir. Welcome. Do you have a written presentation? Mr. Mo Razik (Independent Specialty Wine Stores of Manitoba): Yes, I do. Mr.

Chairperson: Give us a moment to circulate to committee members, then I'll give you a signal. Mr. Razik: Sure. Mr. Chairperson: Please proceed when you're ready, Mr. Razik. Mr. Razik: Mr. Chair, committee members, my name is Mo Razik. I'm the chairman of the Independent Specialty Wine Stores of Manitoba. I'm focusing tonight on subsection 16(1.1) of Bill 41, which is to–a new subsection to be added after 16(1).

It reads: Boutique liquor stores The commission may establish, maintain and operate boutique liquor stores within the premises of grocery stores or at other locations that the commission considers appropriate. Boutique liquor stores sell a limited selection of liquor, in accordance with this Act. Under the current provisions of The Liquor Control Act, subsections 8(1), 10(1), 17.1(1) and 18(2), the MLCC is the supplier, competitor and regulator of the specialty wine stores.

If the MLCC does a good job in each of these roles and is successful, it must ultimately put the specialty wine stores out of business as it pursues its mandate as a competitor. The MLCC can employ its role as a supplier and regulator to maximize its competitive advantage in an unfair way to the specialty wine stores. Basically, it has resource–resources we don't have, plus it knows everything about our businesses. It knows our suppliers, it knows our brands. Our prices, our profit margins are controlled also by MLCC. And we are not alone. We're not the only ones who have been critical of this relationship.

Justice Glenn Joyal, in concluding his findings in a judicial procedure as recent as last year, said: The time has come to revisit the relationship between the private wine stores and the MLCC. This same sentiment was also expressed a year earlier by Mr. Justice Peter Morse, Madam Justice Ruth Krindle and Mr. Gavin Wood, who jointly stated: It is, we believe, time to reconsider this relationship. * (19:50) When judges send clear messages about this conflict of interest and dysfunctional relationship, it is clear that they are directing their messages to you, the lawmakers.

The proposed new subsection 16(1.1) aggravates MLCC's intrinsic conflict of interest. For example, for all indications in the recent press releases and comments of various officials, the intended initial pilot project would be for 10 boutique stores, of which seven would be located in the city of Winnipeg. This represents 26.92 per cent increase in

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 53 MLCC stores in Winnipeg, which amounts to an overnight increase of 26.92 per cent in MLCC's competitive advantage over the specialty wine stores. What are we proposing? A prudent modification to the proposed amendment would be to add a new proposed subsection, 16(1.2), which would state that for each boutique store established by MLCC, it will close an existing MLCC stor e.

Such a measure will not only protect our communities from MLCC's intrinsic conflict, but it will also lead to 26.92 per cent less social problems associated with alcohol than is the case with the government proposal. Of course, as lawmakers, you can always take the advice of the judges and fix this relationship by legislating MLCC right out of retail business. But I don't think that's what you want to do. If you're not going to do that, then at least legislate this. Thank you. Mr. Chairperson: Thank you, Mr. Razik, for your presentation. Questions for the presenter? Mr. Borotsik: Yes, thank you, Mr. Razik.

My first question is: Have you and your organization, the Independent Specialty Wine Stores of Manitoba, had an opportunity to sit down with MLCC and discuss their objective with respect to the boutique stores? Have you talked to MLCC? Mr. Razik: Yes, we have. Mr. Borotsik: And have you been given any kind of assurances that it's not meant to compete with the independent wine stores? Mr. Razik: Assurances compared to a law. I'm looking at a new law that says it doesn't even talk about the 10-store pilot project.

It says they can add boutique stores in grocery stores, which could be 200 of them, or any other place MLCC sees appropriate. There is no limit. And then even the limited selection of liquor in accordance to this act is not defined. What is a limited selection? So assurances–you know, once you have a law, under this law there can be a lot of powers that we can't as private operators sustain. Mr. Borotsik: Thank you. There are currently eight independent wine stores in the city of Winnipeg.

Would your organization look at the possibility of expanding those independent operations, having more independent operations not only in Winnipeg or other places in the province of Manitoba? Mr. Razik: Absolutely. That would be the right direction if, indeed, the specialty liquor stores that are introduced in Bill 41 are intended to serve the people of Manitoba. The right approach would have been to come to us to expand our operations, which we're prohibited from doing. Mr.

Borotsik: It's not necessarily just expand the existing eight that are there, but allowing other independent operators into the marketplace as well. Would your organization be okay with that? Mr. Razik: This is–this would–this is not up to us. It's a legislator's– Mr. Borotsik: I appreciate that. Not very much is up to you. It's all legislated what you can do. I'm asking, if your Independent Specialty Wine Stores of Manitoba would be receptive to having other independent wine stores, not within your own purview, but other operators, then, have other opportunities at developing private wine stores? Mr.

Razik: Sir, we're the beginning of free enterprises and we're all for free enterprises. We want it all to be free enterprises. Mr. Chairperson: Further comments, questions for the presenter? Seeing none, thank you very much, Mr. Razik, for your presentation this evening. Mr. Razik: Thank you. Mr. Chairperson: Next presenter I have on my list for Bill 41, The Liquor Control Amendment Act, is Dwayne Marling, the Canadian Restaurant and Food Services Association. Good evening, sir. Mr. Dwayne Marling (Canadian Restaurant and Food Services Association): Good evening. Mr. Chairperson: Welcome.

Do you have a written presentation? Mr. Marling: I do. Mr. Chairperson: Give us a moment to circulate and then I'll give you the signal to proceed. Please proceed when you're ready, Mr. Marling. Mr. Marling: Good evening. My name is Dwayne Marling. I am the Winnipeg-based Manitoba- Saskatchewan vice-president for the Canadian Restaurant and Food Services Association. We appreciate this opportunity to be able to formally provide our comments on behalf of Manitoba's licensed restaurant industry, along with our colleagues from the Manitoba food

54 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 and–Restaurant and Food Services Association, with regards to Bill 41, The Liquor Control Amendment Act. A little bit of context. Manitoba's restaurant industry contributes $1.7 billion in sales to the province's GDP and 41,000 jobs to its workforce. However, Manitoba's restaurant sales are not keeping pace with the rest of Canada. Adjusted for menu inflation, real commercial food service sales in Manitoba were flat in 2010, while the rest of Canada saw a 4.1 per cent increase.

The restaurant industry provides a wide range of full- and part-time job opportunities for the people of Manitoba and, in particular, supports important entry-level job opportunities for a wide variety of Canadians. Today's diverse hospitality sector is become increasingly complex, where restaurant and bar concepts have become more and more intertwined, combining food service, liquor service and entertainment all in one establishment. And it's becoming increasingly difficult to determine whether licensees are primarily engaged in the service of food or beverage alcohol.

CRFA supports a progressive, flexible equitable liquor-licensing system that responds to consumer needs. And Manitoba's restaurant industry believes that the present liquor-licensing system contains elements that could have been updated to allow licensees more flexibility to meet the needs of their consumers. And, while a number of the regulatory and policy changes announced at the same time as this legislation do address the industry's concerns, the story of this legislation is one of missed opportunities.

There are three primaries of concern for liquor-licensed restaurant operators in Manitoba, and they are: red tape, operational issues and the complex liquor-licensing process. As one of the largest sectors of the provincial economy with that $1.7 billion in sales, the restaurant industry includes a wide range of businesses: licensed, fu ll-service restaurants, quick-service operations, hotel food service, takeout, institutional feeders, et cetera. It is dominated by independent, locally owned companies, with a high proportion operated by families.

There are nearly 22,000–pardon me–2,200–two thousand, two hundred–commercial food service establishments, which can be found in virtually every community across the province. As I said, unfortunately, Manitoba's restaurant industry is underperforming compared to the rest of the country. There are 400 fewer food service establishments in Manitoba today than existed just 10 years ago, in 2001. Manitoba also has the lowest per capita food service sales in the countr y at $1,114, considerably less than the Canadian average of $1,434. Now, to the meat of the issues, red-tape reduction.

While much remains to be done in streamlining the red tape involved in the creation and operation of a licensed establishment here in Manitoba, much of those issues are regulatory and policy based. CRFA acknowledges the positive change that the proposed move to three-year licensing represents from a legislative front. * (20:00) Operationally, in princi ple, CRFA believes that all operators should be able to determine their own hours of operation within a set range.

All licensees, regardless of whether they are beverage rooms or restaurants, should have the flexibility to maintain the same hours of operation as their competitors. No operator should be given a competitive advantage over another as a result of different hours of operation listed on a liquor permit, and standardized hours will also decrease consumer confusion and provide operators with flexibility to manage their opening hours as their business requires. So we appreciate the move in this proposed legislation to standardize operating hour s across all classes of licence.

CRFA believes that the nature of the bring-your- own-wine provisions introduced in the bill on–balance the needs of both restaurant operators and consumers, specifically by making the BYOW voluntary for licensees and allowing them to determine their own corkage rates. However, CRFA has some concerns regarding the bill's provisions regarding disorderly conduct outside licensed establishment. While we share the government's concerns about the issue, we worry about unintended consequences.

We're most concerned that these changes can impose what are properly law enforcement matters dealt with by policing on our licensed members. While we received reassurances that regulation and policy directives will ensure that this is not the case, we feel that it's important to

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 55 express our concerns in the public record on this matter. We're also concerned about the inherent conflict between following the act's requirements to refuse service and requiring a customer to leave the premise because of intoxication and having to worry about their potential conduct outside the premise. With regard to simplifying the liquor licensing system, hospitality operators are above all in the business to serve their cust omers. In recent years, consumer trends in the way the public utilizes the food service industry has changed.

Long gone are the days that restaurants are places only for celebrating special occasions. Busy families depend on many sectors of the restaurant industry to help them keep up with hectic schedules and lifestyles, and as a result, the restaurant and bar concepts have become intertwined, combining food service, liquor service and entertainment. It's becoming difficult to determine where a licensee fits. The current beverage room versus cabaret versus dining room liquor permit system creates competitive inequities between like businesses.

The current licensing system also forces new liquor permit applications to tailor their business to fit within certain liquor permit–a certain liquor permit category rather than the MLCC granting a liquor permit that fits the applicant's business plans. Other Canadian jurisdictions have responded to these changing trends by amending their liquor regulations to streamline liquor licences in order to allow hospitality industry establishments more flexible service options, and that is where this legislation misses an enormous opportunity.

Licensees in Ontario and Alberta are now able to operate as both food primary and liquor primary establishments under the same liquor licence. They operate as primarily food service operations during mealtimes and convert to minors-prohibited primarily liquor service at night. CRFA believes that this legislation should have simplified Manitoba's licensing system rather than adding yet another class of licence. The examples in BC, Alberta, and Ontario could have been used for guidance.

This type of change would have been a real change to accommodate the trends towards multifaceted hospitality industry operations rather than adding yet another band-aid to the act. It would also have enabled the elimination of unnecessary regulations that result in this discrimination between like hospitalities' operations. Simply put, with its 11 and soon to be 12 separate licences, Manitoba's liquor licensing system is burdensome and frustrating for licensees. Simplifying this complex system would save time, effort, and resources for licensees and the MLCC alike.

We're not suggesting a carbon copy of any one model in another province, and we recognize that considerable detail goes into the design of a liquor licensing system, but surely a made-in-Manitoba solution that takes the best of what has already been proven successful in other Canadian jurisdictions could have been developed as part of this package of amendments.

On the subject of brew pubs, CRFA wishes to explicitly state that it does support the brew pub concept but believes that it could have been better accommodated under a move to a simplified liquor licensing system, moving to a single class of licence rather than adding a 12th class to this unnecessarily complex system.

In addition, by not simplifying the system and by making brew pubs subject to both a brew pub licence and one of the four base licences, that my colleague from the Manitoba restaurant association already cited, this legislation opens the door for competing brew pubs to be subject to different regulations regarding matters like food-to-liquor ratios, depending on whether they fall under a dining room licence or a cabaret licence or a beverage room licence, and that has not been addressed as far as I can see in this legislation.

In conclusion, today the diverse hospitality industry has become progressively more complex where restaurant and bar concepts are becoming more and more intertwined. That is why, while supporting a number of the changes proposed in Bill 41, CRFA can't help but feel that the opportunity to undertake a positive and comprehensive simplification in Manitoba's liquor licensing system that would be flexible and equitable has been missed. Thank you. Mr. Chairperson: Thank you, Mr. Marling, for your presentation this evening. Questions for the presenter? Mr.

Borotsik: Yes, thank you, for your presentation, and certainly we do recognize that there are perhaps a plethora of regulations an d licences that they have in Manitoba, as do other jurisdictions. In fact, I do recall saying that it's much easier to get licences in

56 LEGISLATIVE ASSEMBLY OF MANITOBA June 8, 2011 other jurisdictions, particularly Alberta and Ontario, that I'm familiar with, and I'm sure you would agree with me. The one of the comments that you made and, as was echoed by Mr.–I think it was, Jocelyn–was the permit–to permit disorderly persons to be in licensed premises or in the immediat e vicinity outside of the licensed premises–premise.

That definition of the immediate vicinity, can–is there other jurisdictions in Canada that have a similar clause to that where the licensee is responsible for the patrons in an immediate vicinity, and if there is, can you give me the definition of immediate vicinity? Mr. Marling: Mr. Borotsik, that's a very good question, and I'm afraid I'm going to have to play my new guy card one time and since I've been on the job for–it's a little over two months now. I'm been trying to get up to speed with the regulations as they exist in Manitoba and Saskatchewan primarily.

So I can't comment with any authority as to what exists in other jurisdictions at this time. Mr. Borotsik: Back to brew pubs, and, again, there are brew pubs in other jurisdictions. Without putting you on the spot, in your experience, your limited experience, do you know how brew pubs are operated in those other jurisdictions regulatorily? What kind of licensings is required, and is there less control in the brew pubs in those jurisdictions than there is in this legislation? Mr.

Marling: I can say with regard to Saskatchewan that there have been significant challenges with the way in which brew pubs have been licensed in that problem, which to be fair to the government, they have addressed in this in the legislation insofar as it's been put into place. And, as I understand, through my meetings with both the minister and Mr. Hildahl from MLCC, that will be in place here in Manitoba.

The issue around that primarily concerns the ability of brew pubs in th at jurisdiction to off-sell other beer than their own production, and it has led to challenges in those jurisdictions where they are brew pubs in name only, where they've run one batch of beer through their facility at one time and which was promptly poured down the drain to simply allow them the opportunity to sell major brands of beer. So I would say that that is a positive element of the change to this. Again, as I said, we support the concept of brew pubs.

We just think that it could have been dealt with under the broader umbrella of dramatically reducing the number of licences rather than adding yet another class of licence. Mr. Borotsik: Last question. The bring your own wine to restaurants particularly. Again, there are other jurisdictions across the country that allow that to happen. We've heard that there are some very narrow margins in the restaurant business. Howeve r, the other jurisdictions seem to still be operating quite well with bring your own wine.

Do you have any suggestions how that could be accomplished in Manitoba under this particular legislation? Mr. Marling: Based on my conversations with my colleagues from across the country and the lessons that they've learned on that front, I would say, again, to be entirely fair that these have been dealt with, I think, effectively in the legislation, as currently proposed, in that it is restricted to licensed restaurant operations, in that there–and it is voluntary.

A restaurant can choose to make that available to their patrons or not as fits their business model. * (20:10) I've spoken to some of our members who hold–who operate more than one premise who indicate that, while they may offer it in some locations in the city, other locations they may choose not to offer it. And finally, and the most important part to us is that the–and I hope that it remains that way–in that the corkage rate, the charge for opening and serving and being responsible for that bottle of wine is being left entirely to the free market to determine what it should be.

And those are the three critical factors that we saw in regard to BYOW operations in the country. So I'm glad that those have been addressed in this legislation as it stands. Hon. Jon Gerrard (River Heights): Just two points, and maybe you could comment. I note that you point out that there are 400 fewer food service operations now than in 2001. Is red tape a significant factor in that? And the second point is, in terms of your suggesting that the number of licences, types of licences be reduced down from 12 to–how big a reduction should we try to aim for? Thank you. Mr. Marling: Thank you, Mr. Gerrard.

I will address your last question first. With regard to the

June 8, 2011 LEGISLATIVE ASSEMBLY OF MANITOBA 57 number of classes of licence, the Ontario example is that they've moved to a single class of licence with two endorsements: a liquor primary endorsement and a food primary endorsement. It seems to be working quite well for them. The same premise can hold both endorsements, again, separated temporally. The example would be operating 11 till 7:30, 8 o'clock, on a food primary licence, switching to liquor primary after that time to allow them flexibility.

I had the opportunity at the press conference announcing these changes and the other elements with regards to regulation and policy with the CEO of MADD Canada. And I asked him what their experience was with the Ontario model and whether they would oppose the move in Manitoba to a single class of licence. Well, he's not here and I urge you to speak to him directly to confirm what I am telling y o u .

W h a t h e i n f o r m e d m e a t t h a t t i m e w a s t h a t MADD Canada has saw no negative impact from the move to a single class of licence in the province of Ontario and, in fact, would not oppose a similar move here in Manitoba. With regards to the reduction in the number of restaurant operations in the province since 2001, a decline of about 400, I think that it's more complex than just red tape. Red tape is always an issue when you're operating any business.

The burden of filling that requirement, again, it's a positive change with regards to moving to three-year licencing as opposed to a single-year licencing. And some other regulatory changes, I understand, will be introduced as well with regards to reports that would no longer have to be filed, but simply records kept in the place. Those are positive changes, and that is certainly one element of it as well. We can't, obviously, ignore the impact of both the local and the broader economy on those items.

The cost of doing business, whether that is wages, whether that's inputs like beverage, alcohol, food, utilities, et cetera, when you're operating on razor-thin margins, any one of those items can be that–can be the tipping point that could cause a business to go under. Mr. Chairperson: Any further questions for the presenter? Seeing none, thank you very much, Mr. Marling, for your presentation this evening. Next presenter I have on the list for Bill 41, The Liquor Control Amendment Act, is Mr. Jim Baker, Manitoba Hotel Association. Good evening, sir. Mr. Jim Baker (Manitoba Hotel Association): Good evening. Mr.

Chairperson: Nice to see you agai

Document details

Collection	Manitoba — Debates (Hansard)
Citation	39-5-sed4
Type	hansard
Volume / chapter	39th 5th hansardpdf sed4.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	aa92cedf933b8091654a1ada66e53673e420f292

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