I LEGISLATIVE ASSEMBLY OF MANITOBA Tuesday, 20 April, 1982 Tim e - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - ECONOMIC DEVELOPMENT AND TOURISM MR. DEPUTY CHAIRMAN, Phi l Eyler (River East): Com mittee will come to order. We are on Item 2.(b)( 2) In dus trial Devel op ment. The Hon ourable Mem ber for Sturgeon Cree k. MR. J. FRANK JOHNSTON (Sturgeon Creek): Mr. Chairman, I'd ju st lik e to fo llo w up on some of the proj ects that were moving along fairly wel l.

The Pri me Labo ratories with their legume in oculants had been approved by FEARO, a OREE offer had been accepted, and they had plan ned to lo cate in the Town of Selkirk. They changed their mind s for dif fere nt rea sons and the search was un der way for them to lo cate in another place in Man itoba. This was one that the Fed eral Go vern ment was excepti onally in terested in to have come to Canada; they have publ ished a book on it. It was because of a sp eech made by the prev ious Min is ter of Agr icul ture that got these people enthusia stic to come to Mani­ toba.

I ju st wonde r where that stands at the pr esent time because it is a very im por tant one for Man itoba and its researc h and develop ment that we wou ld be look ing for with our agri cu ltural ind ustry. MR. DEPUTY CHAIRMAN: Madam Min is ter. HON. MURIEL SMI TH (Osborne): Mr. Chairper son, the project referred to by the honou ra ble mem ber has now go t the new name of FOR-OAK and it is looking for a su itable building in which to locate, so it's still very much aliv e as a potential proj ect. MR.

JOHNSTON: The OREE offer has not been with­ dr awn or anything while they're looking for a pla ce; it's still their in tention to come to Man itoba. I mean OREE offers are made to go to a specific loca tion and I wou ld hope that the OR EE offer is still avai lable, although they're still sear ching for a spo t to mov e to. MRS. SMI TH: Yes , Mr . Cha ir perso n, the OR EE peo­ ple have offered an extension to this company in their applic ation.

We areed that it looks lik e it has potential, they're de vel oping a prod uc t which will fix nitrogen in the soil and, as we all know, this is a vital stage in the growth process, so it is still al ive. MR. JOHNSTON: I jus t have some that OREE offers were ap proved on that I'd lik e to ask. Wescott Fashions Ltd., they had their applic ation ap proved and it's pub ­ lic kno wledge; it was in the pa per for 1.9 mi llion inv estment for an estimated additional emp loyment of about 100. MRS. SMI TH: Mr. Chai rpe r son, I would lik e to ju st delay resp onding to that.

It was in process in the prev ious year and I can re ply a li ttle later as to what 1672 the cur re nt status of that applic ation is. MR. JOHNSTON: The Canad ian-Anglo Machine ry Com pany had re cei ved a OR EE offer with our sup port assistance fro m our depa r tment to work with OR EE to get that fro m $1, 100,000.00. Ha ve they mo ved ahead with the custom ma chine ry plant? MRS. SMI TH: Yes. Just to back up, OREE has ap proved the Wescott Fash ion and so they're going ahead. MR. JOHNSTON : Wel l, they've ap proved it and they've accept it and they'r e going ahead in other words MRS.

SMITH: Yes, both Wescott and Canadian-Anglo Machi nery Company ha ve been ap proved by OREE and are proceed ing. MR. JOHNSTON: Shell Canada Lim ited, the Minis ter has annou nced that they did n't come to Man itoba or didn' t con tinue with their new plant in Br andon. The reas ons gi ven were in terest rates. As I recal l, the interest rates were highe r last fal l when they were plan nin g to mo ve ahead and they expanded their option on the pro perty in Br andon. I think they increased their mo ney on the option fro m $5,000 to $30, 000 and the decision not to come is because of high interest ra tes.

They were well on the road to doing it when the interest rates were hig her. I'm sur e that every body worked on that very hard to have it come to Manitoba. I would ask, have they drop ped the option on the land in Br andon? MRS. SMI TH: Yes, it's regret table that we have to repor t that they have but the re ason beh ind it - (I nterj ection)- Wel l, maybe I'll carry on and if he has a comment he can fill in later. The reason for the dr opping of the option is not the simple one of in terest rate change or high in terest rate .

The reason has to do with Shell' s situation with regard to their petr oleum reserves and they have decided because of the cur rent situation in re lation to the whole oil indus try that they had to retract some­ what and they have conside ra bly red uced their empha sis on the agri-chemic al side of the ind ustry. This is a retrench ment on their par t based on their re lative ro le in the overa ll petro leu m indus try .

So, regret tably the inv estment that they had hoped to put in to Br andon shif ted down to - wel l, not jus t a lo w priority - shif ted out of the feasible project that their head office was willing to enter in on and the de cision was not taken easily or because of any lack of co­ op erat ion or enthusia sm on the part of the Man itoba Govern ment. MR. JOHNSTON: Did the annou ncement of 3M go to Mo rde n? They did move ahead but did they also keep the option, or pu rchase the large tract of land that they were or iginally plan ning to pur chase? MRS. SMI TH: 3M is occup ying a 40-acre lo t of land

Tuesday, 20 April, 1982 an d I understan d that was the larger amount that they ha d initially consi dered. Is that better, Walter? MR. DEPUTY CHAIRMAN: The Member for Swa n River. MR. D.M. (Doug) GOURLAY (Swan River): Mr. Chairman, I'd like to ask the Minister whether she's had staff members from the department working on the development of 11 meat packing in dustry in North­ ern Manitoba? MRS. SMITH: Mr. Chairperson, I' d ask the member to elaborate on his question. MR.

GOURLAY: I'm wondering whether the depart­ ment has any personnel from the Department of Eco­ nomic Development pursui ng the feasibility of estab­ lishing a meat packing in dustry to serve Northern Manitoba? MRS. SMITH: Mr. Chairperso n, there is some study going on of the options. I trust that the proposals by my. colleagues on the Beef Stabilization Plan will make such an in dustry development a more highly probable development.

As you know, the purpose of ihe Beef Stabiliz atio n Plan proposed by the govern­ me nt is to promote the total in dustry an d to encour­ age people in the beef fiel d to keep their cattle through all the stages of development and provide a rea dy source to any meat packing in dustry that coul d develop in the province. So, I woul d see the probabil­ ity of such an in dustry developme nt hingi ng very greatly on the willingness of farmers to take up the governme nt plan.

The plan, of course, at the beef end of it is a voluntary plan an d it's base d very much on the willingness of farmers to buil d the total in dustry, not to just take

part in one component of the in dustry and sell off their animals through mid dle people to spe­ cialists in the fi nishing end of the in dustry. We hope by the kind of program that we've propose d that there will a real incentive for Manitoba farmers to get into all the phases of the beef in dustry and, in fact, develop something that will add more value here in Manitoba an d very much improve the economic situatio n.

The client that is interested in developing the meat pack­ ing in dustry is going to make a OREE application in a few weeks an d at this poi nt in time, we're gover ned by the usu11I confidentiality requirements around those sorts of applicatio ns. MR. GOURLAY: Well, my reason for asking that question, of course, I guess it was a couple of years ago, there was a North Feeding the North Conference held in The Pas. There's been follow-up meetings as a result of that particular confere nce.

However, just recently, the Valley Meat Packers in Swan River, who do a considerable amount of processing at that loca­ tion 11n d transport meat pro ducts into northern com­ munities, ha d in dicate d that information brought to them indicate d tha t there was some activity in the development of a meat packing in dustry at some loca­ tion in the north . I woul d suspect it woul d be at The Pas. I was just won dering just what activity was com­ ing out of the Department of Economic Development with respect to the overall feasibility and whether or not this was a fact . I appreciate the answer that you have given.

I wonder, a further questio n to the Mi nister, whether there's been any recent activity in the Swa n River area with respect to the development of a wafer boar d pla nt or chip board? I thi nk two or three years ago the Weldwood people in dicate d an interest in that area an d I'm wondering if tha� has developed any further in the last few months? MRS. SMITH: Yes, Mr. Chairperson, the department are active in the first project identified, the meat pack­ ing in dustry. They are assisting with feasibility stu­ dies an d OREE applications in northern areas.

I guess that northern co nference on foo d pro duction di d open the eyes of ma ny people to the potential that does exist in the north. So often we've thought of the north as having very limite d economic development potential an d yet what we're fin di ng by greater atten­ tio n to some of the second-stage industries, if you like, is that, in fact, such an in dustry ca n become quite vi&ble in that setting. I hope that we will be able to assist that project to a successful stage where they can take off.

With regar d to wafer board, the wafer boar d indus­ try or plant; because of the ge neral conditions in the co nstruction in dustry and the market in general in forest-relate d pro ducts, that particular project is in a hol d position. I think we're not likely to see a real development there until there's some recovery show n in the forest products industry as a whole. MR. GOURLAY: Mr.

Chair ma n, I'm wo ndering whether the Minister has any discussions with her colleag ue, the Minister of Municipal Affairs with respect to the development of the Manitoba Mai n Street Program whereby expertise from the Depart­ ment of Eco nomic Development might be able to assist with the Main Street Manitoba Program. MRS. SMI TH: Mr.

Chairperson, because the main thrust of that program is a cosmetic-type of cha nge to a mu nicipality or a main street havi ng to do with si de­ walks, lighting, seating, changes in the curbs for dis­ able d persons, the program fits much more comfor­ tably into the Municipal Affairs Department. My colleague an d I, the Minister of Municipal Affairs, are in regular consultation and if there is any co nstructive role for us to play you can be assure d that we will do so. 1673 MR. DEPUTY CHAI RMAN: The Member for Arthur. MR. DOWNEY: Mr. Chairman, the Minister has ma de a statement that I am quite interested in.

She has indicate d that there are discussions going on with a packinghouse in dustry, is that a new packinghouse industry that is planning to develop in Manitoba or an expa nsion of a present packinghouse facilities? MRS. SMI TH: Mr. Chairperson, it is a new one in the northern region. MR. DOWNEY: One of the further comments that was ma de by the Minister is that she, as the Minister of Economic Development, is depending very heavily on

Tuesday, 20 April, 1982 her colleague's and her government's newly intro­ duced Beef Program that is going to be the new eco­ no mic stimulus of the agriculture sector in her words, and I' m taking it as such.

Is that what I understand that she feels is going to be a new major thrust in the whole of the packinghouse industry and if so, does she plan to move into the packinghouse industry or support the packinghouse industry in the same way in which her colleague, the Minister of Agriculture, intends to move into the feedlot business, that there would be government participation in packinghouse facilities through the public sector, is that some of her intentions? MRS. SMITH: Mr . Chairperson, my colleague, the Minister of Agriculture, has elaborated in great detail the stages of the Beef Stabilization Plan .

The intent of the plan is to develop a strong industry in the Province of Manitoba going from all stages of the cow-calf to the - I keep forgetting the agricultural terms but the fattening - what is it you call it when you keep them fro m - well, you don't slaughter them first - the finishing through to the slaughter and the packing­ house stage .

Up until now, these phases of the indus­ try have been handled by different persons and that has meant that in the exchange or the sale of an ani mal from one business group to another, that there is a certain profit taken off and that in many cases the most profitable end of the operation and that is the packing end of it, the slaughter and the packing­ house, takes place outside of the province . Now the intent of the new plan is to encourage, not require, but to encourage by virtue of its voluntary membership component, encourage farmers in Manitoba to build the industry from one end to the other.

That means they must make a commitment to keep their animals for several years and to market them for slaughter in Manitoba. It means that we must provide some kind of financial incentive to enable farmers to hang onto their animals that long and to carry them to the final stage where they're ready to be slaughtered. The pro­ gra m, as outlined by the Minister of Agriculture, does not have public control or, should we say, it's not intervention, I guess control is the word - it doesn't have that as its goal.

It has the goal of facilitating farmers knowing where the financial pressures will co me as they build the industry. In the final analysis, the success of the program will depend on the desire of Manitoba farmers to build that industry. It 's our belief that there will be more economic benefit to the total population of Manitoba, and of course, to the individual farmer if they're wil­ ling to develop the capacity to take the animals right through the whole cycle.

If the willingness is out there, it 's not something that can be done by govern­ men t alone; government can assist and encourage and help people over the tough stages. If there's response in the farming com munity, then that pro­ gra m will in fact build a strong and viable beef indus­ try in the province.

If the will and the desire is not there among the farming community, well, they need not join and that program will not be fully drawn upon but I think I agree with my colleague, the Minister of Agriculture, that our role as government is to enable, in difficult economic circu mstances, the farming community to build this industry. It 's a co-operative 1674 effort. We have a role to play and the individual farmers have a role to play. At the packinghouse end, our role is to enable that to develop in Manitoba, not to get excited about con­ trolling or running this for some sort of ideological reason.

I submit, if the honourable members will read carefully the details of the proposed plan, they will see, in fact, that is the design of the program, that is the intent of the program and that is certainly the sense in which the progra m can be made successful or not, depending on the desire, the voluntary desire and choices of the farmers of Manitoba. MR. DOWNEY: Mr.

Chairman, to the Minister, I am somewhat concerned about the way in which one or two or maybe many of our colleagues have led her down the garden path, because what she has told me in this last few minutes is if a cow-calf producer who is now an individual who is living in any part of Manitoba who would normally produce a calf crop in the spring of the year from his cow herd, and in the fall of year if there was a profit to be taken, that the government is now not advising those particular individuals to take that profit.

That they could take their livestock to a sale facility, whether it was the one in Brandon which was unfortunately destroyed by fire, whether it was the one in Ashern, or whether it was the one in Roblin, anywhere in this province where the producer of those calves could take them to that sale facility, the Union Stock Yards in Winnipeg, could take those calves to that facility and put them on sale to be purchased by a feed lot operator in Manitoba, in Sas­ katchewan, or in Ontario or wherever the highest bidder came from to take those calves and produce a profit for that individual .

That is now not in the best interests of the livestock industry, that you're going to give it strength by taking away that profitability at that particular time and tell the producer you shall not, if you're in the progra m to build a better beef industry, but if you stay in the beef program or enter this beef progra m that you now feed that ani mal through even though you don't produce grain and you have to buy all the inputs; that a year from now you can market that ani mal and it 'll be sold, must be sold, if the objec­ tive is to sell it directly in Manitoba; that you're going to now force it to be sold and slaughtered in a Mani­ toba slaughterhouse; that beef in the United States is higher; that the producer cannot sell it to that particu­ lar outside market; that if Ontario wants to pay higher money for that beef, or Vancouver, or anywhere else on a live -weight basis, that restrictions will be now placed on that farmer that he has to slaughter that ani mal in Manitoba because of the economic benefit that we're all supposed to get from this new beef program.

I sub mit to you, Mada m Minister, through the Chairman, that it won't work because the whole Can­ adian beef market and the pricing mechanis m is established in the U.S. and North Am erican continent; that beef flows live and dressed all over wherever the highest price dictates, whether it 's a stock calf or whether it 's a slaughter animal, then that's where the producers will eventually get that animal to that par­ ticular mark et. It's traditionally worked the best through the beef marketing system that has been established in this country. I sub mit to you that it will

Tuesday, 20 April, 1982 probab ly continue that way even though, with all good intentions, you are trying to introduce a gov­ ernment program that will do all the grandiose things that have been tried prior to 1977. There was a program which ha d the same kind of principles, to establish feedlot operations, to support the cattle industry in excessively times an d when the times got better, they would pay money bac k to the province, liiid that the option to buy the cattle were there to have them slaughtered in Manitoba.

All those grandiose things that governments, in theory, think can be done, but it just doesn't work. I, again, feel that your interference is going to further muddy the waters as it has done in Saskatchewan an d we've certainly seen depressed beef prices some few months ago because of the intervention of the Saskatchewan government. All it does is further distort the natural marketing and the movement of beef in the North American system. When you get producers of a com­ modity tied into that kind of a program for six years, you're entering them into a program in which they are in a no-win situation.

In fairness to you and your Minister of Agriculture, all we can do is wait until the proof is in the numbers of people that participate. Goodness knows, they need a support program, but they don't need all the additives they get with the one that is being presP.nted by the government today . They need a one-time payment to equalize them with Ontario ari d Alberta.

They don't need a Beef Marketing Commission to direct their beef through - which she woul d refer to as an orderly marketing system - because as she has indicate d, in the rest of the economy of this country that we can't or she can't influence what's happening there. I, again, submit that she can't do it in the beef business because of the overall marketing system in which we live . I would dearly hope that they would get the idea out of your mind, Mr. Chairman, to the Minister, that there is an automatic profit the minute you produce a slaughter animal .

There are too many feedlots that have gone out of business in this province to prove otherwise . That has been one of the areas that have had the extreme difficulties as well as the cow-calf producer. I cannot see where the economic develop­ ment is going to take place through the kind of a program that you're suggesting .

I would just suggest that you're going to cause further management deci­ sion problems with the beef producers; it's going to cause inequities, particularly when you get to the marketing of cattle that are either questionable for - they could either go to the further finishing in feed lots or they could go to the slaughter house.

If a mistake is ma de once they go to the slaughter house an d they grade a "B" or something less than an "A," then you're doing nothing more than costing the taxpayer who is trying to support the industry and the beef producer who is putting a commodity on the market that is not quite finished . They're called two-way cattle; they're cattle that should go to an open market selling system an d the cattle buyers, the people who are profession­ als in their field, make that decision whether they should go for further finishing or to a slaughterhouse.

But once those animals have have been slaughtered for butcher purposes, there's no recourse. You have a commodity that's both undesirable to the industry, 1675 the consumers, an d I think it's an ill-conceived con­ cept that again I have to say I do not believe it will work in its present form. MRS. SMITH: Mr . Chairperson, the question of this program has been fully debated in the agriculture Estimates. I guess the involvement of Economic Development in this field is that we have certain inter­ ests in developing healthier in dustries - an d I say industries - in the Province of Manitoba.

Some of the principles that we observe are that, if you're trying to develop a healthy industry, the more components of it you can include in your province, the more value-a dded that you can accomplish, the more benefits there are for the people. So, that is why we have an interest in retaining the full cycle of the beef in dustry here in the pro vince.

The farmers can catch that vision of their industry an d help it to grow, or it being a voluntary system, they can opt not to an d that will be a choice they make, but we feel that our role is to make possible the developing of a healthy and more integrated industry. Another economic principle we're concerned about is that if we can eliminate an increasing number of middle persons in the industry so that there is Jess taken out in profit at the different stages of the indus­ try, that we can produce a more economical pro duct for the consumers which is our concern.

We're not only trying to maximize profit to the farming commun­ ity. We're trying to see that a valuable product is pro­ duced and available to consumers. I submit that the approach of the Honourable Member is putting the principle of short-sighted max­ imizing gai n ahea d of developing a total industry for the province and that we are making an appeal to the farmers of th e province which they have perfect free­ dom to accept or reject; that there is an opportunity here.

There is an opportunity for them as in dividuals to get a wider and somewhat more complex view of their industry, to add more value here in Manitoba and to ensure more security and eventually more profit for themselves. That is the purpose of the program and as I say if the farmers are of the min d set that whatever has been is okay, that traditional ways of marketing are the best, they are free to make that choice.

I submit that some of the rules of thumb that have governed the beef industry in this province have been that somehow there were cycles, that one coul d pre­ dict the cycle, that one could ask for public support when times were tough and then as one saw the market opening up and the opportunity to make a profit, then one could say government keep out.

Now, I submit that we all in Manitoba and certainly in the farming industry have more to gain by looking at the indus try in a co nnected way an d that we have more to gain by asking for the kind of public support that just doesn't bail out in difficult times but helps to develop the integrated stages of the in dustry, so that more value is added, so that the lowest reasonable prices are available to the consumer, that we really can build an industry that will last. I guess it's in opposition to the concept of one-time payments that assist a farmer when in difficulty .

We're saying, okay, assistance is available but it's in the form of an incentive to encourage you as a group to build a total in dustry in Manitoba .

- - Tuesday, 20 April, 1982 MR. DOWNEY: Mr. Chairman, I will be very brief. I guess the concern that I have is the id ea that the Minister has that these mi ddle persons - I would call them mi ddle-men, as I think is a more understood term in the business world, but to satisfy her we can call them mi ddle persons - if she looks at the front page of the Brandon Sun probably of last Thursday, she would see that there were some 20 some people employe d at the Brandon Auction Mart that was des­ troyed by fire. Some 20 some people were earning a living through a farmer-owne d co-operative market­ ing facility.

They han dled some 120,000 slaughter cat­ tle an d feeder cattle last year. The profit for those middle persons that she refers to is some $42,000 .00. That to me, Mr. Chairman, is a pretty small amount of money when you consider the hundreds of millions of dollars that were put through in livestock sales for a company to retain as a profit on the investment that they ha d. That's not calculating the hea d office staff; that's not calculating the truckers; that's not calculat­ ing all the input that goes into operating that mi ddle man operation that she refers to.

So, if she plans to replace them an d that kin d of a system with a bureau­ cratic system of halting a beef, I wish her well, but I feel very sorry for those people that she's replacing, those people that now have jobs. Then we'll use another one. The Minister of Munici­ pal Affairs is sitting here. He's aware of the livestock organization at Ste. Rose an d the one at Ashern that's owned by the pro ducers; there's people there that are employed.

Those people will no longer have to worry about their jobs because this present Minister of Eco­ nomic Development supported by the Minister of Agriculture is going to change all that. Those jobs will become redundant an d filled with civil servants sitting at a telephone at a packinghouse desk an d that's who'll be doing the work.

So, I have some serious concerns an d reservations about the whole thrust an d I want it on the recor d to show that I think that it's totally unacceptable to the farm community as it is to the packinghouse an d the marketing institutes that are now in place an d I think will continue to be in place, Mr. Chairman. MRS. SMITH: Mr . Chairperson, the people identified by the honourable member have the right to choose whether to pursue the system they think will work or to plug into the system that we are proposing.

It 's my belief that in today's tight economic situation that mere survival is going to require a willingness to change. Standing still an d relying on yesterday's pa tterns an d attitudes is going to lea d to decline. A willingness to change may ensure survival, may, it will not definitely ensure survival. To thrive an d grow in today's economic climate is going to take an open mind, a willingness to see the connectedness of things, to think over longer time frames an d be willing to work together. Now, the cow-calf pro ducers are going to have an option.

They can choose whether they wish to plug into the opportunity that we are offering or not. We feel that offering that opportunity of a different way of organizing their economic activ­ ity is our responsibility. We feel we have done that an d we respect the right of the in divi dual farmer to make a choice. Let's review the situation in a year an d in two years an d see how well it's working. We're certainly 1676 committe d to looking at that. MR. DOWNEY: Well, two concerns, the people that I was referring to that are part of the marketing system do not have the choice that she refers to.

It 's the beef producer who has the choice whether he or she enters the program. Those people who are now unemployed by Manitoba Pool Elevators in Brandon, if that facility is not used by the pro ducers to sell feeder cattle an d to sell the fat cattle, then their jobs become redund­ ant. The people at Ashern who work in the facilities, their jobs, they don't have a choice. The policies of the government woul d be in fact putting them out of a job. That's the point I wante d to make.

The fact that the Minister says we should review it in one or two years, she's asking the pro ducers to sign up for six years, to give 4 to 8 percent of the gross returns of their lives­ tock production to this program. So, I would think that the concerns that are being place d before the Minister should be reviewed now before the pro ducers are aske d to enter a six-year program rather than ask them to enter a contract for six years, an d then say two or three years down the roa d they'll review it. That's not acceptable as far as I' m concerned. MRS. SMITH: Mr.

Chairperson, I believe an d I know my colleague, the Minister of Agriculture, believes that our farmers aren't naive any more. They know that the in dustry they are a part of -(lnterjection )- well, I think that the myth that they live in a completely indi­ vi dualistic free enterprise, self- determining world really is a naive belief. I can understan d people hol d­ ing it but I can 't understan d people who are hurt by the cyclical ups an d downs of the marketing world, particularly in the beef area.

It's a cruel cycle if you happen to be caught in the wrong end of it an d if as at present that cycle doesn't behave in any regular fashion as used to be counted upon so that the plan­ ning an d the calculation that goes on by a far mer is upset. We submit that the market system is not a self­ correcting system; it is not guarantee d to give a fair or optimum benefit to the people involve d in it.

There­ fore, we have to use our Go d-given brains an d resolve to understan d the co mponents of an in dustry to see what can be done constructively to pro duce a healthy industry, an d from our point of view in Economic Development, add the most value here in Manitoba an d provide the most security. Now the program that's come forwar d is designed to do that, but it 's designed to do that only if the farmers want that kin d of in dustry development here an d if they're prepare d to volunteer to be a part of it. If they choose not to, that's their prerogative.

If they choose to enter into it an d catch the excitement, if you like, an d the chal­ lenge an d the greater gains down the roa d, then we will in fact all be the gainers here in Manitoba. I woul d be just as happy to move on in the discussion, if the honourable members are, in fact, so prepared. MR. DEPUTY CHAIRMAN: Is that agreed? I have a speakers ' list. The Member for Lakeside. MR. HARRY ENNS (Lakeside): Mr. Chairman, I don't wish to prolong the Estimates at this time but listening to the Minister, I must confess, while this may not

Tuesday, 20 April, 1982 necessarily win me any votes back home on the farm, but I have to express nothing but awe an d ad miration for this Minister an d for this government that suggests to us in this committee meeting that they are prepare d to make substantive an d fun damental changes to assist them of the production of foo d for all our peo­ ple , an d we're all consumers ; that is going to be a major improvement. Mr. Chairman, most people in this wo rld devote the better part of their working day an d the better part of their disposal income simply to feed themselves.

It so happens that for many different reasons, but certainly one of them is the system that we operate under, that in this country since the 50s we have steadily been able to decrease the amount of effort an d that portion of our disposable income that Manitobans an d Canadians need for food. In the mid'- 50s I believe that figure was in the area of 26, 27 percent, today it's about 18 percent. The leaders in that field, of course, is the United States, our neigh­ bours, who are roughly spending 16 percent of their disposable income to feed themselves.

That country has, of course, the least regulate d economy in terms of foo d production in the world, perhaps. Canadians, Mapito bans are now spending about 18 percent of their disposable income to provide a reasonable level of nutrition an d foo d. I, on the one han d, woul d like to play the devil's advocate. I woul d like to joint that group of favou red professionals perhaps that have very restricted entry into fields as I determined the other day in the Minister of Agriculture's Estimates.

I have two sons, an d one of them may want to be a turkey farmer an d want to be prepare d to sell turkeys to his fellow neighbours an d city cousins, but he can't do that, he's prevented by law. If he wants to sell turkeys for 20 percent less than what is the going price, he'll be put in jail. My other son may want to milk cows for a living, an d does that very well, but if he wants to sell it for 1 O cents a quart less than Modern Dairies sells it for, what Silverwoods sells it for , he'll be put in jail, he can't do that in this country.

I'm just pointing out in a little way what regu­ lation really means, an d we should be aware of that, an d so when the Minister speaks in very flowery terms about providing the very best of all situations, let's remember that we are all consumers in this world. Let's also remember why a dozen Canadian eggs sell for 75 cents a dozen in Minneapolis an d 95 cents a dozen in Winnipeg. There's a reason for that. Now, Madam Minister, let's at least be conscious of that.

But, as I say, I'm enthralle d by the optimism an d the challenge that this Minister is prepare d to undertake in revamping the manner an d the way in which we have provi ded foo d as foo d pro ducers, as farmers, that very basic commodity that all of us need. I just wante d to put that on the record an d I wi ll look for­ war d four years hence, Madam Minister, as to how you'll succeed in this endeavour. MRS. SMITH: Well, Mr. Chairperson, at least for opin­ ion you won't have to wait four years. The foo d pro­ duction system that we have in place in this country is changing.

I don't know where the honourable member has been living the last years of his life, but I'm sure if he lives on the farm, that he has seen the conditions under which his farm is operating change. I don't know the specifics of your farm. I do know that what I understand of the farming in dustry in North America, specifically in Canada, is that some rather significant things have been happening. For one thing, there's been a great deal of artificial chemical put onto the land, there's been a certain mining of the lan d and not necessarily a recognition that there's a limite d amount of that, that can be done.

That at some point, we have to pay back to the lan d what it needs, that it needs time to recover, that it needs time to regenerate an d that some of the older, slower methods of farming an d crop rotation an d plowing back in summer fallow did regenerate the lan d although they did not make the quickest buck in the short run. In the long run, they may have ma de a lot of sense, but there's something has happened to the farming industry.

For one thing people have been brainwashe d, I believe brainwashed, that's my opinion, into thinking that the large farm highly mechanized, highly supported by chemical fer­ tilizer, herbicide, pesticide is automatically the best an d that so what if they end up owing more to the bank an d paying higher prices for fuel, for chemicals, that somehow in the marvelous market system of ours things are supposed to work out. I submit that there are some things that might not work out. We may be depleting our soil which is the very basis on which we all depend.

We may be allow­ ing a specialization an d a refinement of our seed types to be occurring through plant breeders, rights, moves an d so on, so that the very genetic material on which we all depend for our livelihoo d is beco ming deprived of its capacity to respond an d generate new forms that can overcome ailments. We have allowe d our Canadian system to move into specialization in fewer an d fewer crops.

I've been please d to see the diversification that's starte d to occur at least in some of the grain crops in recent years but, in general, we've allowe d our Canadian system to become more an d more specialized, we've allowe d fine lan d arable lan d to be moved into nonproductive use, an d I sub­ mit that this may have looked goo d in the short run because the market forces seemed to indicate there was better profit to specialize, but in the long run it may be suicidal because it reduces the capacity of our country to produce the diversity of foo d crops that we need.

Tra de looks goo d when transportation costs are minimal, but with the price of oil shooting up an d the reliability of that kind of a foo d pro duction system grows, we may fin d that what we have created is not an economic miracle but an economic disaster. 1677 Now, I'm deliberately painting it in extreme terms. I don't think we're in that quite that ba d a situation. but I submit that our choices are not whether to carry on with a system that's working very well an d is somehow stable an d a system that we are proposing which is somehow new, frightening an d different.

Our choices are rather going on with a system that in many ways is hea ding in a destructive direction, that does not vote well for our future capacity to feed ourselves well or economically, an d that we have the opportunity in this current time to make choices about how we use the land, what kin d of things we grow an d the way in which we organize our foo d growing capacities here in Manitoba. I submit that the healthy development of the full stages of an in dustry like the beef industry is a valua­ ble option an d farmers do not have to choose it but

I • Tuesday, 20 April, 1982 we, in our consideration of the important components of the food industry are recommending that approach. MR. DEPUTY CHAIRMAN: The Member for Lakeside. MR. ENNS: Madam Minister, the difference between you and me is that I am an optimist; I'm also a cattle­ man. I believe that our genetic scientist will eventually produce a cow that will produce, not a calf, but a litter of five and eight and that they will feed and sustain themselves on rusty tin cans and clean up our envi­ ronment while they're at it.

That genuinely is an optim­ istic viewpoint that free enterprisers and entrepre­ neurs have, and before you scoff at it, what has happened genetically in the livestock industry, surro­ gate cows that will carry very valuable $1 0,000, $1 5,000, $20,000 calves in them by implant, etc. etc., one should not take too lightly about what can happen if given a free rein and if offered an incentive to do so.

Really, the question and I don't want to prolong this debate because we are now talking in Agriculture and you are the Economic Development Minister and you don't have to particularly, I know you may want to, defend a particular status quo of a particular type of farming or something like that, but I'm talking about production. I am talking about what are we providing for our citizens. What we have provided for our citi­ zens is the lowest possible price for food, some 18 percent of their disposable income. They can do many other things with income.

They can support political parties and get them elected if they want to; they can support leisure at the lake; they can support going to cultural happenings and broaden their living experience that way, in a manner, in a way, which very few other groupings of peoples, civilizations have other than here on the North American continent. You have quoted from time to time the Japanese experience. They spend about 35 percent of their disposable income on food. Western Europe spends about 28 to 30 percent of their disposable income on food.

It is only in this country that we spend as little as 18 percent of our disposable income on food and you have the -(Interjection)- no, no, I'm not saying the gall. I say the courage and that's why I say I admire her courage to tinker with that system. I happen to think that we have in many ways already restricted further progress by not allowing the bringing together of technology, of bringing together capital, whether it is big firms or multinational firms of considerably enhancing our processing industry here in this pro­ vince. That has not happened just under your Minis­ try, Mrs. Minister.

That's happened under Conserva­ tive Ministries; that's happened under my Ministry back in 19 67 -68 when we had opportunities of provid­ ing many hundreds of jobs. I won't exaggerate, per­ haps even thousands of jobs, in expanding the pro­ cessing industry in this province.

It is my belief, Madam Minister, that the biggest direction of the Department of Economics should be that the excess food that we have the capacity of producing in this province should have the biggest amount of labour input into it; that we should be processing it to the greate.st extent; that we should do far more exporting of finished product rather than the raw product, but that takes a certain amount of appre- ciation that capital, business, requires their elbow room to make this happen.

That isn't always happen­ ing under our current restricted Marketing Board leg­ islation and I don't put that at the feet of this Minister. That's happened under many different jurisdictions including a jurisdiction that I had at one particular time. I'm simply putting it on the record and I'll agree with the Minister. I won't pursue the argument much further that it's a very admirable role for the Minister to assume that she can and that this government will considerably improve in terms of the net product. The net product is providing nutritious food for Manitobans at less cost than it is today. MRS. SMITH: Mr.

Chairperson, maybe in this lengthy interchange, we are arriving at some common under­ standings and that is that our goal is to provide nutri­ tious food for our own people at moderate cost. I think we can agree on that. I think where we have to dis­ agree and I would just like to itemize some of the issues. I think you are possibly a year or a year-and-a­ ha If perhaps my senior.

You were raised in that same era where we were encouraged to trust unquestion­ ingly in the ability of scientists to solve all our prob­ lems and to bring greater plenty if only we would put more money into technology or, at the same time, into business, into capital investment. I submit, technology and enterprise can do a great deal.

In some respects they can do things that we haven't yet imagined, but there are also the possibili­ ties of limits to what they can do and I think to have a blind faith that technology can solve all our problems or that, at least, pursuing any technology is good and that we don't have to sit back and look at the cumula­ tive affect and make some judgment calls is a very dangerous sort of faith. I don't share that faith.

I am very interested and supportive of scientific develop­ ment, but I think there also has to be a kind of judg­ ment that looks at the possibility that we may deplete our soils; that we may seriously reduce the genetic capacity of our seeds to regenerate; that we may so add preservatives and so on to our food that we reduce its nutrition; that cost to the consumer is not the only factor. There is also quality.

If we trust in whatever agricultural policy produces quick profit to the producer, we may end up in hurting the common heredity of all of us, the soil, and we may end up not always delivering the best nutrition at the most reasonable cost to the consumer. So, I think we shouldn't go into any of these issues with a blind faith. Curiosity, openness, willingness to evaluate, yes, but not a blind faith.

I think that we are after good nutri­ tion, reasonable use of our land, as much self­ sufficiency in food as we can reasonably manage given our climate and reasonable profit for the people engaged in all the activities in the chain of the food production cycle. I submit that is what we're after in other industries as well. We think that it's a balanced approach and that it does not rely blindly on what I think are really outmoded beliefs. 1678 MR. DEPUTY CHAIRMAN: The Member for Swan River. MR. GOURLAY: I have a short question regarding

Tuesday, 20 April, 1982 Porky Packers that was established at The Pas some 10 or 12 years ago and it only functioned for a short time and was closed down because it violated a municipal by-law. I'm wondering, the Minister indi­ cated that there was some feasibility work going on in the North with respect to establishing a new meat processing facility. Does this involve the future use of Porky Packers. by any chance? MRS. SMITH: The future use of what? MR. DOWNEY: Porky Packers, at The Pas. MRS. SMITH: Mr.

Chairperson, I can say no. but that we would rather keep confidential the name of firms that we're dealing with. I think that's the basis on which we work with them. MR. DOWNEY: I'm not seeking the name of the firm that wants to get a new facility going, but I know that the Federal Government and I'm not sure about the province. did put in a fair amount of money in the facility that is sitting there and hasn't been operating as· a complete meat processing. I am wondering if there has been a change in the municipal zoning there that this facility might be used in part for such a project? MRS. SMITH: Mr.

Chairperson, I don't know about the particular proposal that the member is referring to. I really don't have anything specific to say about it. MR. DEPUTY CHAIRMAN: The Member for Stur­ geon Creek. MR. JOHNSTON: Thank you, Mr. Chairman. I just want to be clear on one thing.

The person or persons making OREE application or proposal which means there must have been some research done ahead of time or else there's no sense going with the proposal, am I to understand that there would be a packing plant in The Pas that would slaughter cattle, then pack a product and put it on the market under a name brand, whatever the name brand may be and that the Provincial Government may be involved in establish­ ing that plant with the OREE applicant? MRS. SMITH: Well, Mr.

Chairperson, I never menti­ oned a town in the north; I never mentioned which animal was being considered I never mentioned an active role for the Provincial Government other than in feasibility study. So, I guess the answer in sum to the honourable member is, no. MR. JOHNSTON: But we are looking at a new pack­ ing plant that would be established then on the basis of the program that the Minister of Agriculture has and that plant would be slaughtering and producing a product.

We don't know who it is, but the product would have to have a name and would have to com ­ pete on the market with other companies or maybe it's one of the bigger companies that is taking a look at the feasibility, but we are looking at another packing plant in northern Manitoba. Let's put it that way. MRS. SMITH: Mr. Chairperson. the most I can say is that there is a OREE application for a northern meat industry plant and that is the long and the short of it. MR. JOHNSTON: The Minister said that the involve­ ment at the present time is feasibility study.

Would it be the intention of the government to consider having a joint venture in this plant? MRS. SMITH: Well, Mr. Chairperson, we are open a lot of possibilities no w and in the future, but this particular project that I referred to earlier is a OREE application. OREE meaning Federal Government not Provincial and that's where it sits. There is no current plan or intention of the Provincial Government to be involved in any formal way. MR. JOHNSTON: I have another question on another subject. In Manitoba, we have on Black Island proba­ bly the best silica sand that there is.

At the present time, we have that sand come down to Selkirk and it's shipped in many places in North America, but one that I would mention. It goes to Alberta where they make bottles and the bottles are shipped back to Manitoba to be used in the Manitoba bottling industry and there was a lot of work being done to try and establish a plant that would use that sand either in bottles or in lamps or in dishes or whatever. I know that there was a group went down to New York to a convention.

I believe it was glass manufacturing companies that they attended and they were working very sincerely to try and establish an industry to use that sand in the Province of Manitoba. Is that still being worked on? MRS. SMITH: Mr. Chairperson, I'm informed the specific project the honourable member is referring to was in fact dropped during his tenure.

There is not at present another specific company looking at that possibility, but I guess we've been alerted to the fact that we do have a rather special quality of silica sand in Manitoba and that's one of the opportunities for development that we will be keeping in mind. MR. JOHNSTON: Yes, there was more than one dropped during the last administration, but there was an insistence, I guess, on my part that we keep trying very hard to use that resource of Manitobans in Mani- · toba. I would sincerely hope that effort is still being made. MRS. SMITH: Yes, Mr.

Chairperson, there is another firm actively looking at the glass production, but their intention would not be to use that particular sand. However. I think the honourable member has raised the issue and identified the potential of that sand and I think that's often how good ideas develop. Someone initially investigates; it doesn't look feasible from their point of view. but in the course of time someone else comes along, perhaps with the right piece of the puz­ zle and an industry can in fact develop. MR. JOHNSTON: Mr. Chairman. I wanted to move from (

a) to (b). My question, do you want to pass (

a) and (

b) or just let me ... or (a). MR. DEPUTY CHAIRMAN: (

a) is passed already. 1679

- Tuesday, 20 April, 1982 We're on 2(b)(2). MR. JOHNSTON: Mr. Chairman, I'd just like to ask the Minister, there isn't an increase in personnel in Industrial Development according to the sheet I was supplied with. In fact, it appears that it's a decrease of two people and yet, the Other Expenditures are up about $1 26,000.00. I wonder if the Minister could advise us what that increase is for. MRS. SMITH: Yes, Mr. Chairperson, two people were transferred out from the printed vote to thetime when we did our Estimates. In fact, it was during the hon­ ourable member's tenure.

One was transferred to Regional Benefits and another to Communication and Creative Services. The basic increase in our expenditures is largely accounted for by a second part of a two-part vote to Superior Bus. MR. DEPUTY CHAIRMAN: 2. (b)(2)-pass - the Min­ ister of Municipal Affairs. HON. A.R. PETE ADAM (Ste. Rose): Thank you, Mr. Chairperson. I know that you have allowed a great deal of latitude and I am sure that we should not be discussing in depth, as we have done the Department of Agriculture.

However, I feel compelled to make a few comments not to leave on the record unchal­ lenged some of the remarks that were made by my honourable friend, the Member for Arthur, in that he indicated in his opening remarks that the government was, with it's new program for Beef Stabilization, intending to take control of the industry. As well, I think he mentioned the intention of the government to take over the operation of the Pool Auction Mart in Brandon and I think that the record should be clear that is not the case. I think the Minister of Agriculture made that statement in the House, I believe, yesterday. Mr.

Chairperson, I was in Brandon on Thursday. It was not possible to get hold of the Pool people there on Wednesday because of the fire and I went down and had an on site inspection. In fact, I was there Thursday and Friday as well. Mr. Chairperson, it is certainly a very unfortunate occurrence that hap­ pened there and when I was there, the dead animals were still in the building and the roof was caved in. It was an unbelievable mess and, Mr. Chairman, it was really a gigantic operation to try and clean that out.

The advisory group to the Manitoba Pool held a meet­ ing, I believe that meeting was held on Thursday, and there was some enthusiasm to reopen the auction mart on the part of the adviser; that's what I had been informed by the manager there. However, the Direc­ tors of the Pool were to meet yesterday, that is Mon­ day, to discuss the matter further.

Now the suggestion that the facility would be closed because of an effort on the part of the government to, at least, attempt to try and save the livestock industry is a bit unfair because in speaking to the manager of the auction mart there, he indicated that yes, there were some questions as to whether they would reopen again, but in view of the state of the economy of the beef indus­ try, and it was not whether or not there was a beef program in place, but it was rather the overall condi­ tion of the beef industry at the present time.

I wanted to make that statement, to not leave on the record the statement that the government is trying to take over the facility in Brandon. I believe that, Mr.

Chairperson, there is room and the program has not been finalized, there are still discussions taking place with the beef producers in the Province of Manitoba and there are going to be further meetings held to discuss the program , and there may well be a role for a facility like there is in Brandon to continue and, in fact, I was advised when I was there that they were perhaps planning to change their operation to a rail grade rather than the way they have in the past. The beef stabilization that we are trying to put together is in response to discussions with beef pro­ ducers across the province.

Let's say, for instance, the Manitoba Cattle Producers Association who have recommended a stabilization program that the beef producers would put payment into a fund on every animal sold, that was a position that was put forward by the cattlemen association, and the other compo­ nent is recommendations put forward by other pro­ ducers and it is the combination of different views out there and different positions and it is an attempt, an effort to try and save an industry that's in very serious difficulty and in serious trouble at the present time and it's an attempt to try and rectify some of the weaknesses that is evident in the industry and caus­ ing many of our producers to go out of business, not only in Manitoba, but the same thing is happening in other provinces.

Because of the seriousness of the situation many of our neighbouring provinces have come forward with some very rich programs in some instances and the honourable member is naive, he is very naive if he believes that the Province of Manitoba is able to come forward with say $40 million to save the industry in a one-shot injection of funds that we have just com­ pleted doing a few years ago, and that the livestoc k industry will be here again next year or the year after for the same thing because the nature of the free market does not provide cost of production and there­ fore this is an attempt. Mr.

Chairperson, I'm not sure whether this will save the industry. It may be too late but, at least, it's an attempt to do something, and I've heard about commments from many people, many sectors, about the New Democrats and being with their heads in the sand as far as the Crow rate is concerned. I could reciprocate by saying that on this issue I think the honourable members opposite are indeed not progressive, they are not progressive. 1680 I'm going to be polite, Mr. Chairperson, and say that they are not being progressive.I think we have to address this problem.

The idea behind this is to try and prevent our 400 pound calves, our 500 pound calves from being shipped out of the province, fin­ ished in other provinces, slaughtered in other provin­ ces, sold in other provinces, consumed in other pro­ vinces. This is an attempt to try -(Interjection)- We are not going to force, Mr. Chairman. Now, the members opposite would like to use the word "force." Mr.

Chairperson, the honourable members like to use the word "force." I've heard the Member for Arthur say that word two, three times in his remarks, force, force, force and I hear the Member for Lakeside saying the same thing, and I recall, Mr. Chairman, that the Bill 25, I think it was, that forced every cattle producer in the province to have a check off on his cattle, it was not a

Tuesday, 20 April, 1982 free choice. fhis at least , Mr. Chairperso n, is free for those who feel that they ca nnot battle the free market any more, that they have to have a lo nger term pr'otec­ tion and it is absolutely voluntary, they ma y enter the progra m. I sub mit that there will be roo m for the auct ion marts. There will be ma ny other types of ca ttle that will not be goi ng for slaught er . There will only be a percentage of the cattle goi ng under the progra m if it is successful and there will be roo m for auctio n marts for other types of cattle.

There ma y be roo m for the auctio n marts for assembling points for those cattle that ma y be goi ng to for rail grade, there are all ki nds of other alter natives out there. And I would hope, Mr.

Chairperso n, that members opposite would at least try and be more broad minded on this issue because the industry is in dire stra its an d so mething has to be do ne because the industry is go ne if we do n't do so mething, an d I submit that a cash injectio n of even $40 millio n to tr y and save the industry at this ti me will not help because they'll be back here next year for another 40 millio n an d Ma nitoba is not a, you know, the Treasury is not a bottomless pit such as we have per.haps in so me of our neighbouri ng prov inces. So, Mr.

Chairperson, I just wa nted to leave those re marks on the record so as not to have an y misinterpretatio n about whether the gover nm ent is intend ing to take over this or to take over that, the progra m is volu ntary an d it's free for anyone to joi n or sta y out if he so desires. MR. DE PUTY CHAIRM AN: 2.(b )( 2) - the Member for Morr is. MR. CLAYTON MANNESS (Morris): Tha nk you, Mr. Chair ma n.

First of all, I' m holding myself back and I won't ju mp into the meat debate although the co nten­ tious co mm ents made by the Mi nister, and I'd like to quote - she's talking about far ming and I think she sa id, "It was lead ing to an eco nomic di sast er." She said, "It was heading in a destructive direct ion and that we'll all have to lear n how to use the la nd." I thi nk those co mm ents cr y out for so me type of rebuttal but this is a new Sessio n and I' m sure we'll have ma ny opportunities to debate those co mm ents later on.

This is the first opportunity I have had to sit in this particular depart ment, the Est imates of this depart­ ment, an d the questio n I' m about to ask ma y have bee n covered. In this particular area I' m wondering if the Mi nister could indicat e to us how ma ny fir ms that her depart me nt is aware of that are prepared to expa nd in this province, bear ing in mind not including those that ma y have made announcements to that effect. How ma ny, let's sa y, with 10 emplo yees and over is her depart ment aw are of are prepared to expand their productio n fac ilities in this province at this ti me? MRS.

SMITH: Mr. Chairp erso n, I could sort of toss off numbers like twenty-seven and three-quarters or 3,293. I'd be presumptuous, I do n't know precisely because fir ms in the current method of operation, unless they co me an d ask us for so me ki nd of assis­ ta nce or advice, operate on their own and that's as it should be for the large perce ntage of them. We are activel y assisti ng 20 fir ms with their assess ment of 1681 investment here.

I did, just before we left the beef scene co mpletely, wa nt to bring up to date my colleague, the Honour­ able Mi nister of Municipal Af fair's report on the Bra n­ do n beef and just dra w the attentio n of the gro up to the report made by the Honourable Mi nister of Envi­ ro nment toda y in the House in nonmetric for the be nefit of the members opposite that the fate of the beef cattle in Bra ndon is now be ing settled in a pit 50 feet by 50 feet under la yers of li me, cattle, lim e, cattle and lim e.

Seriously though, to get back to the numbers of fir ms that have intention to co me here, our normal wa y of hear ing fro m fir ms is that they either phone us up as is the wa nt of a fi rm that's looking at investing in a prov ince, they need to know infor matio n about our la ws and there's a lot of infor matio n that ca n be obta ined just by pho ning the depart ment.

There's also specialists in each of the priority industr y sectors who keep on top of what's goi ng on either with exist­ ing firm s or with prospective fir ms, not only here but across the country and so meti mes in other cou ntries, particularly the Un ited States. They travel to events where there are collectio ns of people in these prior ity sectors and they carry with them, of course, infor ma­ tion about the prospects here in Ma nitoba, and if they can interest so meone in an opportunity here, they will do so.

So it's a co mb inat ion of reactio n to quest ions asked by industries and outreach to induce industr ies to co me here, industries whose

part icular needs happe n to match what we hav e to offer. MR. MANNESS: Tha nk you, Mada m Mi nister. I real­ ize full well that, of course, you couldn't know of the hopes or the ideas of all those fir ms that are prepared to expand, but two questions; first of all, you me nti­ oned 20 firms. Are those that are interested in locating here at present, or in fact does that number include those that are now situated here an d are th inking of expanding? Because that was the intent of my ques­ tio n. How ma ny local fi rm s that are now in ex istence are prepared to expand at this ti me in this province? MRS.

SMITH: Mr. Chairperso n, on our active list we have in the neighborhood of seven or eight fro m out­ side the province and in the neighborhood of 25 to 30 fi rm s in the prov ince that are look ing at expa nsion or new directions. MR. DE PUTY CHAIRMAN: 2.(b )( 2)- pass. 2.(b )( 3) Regional Benefits - the Member for Stur­ geo n Creek. MR. JOHNSTON: Mr. Cha irma n, I wonder if the Min­ ister would just outli ne this Regio nal Benefits Depart ment. MRS. SMITH: Yes, Mr.

Chairperso n, this was a bra nch that was developed under the precedi ng gover nment an d was entitled "I ndustrial Benefits." The intentio n was to work with Ma nitoba suppliers and purchasers to maximize the use of Ma nitoba goods and services in all major Capital economic activities throughout the province. The initial fu nction was to look at poten­ tial mega projects but this has been expa nded to include mega projects or large energy projects to the

Tuesday, 20 April, 1982 west of us and also to maximize purchases by the Manitoba Government, its agencies and other related institutions. MR. JOHNSTON: Well, this takes in then the Indus­ trial Benefits, as we call it. It's Regional Benefits, but does it take in the group that we're working in, Alberta and Saskatchewan, on the large projects out there, sourcing them to find out what Manitoba manufactur­ ers could supply and having the information of what manufacturers do manufacture, to relate it to those larger projects? MRS. SMITH: Mr.

Chairperson, strictly speaking, that's a trade activity, but a lot of the data collected has some connection because with the Regional Benefits, which is primarily Manitoba based, we have developed this sourcing directory and that means the listing of all firms in Manitoba, what they can produce, the quantities, time frame and that sort of thing, along with the purchases that are made in Manitoba by major purchasers . The trade component of this is an extension where the same type of listing is applied to the trade field . There was, in January, a trade fair here.

I haven't got the correct name of it here, but where potential purchasers from the Alberta energy projects came here and met with our potential suppliers and that was both to acquaint the purchasers with the capacities here in Manitoba and also to give the local suppliers some idea of what the opportunities were in Alberta, what the preferred methods of approaching the different companies were, and in general, to improve, increase their capacity to expand their busi­ ness in a more active way. MR.

JOHNSTON: Well, the book on what Manitoba manufacturers produce has been there for a while and we have had seminars over the years, the past six or seven years come in explaining to Manitoba manufac ­ turers what would be required on many projects in other areas. So, the Regional Benefits is basically, let me put it this way, that is being continued more under Trade Development than the Regional Benefits. One is the expansion of the benefits on all projects in Manitoba or looking at all projects in Manitoba from the point of view of purchasing practices of Manitoba manufacturers and government purchasing.

Similarly, we had a show that had a group of manufacturers in Manitoba showing what they imported or what they purchased from out of province. This department is going to carry on and expand that work. MRS. SMITH: Yes, it seems like an artificial distinc­ tion between the Trade group and the Regiona l Benefits, but functionally the Regional Benefits focuses on trade here in Manitoba and the Trade group work on export opportunities to other provin­ ces, indeed to the United States .

The type of invento­ rying of industrial production, of industrial services available, the running of seminars and so on here in Manitoba is an extension of what was done before, but as the program develops there's outreach to more and more groups, more follow through accomplished and the focus has expanded from the initial focus on expected mega projects to include the whole range of Manitoba economic activity. The big marketing pro- gram that will come this fall, it's the Canadian Institu­ tional Marketing Program .

So, it's partly trade and partly Regional Benefits, but, a sub -component of that is the emphasis on government institutions here in Manitoba purchasing Manitoba goods . So, it's a dual thrust by Manitoba and, if that isn't available, by Canadians. MR. JOHNSTON: The Minister may not have the answer to this. Is it the intention of the government to change the purchasing policy of Manitoba corpora­ tions from the tender basis, where the lowest tender usually gets the work, or is it going to be giving a preference to Manitoba manufacturers even though they're higher? MRS. SMITH: Mr .

Chairperson, the policy of gov­ ernment procurement is under active review at the moment and we haven't as yet defined a policy for the coming year. The kind of things that we'll be looking at is what's being done in the other provinces, either as to price preference or in fact to regional preference within a province and whether it's a price differential or a kind of proportion of the market depending on what kind of employment they have in the province.

We're mindful, in developing a government procure­ ment policy, that we have to pay attention both to the need of local industries to have opportunity, at the same of maintaining a fair climate for tendering for companies from outside the province. I think any modifications we make will be gradual and clearly an nounced to tendering companies. MR.

JOHNSTON: I hope the Minister is aware that Manitoba is a very broad manufacturing base and we're only a million people and we don't use, as Man­ itobans, anywhere nearthe amount of productio n that we are capable of; that we turn out every year; that has been increasing steadily every year. If we - the fig­ ures are there - in Manitoba we are the second larg­ est exporter percentage wise of all provinces, Ontario being first, and I stress percentage wise.

If we start to have any rules on preference of purchasing or protec­ tion for Manitoba manufacturers, I would like to assure the Minister that other provinces will retaliate and will put Manitoba in a very awkward position. I think that should be looked at very carefully while you're reviewing the purchasing practices ift he Mani­ toba government is goi ng into a large project.

I think that there are ways to see that manufacturers in Ma ni­ toba have a preference, but be very careful about publishing the same as B.C. does and the same as Saskatchewan does by percentage preference to their manufacturers because it will only back fire in Manitoba. MRS. SMITH: Mr . Chairperson , I think the honour­ able member is repeating what I said that we are aware of the sensitivity on the trade end. We are com­ piling the information and reviewing it about what is the practice in other provinces.

As the member alluded to, we do have a relatively good record on the proportion of manufacturing exports that we enjoy. Forty percent of our manufactured goods are shipped out of the province as end products and that propor­ tion is second only to Ontario. So, the concern that 1682

Tuesday, 20 April, 19 82 the melt! HE!t expresses is one that's alive in our minds and we will be balan ci ng that out against thedesire to use whatever means we can to generate a good stable manufacturing base here in Manitoba. MR. DEPUTY CHAI RM AN: 2.(b) (3) - the Member for I nkster. MR. DON SCOT T (lnk ster): Mr. Chairman, on this point, I'd just like to raise a concer n that was br ought to my attention relatively recently. It's somet hing that I would not to see repeated and I feel very co nfident will not be repeated.

It 's gearing towards the - (I nterjection) - well, in this instance, I c a n assure the Member for Arthur it will not be repeated. We ha d a very, I guess you co uld call them an exceptionally forward looking fir m in the provi nce, it happens to be located in my co nstituency. It tendered on a very large governme nt related contract. It was a low tender. This happened, I believe it was in 19 78 or 1979 , possibly '79 because that's abo ut the stage the project wo uld be in at that poi nt in time and yet did not get the tender. Yet, it was a low tender for the project.

The project was in tens of tho usands of dollars an d I think that it -( lnte tjection) - It was not do ne through Government Services; it was do ne through an other department. It was an arm of government, if you wish. Okay? But, the people at the time in the ind ustry had taken it to the point of goi ng to the Minister and were told that they sho uld best not do that beca use they rely on a lot of other government co ntracts an d if they were to ca use an y dist urba nce on this one that it may ca use them problems in the fut ure. Now, that I do not -( I nterjection)- MA. DEP UTY CHAIRMAN: Order please. MR.

SC OTT: For the very same reason that they're afraid perhaps that something wo uld happe n to their future contracts as well. I would speak very much in favour of the Opposition at the time they have bee n asleep -( Interjection) - but, Mr. Chairman, I would urge to you the Minister that we do follow an example and do follow a position, where there is a close tender at all, that we do try and give preference to the local man ufacturers where the greatest val ue added is in the product.

We have an aw f ul lot of cases where we're going outside the co untry, in some instances, to bu y materials when we co uld be bu ildi ng them here within Canada. I' m speaki ng of the co untry as a whole. If you look at the Japanese experience an d a lot of this is just thro ugh their own patriotism really and it's patriotism not just by governments, bu t also by the individuals and the purchasi ng patterns of the in di­ viduals there, is that they have a stro ng preference for comm oC:lities produced in their own co untry and that's dtie of the reasons they are where they are today.

That's one of the reasons -( Interjectio n) - but they have developed. MR. DEPUTY CHAIRMAN: Order, order please. MR. SC OtT: The y have de velop ed in d ustries thro ughout fhei r co untry of Japan primarily by havi ng a pref erence, not only on the government but on the consumers themselves, in being willing to take the time to be able to develop their products.

Yo u just have to look an d one example is computers where they were so far behind IBM and some of the other huge traditional firms and now the Ja panese are the world leaders in the field and have machines that are quite a bit faster, many times faster tha n the f astest of the North American machines. So, there ar e strong benefits towards a gover nment backi ng up the indus­ try who are the employers of the people of that prov­ ince an d of our province, to back them up and to give preference to Manitoba and, secondly, Ca nadia n ma nufacturers. MRS. SMITH: Mr.

Chairperson, there was quite a study of proc urement policy do ne by the previous government and one of the interesting things ab out it is that it 's one thi ng to develop policy; it 's an other thing to do the follow through and ens ure that the policies recommended are in fact being carried out by all the departme nts. I think w e can experience signifi­ cant gains in out Ma nitoba purchasi ng just by ap ply­ ing the policy that's currently on the bo oks.

It does state that where quality and price are eq ual that buy Manitoba be the rule, so I think there is quite a lot of ga in ca n be secured by developing that po licy to the full at the im plementation end an d we are going to be carryi ng out a pretty thorough st udy of other possibil ­ ities in the tendering process in terms of promoti ng Manitoba n industry. Some of the goals we would like to achieve for Ma nitoba ind ustry can be better accom plished by other means, so the government proc urement policy can do some things, but it ca n't do everything. 16 83 MR.

DEPU TY CHAIRMAN: The Member for St ur­ geo n Creek. MR. JOH NSTO N: Mr. Chairman, I had indicated to pa ss this item and I would only refer to the Member for lnkster's statements that if he had bro ught his co n­ cerns to the Department of Economic Developme nt or the Minister of Economic Development, we had a gro up within our depart ment that examined any com­ plaints such as he's speaking of and followed them thro ugh very thoroughly.

If he has a complai nt, it wo uld real ly be upon him to attend the Minister 's offices and these are good offices to find out the particular circumstances of that partic ular order which obviously happ ened in a Crown Corporation and it can be looked into. Crown Corporations have boards; they have chairmen of boards appointed by gover n­ ments, bu t the government still can look into the prac­ tices if the member has any concerns.

As a matter of tact, if he had been a goo d citize n at al i, he probably wo uld have gone to his member at that time and com­ plained and his member would have come to me as the Minister. MR. DEPU TY CHAIRMAN: Order please. 2.(b) (3)­ pass ; page by page 2.(b) (4) - the Member for Stur­ geon Creek. MR. JOHNSTON: Mr. Chairman, the Minister pretty well did outline the department. We touched on it in Regional Benefits. This department is continuing to

Tuesday, 20 April, 19 82 work with the sourci ng program and work interpro­ vincially with the other provinc es and I hope that the other provinc es are supplying you with the li sts of projects that are bei ng carried on in their provinces as we supplied lis ts to them.

It was a co-operative arran­ gement that the Min ister of Economic De velopment had arranged between them at a Western Economic Devel opment Minis ters' meeting and certainly the decision of the Min isters made it easy for the people in this department to be working with the government offi cials in other provinces and getting leads etc., for Ma nit oba man ufacturers. I hope that is sti ll bei ng car­ ried on with the sour cing program. MRS. SMITH: Yes, it is. MR.

JOHNS TON: Just one other point on this, I have an ar ticle tha t came to my attention it's from the Export Dev elopment Corporation and the Export Dev elopment Corporation in this ar ticle has pictures of Mr . Lumle y and all those fel lows, the Mexic an offi­ cials etc. ,where it states that the Canadian Govern­ ment was putting up $15 0 mil lion towards the pur­ chase - Mr.

Lu mle y indic ated an agre ement marked the first use of a 900 milli on fund to establish a Federal Government to help Canadian exporters com pete with Canadian Govern ment subsidiz ed expor ts fi nancing from other countries and there was $15 0 millio n put in towards the purchase of buses in Mexico. It would seem that Bomb adier in Quebec and two or three other companies in Quebec are going to get the major portion of this busi ness.

I'm wondering if the Export Dev elopment Corporation has been in contact with the Ma nit oba Government or have you been in contact with them making a request that they come to Man itoba and explain to the Man itoba man ufacturers what products are going to be needed in this contract and if Mani tob a man ufacturers will be able to supply any of them. MRS. SMI TH: Mr . Chai rperson, on the relationsh ip with our export to EDC and the Honour able Mr . Lum­ ley, we have an ongoing communic ation there.

We don't have any sales in Mexico, but we are acco mp­ lishing some buses in other countrie s, but we shall certainly keep on top of opportuni tie s in both coun­ tries. I don't think we can always expect to be the ones that land the contracts. I, for one, was happy to see the Qu ebec firm get a good contract. I think we want to see as much Cana dian export as we possibly can and that'll be the goal that we will be fol lowing. We have been pleased with some of the recent contracts that our bus manuf acturers have landed. MR. JOH NSTON: I wasn't necessarily referr ing to com plete buses, Mr. Chairman.

If the people of Can­ ada, which Ma nitob a is part of, are going to put $15 0 milli on into the man ufacture of buses or towards the man ufacture of buses that's tak ing place in Canada, a very large order. are the manuf acturers of Mani toba going to have an opportunity to quote on some of the comp onents that go into that order or go into that contract. I don't necessarily mean the com plete bus, but are we going to be given the opportunity to supply some of that. Let me gi ve you an example .

When the Federal Government purchased tanks from Germany, German man ufacturers came to Mani­ toba and had a sem inar and explaine d and went over all of the different items that would be requir ed and some of our compan ies did take the opportunity to quote on some of the compo nents for that work. Will Ma nitoba man ufacturers have the opportuni ty to quote on com ponents on this size of an order that's being man ufact ured in Cana da and 15 0 million Cana ­ dian doll ars going towards it? MRS. SMITH: Mr. Chai rperson, there is no reason why we won't be giv en an opportunity to quote on those orders.

I think the secret is going to be maintain­ ing close and co-operative relationship s with our Federal partners and with those organizations that are set up to promote Canadian trade. When the Hon­ ourable Mr. Lumley was here, we did disc uss the mat­ ter of how Manit oba could best take advantage of the services of EDC and I assure the honourable memb er that we are going to be pursuing any and every oppor­ tunity that looks good for Man itoba producers. 16 84 MR. JOHNS TON: In the same article, it says ED C's forfei ting workshops for exporters.

"EDC will conduct the first in its series of nationwide forfeit ing purchase workshops for exporters in Vancouver on November 26th, this is 19 81, in Mo ntreal, Novemb er 23rd. The workshops will be free of charge." Is it the intention of the EDC to have any workshops in Man itoba for Mani ­ toba manuf actu rers regarding goods that are bei ng produced in Canada and bei ng exported, so that Ma nitob a man ufacturers can have the opportunity to quote on com ponents for those exports? MRS . SMITH: Mr.

Chai rperson, we have no in dica­ tion of a fixed date in Manitob a, but we don't feel limi ted by the location of such shows and we'll cer­ tainly ensur e that our people are represented. lfther e are shows held in other parts of the country, ensur e that they are there. MR. JOH NSTON: Mr . Chairman, we've been having this battle with the Federal Governmen t for a long time. I call it a battle because it's very serious. Every time there was a trade mi ssion from another country that was organi zed in Ottawa, they would arrange for them to go to Alberta and B. C. and they would have them in Ont ario and Queb ec.

They would send us a letter sayi ng these gentlemen would be in Ottawa on such and such a date and if anybody would care to come down to Ottawa and meet with them , we would be welcome to do so. We used to argue that there was no reason why those mi ssions could not stop in Mani­ toba, as well. Tha t was brought to the attention of the Mi nis ter. I kno w the Deputy has had discussions with them on this particular seri ous situation of Man itoba being elimi nated.

I'm wondering if they are intending to make arrangement s for the EDC to come to Mani­ toba with their workshops and if we are going to have the trade mis sions stopping in Man itoba when they come across Canada. MRS . SMIT H: Mr . Chai rperson, on the question of foreign mis sions com ing to Canada and whether or not they stop in Man itoba, we have had a situation

Tuesday, 20 April, 1982 recently where a very extensive Japa nese mission visited Canada. Now, their plan was not to co me to Manito ba ; however, we negotiated a fairly sizable presentation by our group in Otta wa . A great deal of pr eparation went into this presentation; an audiovis­ ual, a kit an d pr esentation to show, in as compact an d im pressive a way as we could, what the advantages were of locating in Manitoba ; what our basic resour­ ces were; What our existing manufactu ri ng potential was.

We have since had quit e a show of in terest fro m that presentation, includi ng an invitat io n to a big show in Houston where a gr eat ma ny Ja panese pur­ chasing compa nies will be att ending to bid on mate­ rials required for big energy projects. We have some of our suppliers who will be att endi ng there and get an opportunity to plug in to that range of opportuniti es. We have since, as well, met wit h the Consul General of Japa n and discussed our economic sit uation and some of the opportunities we saw here an d hav e worked out with him a regular excha nge of infor ma­ tion.

We found out what so me of the perceptual blocks the Japanese ha d"about coming to Ma nitoba, either blank spots or preconceived notions and ar e pla )l ning to address those. We also have had a visitor here. an Assistant Ambassador from Japan, who was also interested in exploring the sa me li ne of investiga­ tion and we hav e be en going out of our way to culti­ vate the relationship with this particular group. We will be doing the sa me with other groups as they com e along. I wish to make one correction.

The member asked whether we had a Federal show here and whether or not we had any Manitoban companies abl e to make a presentation or a bid for trading opportunities. t here was one held here just recently, just last mo nth, by EDC and in fact 40 Manitoba companies were enabled to attend and show what they had to offer . MR. JOHNSTON: Well, I'm certainly pleased to hear that EDC is coming to Manitoba. I get the im pression an d wit h all due respect that the Minister seems to be happy, or not happy, but not concerned that Manito­ bans have to go to Ottawa to give their presentations to delegations.

I can't, for the life of me, understand why when the Federal Govern ment is arranging to have delegations cross this country that they don't stop in Manitoba and give us the opportunity to ma ke the presentation here and show them Manitoba in the time that is allotted to us. I think it is deplorable that the Federal Government seems to want to have the delegations fly over us instead of stopping here and letting us mak e a presentation.

I think I would suggest that the Minister talk to the Federal Minister for Mani­ toba and go on record that you're not pleased with the way they neglect us in that particular sit uation or circumstance . MRS. SMITH : Mr. Chairperson, I agree that we could dr�w more att ention to the fact that we would like to be given . I guess you could say equal status, in these situations and I think we have gone out of our way to point to just such a pattern that EDC may follow.

On the other hand, the mood or style in which we've done it hasn't been so muc h a complaining or pointing of a finger or a standing on proto col concerns ; we've drawn at tention to it . At the same ti me, we have been willing to go out of our way to go to Ottawa, if that's the first step, and make such an impact by the co ntent and style of our pr esentations that we are not so easy to overlook next time. I thi nk that a combination of standing up for our rights an d bei ng willi ng to go in an d take initiative and show that we have things to offer and that we are capable is a goo d strategy. MR.

JOHNSTON: Madam Mi nister, we have been goi ng to Ottawa for a lo ng ti me. We accepted the strat egy that you had, but at the same ti me, we tried to be very diplomatic at first, bu t wh en it keeps goi ng on an d on an d keeps happ ening with no results. I think it's then time to start to get a little bit, shall we say, huffy about it an d suggest to them that we want them to co me to Ma nitoba in no uncertain terms . I have no more to say on that.

It just seems to disgust me that they ca n sit dow n there and plan those things and completely ig nore us and tell us that if we wa nt to make a presentation to co me to Ottawa. We have made ma ny presentations in Ottawa an d we have had ma ny good follow-ups, but I can't see why they ca n't come to Winnipeg or Manitoba. MRS. SMITH: Once again, I repeat for the honour­ able mem ber's benefit that we could sit back and feel hurt and negl ected and complai n or we can go for­ ward and voice our co ncern, but at the same time offer so mething positive which I think is what we're doi ng.

I think when one brings a foreig n miss ion to a country, they can't stop everywhere and they will tend to map out their stops in terms of what areas they know in advance or where they know thi ngs are goi ng on. I think it's up to us to dra matize our particular location and to have well thought out what kind of match there might be between that country and us, as I think we did with our meetings with the Japanes e.

Pick out in a very sensitive way what the blocks in their minds were, not necessarily things that we would have even been aware of, but by dialogui ng very carefully with them drawing out what could be blocks or in fact just big gaps in their awareness and then taking im agina­ tive action to overcome those problems.

For example, the group that went to Ottawa found out that the main awareness that the Japanese group had of Ma nitoba was that we were hog suppliers because they apparently no longer get their basic hog supplies from Denmark which has trouble with foot and mouth disease and they did know that they were importing hogs fro m Manito ba .

Since that, we have been abl e to work, as I say, with our local Consul General . with the visiting ambassador and with that mission group that we met in Ottawa to change that perception so that they can no longer think of Mani­ tob a in quite that way. 1685 I know it is discouraging to think that we are not the main stop on the route and I intend to keep pleading our case on that , maybe pleading is the wrong word, asser ting our case, but I don't think if we don't get imm ediate response fro m Ottawa or EDC that we're going to sit ba ck and think that the ga me is over.

We're playing an a ctive gam e·and we are out to do the best we can for Manitoba, I think, in the long run, that combinati on of ap proaches is going to be effective. MR. JOHNSTON: Mr. Chairman, I repeat again, we

- Tu esday, 20 April, 1982 have been playing an active game ; we have been doing the things that we had to do for a long time. I just repea t. I am pleased to hear the Minister say that she is going to assert herself to have the people in Ottawa consider Manitoba. If the Japanese people had come here and seen what we are in Mani toba, they would have gone back knowing that we do an awful lo t more. I' m not saying your presentation is right, but I think these people should be coming here. MR. DEPUTY CHAIRMAN: 2.(b )(4 ) -pass; 2.(b )(5 ) - the Member for Sturgeon Creek. MR.

JOHNSTON: I wonder if the Minister could give me an outline of the planned advertising for 198 2- 83. MRS. SMITH: Mr. Chairperson. that hasn't been determined yet. We are going through the tendering pr ocess. MR. JOHNSTON: I would ask the Minister - I am looking at a page in front of me that I admit was !ast year's and we had advertising exhibits provided for departments. Manitoba's Economic Development campaig n support was budgeted at $1 86,000 ; printing and statio nery supplies was 90, the sor t of a run down of wha t adver tising the Department of Economic Development was going to do. MRS.

SMITH: We will be working with the special supplements and sections advertising in major Cana­ dia n and US business media; we'll be doing a high profile advertisin g campaign in support of depart­ men t and Enterprise Manitoba programs relating to industrial development; we'll be working on visual material and a co-ordinated package to illustrate rural Manitoba capability and industry sector profiles.

We will be increasing our parti cipation at trade shows and business exhib its and there will be an intensive infor­ mation inia tive through the printed media and im provement of our public and editorial inquiry response activi ties. MR. JOHNSTON: Can the Minister advise us as to why the advertising agency was changed and it wasn 't tendered? MRS. SMITH: Mr. Chairperson, I think I said before that the advertising agency is out to tender and any advertising agency is open to apply. The decision has not yet been made on the tendered . . . MR.

JOHNSTON: Is Mc Kim your advertising agency or is it out for tender to have a new agency at the present time? It seemed to me that I recall there was some thing in the paper or something mentioned in the House that the adver tising agency of the Depart­ men t of Economic Development had been changed and there were no tenders at that time. MRS. SMITH: Mr. Chairpe rson, the ann ouncement .. was that the single agency that was used bef ore was no longer to be the single agency ; bu t they were not precluded from submitting a tender.

In fact, 11 agen­ cies have been invited to make a presentation and they will be meeting tomorrow. 1686 I' d like to move committee rise. MR. JOHNSTON: Do you want to pass that item? MR. DEPUTY CHAIRMAN: It em 5-pass . Committee rise SUPPLY -HEAL TH MR. CHAIRMAN, Jerry T. Storie (F lin Flon): The meeting will come to order . The Honourable Minister. HON. LAURENT DESJARDINS (St. Boni face): Mr. Chairman, the members will find a Senior Citizens' Handbook on their desk. It is my pleasure, Mr. Chairman, to table the Mani­ toba Senior Citizens ' Hand book today.

This is the first handbook of information for senior citizens produced for Manitobans. It is fi tti ng that this effort by the Mani­ toba Council on Aging should be occurring in 198 2, a year in which much attentiorfiivill be focused on aging in view of the United Nations having called the first World Assembly on Aging in 198 2. The first printing which you have in front of you is of 10,000 copies which will be circulated to people working with senior citizens, to governm ent and volunteer agency offices, hospitals, personal car e homes and a selection of seniors and their families.

If this pilot dis tribution meets with approval, additional copies will be printed for broader distribution to senior ci tizens later this year. Over 80 different programs and agencies are included in this handbook. We're presenting in excess of 500 different locations of programs and services throughout Manitoba. The co-operation of public and private sector staff in assisting the council with pro­ viding all of this material in a single 100-page hand­ book is very encouraging to me as Minister of Heal th. Mr.

Chairman, I imagine that the former Minister is very pleased because this is something that he initia ted and the credit certainly doesn 't go to me. I just inher­ ited the tabling of it. Did you see the format? It would have to be a big format like that. MR. CHAIRMAN: The Honourable Member for Fort Garry. MR. L.R. (B ud) SHERMAN (Fort Garry): Mr. Chair­ man, I' ll just say one word in acknowledgement of the appearance of the Man itoba Senior Citizens' Hand­ book. I'm very pleased that it has been completed and is now available for distribution to our senior citizens throughout the province.

It was certainly the product of a very imaginative, creative and co-operative effort over a period to some 18 to 24 mo nths and I congratu­ late those who conceived it an d, those who contrib­ uted to its pro duction. I' m very glad that it's in circula­ tion. It reflects one of the primary recommendations of the Council on Aging which was a recommenda� tion calling for a more readily available informa tion for senior ci tizens on the various programs and servi­ ces that are available to them and I hope that it serves an extre mely useful purpose in that regard.

Certainly I join with the Minister in recognizing the influence that the Council on Agi n§ had on this book and on the fact that it was in large par t their recommendation and

Tuesday, 20 April, 19 82 their initiative that has led to its realization today. MR. CHAIRMAN: Continuing with the Health Esti­ mates, particularly Item No. 3. Community Health Services and 3.(c)

(3) Financial Assistance/External Agencies. 3.(c)( 3) - pass ; (c) -pass. Item No. 3.(

d) Medical Public Health Services, 3.(d)( 1) Salaries - the Honourable Member for Fort Gar ry . MR. SHERMAN: Mr.

Chairman, with the realignment of the department, the medical officers of Health, I believe, are now budgeted for under this appropria­ tion and I want to raise the question with respect to medical officers of Health that I touched on this after­ noon in discussions with the Minister under the Regional Personal Services Appropriation, can he advise the Committee how many Medical Officers of Health we have got in Manitoba right now, what regions do we have MOH s in and in what regions are we attempting to find them and provide them? MR. DE SJARDINS: Yes, Mr.

Chairman, the medical officers of Health in the Westman Region in Killarney, there is Dr. William Marshall ; the Central Region, Morden, Dr. E. Mc Ruer, 4 days a week; Winnipeg Region, Dr. Campbell and Dr. Sirrett ; the Interlake Region in Selkirk, Dr. Rihal ; Eastman Region, Beause­ jour, Dr. Robertson ; and then there are part-time med­ ical officers of Health in the Parklands Region, Dau­ phin, Dr. Eric Sigurdson, half time, Swan River, Dr. Frank Malcolm, part-time clinic al ; Thompson Region, Dr. Ted. Redekop, half time, Dr. Lee, part-time clini­ cal ; baylines, NorMan-The Pas, Dr.

David Penner, weekend clinical, in Moose Lake and Easterville . Eastman, Beausejour Medical Clinic share contract services with Federal Health and Welfare. Canada Mental Services serve Long Water and Little Black River. MR. SHERMAN: Mr. Chairman, the Minister's response is certainly encouraging. On the basis of that response then we are reassured that there are in fact medical officers of Health, either in place on a full-time basis or a part-time basis, in every region of the province. Is that correct? MR. DE SJARDINS: Yes. MR.

SHERMAN: So where there may be a shortage, it's limited to Winnipeg region where we currently have one medical officer of Health and really, on the basis of the opinion of the experts in the department, including those sitting in front of the Minister, we should have three. Is that co rrect? MR. DE SJARDINS: I'm informed that there are two. There is Dr. Sirrett and Dr. Campbell. We had one before, there are two now. MR. SHERMAN: Is the department looking for a third one or is two considered the acceptable establishment? MR. DE SJARDINS: Mr .

Chairman, as far as I know now with the work load that we have, we're satisfied with two, but we were afraid of losing one at one time because it takes a bit of getting used to the work. This person was in training as a medical officer in Public Health. Apparently, things have been resolved now to everybody's satisfaction. We hope so anyway and we would certainly like to keep him, but we're certainly not this year. We're not asking for any more than two. MR. SHERMAN: Mr. Chairman, with the regrettable departure of Dr.

Manny Snell, some two years ago or so, which was forced as much by ill health as anything and of course, as most members know, since that time Dr. Snell has died and the province has lost that out­ standing servant and citizen to everyone's regret. With that departure, Dr. John Eadie subsequently has become the Chief Provincial Epidemiologist. Can the Minister advise the committee as to the structure of the Medical Health Services Branch as a conse­ quence of that particular change in assignment? MR. DE SJARDINS: Mr. Chairman, I wonder if at this time I could read a statement that I had prepared on Dr . Snell.

I think that he's worked for the province long enough and I'm pleased that the former Minister sa w fit to recognize him. I feel that it is only fitting now, Mr. Chairman, to pay a tribute to the late Dr. Emmanuel Snell, former Director of Preventative Medical Servi­ ces and Provincial Epidemiologist for the Department of Health. Dr. Snell passed aw ay February 21 , 19 82 after contributing 23 years of dedicated service to the province in the preventative health field. A medical graduate from the University of Glasgow, Scotland, Dr.

Snell served in the Royal Army Medical Corps during World War II and was a prisoner of war duri ng the fall of Singapore in 19 42. Following the war, he returned to England for a fe w years and then immi­ grated to Canada in 19 57. In Canada he worked for one year in Newfoundland and then joined the Mani­ toba Department of Health in 19 58. In Manitoba, Dr. Snell served as Medical Director of Public Health Services in Portage la Prairie and St . Boniface and was promoted to the position of Direc­ tor of Venereal Disease Control for the province in 196 1.

In 19 64, he was again promoted to the position of Director of Preventative Medical Services, a posi­ tion he held until retirement from the province service in 1981 . During his tenure with the Manitoba Depart­ me nt of Health, Dr. Snell set an extremely high stan­ dard of professional work. He played a major role in establishing the Western Equinine Encephalitis Con­ trol Program. He contributed significantly to Tuber­ culosis and Silicosis Control Programs in Manitoba. Dr.

Snell's efforts were recognized, nationally and internationally, through various honours in his field, including being elected a fellow of the American Pub­ lic Health Association in 19 65. Dr. Emmanuel Snell was a dedicated member of his profession, loyal to the institutio n he served. He has been serving this by his family, friends and colleagues. I was fortunate enough to work with Dr. Snell for about four years and of course the former Minister knows him very well. He worked with him and I'm sure that we agree on this.

We feel that this man deserves at least this little bit of recognition for what he's done for the province in the last fe w years. It wasn't always easy. At one time, I think he was the only ones ; he 16 87

- Tuesday, 20 April, 1982 didn't have the support staff that he had in the later years . Mr . Chairman, as far as the department, we are in the process of re-organ izing right now that depart­ ment with Dr. Eadie as -y es, Dr. Eadie's job is being posted and advertised this week and this

section is, as I say, be ing re-organized at the present time . - (Interjection)- His old job, yes. MR. SHERMAN: But, he's cont inuing as Chief Pro­ vinc ial Ep idem iologist? Mr . Chairman, I'd like to associate myself and the Progressive Conservat ive caucus, Her Majesty's Loyal Opposition, with the statement just pro ffered the Comm ittee by the Minister, with respect to the late Dr . Manny Snell .

I certainly was grateful for the educa­ tion, guidance and support that he gave me and the Min ister has had considerable experience of the same and we would bot h agree that the people of Manitoba were the benef iciaries of his life and his career . Mr. Cha irman , this Salaries item, which is the one we are on, is virtually the same as last year except for an increase of approximately $200,000 and I would ask the Minister to describe the dif ference in those two levels on the basis of the structure of the ad minis­ tration of that departm ent. He says that Dr .

Eadie has been confirmed in the pos ition of Chief Provincial Epidemiologist an d Dr . Eadie's old job is being posted now. It's being advertised for a successor, but are there ot her additional sta ffing changes that explain the relatively limited increase in the Salaries item, an increase that is not excessive but is an increase nonetheless. MR. DESJARDINS: Mr . Chairman, I am told that part of the reason for that in 1981 -82, that amount was not spent. It was 949 instead of $1 .1 million an d then there were two positions that no salary was included. I've just been inform ed ; I don't know how that works .

I do n't know if peo ple work for not hing or who pays them but apparently there was no money involved in that . You asked for three, but you didn't ask for any money to pay them . -(Interjection)- Well, Mr . Cha irman, the former Minister would know better than I, but ap pa rently you requested three last year and you could only fi ll one position at the time . So anyway it was underspent by -w ell, close to $1 00,000 and now we're ask ing, well, from 947 to 1,2 74,000.00 . That's the increase. MR. SHERMAN: That's correct, there were three requested and one fi lled .

Now those other two pos i­ tions are being filled this year, is that correct, they're included ih this budgeted appropriation request? MR. DESJARDINS: Yes, they are . In fact, we're ask­ ing for an increase of 6 here from 35 to 41. MR. SHERMAN: That includes those other two. MR. DESJARDINS: Yes. MR. CHAI RMAN: 3.(d)( 1)-pass ; 3.(d)

(2) Other Expend itures. The Honourable Member for Fort Gar ry . 1688 MR. SHERMAN: There is a fa irly substantial increase in the Other Expenditures appropriation, Mr . Chair­ man, that would appear to account for more than normal cost price and inflationary increases. Would the Min ister describe to the Comm ittee what the range of Other Expenditures encompasses? MR. DESJARDINS: Yes, I will . I'll also give you the diffe rence from last year to this year .

The medical adm inistration was 51.7 last year and 74.4 this year ; the epidem iological surveillance, 79 to 102, I'll never pronounce that right ; Western Equine Encephalitis, 39.9 to 64 .1; venereal disease control, 125. 1 to 145.7; virolog ical products 1, 18 6,500 going to 1,2 98,600. MR. SHERMAN: Where do the expenditures, for example, for such projects as the Interlake Regional Hearing Centre appear? Do they appear under a dif­ ferent appropriation or under this one? MR. DESJARDINS: Mr . Chairman, I didn't complete the list .

It was Maternal and Child Health, 48 . 7 to 50 .3; Office of Hearing Conservation, 24 9.7 to 320. That completes the list . MR. SHERMAN: Your off ice of Hearing Conservation goes from 249,000 to 320,000, that provides for an additional hearing centre to be located in the Inter­ la ke? Is that correct? MR. DE SJARDI NS: And also in Winnipeg. MR. SHERMAN: Where will that Hearing Conserva­ tion Centre be located in Winnipeg? Does the Minister know that yet? MR. DESJA RDI NS: Possi bly, it's not definite at this time but probably at Seven Oaks Hospital. MR. SHERMAN: Mr.

Chairman, was the Diabetic Education Service, the concept that was developed in the past year or so and was being pursued by the previous gov ernment and was to be directed by Dr. John Moorehouse, placed under this particular appropriation? Was it under this appr opriation that it would have been given cons iderat ion or is it some­ where else in the Estimates that it would have come up for review by the Minister and his officials? MR. DESJARDINS: This would be the place, Mr . Chairman . MR. SHERMAN: Mr . Chairman, I have some con­ cerns about the inability of the department to proceed with that

part icular program . I am advised that there are some 1,500 adolescent or juvenile diabetics in Manito ba . Certainly, if one is attempting to shift the · cura tive system that's in place in Health at the present time even a degree or two in the direction of preventa­ tion, it's programs of this kind that are invaluable in achieving that change . The program was aimed at offering experienced medical counsel an d advice to diabetics, particularly adolescent diabetics, on the best methods of maintain ing proper balance in their own systems, the best lifestyles to be pursued in order to ma inta in those physiological balances and to pre-

Tuesday, 20 April, 19 82 vent what can often be extremely serious effects of diabetes, as the Minister knows, in later stages of life . The whole rationale for it was to ensure that people who had diabetes. notwithstanding the benefits derived from insulin, were to be given ad ditional pro­ tection which would ensure that they would grow into their older years. their senior years in much better health than often times unfortunately is the case for a diabet ic .

In many cases, diabetes, as the Minister knows an d as the diabetics themselves know, can lead to cardio -vascular disease, ki dney disease, other difficulties which create extre me problems for th em in terms of me dical and hospital care and are life threat­ ening to say the least an d impact upon the services delivered by our hospital an d me dical systems . Over and above that, there's the whole matter of the welfare an d well being of the individual diabetic himself or herself . I have to say for the record, Mr .

Chairman, that I felt that the Diabetic Education Service was an extremely valuable an d relatively inexpensive initiative in the field of general public health an d preventive me di­ cine. I woul d simply ask the Minister why the decision w as ma de to priorize it at a low level of 19 82-83 initia­ tives and defer it for consideration in the future rather than attempting to work it into his bu dget in 198 2-83 . If we were talking about a total Health budget of a quarter of a billion dollars, it woul d be a different thing, but we're talking about a total Health budget of almost a billion dolla rs .

That education service, I believe, was going to cost perhaps approximately $1 00,000 on a full year basis . It certainly wasn't going to cost $1 00,000 to launch it, but annualized it might have been a $1 00,000 . It seems to me to be a rather imprudent decision when it comes to priorizing to ignore a relatively inexpensive program of that nature with such a high impact an d result and benefit not only for the patients themselves, the diabetics, but for the whole health system on which there is such a continuing strain in terms of be ds, facilities an d me di­ cal support systems . MR. DESJARDINS: Mr .

Chairman, what could be sai d? I agree in part with what has been said by the former Minister, but it 's not that easy and he knows it . It 's not a question of just $1 00,000; there's man v areas like that . You have to draw the line somewhere . This was one of the last ones that was not cancelle d, was cut off for this year and the rationale on this was that unfortunately due to the demands for funding in the next fiscal year, their need to priorize available funds, we felt that we were unable to support Diabetic Pro­ vincial Program beyond March 31 st of this year .

That doesn't mean that we won't look at it again . Now, the main reason for that, rightly or wrongly is that our senior me dical staff are encouraging Dr . Moorehouse to make application through the Manitoba Diabetic Foundation for Federal health grant funding . We feel that this is appropriate, that this program is in a research an d developmental stage . If he agree� to do this an d is successful in receiving funding, we would be more than pleased to continue to work with him through our fiel d staff and continue to recognize Dr . Moorehouse as our departmental consultant on dia­ betes .

We certainly will look at it next year again, but the decision was ma de for this year unfortunately . MR. SHERMAN: Mr . Chairman, I hope the Minister will keep it in min d and keep it on a list of priorities on his desk and look at it again in the very near future -(Interjecti on) - $17 0,000 .00. Are there any program expansions this year in Med­ ical Public Health Services under this particular appropriation for Other Expenditures, other than the ones that have been in place but are being expanded along the financial lines that the Minister has already described?

Are there any new programs under Medi­ cal Public Health Services? MR. DESJARDINS: Those that I can think of . Well, we've covered the Hearing Centre an d then there is some expansion in the Luther Homes Telecommuni­ cation Services to cover the rural area . That was only Winnipeg was covered befo re . Now, the intention is to cover the rural area . MR. SHERMAN: I'd like to ask the Minister, Mr . Chairman, about the Western Equine Encephalitis program, the surveillance program . I note a substan­ tial increase in the appropriation being requested for that program .

Will that increase be devoted either to an increase in the number of central flocks an d sur­ veillance stations or will some of it be going to accommodate the expenses that would be encoun­ tered in any ongoing research project aime d at find­ ing a weapon for control of the vector mosquito an d control of that particular public health threat . MR. DESJARDINS: Mr . Chairman, as a result of dis­ cussions an d deliberations, certain improvements an d requirements are to be ad opted on this program . We are designing mosquito traps that are easier to transport than those formerly used.

There will be closer monitoring of weather data using computers an d related by computer to counts of mosquitos, par­ ticularly col extra an d tarcel lus . Personnel of the Cad­ ham Provincial Laboratories are studying quicker methods of culturing the virus in the laboratory . In 1981 , there were 25 cases in humans with 2 deaths; 120 equine cases with 20 deaths and this was the worst epidemic since 19 41. The Emergency Measures Organization provided excellent support services during this epidemic .

In the opinion of all scientists attending the Febru­ ary workshop, the development of a vaccine is not practicable . Because of the ongoing debate between the environmental and medical scientists on the sub­ ject of spraying or not spraying, my colleague, the Minister Responsible for the Environment-Northern Affairs, has instructed the Clean Environment Commssion to review this matter also . We are await­ ing a report from them . 16 89 MR. SHERMAN: Mr .

Chairman, I am particularly interested in that comment by the Minister and espe­ cially so in his acknowledgment of the conclusions reached by most of the scientists attending the Feb­ ruary workshop, which I also attended . As he points out, the consensus of the scientists attending that workshop is that the achievement of a human vaccine for Western Equine Encephalitis is not really a practi­ cal goal for a number of reasons, but given that and given the fact that it certainly was an alternative that

• • Tuesday, 20 April, 19 82 deserved exam in ation scientifical ly and has re cei ved exami nation scientifically, I ju st want to re count with the Mi nis ter the fact that the prev ious go vernment did put in pla ce a gr oup that was, if not official in natur e, at least qua si -official in nature that was charged with the res ponsi bil ity hopefu lly of pu rsu ing di ffere nt avenue s of researc h with the goal in min d of id entify­ ing the most pract ic al weapon to seek out and lo cate and develop and put in pl ace for use in future Western Equine Encephalitis prev ention progra ms.

The qu estion that ob viously conf ronted ever yone on the sur face was whether they should be loo king for some form of biological contr ol; whether there was some type of genetic techniqu e that cou ld be devel­ oped and injected into the mosqu ito popu lation; whether we should be looking for a hum an vacc in e; whether we should be looking for a dif fer ent and mo re acceptable kind of ins ecticide spray or poss ibly pur ­ suing some avenue s that have not even been sug­ gested up to this point in time.

That comm ittee was char ged, late in the sum mer or earl y in the fall of 19 81, with attempti ng to identify those avenues of search for us and some funding was gua rante ed that comm it­ tee and I belie ve that Dr. Jack Wil t of the Cad ham Lab was pl aced in charge of that comm ittee. I woul d ask the Minis ter whether that proj ect is continuing? MR. DES JAR DINS: Yes, Mr. Chairman , there has bee n no change on that at all. Last year, there was 79.6 voted and we are ask ing for 102 .4 this year. We are also trying to get mo re of the step-studen ts for this pr ogr am.

I think that in the last year, there were only eight students prov ided for the step to carry out the su rv eilla nce. In pr evious years, 12 students had been pr ovide d. In cl uded in this year's Bu dg et to the Medi­ cal Public Health Serv ice, there is $20,000 to emplo y the add itional students req uir ed for the su rveilla nce pr ogram. For the 19 82-83 fiscal year, 17 students were req u ested un der the step pr ogram and 14 were approved , so that'll pay for the rest if we feel that we need them. No w, this is a very dif ficul t su bject.

I know that the former Minis ter spent many years and was congr atu­ lated and was cr iticized and I gu ess you can't escape that. Now, the people that we had, the sem ina r that he had org ani zed I think and that was held after the change of go vern ment, by some - I'm not co mm ent­ ing on that at all; I'm ju st giving him facts, but some felt that it was foreg one con clusion; there were al l people on the one side. There was some criti cism of that, so we tri ed to salvage some thing.

We agreed to open it to the press and to invite other people and then we felt, if that was the case, ins tead it was too late, ins tead of some body trying to boyco tt it with we had all the peo ple that we had com ing in, we felt that they woul d have their day later on if we needed a second one and look at the other side.

This wou ld be accep­ table to us, but then in di scussions that we had with my colleague and I gu ess that part of it interested him qu ite a bit, it was decided to have this inqui ry that I mentioned before and I'd lik e to inv ite my col leag ue, the Minis ter of No rthern Affairs, to maybe say a few words on this. MR. CHAIRMAN: The Hon our able Mem ber for Church ill. MR. COWAN: Yes, Mr.

Chairman, I ap pr eci ate the in vitation and the opp or tunity and we think it's app ropri ate that, perhaps in the Leg isla ture, we should make the annou ncement as has alr eady been made by the Clean Environ ment Com mis sion that we will be holding a series of heari ngs in May, throughout the prov inc e.

I belie ve in Brand on, Dauphin, Thom pson and Wi nnip eg, in order to allow perso ns fro m di ffere nt areas of the prov inc e to come forward and to prov ide us with their sugge stions, with their cr iticisms, with their commen ts and ho pefu lly with their vi ews on op tions which we migh t pu rs ue in order to not bri ng us to the situation which we fo und ou rselves in a numb er of years ago. It's not only li mited to one adm inis tration. It's a situation that every adminis tra­ tion has foun d itself in as a re sult of a threat of West­ ern Equine Encephalitis.

I think the process which we are under taking at this point will allo w us to rev iew the Bagon spra ying progra m; but the di ffere nt options which the mem ber has put forward and which the Minis ter has put forward in re sp ect to how we can pre vent the qui ck res ponse, perh aps that's wro ng, how we can mak e it so that we do not have to res pond in such a qui ck manne r without havi ng had the benefit of some rev iews by the Cl ean Envir on ment Com mis ­ sion to assist us in making a de cision. I want to make that point very cle ar.

The Clean Envir on ment Comm ission heari ngs are bei ng con du cted to allo w us to look over dif fere nt options in a non-emergency, non-crisis envir onme nt, no pun in tended. It is des ig ned to allo w the public to make kn own their inp ut in a way which rem oves the whole process from the im medi ate threat of a medical eme rg ency and all ows us the op por tunity and the time to look over the entire situation care fully and in a con side red way.

That is how it has been de signe d; that is the pur pose I'm cer tain that it will serve and I know that the Min ister of Health and the prev ious Minis ter of Health are in terested in this matter and I wi ll ende avour to keep them adv ised through the Leg isla tur e and through other means as wel l, the pres ent Minis ter, through our constant discussions on this sub ject as to exac tly what is happ ening and hope fully we can come forward with the types of solu­ tions which will enable us to mo re effectively deal with eme rg ency situations. MR. CHAIRMAN: The Ho nourable Mem ber for For t Garry. MR.

SHERM AN: Mr. Chairma n, I endo rse that ini tia­ tive been under taken by the Minis ter of the Environ­ ment and the Min is ter of Health and welcome it again now as I did duri ng exami nation of the Estimates of the Depa r tment of No rthern Affair s and Envir on men­ tal Ma nagement when the Min is ter of the Environ­ ment made the announc ement of the imp endi ng revi ew. I think it's an absolutely esse ntial proj ect to unde rtake and cer tainly now is the time to do it, when an eme rgency is no t conf r onting us head-on.

So, I repea t my endo rse ment of that posi tion and ass ur e the Minis ter and his coll eague, the Minis ter of Health, that it's wel come d on this side. My par tial conc ern is that we not sim ply be look ing 16 90

Tuesday, 20 April, 19 82 at what was do ne in the summ er of 1981 , but wha t migh t be possible for us to do sho