Manitoba Committee Hansard — 24 May 1983 (Public Utilities Committee, Sitting 5, 32nd Legislature, 2nd Session)

32-2-pu5

Manitoba — Debates (Hansard)

I ISSN 0542-5492 Second Session - Thirty-Second Legislature of the Legislative Assembly of Manitoba STANDING COMMITTEE on PUBLIC UTILITIES and NATUR AL RESOURCES 31-32 Elizabeth 11 Chairman Mr. P. Eyler Constituency of River East VOL. XXXI No. 5 - 10:00 a.m., TUESDAY, 24 MAY, 1983. Printed by the Office of the Queens Printer, Provmce or Manitoba

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Second Legislature Members, Constituencies and Political Affiliation Name ADAM, Hon. A.R. (Pete) ANSTE TT, Andy ASHTON, Sieve BANMAN, Robert (Bob) BLAKE, David R. (Dave) BROWN, Arnold BUCKLASCHUK, Hon. John M. CARROLL, Q.C., Henry N. CORRIN, Brian COWAN, Hon. Jay DESJARDINS, Hon. Laurent DODICK, Doreen DOERN, Russell DOLIN, Hon. Mary Beth DOWNEY, James E. DRIEDGER, Albert ENNS, Harry EVANS, Hon. Leonard S. EYLER, Phil FILMON, Gary FOX, Peter GOURLAY, D.M. (Doug) GRAHAM, Harry HAMMOND, Gerrie HARAPIAK, Harry M. HARPER, Elijah HEMPHILL, Hon. Maureen HYDE, Lloyd JOHNSTON, J.

Frank KOSTYRA, Hon. Eugene KOV NATS, Abe LECUYER, Gerard LYON, Q.C., Hon. Sterling MACKLING, Q.C., Hon. AI MALINOWSKI, Donald M. MANNESS, Clayton McKENZIE, J. Wally MERCIER, Q.C., G. W.J. (Gerry) NORDMAN, Rurik (Ric) OLESON, Charlotte ORCHARD, Donald PAWLEY, Q.C., Hon. Howard R. PARASIUK, Hon. Wilson PENNER, Q.C., Hon. Roland PHILLIPS, Myrna A. PLOHMAN, Hon. John RANSOM, A. Brian SANTOS, Conrad SCHROEDER, Hon. VIe SCOTl; Don SHERMAN, L.R. (Bud) SMITH, Hon. Muriel STEEN, Warren STORIE, Hon. Jerry T. URUSKI, Hon. Bill USKIW, Hon. Samuel WALDING, Hon. D. James Constituency Ste.

Rose Spr ingfield Thompson La Verendrye Minnedosa Rhineland Gimli Brandon West Ell ice Churchill St. Bo niface Riel Elm wood Kildonan Arthur Emerson Lake side Brandon East River East Tuxedo Concordia Swan River Vir den Kirk field Park The Pas Rupe rtsland Logan Portag e la Prairie Sturg eon Creek Se ven Oak s Niakwa Radisson Charleswood St. Jam es St. Johns Morris Roblin-Russell St. Norbe rt Assiniboia Gladstone Pemb ina Selkirk Transcona Fort Rouge Wolsele y Dauphin Turtle Mountain Burro ws Rossmere lnkster Fort Garry Os borne River Heights Flin Flon lnterlake Lac du Bo nnet St.

Vital Party NDP NDP NDP PC PC PC NDP IND NDP NDP NDP NDP NDP NDP PC PC PC NDP NDP PC NDP PC PC PC NDP NDP NDP PC PC NDP PC NDP PC NDP NDP PC PC PC PC PC PC NDP NDP NDP NDP NDP PC NDP NDP NDP PC NDP PC NDP NDP NDP NDP

LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMI TTEE ON PUBLIC UTILITIES AND NATURAL RESOURCES Tuesday, 24 May, 1983 TIME - 10:00 a.m. LOCA TION - Room 255, Legislative Building, Winnipeg. CHAIRMAN - Mr. Phil Eyler (River East) ATTENDANCE - QUORUM - 6 Members of the Committee present: Hon. Messrs. Parasi u k and Plohman Me ssrs. An st ett, Do ern, Eyl er, Fo x and Orchard APPEARING: Mr. Go rdon W. Holland, Ge neral Manag er Mr. Saul Miller, Chairman of the Board Mr. 0.

Pe dde, Dire ctor of Marketing MATTERS UNDER DISCUSSION: An nual Repo rt of Manitoba Telephone System for the fiscal ye ar ending March 31, 19 82. MADAM CLERK, Carmen DePape: Committee come to order. Since our Chairman, Mr. Eyler, is pre sently busy, could a membe r of the committee ple ase take the Chair to begin the me eting? Mr. Anstett. MR. DEPUTY CHAIRMAN, A. Anstett: Committee ple ase come to order. Referral before the committee is the Annual Re port of the Manitoba Telephone System. I don't recall where we left off. However, are there further que stions, or are there any rep orts? Mr. Holland. MR. G.

HOLLAND: Mr. Chairman, there was some information asked for at the last me eting which I might re port on. Do you agr ee? MR. DEPUTY CHAIRMAN: Ple ase proceed. MR. G. HOLLAND: There was a que stion on the policy re garding pro visioning of premium services. MR. CHAIRMAN, P. Eyler: Go od morn ing. Mr. Holland. MR. G. HOLLAND: The new tariff is a trial offer ing to be eff ective fro m February '83 to February '84. The pr ovisioning of single line service is subje ct to the availability of facilities.

Pr ovisioning charges are related to distance requ irement, and for the first two miles are 81 $55 pe r quarter mile, for the next two miles $50 pe r qua rter mile, with a maximum charge of $500 in effect for the trial pe riod. The customer then also pays a flat rat e of $2.80 pe r mo nth fo r extra ex change measure ments charge. Pre sently, there are about 3,400 customers pay ing this charge. An other que stion, Mr. Chairman, had to do with the illustrative costs of eliminating toll charges within the pr ovince. That is a difficult estimate to make and requ ires a considera ble numbe r of assumptions.

Last mee ting, we referre d to the two components here . On e is the loss of toll revenue, and the other one is the significant capital investment requ ired to accommodate the stimulation in customer usage. Assum ing that the customer utilization both in frequ ency and holding times is stimulated te nfold from the pr esent, we've estimated that the average customer rate for exchange service would have to rise by $40 per month and that would be for all main stations in the pro vince in order to obtain pr ovince-wide free calling. Another que stion, Mr. Chairman, had to do with video conferen cing ser vices.

These ser vices are available at seven locations within Bell Canada terri tory at the mome nt: Ottawa, Qu ebe c City, Kingston, Lo ndon, Thunder Bay, Tor onto and Montreal. Be ll Canada pr ovides corporate studios in Toronto, Montreal, Ottawa and Qu ebe c City and will pro vide studio equipment on customer premi ses for spe cific conferences or on a trial basis. The cost depends on the numbe r of locations involved in the conference, the distance between those locations, the le ngth of the video conferences and the cost of studio equipment.

The average cost to a customer for a video co nference invol ving two locations is appr oximately $1 ,000 per hour. An other que stion, Mr. Chairman, had to do with the annual reven u es to be expected from the four Northern communities of Shamattawa, Tadoule La ke, Lac Tadoule and Bro chet. Our curr ent est imat e is that an nual re venues from the four communities will be about $5 5,000 .00.

An other que stion re lated to the use of fibre optics versus coax ial cable in certain are as -the coax ial was installed in Stonewall in 19 79 and in Beause jour in 19 80 in order to pro vide cable te le vision to those communities. The unused capacity on those cables at the mome nt could accommodate about 288 voice telephone lines, the equivalent of 288 voice circuits.

The re quire ment, toge ther with some allowance for growth through 19 84, was 432 voice circuits to Be ausejour and 312 to Stonewall, thus there was another structure chosen as the means of pro viding those ser vices and fibre optics was the most desirable engineer ing solution. An other que stion had to do with court authorized wire taps ser ved on MTS. In the pe r iod 19 82-83 there were 35 such authorizations served. They affected 84 locations and involved 76 subje cts.

Tuesday, 24 May, 1983 Lastly, Mr. Chairman, there were questions on the restructuring of telecommunications that is taking place in the USA, and what such restructuring might mean to Canada and Manitoba to the extent that it proceeds here. We have available a recent FCC decision dealing with the impact on access charges or local rates in the USA, together with some comment on the implications that we perceive for Canada and Manitoba of this trend. We also have an

article from the April 14 th issue of Public Utilities Fortnightly, and an

article by Edward P. Lark in, who is with the New York Public Service Commission, serving his fourth term with the New York Regula tor. He deals in the

article with some of these implications for the local exchange rates. Copies of those are available to members of the committee, if you would like to have them. MR. CHAIRMAN: That completes the answers from previous questions, I suppose. Are there any further questions in a general way on the MTS Annual Report? Mr. Orchard. MR. D. ORCHARD: Thank you, Mr. Chairman. I would appreciate a copy of the report that Mr. Holland referred to in his last remark s. Mr. Holland, could you indicate the numbers of term staff that you are expecting to employ this summer? MR. G. HOLLAND: Mr.

Chairman, I don't have the exact figure here. lt is a limited number; it is being contained this year. MR. D. ORCHARD: Now, when you mention a limited number, is that number of term empl oyees lower, for instance, this summer than it was last summer? MR. G. HOLLAND: Yes, Mr. Chairman, I believe it is lower. MR. D. ORCHARD: Do you have similar figures for summer student employment for the system as well? MR. G. HOLLAND: From last year, Mr. Chairman? MR. D. ORCHARD: Mr. Chairman, if I may, if you could provide the figures for last year and the numbers you anticipate hiring this summer as well? MR. G. HOLLAND: Mr.

Chairman, I think I should undertake to provide those to make sure they're correct. MR. D. ORCHARD: That would be fille if Mr. Holland could provide those at a later date. Getting back into last summer, we were dealing with that item briefly the last morning we met.

The general manager indicated that about August, or after the first quarter was in, there was some indication there was going to be a fairly substantial deficit and a number of proposals to reduce that deficit position were put forward, one of them being to rather than wholesale layoffs of upwards of 200 staff, the management had come up with a plan of a two-week unpaid vacation.

There was indication by the government, by the former Minister responsible and the new Minister that the layoff plan was unacceptable. 82 Now, as a consequence of that indication by the government that management's suggestions for cost reductions were unacceptable, we found out that what in fact happened was that a number of the term staff that were hired last summer were let go earlier than they normally would have and that was also the case with summer student employment.

Could the general manager give any indication as to whether there was a 20 percent reduction in the time work ed by those term people and summer students, 30 percent, 40 percent, what rough ballpark might be applicable to the early termination of those term and summer student emplo yees? MR. G. HOLLAND: Mr. Chairman, I don't have a breakdown between our term emplo yees and summer students. Together there were 74 term emplo yees and students laid off in the period July through September, in that quarter, and 26 in the October to December period. MR. D.

ORCHARD: Would those numbers represent an earlier than normal layoff? MR. G. HOLLAND: Mr. Chairman, I would say "y es" for both categories. The term emp loyees normally come on staff at MTS for the construction season in Aprii May and work through the end of the construction seas on, and the students for their period between educational terms. MR. D. ORCHARD: A question to the Minister, was the Minister aware that term and summer student emp loyees were being laid off ahead of normal? MR. D. ORCHARD: No, that was to the Minister, Mr. Chairman. MR. CHAIRMAN: Mr. Plohman. HON. J.

PLOHMAN: We were told at the time that I became Minister that the amount of term time was being cut back, and I don't know whether I was aware that meant layoff or whether it meant reduced use of term empl oyees. At any rate, that was part of an earlier phase that was not affected by the announcement by the former Minister that he did not find general layoffs acceptable. So that was not part of the same operation; it was part of one of the first and second phases of cost-cutting measur es that were taking place. MR. D. ORCHARD: Mr.

Chairman, I think the Minister's answer lacks a little forthrightness in it, because the Minister and the former Minister were in the newspaper, mid-August, indicating that there should be no layoffs. I have a picture of the new Minister with a headline here that says, "MTS loss cutting scheme leaves new Minister cold." That's about August 21 st. During that period until the end of September , there were up to 7 4 term and student emp loyees that were laid off early and, well into the Minister's responsibil ity, there were a further 26 from October to December .

Now, the Minister says, he's not sure whether he was aware that was happening at the time, but at any rate it was something that was going on befor ehand.

Tuesday, 24 May, 1983 Well, you know, if the Minister is in the newspaper saying that layo ffs, and here's a direct quote from him, saying, "L aying off workers is not going to make your operation more ef ficient." Now whether that was an earlier stage or a later stage, if that's what the Minister is saying in the newspap er, and I have to assume this quotation is a correct quotation from the new Minister, then it would appear to me that the Minister, publ icly, for the consumption of the reading public of Manitoba, says one thing whilst he is aware that another thing is going on within the corporation.

Now, he just said that, yes, that was going on and it was a previous stage. Theref ore, it was legitimate, but yet he tells the reporter in this particular case in mid-August that layo ffs are unacceptable, the plan leaves the new Minister cold, and laying off work ers is not going to make your operation more efficient. A further quote, it says in here that, "E mployment takes precedence over balanced budget.

" You know, those are all grandiose and fine public postures to take, but obviously either the Minister knew that there were going to be earlier layoffs than normal of term and student empl oyees, and he's saying one thing publicly and while he's saying it, there are being layo ffs of term and student employees.

Now, the Minister made a nice statement in the public, but facts, as we now know them, say that the Minister's statements were public posturing on one hand and privately watching summer students not achieve their full term of employment during the summer and the term emp loyees not also working their full term; public stance on one hand that says one thing and an adminis trative knowledge that, in fact, the exact opposite is happening. 1 guess maybe it's those kinds of anomalies that we see emanating from the government that cause a lot of concern as to what really is going on in government when they can publicly say one thing and, at the same time, the exact opposite is happening.

Maybe the Minister would like to comment on that. HON. J. PLOHMAN: I certainly would lik e to comment on it, Mr. Chairman. The announcement made by MTS around the middle of August came out at least in the papers with regard to layo ffs, or the proposal that was made to the unions, as well, just one of the proposals, one of the ideas, that should be looked at was to affect permanent emp loyees , and we're not talking about term and student employees at that stage.

So, my comments and the previous Minister's were referring to emp loyees of permanent status, and we were directing our comments to the questions that were ask ed of us with regard to the statements made by MTS or the proposal made by MTS to the unions who were representing the people at the meeting where this took place. So, it did not affect the term employ ees.

That statement was made, or that move was made by MTS at an earlier time when they were taking some other steps to reduce costs and that was to reduce the amount of overtime, the amount of travel time, the amount of term emp loyees used and so on, and that's where that came into it.

I don't know whether the honourable member is suggesting that there should have been more layo ffs or not, he seems to be indicating that he would have 83 liked to have seen more layoffs in addition to what took place in terms of the term empl oyees. lt seems to me, as well, that I recall the honourable member publicly making a statement that he also felt that layo ffs at that time were not acceptable, and I wonder if he's making an about-face now, or whether he wishes to deny that he said that at the time. it's quite clear that what the member is proposing here, if it had been indeed a fact, in addition to a cutback in the number of term employ ees, was a cutback in the number of permanent employ ees, we would have had more unemplo yment in this province.

If that's what the honourable member is advocating, then he should come out and say it. MR. D. ORCHARD: The Minister is indicating that he doesn't know exactly what I'm after. What I'm after is a truthful statement from the Minister. You know, we've got another

article here on the 24th of August in The Sun, and the headline says, "No Layo ffs at MTS for Now, Says Plohman." Layo ffs and leaves of absence are unacceptable to the NDP, according to the Minister, but yet the Minister is trying to make a public posture that there are going to be no layo ffs at MTS, while layoffs, indeed, are happening amongst term and student empl oyees, and I might add that the student employees, no doubt, were probably financing their 19 82-83 university year through their summer jobs and premature layoff or layo ff bef ore re sumption of university would probably cut into their ability to fund their university without borrowing money.

But the Minister is saying that, well, you know, really , of course, I knew there were layo ffs of students and term emp loyees, but I chose to publicly discriminate against them and not include them in the worthy category of permanent emp loyees, that's really what I was saying, publ icly, that it was only permanent emplo yees that I was talking about. I don't really care about the term and the student emp loyees now - (Inter jection) - Mr. Chairman, I hear a comment from the other side that I'm stooping pretty low.

If the member that made the comment would have just listened to what the Minister said, he said, no, no. When I was talking about no layo ffs, I meant permanent staff. I didn't mean student and term. That's what the Minister just said. In other words, according to this Minister, term and student emp loyees are there to be discrimina ted against, that they can be laid off prematu rely, even though he's publicly saying there shall be no layo ffs at MTS. Even though he's maintaining that kind of a public posture, he is allowing summer students and term empl oyees to be laid off.

What I'm after from the Minister is an indication of when he makes public statements, whether we have to give a detailed questioning of them, to know, to determine whether he knows, in fact, what's going on, No. 1. No. 2, whether he is telling us all of the facts when he makes these public pronouncements, because it's pretty obvious now that the headline just isn't true -that there were layo ffs at MTS and that's a headline on the 24th of August. We could go on, I suppose.

So, if the Minister is questioning my motives this morning, as to what I'm trying to determine from the Minister, I simply want to assure him that I'm trying to determine from him when we can rely on his public

Tuesday, 24 May, 1983 statements as being carried out. We couldn't last summe r, when he said there would be no layoffs, and there may be statements he makes over the next several months and it would be nice to rest assured that we could rely on those statements as being factuaL HON. J. PLOHMAN: I think it was quite clear -and it's nice to take an incident like this out of context at this point. lt was quite clear at that time that all of the discussion was referring to the reference to permanent empl oyees. That was discussed with the unions -plans, the proposals to cut costs.

Therefore they were not discussing term empl oyees or students at that time. All of the discussion, the public discussion and the discussion that I had with the press, certainly referred to that angle that was being proposed by the people involved, by the parties involved at that time. So therefore, saying now, at this time, that I didn't come forward and volunteer that there were some layoffs of term employees. was certainly not the subject of discussion, or the area of concern at that particular time.

Certainly I'm concerned when anyone loses their jobs, but at that time, judging by the financial situation, it looked serious. lt looked like the MTS was indeed going to have problems coming out in the black, and therefore, some pretty significant moves had to be taken at that time. When you're dealing with student empl oyees, certainly you're not dealing with people that are earning their livelihood in a permanent way, from the job that they are engaged in, at that particular time.

As the member said, probably they were assisting themselves through school and that's a little bit of a different situation than people who are working full-time and they've decided to make that their career. I think the other thing is, and it should be mentioned, that we have expanded, this government has expanded significantly the Student Aid Program for bursaries and for student loans, and certainly, that would have assisted students who either didn't have a job, or weren't able to keep that job for the whole summer. So I think that was a significant move to assist students.

I think the headlines that the member is quoting certainly were not statements by myself. I think the member is quite aware of who makes the headlines in the press. There are people who do that and it's not necessarily -it isn't the person who even writes the article. So certainly quotes from headlines are not quotes from individuals made in interviews and I think the member should be aware of that.

The actions taken by MTS before the time that I became involved with the discussion of the proposals regarding permanent empl oyees, did have significant effects on cost-cutting for MTS, anc. therefore, as I said, at the last mee ting that we were at before Public Utilities, it turned out that it was not necessary to have further layoffs.

Significant cost-cutting measures were made, red uction in hiring took place, and this accomplished the same thing as layoffs would have, only the people that wanted to maintain and keep their jobs were able to do so, and I think that was a very significant effect of the announcements that were made by the Minister and myself, with regard to the proposals on layoffs. MR. D. ORCHARD: Mr.

Chairman, back when the System became aware of its financial position, did not 84 the general manager indicate at that time that their projections in August -and I haven't got it in front of me -but I think they were talking about, what? A projected $6 million deficit at that time? MR. G. HOLLAND: $5.7 million was the projection on August 30th. MR. D. ORCHARD: Yes, and rough calculations indicate that what is the financial position to be at the end of this year? MR. G. HOLLAND: Mr. Chairman, slightly under $4 million positive. MR. D.

ORCHARD: Now, that means a change over the eight months, or whatever, nine months, of about -my figure is about $10 .6 million, $10.7 million? MR. G. HOLLAND: Mr. Chairman, it would be over $9 million. MR. D. ORCHARD: Over $9 million? Right now, the System is before the Public Utilities Board for a rate increase of approximately 6 percent, is it? MR. G. HOLLAND: Mr. Chairman, approximately 6 percent in the residential rate. The total tariff would produce revenues of about 3 percent higher than gross revenues. MR. D. ORCHARD: So you're talking -here, I have the press release here.

You'r e tal king res idential, individual line resident's rates would increase by about 6.5 percent and long distance toll calls within Manitoba about 6 percent. If you're granted this increase as applied for, what is the overall impact on revenue then? MR. G. HOLLAND: Mr. Chairman, the net revenue projection is for a small positive net revenue for 19 83- 84, with the increase. MR. D. ORCHARD: But Manitoba rates, the rates that the Manitoba consumer on a telephone service is going to have to pay approximately 6 percent more, is that fair? MR. G. HOLLAND: Approxim ately. Mr. Chairman, the tariffs do vary.

The inter-toll increase, for instance, on ODD calls is I believe a flat 6-cent increase on all calls; but the residential rate in Winnipeg, for instance, is about 6 percent. MR. D. ORCHARD: Mr. Chairman, I, from time to time, read letters from Mr. Krawetz in the ne wspaper respo nding to various criticisms that are level led from time to time at the system, particularly in the one newspaper , the Free Press. I note with a great deal of interest that whenever the system feels aggrie ved by those editorial comments or otherwise, Mr.

Krawetz is very very quick to correct any mistaken information or any incorrect impressions. I watched very carefully from April 18 th of this year on and I don't believe I saw a letter to the editor from Mr. Krawetz correcting an incorrect statement in an editorial of April 18 , 1983,

Tuesday, 24 May, 1983 in the Free Press. The editorial dealt with, well, the headline on it was "MTS Wants More Again. " They went through the recent rate increases that MTS has applied for and been granted. There's one rather glaring error in that editorial, I believe. If I'm incorrect, the general manager will no doubt correct me, but they mentioned that there was a rate increase in 19 75, and then again in 19 79, and then they indicate that there was a rate increase in 198 0. Now, I don't recall any rate increase in 198 0.

I think the rate increase that they refer to in here of 9. 7 percent was in fact applied for in 198 2 and granted in 198 2, would that be correct? MR. G. HOLLAND: There was a rate increase in 19 75, 1978 , 198 2 and one other year, I've forgotten the effective date. Perhaps Mr. Beatty could obtain that and gi ve it to me. MR. D. ORCHARD: Well, Mr. Chairman, I don't recall any rate increase in 198 0, and I'm quite sure that the 198 2 rate increase is the one that was referred to in the editorial. I'm very surprised that Mr.

Krawetz missed that and didn't have a letter to the editor correcting the rate increases because, ob viously, the information is not correct. Furthermore, Mr. Chairman, I would not want to have a blem ish on the Pr ogress ive Conserv at ive administration record of having a rate increase in 19 79 and the impression that there was one again in 198 0; such as now we 're hav ing, under the NDP admi nistrat ion, a rate increase in 198 2 and an application for one in 198 3. I think if Mr. Krawetz would use his writing skills, he might wish to correct that wrong impression in that April 18 th editorial. Now, Mr.

Chairman, I've got a question for the Minister. Is the Minister satisfied and agrees with the request that's currently before the Public Utilities Board for a rate increase? HON. J. PLOHMAN: Mr. Chairman, it would seem that from the figures that are presented by MTS that without an increase this year there would be severe pressure on the system to at least break even. I bel ieve I recall when the application was made that the figures MTS were using was that there would be a deficit position if there was no increase in rates this year.

So that coupled with the fact that there has been a slowdown throughout, as the honourable member knows, in the amount of telephones that certainly are being installed, with the slowdown in the economy, the Telephone System has certainly felt that and therefore have put forward a request for an increase that is very modest. I certainly agree that it had to be modest; that it indeed though was necessary for the MTS to retain a relat ively positive financial position and therefore feel that the increase that is being proposed by MTS is a reasonable one. MR. D.

ORCHARD: I take it then that the Minister agrees basically then with the application for rate increase, and he bases his agreement on the basis of information pro vided to him about a projected $7 million to $8 million loss that the system may well endure should they not rece ive a rate increase as applied for. 85 I want to ask the Minister, is he any more confident of the projections given that he's using to justify a rate increase than he was, for instance, in August of last year when the corporation was projecting in August a $6 million deficit and in fact ended up with almost a $5 million net income figure, a dispari ty of some $10 million?

Is the Minister more satisfied that the figures pro vided requesting a rate increase are more accurate than those supplied to him last August when the suggestion was made oy general management, and I believe and I'll stand corrected if I'm not, the Board of Commissioners and the Chairman to implement a program of two-week unpaid leaves which was a method of cutting costs to eli minate a deficit?

Is the Minister saying to us today that he believes the projected deficit figures, when it's time for a rate increase, more so than what he did last August when it was to justify a two week unpaid leave suggestion by management? HON. J. PLOHMAN: Certainly, Mr. Chairman, I believe the estimated figures as much at any one time as another. However, when the honourable member is referring to layoffs, I think there's reason to be a little more cautious and make some other attempts to cut costs to prev ent the necessity of having to lay off people.

However, I believe that the estimates gi ven are the best estimates at any given time. There are a lot of variables in there, as the honourable member well knows. Certainly, the foreign ex change rate has a lot to do with how the estimates turn out in the long run. However, the estimates that are given now are the best estimates that MTS can put together at this particular time for the financial situation of the MTS over the next year or two and, therefore, I feel that they are the kinds of estimates that one has to accept.

I don't know whether the honourable member feels that we should be asking the MTS for another estimate, and say, "Now, give us the real estimate." I believe that they have given us the best estimate that they can at this particular time. In addition, I want to point out the honourable member is referring to the fact - is aski ng me whether I agree with the rate increase and so on. I think a very important fact is that the MTS is still delivering a very efficient ser vice, a very good ser vice at a rate that is lower than any in Canada in almost all categories, even after this rate increase.

I think that is certainly something that one can look at when look ing at the rates and saying where are they reasonable. I feel that the rates in Manitoba certainly are reasonable. MR. D. ORCHARD: Mr. Chairman, could the general manager indicate what were the projected savings that the System anticipated if they were to carry out their proposal they made in August of a two-week unpaid leave for all of the personnel in the corporation? MR. G. HOLLAND: My recollection, Mr. Chairman, is that we were looking for savings of appro ximately $3 million at that point. MR. D. ORCHARD: Thank you.

Now, another que stion to the general manager, and he's probably answered it throughout the Estimate but, general ly, the volume of telephone business is still down compared to, say, a year ago or two years ago?

Tuesday, 24 May, 1983 MR. G. HOLLAND: Mr. Chairman, the growth rate is substantially lower than it has been in previous years. MR. D. ORCHARD: Is the growth rate a negativ e growth rate or is it still a positive growth rate? I mean not in dollar volume because dollar volumes are affected by rate increases, but in actual volumes of telephone calls, long distance calls, installation of telephones, etc. When the general manager indicates the growth rate is lower, is it still a positive growth rate factoring out rate increases, or is it a negative growth? MR. G. HOLLAND: Mr.

Chairman, the volume of messages is positive, likely about 6 percent, typically, as opposed to considerably higher percentages in previous years. Ne t incr ease in in stallations of telephones is down, has dropped off from previous years. Some of the factors, Mr. Chairman, that are reported as at the end of March: intra-toll messages increased at 5.1 percent over the previous year; Manitoba, Saskatchewan -1. 7; MTS to Bell Canada dropped .7 percent; TransCanada Telephone System volumes were down 2.8 percent over the previous year; Canada-U.S. volumes increased 2.7 percent. MR. D.

ORCHARD: Well, certainly, that's a levelling off of the growth pattern that had been in place, but is it fair to assume that when we're talking calls and what not, basically, they don't have the major impact on workload since the majority of them, of course, are routed through automatic switching, very mechanically, very efficiently done, as is the billing. The main indicator -and correct me if I'm wrong, Mr.

Holland -of the requir ements on the system would be the installation, assuming that maintenance is basically year-by-year not a high variable; maintenance is probably there whether you use the line for one call or a million calls. You're going to have to maintain it at some point in time from weather or other factors, but the major indicator of requirement of demand on staff time would be the installation of new equipment which you've indicated, Mr. Holland, is down. Is that a fair assumption? MR. G. HOLLAND: Mr.

Chairman, the growth rate certainly impacts our construction program and our construction activities, and we have noted that our construction program was reduced by some $10 million in the light of these shifting utilization rates. The volumes of installations inward and outward were also down last year, the maintenance activity measurements. MR. D.

ORCHARD: Well, I would suspect that it was as a result of being faced with those kinds of figures, and to my knowledge -and I haven't looked at the internal accounting procedures of that many major corporations -but I think the Telephone System probably has a better tab on more areas of information in their operations than probably very many other corporations do. The internal control over there is quite superb. That monthly confidential report that comes out has every thing but the kitchen sink in it in terms of what MTS and its staff and emp loyees have done.

Now, I'm sure that having viewed the trend line and having viewed the request for in-and-out installations, 86 etc., and seeing that they are down, that would have to telegraph, I believe, to the management of the System that we definitely have a declining workload on us, and that's going to have an impact on declining revenues.

I thought that what the management and, once again, I'll make the assu mption that the Board of Comm issioners was in basic concurr ence with management proposal for the two-week unpaid leave of absence which was quite an innovative approach to the dual problem of declining reven ues, and with installations, maintenance, etc., down, really a declining demand on the existing staff of the Telephone System. The out-and-out layoff of 150 to 20 0 permanent employees would probably have accomplished the same $3 million saving.

I thought that the approach by the System was fairly innovative in meeting with the realities of the economic situation today. Now, the Minister had just made a comment that I should be aware that the Telephone System , even though they're applying for a 6 percent rate increase, is still probably amongst the lowest rates in Canada. We're all aware of that. That is a situation that has existed through probably the last six or seven or eight administrations in this province, and I think that by itself is a commendation of the :�ay the Telephone System has been run over the years.

I don't think it is particularly any bouquet or bonus that any particular political administration might be able to claim as credit. That's been ongoing maybe even since the inception of the system in the early 190 0s. That situation can exist if the management who are profess ionals are allowed to make good decisions. That can deteriorate when you have government interference; when you have government imposition of policy directions and policy approaches that are political approaches and not necessarily well-founded management approaches.

The Minister and this government have said to the Telephone System that we don't like your innovative idea as a method of reducing the costs within the system to real ize tr.e economic downturn's impact on the system in terms of lower volume, lower demand for maintenance installation, etc., and lower demand for serv ices on the staff of the MTS. The government and this Minister have said, no, we don't recognize your management decision there.

We are going to impose a political decision on you that you are not going to be laying off any permanent staff and you are not going to be considering the innovative approach of a two week unpaid leave of absence. What the government has allowed to happen now is an application for a 6 percent rate increase so that all Manitobans now are going to be paying, if this is approved, some 6 percent more.

You know, I don't think it takes any in-depth analysis to recognize that most Manitobans don't ll'.ant and can't afford to bear any additional cost regardless of the source. lt would seem to me it is pretty clear that in this case government interference by this Minis ter, this gov ernment in preventing the management of the Telephone System in undertaking some innovative cost-saving measures to recognize the kind of economic times we're in, is causing all Manitobans to be faced with a 6 percent rate increase.

Those rates that have been maintained at a very economic and low rate throughout the years, throughout a number of administrations can indeed be jeopard ized

Tuesday, 24 May, 1983 by government interference. I think this is the first example of a rate increase that is, no doubt, a good portion of it because of government interference in the management and the board decisions as to how to run the Telephone System in an efficient manner as they are mandated by legislation to do, and in a manner in which it reflects the current economic times. No one likes layoffs.

There is no que stion about that, but yet other industries in this pro vince and other industries in this country have had to recognize the downturn in the volume of their busi ness and they have had to undertake numerous cost-saving measures which included the layoff of staff to reduce ex penses. That has been the pr ivate sector's response to surv iving, because if they don't sur vive then there will be no jobs in those companies when the economy does turn around as it surely will.

But here we have a circumstance where government interference has prev ented what I think was an innovative alternat ive to direct layoffs. The Telephone System wasn't talking about laying off permanent staff. What they were talking about was two-week unpaid leaves of absence to reflect lower volumes. I think it was an innovative approach. I don't think the financial imposition, although there would be financial imposition on those staff so affected, it is not nearly as severe a financial implication as a direct layoff.

And it has been offset now by this Minister's approv al in principle of a rate increase for all Manitobans. Now we have those summer students who were laid off prematurely last year going to pay 6 percent more for thei r telephone rates. We have fi xed income pensioners, etc., going to be paying more for their telephone rates as a direct result of this Minister and this government's interference with the management and operat ions of the Telephone System.

So, you know, the Minister made one correct statement this morning where he said that the system has been able to operate at as low a cost as any other system in Canada and pro vide ser vice at as low a cost as any other system in Canada. I want to just add to the Minister's correct statement by saying that they can continue to do that as long as you don't have undue government influence and interference on the corporation to prev ent them from maintaining that type of ser vice at a cost that is certainly amongst the lowest in Canada. HON. J. PLOHMAN: Certainly there are a few points, Mr.

Chairman, that should be made to clarify the situation . We suggested at the time that a committee be set up, membershi p from MTS management and the professional groups from the unions involved, to look at the financial situation of MTS, to look at the employment situation, to discuss and review options that could be taken if there were problems that were identified and mutually agreed upon.

Certainly that committee has been worki ng and will be presenti ng a final report and recommendations that they feel could take place to meet any crisis situations or financial problems that MTS might have as a result of that review process. I think that it has been a good process. and I think it shows one thing. That is that suggesti ons made such as those last year for a two-week layoff proposal, suggesti ons like that are not necessarily negat ive. They 87 are very constructive, but they needed a lot more discussion.

At the time that this took place, there was not an oppor tunity for that discussion because it became public at very close to the same time that they were first thrown out for discussion. I think that's an important point to remember; that all of the unions certainly needed to have input. The member ship needed to have input into any decisions such as those. That was not feasible in the climate that ex isted at that particular time, because there was no chance for them to discuss this pr ivately. lt was public information very quickly. I think that constructive alternat ives did take place though.

One of them was that, through the early retirement pro visions that were made for the Civil Ser vice and also for the MTS employees, people who voluntarily selected that they would like to sever their employment at an earli er time than they would have been able to before without suffering penalty were able to retire. In addition to that, other people were able to ret ire, people who had reached normal retirement age over the course of the year. They were not replaced at the same rate they would have been under normal situations with normal revenue projections.

Therefore, the number of emplo yees was reduced without having to lay off active workers during that peri od of time, people who did not want to

part company with the MTS at that time, permanent employees. I'm advised 270 fewer empl oyees than last year, so there was I think a very effective way of reducing the number of emp loyees and I think then I would on that basis completely reject what the member is saying, that it is because of the fact that there are too many emp loyees in MTS, that the people of Manitoba are being expected to pay more for their bills and for telephone ser vice this year. I think that is an erroneous assumption.

I think it is made for pol itical reasons and is not made on the basis of fact, and I think the honourable member is not attempting to reason out the other alternatives that were taken, constructive ones, to achieve a reduction in the number of emp loyees in areas where it could be shown that it was necessary.

Certainly, with the rebui ld of the cable system in the plant area, there would be a necessity to have more emplo yees in that area, or at least it would certainly make sure that MTS would be utilizing them efficiently and that, as the honourable member knows, is a necessity in the very near future to rebuild the cable system in Winnipeg.

Those people in the plant area, in the construction area, that were involved in past major projects, such as the Jack Program for homes and the building of the cable system, would find themselves in the same kind of work in a very effective utilization of those employees, I think, when the rebuild would take place. We ex pect that would be taking place in the near future, and perhap s the general manager would comment on that at some point. MR. D. ORCHARD: Mr.

Chairman, to the Minister, when did the policy on early retirement come in which would allo w MTS employees to ret ire earl ier wi thout disadvantaging their pensi on scheme or their pensi on pay out? HON. J. PLOHMAN: Wel l, the wi ndow for early retirement was Apri l 1, 198 3, and is until the end of

Tuesday, 24 May, 1983 June, 198 3, which would certainly affect the next fiscal year for MTS . MR. D. ORCHARD: Since we are dealing with the report ending March 31, 198 3, could the Mi nister indicate what effect on this report -pardon me, we're not dealing with that report -we're dealing with the one 198 2, we're talking about the fiscal year ending 198 3, March 31 st. Can the Mi nister indicate to me what effect the early retirement program that he hc.s indicated help reduce costs, what effect it had on the year ending March 31, 198 3? HON. J. PLOHMAN: Mr.

Chairman, I wish we were dealing with that report, ob viously, the honourable member isn't aware of that. He's just been asking que st ions about the rate increase for this year, the application that was made . I guess he can take the advice that he just gave me and maybe concent rate on dealing with the report; however, I'm sure he feels that he would like to deal with more current questions than the report itself .

But I certainly don't feel it is relev ant for him to be gi ving me advice as to what we're dealing with here when he, himself, has wandered from the whole gauntlet, the number of years, and certainly right up to the present. Certainly, the retirement, without replacing employees at the same rate as they would have in pre vious years, has led to a cutback in the number of empl oyees and that has been effectively done through retirements. lt will be even more effe ctively done through the utilization of the early retirement pro visions that are in place now. MR. D. ORCHARD: Well, Mr.

Chairman, the Minister indicated to us about five minutes ago that some of these new innovative approaches that alle viated the necessity of undertaki ng a two-week leave of absence without pay was because of the early retirement policy that has been brought in. I point out to the Minister that's effective April 1, 198 3. lt had no effect on the year that we're discussing, yet he's trying to claim it as part of the reason why the system saved money. lt indicates the Minister doesn't know what he's talking about or else he's mak ing more public statements that aren't based on fact.

Now, the Minister indicated that there were 270, I bel ieve, employ ees fewer at the end of this fiscal year, March 31, 198 3. Could the Minister indicate whether all or what port ion of the 270 were early retirement vacancies? HON. J. PLOHMAN: Well, for the hono11rable member's edification, I indicated the major reason that they're able to achieve a cutback in the total number of emp loyees was through retirements and not replacing . I did mention that the early retirement pro visions, in the total context of what I was saying, that will affect .

The honourable member was saying a few minutes ago, the fact that MTS needs an increase, aski ng all Manitobans to pay more for their telephone ser vice, was because of government interference and the fact that they weren 't able to reduce the num ber of emp loyees they had; therefore, it was an inefficient operati on is what is being inferred by the honourable member. I'm saying that in the future, which this increase 88 is for, for the next fiscal year, will affect the revenues for this current fiscal year, that there is an ability by MTS to continue to cut costs, if that's necessary, through retirement.

They're able to do it in a accelerated fashion because of the early retirement pro visions, so there is a tie into that. Now, in terms of the number 270 emplo yees, that there are fewer now, I don't how many have retired since April 1st and therefore would come into that figure. I' m certain that the management could fi nd that information, if the honourable member wished it, but I don't have it at my disposal at this time. MR. D.

ORCHARD: Well, I'd appreci ate clarification on the 270 from the fiscal year ending March 31, 198 3, because the Minister left the inference, when he was bringing the statement forward, that was because of the early retirement policy that his government had brought in which wasn't even in effect in the year he's talk ing about. So if he could pro vide the numbers of retirements then, because we can't talk about early retirement for the fiscal year ending March 31, 19 83.

But of the 270, if the Minister could indicate what number of those were retirements, that would allow us to better analyze these other areas of innovation and approach to cost cutting within the system . A couple of que stions now for the general manager. Could the general manager indicate, now that the system is going to face a full year with the payroll tax, what is the projected payment to the Pro vincial Government on the payroll tax for the upcoming fiscal year 198 3-84? MR. G. HOLLAND: Mr. Chairman, the full year's tax is just under $2 million, I believe, $1 ,950 ,0 00 in the current fiscal year. MR. D.

ORCHARD: Mr. Chairman, is the Telephone System ex empt from pro vincial gasoline tax? MR. G. HOLLAND: Mr. Chairman, no, we're subject to that. MR. D. ORCHARD: Could the general manager give us an indication of what the increased gasoline tax, as of last Budget, will have on the corporation in this fiscal year? MR. G. HOLLAND: Mr. Chairman, could we undertake to get a calculation and pro vide it to the member? MR. D. ORCHARD: Mr. Chairman, is the Manitoba Telephone System ex empt from Manitoba sales tax? MR. G. HOLLAND: Mr. Chairman, we are subject to the provincial sales tax. MR. D.

ORCHARD: Could the general manager pro vide an indication of what the increase in the Manitoba retail sales tax as brought in in the last Budget will have on the corporation? MR. G. HOLLAND: Mr. Chairman, we'll undertake to pro vide that information . MR. D. ORCHARD: lt will be interesting, Mr. Chairman, to see just what the total of those three tax impositions

Tuesday, 24 May, 1983 are on the Manitoba Telephone System, and it will be interesting to add the three of them up to add to them the $3 million saving of the innovative staffing proposal made last August by the mana gement and commissioners of the Telephone System, adding the four items up and seeing how close we come to the projected deficit for next year. Then it will be very interesting for this Mi nister to then say with all clarity and honesty and integrity that government interference has not caused a rate increase in the Telephone System, because I think, Mr.

Chairman, we're going to find that when we get the totals, that the new taxes that have been imposed by the Provincial Government and their interference in a management decision will probably equate nicely to at least the revenue increase that is being projected by the rate increase.

I believe that is -well, I just can't find it close at hand here, but I'll have it for the nex t time we meet -but I think we are going to find that the combination of government interference on staffing practices and imposition of new taxes are going to equate to the rate increase that the Telephone System is currently before the Public Utilities Board in hopes of receiving app roval of that rate increase. Could the general manager indicate whether the corporation incurred any unusual costs over the last 12 months, any out of the ordinary costs which impacted negatively on the Telephone System? HON. J.

PLOHMAN: Before the general mana ger answers that question, I just want to answer some of the statements made by the honourable member with regard to the total costs of the taxes and whether that will equa te with the cost-cutting measures that were taken by MTS during this past year. I think what the honourable member seems to be saying is that we should be cutting taxes. If that's what he is saying on the one hand, this is typical of this opposition's approach to the handling of government affairs. On the one hand, they want taxes cut. On the other hand, they say the deficit's too high.

On one hand, they say that we should be creating employment. On the other hand, they're saying unemp loyment 's too high. Ther e are contradictory approaches by the members to that. 1 think if we wanted to use that logic, we could go back to the gasol ine tax increases over the four years of the previous government and add them up and find out what cost they were to MTS. There were significant cost increases in gasoline tax.

We could go back to the sales tax when it was first introduced -if that's what the honourable member wants to do -by the Roblin Government, and add that up over the years and find out what it cost the MTS to operate to pay that tax over the years. Those assumptions that the member is taking, the relat ionship just doesn't ex ist. Certainly, he knows that those are costs of doing business by every company, and certainly the government has to have revenues to carry on its business. The honourable member was part of a government that had to do that as well.

He knows very clearly that it does not make sense to add up the total provincial taxes that a particular company might pay, a corporation might pay in a particular year, and then equate that to their employment situation. So I would reject the statements made by the member with regard to the kind of situation that I would find 89 myself in, or anyone else, any other Mi nister would find himself in if he had to add •JP the taxes that were put in place duri ng that

part icular govern ment's administration. That can be done by anyone at any peri od in time. MR. D. ORCHARD: Mr. Chairman, the Minister is obviously caught with his proverbi al pants down. He wants to talk about imposi tion of tax es by our government in four years. I simply want to point out to the Minister that in four years there was one rate increase by the Manitoba Telephone System. You haven't even been government two years, and they are now applyi ng for their second rate increase.

If the Minister thinks that government interference does not account for a major portion of the rate increase, I will tell him that already we've got $2 million in payroll tax that the corporation is paying, a brand new NDP tax on employment. When we find out what the increased gasoline tax and sales tax are, we are going to find that those taxes probably equate directly to the rate increase. Now, the Mi nister is using some kind of illogical statement that we increased taxes.

Certainly, we did but, my goodness, one rate increase from the Telephone System in four years compared to two in less than two years by the NDP administration. So, you know, at the end of four years, we'll see just what the total impact of this incompetent government and their taxation pol icies will be on this Crown corporation and the ki nd of dollars it's going to force this Crown corporation to glean from the telephone users in Manitoba, because that's what we're talking about.

We are talking about gleaning the payroll tax imposed on the Manitoba Telephone System by the NDP from each and every little telephone user, big or small, in the Provi nce of Manitoba. They are gleani ng the payroll tax directly from the backs of every Manitoban. That is an imposition on the System that never existed before and it's justification for rate increases. So the Mi nister cannot get around it.

This gang is causing the Telephone System to be a less efficient operation by interfering with management decisions, No. 1, and imposing new taxes on them, and that is causing the rates of necessity to go up; a direct transfer of costs from an incompetent government to an ef ficient Telephone System onto the backs of the Manitoba telephone user, clear and simple. MR. CHAIRMAN: Mr. Anstett. MR. A. ANSTET T: Mr. Chairman, Mr. Orchard 's suggesting there was only one rate increase in four years. Yet I recall earl ier, when Mr. Orchard asked Mr. Holland the question, Mr.

Holland suggested there was another increase but he couldn't recall what year it was. I'm wondering if I can ask the chairman to advise the committee so we can all be clear as to whether or not Mr. Orchard has his facts right as to ex actly when those increases were and what year it was where there was an increase wh ich Mr. Holland couldn't recall earl ier. I am wondering if the staff that are here have that information. The second que stion I would like answered is: What were the scale of those increases from 19 77 through

Tuesday, 24 May, 1983 to last year? We don't know what the scale of this year's increase will be. We only know what MTS has requested. I would like to put the total percentage increases achieved during those peri ods to which Mr. Orchard refers into perspect ive. He hasn't gi ven us that information in his harangue of the general manager and of the Minister about what's happened, and I think that's the kind of information we should have so we can see Mr. Orchard's comments in their proper light. I am wondering, Mr. Chairman, if we can get that information? MR. G. HOLLAND: Mr.

Chairman, we don't have the exact dates here, but we will undertake to describe the applications and the tariffs implemented. We' ve reported 75-78 in 198 2, and we will pro vide those with a

summary of the tariff changes to all members of the committee. MR. D. ORCHARD: I've gQt a couple of other questions. Last year, what was the capital exp enditure? -that's fiscal ending 198 3. MR. G. HOLLAND: The approv ed capital budget, Mr. Chairman, was 120 million, and I bel ieve the final figure was 10 8.5 million. MR. D. ORCHARD: What are the projections for this year in capital expen ditures? Have you got those handy? MR. G. HOLLAND: The program submitted, which will be before the Legislature at this Session, proposes a capital program of $110 million. MR. D.

ORCHARD: As with all undertakings nowadays, they are subject to inflationary pressures. Would $1 10 million buy 10 percent less than 10 8 million last year? MR. G. HOLLAND: Probably 8 to 10 percent, Mr. Chairman. MR. D. ORCHARD: So, then, proba bly, you're going to have an 8 to 10 percent reduction in construction activity, capital activity. Could the general manager indicate what impact that would have on employment within and in terms of term hiring by the corporation for the construction season? MR. G. HOLLAND: Well, Mr. Chairman, that will be reflected in the forces requ ired for the construction season.

There will be a reduction. lt may not be a directly proporti onate impact on the labour force. lt depends on the mix of the capital program, how much of that is major eq uipment, how much of it is outside plant construction and so on, but there will be a reduced work force. MR. D. ORCHARD: Has the telephone system any participation in the so-called Jobs Fund? MR. G. HOLLAND: Mr. Chairman, we are participating in one or two publicly assisted programs, and I don't think I have the information here to indicate the number of emp loyees affected.

One, I believe, is the NEED Program, and the other is, of course, the Student Employment Program. 90 MR. D. ORCHARD: In the $1 10 million projected capital budget, does that include monies to be spent on projects contained within the Jobs Fund? MR. G. HOLLAND: Mr. Chairman, the $110 million was dev eloped by the chief engi neer last Nov ember , Decem ber, reflect ing utilization rates, growth factors and so would not reflect the Jobs Fund directly. MR. D. ORCHARD: Could the general manager indicate what the value of MTS participation in the Jobs Funds would be in dollar terms? MR. G. HOLLAND: Mr.

Chairman, I'm unable to do so at this time. MR. D. ORCHARD: Mr.

Chairman, if the general manager could undertake to pro vide that kind of information, that would be much appreciated, because I think we could probab ly, once again, establish another area where the Jobs Fund is more appropri ately called the "Fraud Fund", where the government is simply trans ferri ng normally carri ed-out work by line departments and, now, possibly, we'll see when we get the figures, possibly by Crown corporations, transferring those kinds of work activities into the Jobs Fund calling it a centre-piece initiative by the government when in reality it is simply a transfer of work activity from line departments into a fraud fund. lt will be interest ing to see the value of the two areas of undertaki ng via the Jobs Fund to see if they are in the neighbourhood of 8 to 10 million which would allow the telephone system to theoretically maintain the same size of capital works program and, hence, one would make the direct analogy of employment through that construction program this year as they were able to undertake in the last year.

If it's simply maintenance, allows the telephone system to simply maintain the number of jobs last year, it would buy money that is now earmarked out of the Jobs Fund through NEED and through Student Employment, it would simply point out that there are no new jobs being created in this instance by the Jobs Fund, that it is simply a maintenance of jobs that were in place last year. Hence, further justification for our critical terminology of referring to the Jobs Fund as the "Fraud Fund". Mr. Chairman, well the Mi nister had his hand up. He might want to comment on that. HON. J. PLOHMAN: I don't think, Mr.

Chairman, that the honourable member has had any basis from the information he has received from the general manager this morn ing to make the statement he did. lt's not based on any fact. it's just straight innuendo and discussion that he had in his mind before he got here and not based on the answers he got whatsoever. The statements were not confirmed that any of the 110 million was part of the Jobs Fund. Therefore, any statements he's making in reference to that are not based on any fact whatsoever. MR. D. ORCHARD: Well, I want to thank the Minister for that clarifi cation.

If the Mi nister was listening attentively, as :1e should have been, I said, now possibly

l I Tuesday, 24 May, 1983 we' ve even got Crown corporations involved in the fraud fund, as we have already identified line departments being involved in the fraud fund. I will wait with patience, as I know the Mi nister will, to get final confirmation of my suspicion . Mr. Chairman, I'd like to ask the general manager, he mentioned in his earli er remarks, and I've got so doggone many pieces of paper in front of me now - there we are - that the pr ivate line offering, I assume that he was referring to the $500 flat rate offering, is available from February 19 83 to February 19 84, for that one-year period.

Now, it was, if I recall the general manager's comments, it was su bject to facil ity availability. Could the general manager ex plain what is facility availability as a criterion of qualifying for that flat charge of $500. 00? MR. G. HOLLAND: Mr. Chairman, when we ex tend, particularly outside plant facilities in an area, we build in forecasts of customer requ irements, usage, growth, usually at least two or three years ahead. In conjunction with the major rural improvement program, the $34 million program, we build in some ex tra facilities as that program was implemented across the pro vince.

So basically these are circuits available over and above the standard ser vice offerings in the ex change. MR. D. ORCHARD: Now, those facilities are there as spare capacity and now the system is achiev ing two ki nds of revenue from them. Namely the $500 up-front charge, and also an increased rental rate from the pr ivate line system so that the impact on rev enue, I would assume that the capital investment is already made in these cases, it's a substantial improvement in the revenue picture that the system would have from those available lines. MR. G. HOLLAND: Mr.

Chairman, the standard offering in these areas is multi-party. Not more than four

part ies per line. That is the standard servi ce of fering. When the program was completed for instance the average number of customers was about 2.6, and I think presently about 2.8. it is that standard offering on which the forecast requi rements are based together with some growth forecasts . So on that premi se we say that if premium ser vice is requ ired and if facilities are available we will offer it at premi um up-front charges plus an ongoing monthly rate. MR. D.

ORCHARD: Now, if I'm on a line in which I have a couple of neighbors on it on a party line system, and I applied for pr ivate line ser vice would you shift and increase the line loading from say two on a line, up to three on a line to free up my line as a pr ivate line, and increase the loading on another line to achieve getting me my pr ivate line? MR. G. HOLLAND: Mr. Chairman, we would ensure that our multi-party standard offering was available to all of the customers plus pro vision two or three years out, such that future customers could be serv ed .

Li ne loadings, and line reallocation is an ongoing process in all of the rural ex changes. We normally, for instance, do not offer one customer on one line. There are at least two customers on all 91 of the lines . The selection of the circuit for a premium offering could result in some realignment MR. D. ORCHARD: Mr. Holland, indicated that the rural improvement ser vice $34 million ex pen diture set a standard with a cushion three to four years in ad vance of a maximum line loading of four. That line loading, I believe, is somewhere around 2.2, 2.3 per line.

Now does this mean that you could put in a number of pr ivate lines so long as you had that 2.2 per line on the party line system, and bumped it up to 3.2, you could free up a number of pr ivate lines. Is that basically the system that would be undertaken? MR. G. HOLLAND: Mr. Chairman, I believ e the ratio is between 2.6 and 2.8 and does shift each year according to relocation patterns and where our new customers locate and so on . Our standard multi-party of fering is not more than four customers per line.

So that we try to judiciously offer premium ser vice where we have facilities available but under no circumstances to mod ify our multi-party standard of fering. MR. D. ORCHARD: But it would be fair to say that you would increase your line loading on multi-party as long as it didn't exceed four to achieve installation of a pr ivate line somewhere within that party line system? MR. G. HOLLAND: The brief answer to that is yes, Mr. Chairman. Our regional officers, howev er will use good sense in ensuri ng that the quality of ser vice for other customers is not seriously impacted.

That is going to requ ire considerable good judgment on the part of our regional offices. MR. D. ORCHARD: Well, it's not that I want to seem like a socialist, Mr. Chairman, but the accusation that could be made here is that you've got a seri es of party lines in rural Manitoba. You don't have any ex tra line capacity. Your line loading on the party line is 2.5. So let's say between two and three customers are on a number of party lines .

One person in that system, in that area, or two people in that area could come up with the $500 and achieve a pr ivate line status at the ex pense of loading the neighbors with possibly one, or maybe two more customers to bring up to that four per party line standard.

Now, I've got a problem with that in that the person who knows about it first of f the bat, is going to take advantage of it, and another neighbor who may be equally as able to pay the $500 in the increased monthly charge may not be able to do that because the ex tra line to bring the party lines up to four or three or whatever you want to achieve as a standard out there will have been used up by the first man in.

Second ly, if one cannot af ford the pr ivate line, certainly you are going to be imposed upon in terms of the quality of your ser vice from having a line that you may have only one other neighbor on, or two other neighbors on to ha ving an additional person on your line. The more people you have on those party lines out in rural Manitoba the less oppor tunity you have to use the phone. So that it would seem that although I have to tell the general manager this and he well kno ws this is

Tuesday, 24 May, 1983 something that I was pushing the telephone system to move on as quickly as possible because the private line is becoming a business necessity to many farmers. I think the general manager and the management of the MTS fully recognize that. The problem is firstly dollars in trying to achieve it, and secondly I suppose in coming up with an equitable way of achieving it.

Now it would appear here that the system has devised a way of achieving some penetration of private lines in rural Manitoba but I'm afraid that it might have been at the expense of other people on multi-party lines having their line loadings albeit below, that they are currently below the standard of four the maximum allowable, having it pushed closer to that four at a service disadvantage to those other people on the multi party line service. it's achieving a goal.

Maybe the method is going to cause some repercussions and possibly by next year we can discuss this further and find out whether the system has had a number of complaints as a result of the policy change. MR. G. HOLLAND: Well, Mr. Chairman, we should remark that the multi-year program completed in 1981 was a major improvement in the quality of service right through the province, because it was not only reduction of line loadings; the project entailed a great deal of new plant and improved plant. So there was a very major improvement in the quality of service all through the province.

We have been faced more and more with the business requir ements of farmers for individual line service, and we have been trying to respond where we could to those demands. Under the multi-party program, the quality of service can deteriorate very rapidly if you get a neighbour with three or four teenage kids on it, and our regions at all times are considering customer problems in this area and trying to reassign the lines and redistribute loadings and so on.

That is just an ongoing process. lt is our intent to offer private line service where we can without any significant impairment of other lines on that exchange. That is the balancing act that we'll be trying to achieve. HON. J. PLOHMAN: Well, I just think it should be pointed out at this time, Mr.

Chairman, that there again the honourable member is asking for improved service and we'd all like to see private lines tor everyone that would like to have them, but when you're looking at difficult economic conditions and at the same time arguing on the other hand that you don't want any increases such as the honourable member says that they shouldn't, then here we are asking for another increase. He's asking on the other hand for improved service, and he should rationalize those two points of view. MR. CHAIRMAN: Mr. Doern. MR. R. DOERN: I'll wait for the Member for Pembina to return, Mr. Chairman. MR.

CHAIRMAN: Mr. Gourlay. MR. D. GOURL AY: Thank you, Mr. Chairman. I'd like to offer my congratulations to the Manitoba Telephone 92 System on their 75th Anniversar y, which happens to coincide with the 75th Anniversary of the Town of Swan River, and we had the opportunity to have both parties together in Swan River just a week ago to sort of kick off the celebrations. The questioning on private lines, did I hear the general manager say that this was a one-year program starting February of 19 83 and running until February of 19 84? MR. G. HOLLAND: Mr.

Chairman, the revised tariffs with the capping of $500 that we're seeking approval by the Public Utilities Board to offer those for a one year period, then based presumably on the experience and any problems that arise from the revised offering will be assessed, and we'll decide then what permanent tariffs should be proposed to the Public Utilities Board. MR. D. GOU RLAY: How is the general public informed of this offer being available - I don't recall an announcement being made -or just how would an individual be aware of the fact and able to take advantage of that flat rate for private line? MR. G.

HOLLAND: Mr. Chairman, to date, I believe it has been through the business offices in the regions who generally have a backlog of requests for a private line service. So it has been done informally to this point. We have not advertised it for some of the reasons that Mr. Orchard cited. MR. D.

GOURLAY: I had received a complaint on this situation where an individual had applied for a private line during the summer of 19 82, received the line, and I think he was offered the opportunity of paying the rate which was determined by MTS, paying it at the time the phone was installed or he could spread that payment over a 12 -month peri od. The individual received the phone and was not billed until early March, but was not given the opportunity to pay the $500 flat rate, but was billed five or six-months' payments that had been overlooked by MTS. I wonder if the manager would like to comment on that. MR. G.

HOLLAND: Mr. Chairman, if we could know the situation, we would go back to the customer and explain fully what happened in that case and attempt to negotiate suitable arrangements with him. MR. D. GOURLAY: So if I could provide you with those details, you'd be prepared to look into that further? MR. G. HOLLAND: Yes, Mr. Chairman. MR. D. GOURLAY: The Minister, when he spoke earlier , made reference to the Jack Program. Was that program just avai lable for a specific period of time? MR. G. HOLLAND: Yes, it was a concentr ated installation program area-by-area.

In Winnipeg, I believe it extended over perhaps two and a half years. We used specialized teams who went out and did street-by-street and did it on a very economical basis, and it was completed in 19 81. We've done most of the other major centres on a similar basis as a one-time offering without charge to our customer. Those are all complete, I believe, all o: those that are planned.

Tuesday, 24 May, 1983 MR. D. GOURL AY: Individuals living in a home that doesn't have the jack facilities and would like to have that facility installed, that is not available today at a no-charge arrangement? MR. G. HOLLAND: No, the residential customers would be charged a fee by our installer to do it. MR. D. GOURL AY: I wonder if I could ask a question on the Extended Area Service Program. In the Swan River Constituency, we have the Extended Area Service to include the communities of Benito and Cowan this year, I believe.

There are other communities that would like to belong to the Extended Area in the Swan River vicinity -the communities of Mafeking and possibly Pine River -because of the fact that their local government district office is located in Swan River. Hospitals, schools, for the most part, are also in Swan River, at least for Mafek ing, and to some extent for Pine River. When would those areas be able to expect to be included in this Extended Area Service? MR. G. HOLLAND: Mr. Chairman, as Mr. Gourlay noted, Benito and Cowan will be added to the Swan River area in 19 83.

We're now looking at Mafeking to see what costs and implications would be involved in including Mafeking. Other than those, Pine River would be included in our current review of EAS across the province and would fall in the criteria that are developed for EAS. MR. D. GOURLAY: The criteria as it now stands is that the area to be included is to be within 20 miles of an existing Extended Area Service? MR. G. HOLLAND: Mr. Chairman, I believe it's 25 miles. MR. D.

GOURLAY: In the case of Mafeking, which would be under that as far as from Birch River which is part of the Extended Area Service, as you mentioned, Mafeking is being currently looked at? MR. G. HOLLAND: Yes, Mr. Chairman. MR. D. GOURL AY: I think that covers what I have. MR. CHAIRMAN: Mr. Doern. MR. R. DOERN: Mr. Chairman, I wanted to direct a few remarks at the inflammatory comments by the Member for Pembina about the so-called fraud fund as he refers to the Jobs Fund, which I think is one of the better programs of this government, and really I think that his argument is where the fraudulant factor is.

He sounds very much like his leader when he argues about this par ticula r posit ion. To the best of my knowledge, he's the only person in the Legislature who ever wanted to be like the Leader of the Official Opposition when he grows up. MR. P. FOX: If he grows up, not when. MR. R. DOERN: He made two particular points, Mr.

Chairman, and I wanted to really deal with the second one, but I want to say in passing that the No. 1 priority 93 of the government is emplo yment This seems to be something that the member finds difficult to accept He still wants the government to adopt an economic policy that is no more than a passive observation of what is occurring in the economy. He adopts the Herbert Hoover position of sit back and wait for an upturn.

But what I find interesting is that he seemed to argue today that taxes paid by private and public corporations and, in particular, by Crown corporations somehow or other harm those corporations or somehow or other harm the public. He seems to think and seems to argue that Crown corporations should be exempt from all provincial taxes. He equates the levying of a tax as something that is harmful or detrimental, in this case, to the Manitoba Telephone System. Mr. Chairman, I find that a peculiar argument.

You know, it's not as peculiar as perhaps some of his senior colleagues in the Conservative Party who openly argue for, if not the dismantling of Medicare, at least the harm to Medicare by instituting premiums, user fees and, in particular, the actions of the former Clark Government which actively attempted to dismantle Crown corporations. That is, of course, a position of the Cons ervative Party to elimi nate, wind down and constrict to the greatest possi ble extent Crown corporations, many of which have been established and operating successfully in Canada for many decades.

So I simply say to him that I find it a strange argument indeed that he wants to argue that taxes that are levied by a government must be borne by Crown corporations. I think the real question is: Who would harm the public more and who would help the public more? Who would best protect and preserve the Crown corporations of Manitoba for the benefit of the people of our province? I think history will show that it is the New Democratic Party that has done so.

I also remind the member in passing that there was a greater degree of progressivity in the Conservative Party many years ago when Rodmond Roblin established the MTS and had no problem in establishing the corporation. Our government has had no problem in expanding the corporation and has no problem in levying taxes on Crown corporations and private corporations alike. MR. D. ORCHARD: Mr.

Chairman, the last speaker there should have put some more of his great depth of knowledge on the record from his previous eight years in the last NDP administration and talked about the Crown corporations of Saunders Aircraft, Morden Fine Foods and some of the other really good ones that they created in their brief tenure with the province. But, of course, as is often the accusation made by both sides of the House, it's nice to talk selectively. Mr.

Chairman, I would like to ask the general manager if there is any possibility of exte nding 800 service, the tol l-free availabil ity, across the border into Nor th Dakota? We have a number of aggressive machinery and service industries in the border communities within 20, 25 miles of the U.S. border who do a fair bit of business down in North Dakota and in the States. Some of them have expressed interest in exten ding the 800 toll-free lines to potential American customers. Is that something that is possible to do, and something the corporation could undertake?

Tuesday, 24 May, 1983 MR. G. HOLLAND: Mr. Chairman, this has been under study by the TransCanada Telephone System now for at least three years to my knowledge. I believe that they are hopeful that this year or early next there will be some possibility of exten ding this service. I believe it depends on changes in regula tory practice by the FCC. There is a considerable effort to get those changes approved. MR. D. ORCHARD: Then can I interpret from the general manager's remarks that there is certainly some possibility that service may be able to be extended within the next year to two years?

Are the discussions that far along and agreement that close? MR. G. HOLLAND: Mr. Chairman, I believe the target date is early 19 84. If I have any more information on that in the next while, I will keep Mr. Orchard apprised of it. MR. D. ORCHARD: Fine. Mr. Chairman, the Telephone System ... MR. A. ANSTETT: Mr. Orchard's question is on another topic. I had a question on this same topic of the 800 lines. What is the advantage, other than the appearance, of a toll-free number without going through the operator, of using 1-800 numbers over Zenith numbers?

I know some contin ental busi nesses, airlin es and other organizations of that sort use Zenith numb ers. I understand that there is no limit on the number of Zenith numbers they can use, why would there be a concern about increasing access to 1-800 lines? MR. G. HOLLAND: Mr. Chairman, I think I should ask our Director of Marketing, Mr. Pedde, to deal with those. MR. CHAIRMAN: Mr. Pedde. MR. 0. PEDDE: Mr. Chairman, if I understood the question, I belie ve the difference is both in the way the service is utilized and perhaps in the cost. MR. A. ANSTETT: Which?

I don't understand what the differences are in the way the service is then utilized and which type of service would be cheaper. MR. 0. PEDDE: Mr. Chairman, we have two types of WATS services. One is called an OUTWATS, and the other previously called INWATS service, now called 800 service, which are fully automated services. The Zenith service is a manual service, so firstly, it implies likely a higher cost, and in our customers' views, it is sometimes inhibiting, in terms of access to go to the operator, as opposed to dialing a number directly. MR. A. ANSTETT: So 800 service is cheaper than Zenith service? MR. 0.

PEDDE: That's correct. MR. A. ANSTETT: Thank you. MR. D. ORCHARD: Thank you, Mr. Chairman. The Manitoba Telephone System was participating in a bid 94 with, I belie ve, Alberta Government Telephones and Bell Canada for installation of, I think - I forget the technical term -but wide-spectrum service in Saudi Arabia and it was to be a fairly substantial contract. The joint venture approach was chosen with AGT and Bell Canada to, not only spread the risk, but to spread the expertise around. Can the general manager indicate what happened with that bid process? MR. G. HOLLAND: Mr.

Chairman, the three companies did form a partnership for the purposes of that one project, prepared a bid on it to a Canadian agency, which was managing it and was not successful. MR. D. ORCHARD: So then that particular project was simply not carried forward, because you wer en't necessarily the lowest or the best application or tender to the Saudi Arabian Government? MR. G. HOLLAND: In the view of the Canadian agen cy, which was review ing their options, this was not the best bid. it was a spectrum management system for the Kingdom of Saudi Arabia. MR. D.

ORCHARD: Now, I note that the corporation has establis hed a su bsidiary called MTX Telecom Services Inc. Could Mr. Holland indicate the raison d'etre for MTX, and what it's undertaking to do at the present time? MR. G. HOLLAND: Mr. Chairman, MTS has been engaged in extra provincial programs for four or five years. There has been net income earned from projects of this type. it was the view, because of the special nature of these projects, that they should be done under the auspices of a separate corporation and, of course, all costs carefully attributed to the subsidiary, the wholly owned subsidiary. MR. D.

ORCHARD: Now, the wholly-owned subsidiary, MTX, has entered into a 50-50 partnership with a Saudi Arabian company. What was the reason for entering into -well, No. 1, for setting up a separate corporation; and No. 2, entering a partnership in Saudi Arabia? Mr. Holland has indicated that over the past several years, the System has undertaken work outside of Canada -international work -and that's right.

As a matter of fact, a fairly substantial amount of work was done in Saudi Arabia over the last several years, but there was no necessity, at that time, to establish MTX, or to my knowledge, establish a 50-50 partnership with a Saudi Arabian company. Could the general manager indicate what has necessitated these two moves, first of all, the wholly-owned subsidiary, MTX, and the partnership with the Saudi Arabian company? MR. G. HOLLAND: Mr. Chairman, MTX has been serving as a contractor for some time to a Saudi Arabian telecommunications firm.

MTX identifies suppliers, and suggests standards for equipment and installation, and has been ob taining those suppl ies, primarily for Manitoban and Canadian manufacturers for some time. That is a general telecommunications service. That company wish..,d to have MTS involved in some fashion,

Tuesday, 24 May, 1983 directly with them in data communications. lt is a partnership and Datacom has applied to the authorities in Saudi Arabia for incorporation, has been approved by their Foreign Investment Review Authority, and it's expected that the incorporation will be finalized within the next short while. MR. D. ORCHARD: Mr. Holland, you lost me there in a couple of steps. Are you saying that this partnership with the Saudi Arabian company is soon to be incorporated to undertake work in Saudi Arabia? MR. G. HOLLAND: Mr. Chai rman , yes.

The incorporation should take place very shortly and that partnership will be offering data communications and data services in Saudi Arabia. MR. D. ORCHARD: Now, what will be the name of that new corporate structure in Saudi Arabia? I assume it's going to be a Saudi Arabian company, and what will be the financial arrangements between AI Bassan International Company -the current partner -and MTX? MR. G. HOLLAND: AI Bassan International Company Telecom will continue its operations and MTS hopefully will continue to be a supplier of personnel and equipment and expertise to Telecom.

Additionally, AI Bassan is joining with MTS in a partnership known as Saudi Arabian Computer Communications Company Limited. That will be a freest anding entity concerned with provision of data commun ications and data services. MR. D. ORCHARD: Does this mean that we now have MTX participating in Saudi Arabia as a wholly-owned subsidiary of MTS and, as well, we have MTS directly forming a corporate arrangement with a Saudi Arabian company and also participa ting in Saudi Arabian ventures? MR. G. HOLLAND: Yes, Mr. Chairman.

MTX will work directly with AI Bassan International Company and will be the 50 percent shareholder of a new entity based in Saudi Arabia. MR. D. ORCHARD: And MTS will be in a business arrangement, be it corporate or a new corporate structure, with AI Bassan International Telecom, am I correct there? MR. G. HOLLAND: MTX is a wholly-owned subsidiary of MTS. MR. D. ORCHARD: We've got MTX participating with AI Bassan International company. You mentioned AI Bassan International Telecom, I believe, as participating directly with MTS, did I not hear you correctly there? MR. G. HOLLAND: MTX, Mr. Chairman. MR. D.

ORCHARD: X. MR. G. HOLLAND: Yes. MR. D. ORCHARD: Oka y. So that we've got MTX then participating in two companies in Saudi Arabia for two different purposes? 95 MR. G. HOLLAND: Mr. Chairman, MTX serves as a supplier basically to AI Bassan International Telecom. lt contracts to provide equ ipment, personnel and engin eering design quotations. So MTX participates directly in that aspect. MR. D. ORCHARD: But there's just one new company that MTX is a 50-50 partner in? MR. G. HOLLAND: Yes, Mr. Chairman, that is the Saudi Arabian Computer Communications Company Ltd. soon to be incorporated. MR. D.

ORCHARD: Oka y, and is that separate and apart from the 50-50 partnership with International Telecom? MR. G. HOLLAND : Mr. Chairman, that is the partnership and the only partnership that MTX has. MR. D. ORCHARD: Now, Mr. Holland has indicated that MTX has existed for some time. How long has MTX been part of the telephone system? MR. G. HOLLAND: lt was established January 15, 19 82. MR. D. ORCHARD: Mr. Chairman, it was established primarily to participate with AI Bassan in Saudi Arabia to get into this new venture that we've been discussing, is that a fair assumption? MR. G. HOLLAND: Mr.

Chairman, it was formed to consider extra provi ncial projects where it was considered that MTS had the expertise and resources to do a commendable job -any such projects. MR. D. ORCHARD: Now, this new corporation that's soon to be incorpo rated in Saudi Arabia as a partner ship, a 50-50 partnersh ip, between MTX and the Saudi Arabian company, it is undertaking work or projects or providing service that is su bstantially different from the spectrum management contract that was being jointly bid on AGT Bell and MTS, is that correct? MR. G. HOLLAND: Mr.

Chairman, one of MTX's first activities was to form to the partnership solely for the purpo se of bidding on the spectrum management proposal which was unsuccessful. MR. D. ORCHARD: Now that AGT and Bell are no longer part of the bid process, is MTX now taking on the Canadian participation that was envisioned between AGT, MTS and Bell Canada on their own for this spectrum management? MR. G. HOLLAND: Mr. Chairman, no.

The MTX, AGT, Bell Canada partnership was formed solely for the pur pose of bidding on the spectrum management proposal and that partnership would have been used to carry the project out in Saudi Arabia, had it been successful. The proposal was not accepted, so that venture is effectively terminated. MR. D. ORCHARD: No w, in deciding to enter partnership with AI Bassan and to incorporate this new

Tuesday, 24 May, 1983 Saudi Arabian corporation, was there a competition of any sort to decide that AI Bassan was the one to joint venture with in Saudi Arabia, or how was AI Bassan the one that was chosen to enter into a partnership with? MR. G. HOLLAND: Mr. Chairman, we had been working successfully in AI Bassan International Company Telecom for some considerable period of time. lt was their wish that rather than a contractor relationship that there should be a partnership formed in the data and data communications area .

The feeling was that it should be a resident company in Saudi Arabia and that it should be a full partners hip. MR. D. ORCHARD: Who are the principals of AI Bassan, the principal owners, the principal shareholders? MR. G. HOLLAND: Mr. Chairman, the principal is Sheik Abdullah AI Bassan, who is the chairman, and they are a very highly respected Saudi Arabian business family. On the Datacom Board, when it is incorporated, Sheik Abdullah will be the chairman. Other representatives will be Tariq AI Bassan and Chafe Abou Richeh along with our Mr. Anderson, Mr. Pedde, and Mr. Provencher. MR. D.

ORCHARD: Where will the board meetings be held? MR. G. HOLLAND: Mr. Chairman, I expect that the wonders of telecommunications will be used extensively in board business, but periodically full meetings will be required and likely they will alternate, perhaps one meeting in Saudi Arabia and another at a convenient central spot or something of that sort. MR. D. ORCHARD: Who is the general manager of MTX that's in Saudi Arabia theoretically headmanning up this joint venture? MR. G. HOLLAND: MTX has appointed Mike Aysan as its resident general manager.

On incorporation, the board will have to confirm their new officers officially. MR. D. ORCHARD: How many other MTS staff have been on loan, or working leave, or whatever with MTX, and how many of those personnel are now in Saudi Arabia? 96 MR. G. HOLLAND: Mr. Chairman, there are five emp loyees resident in Saudi Arabia at the moment whose full time will be with Datacom. MR. D. ORCHARD: Are those five emp loyees Saudi Arabian emp loyees or are they MTS emp loyees that have been moved to Saudi Arabia? MR. G. HOLLAND: Mr. Chairman, those are the ex MTS emp loyees now located in Saudi Arabia. MR. D.

ORCHARD: Now, Mr. Chairman, I have got maybe another 10 minutes of questioning on this item if we wish to go through and then we can complete the report another day, or if you want to shut it down at 12 :30, that's fine with me. MR. R. DOERN: Mr. Chairman, just on a point of order. We have a caucus meeting at 1: 00, and we have to eat and so on and so on. I suggest we adjourn at 12:30. MR. D. ORCHARD: Ok ay.

Could the general manager provide us with some information for next time we meet then: No. 1, the volume of business that it's expected the newly incorporated company would be part of, or what kind of business revenues will they generate in Saudi Arabia; what the projections of net earnings to MTX, hence MTS, would be from this newly formed partnership; and -I'm not familiar with business dealings in Saudi Arabia and we are dealing a long ways away from, for instance, arms deals, weaponry dealings to communications dealings -but it's always been alleged that to deal in Saudi Arabia, you have got to have yourself an inside person that will allow you to have access to the proper authorities and the proper money.

To achieve sales success, it doesn't hurt to have that kind of a person, and I forget the fellow's name. He has his own private 747, one of the sheiks in Saudi Arabia who does considerable trade in weaponry in Saudi Arabia, and his finder's fees are substantial. MR. CHAIRMAN: Order please. The hour is 12:30, time for committee to rise. There are no further meetings scheduled for consi deration of MTS, but an announcement will be made in the House when a date is set for the next reconvening of Public Utilities Committee to consider MTS. Committee rise.

Document details

Collection	Manitoba — Debates (Hansard)
Citation	32-2-pu5
Type	hansard
Volume / chapter	32nd 2nd hansardpdf pu5.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	ad9f3753f954e9985c76e445c4d1524b91f96acf

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