Manitoba Hansard — 8 December 1977 (Sitting 19B, 31st Legislature, 1st Session)

31-1-19b

Manitoba — Debates (Hansard)

ISSN 0542-5492 First Session - Thirty-First Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS Vol. XXV No. 198. 26 Elizabeth II Published under the authority of The Honourable Harry E. Graham Speaker 8:00 p.m.Thur sday, December 8, 1977 Printed by P. N. Crosbie - Queens Printer for the Province of Manitoba

THE LEGISLATIVE ASSEMBLY of MANITOBA Thursday, December 8, 1977 TIME : 8:00 p.m. BILL NO. 6- THE EMPLOYMENT STANDARDS ACT (OVERTIME RATE) MR. SPEAKER: The Honour able Member for Wellington. MR. CORRIN: Thank you, Mr . Sp eaker. Ju st before the recess, I was addres sing myself to the question of tech no log ical change and I was talk ing generally about the ol d work ethic and howeve r !a udible that was, I was sugge st ing tha t in the context of this bill and in the cont ext of roll ing bac k overtime wages and encourag ing more over time in our pro v ince that this , in my opini on, was regressi v e.

Ju st before the adj ou rnment, I was referrin g to stat istics and comments tha t had been made even by the Honour able Min ister of Labour which corrobor ated and confirmed my hypothe sis and I draw your att ention to one state ment at trib uted to the honour able minister ve ry re cently . She indicated that she fel t that the number of injuries and fatal accidents in the Man itoba mining industry - and I' m quoti ng here -" is an important matter which req uir es some attenti on.

" She pr omised tha t consideration wil l be give n to appo inting a commission to tudy the prob le m and make recommendations and I say, Sir , that it's lo ng overdue, it's lo ng over due. With all th e tech no log. ical change and all the so-cal led progressi ve measur es that have been taken in industry, we still find ou rselv es with more and more acci dents. One would think that just the opposite would be the ca se but that's not so. There are not fewer accidents, there are more.

I draw your at tention to statisti c s rev eal ed, I bel ieve, in the Hous e just this morn ing, I think , in response to a question. It was indicate d that there were 82 ti me-lo st accidents in 19 77 to date. Now that , Sir , coupl ed with five death s, th is I say is intolerab le . This is an into le rab le bur den for peo ple in industry to have to bear and I suggest and I know that there are no figures but I stil l suggest and respectfull y that ther e is a pos sibil ity th at many of those time-lost hou rs, some of those deaths, may have been avoided if workers were not req uir ed to work over time.

Those are ve ry strenuo us, demanding occup at ions. We have members of this Ho us e who have serve d in the mines. We have heard during Thr one Speech debate about their backg rounds, about their tri bula tions and experiences and I say, Sir, that it's not a matter to be taken li ghtl y. We're talk ing about a situa tion where in the past year, nine and one-half man years of work were lo st beca use of acc idents in this pro vi nce's mining industry and one has to questio nw hy? Ni ne and one-half years. Now those jus t aren't physical costs.

Obvi ously th ere are social co sts assoc iated with those sorts of injuries and they'r e not jus t those sor ts of co sts , physical and social costs , but they are financial costs. They're not just to the pers on who is injur ed but also to the employer. So I suggest, Sir , that we shoul dn't be encour aging over time; we shoul dn't be going forw ard in that rega rd , not even knowing the possib le consequences. There has neve r been an analysis in th is pro vi nce , to my knowledge, and I've done some resear c h in the past week, there ha s nev er been an analy sis of overtime accidents.

No body knows for sur e how many acc idents actuall y take place as a result of overtime and, more ove r , how many accidents may possib ly take place, perhaps not duri ng overtime hour s but as a resul t of people being ov erwork ed , fatigu ed, under stress. I suggest and suggest respect full y that it is time, it is time that we lo ok into this. We shoul d not be going ahead bl ind. We should not be encour aging workers in this pro vi nce and emplo yers to pr ess th eir emplo yees into preca rious circu mstanc es.

We don't know and in the fac e of the lack of knowledge , the lack of information, we shoul d be repo sing and refle ct ing. I think that is th e co rr ect manner of deali ng with this particu l ar problem, not encour aging more work. That's irre sponsib le righ t now. Pr oduct ivi t y, as I sa id before the recess, does not equal pr ogr ess. That is not ho w a civilized society measures prog ress. One has to lo ok not just to the quantity but also to the quality and I ask that there be a qualitati ve rev iew, in a sense a qualitati ve assess ment, of what we're do ing, what is our intention to acco mpli sh?

So le t's stop , refl ect , le t's do an analy sis of the possib le re percu ssions and ramifications of what we have done. Go odness knows, before the former gove rnment, before the NOP turned bac k the work week, as I sugg ested before the recess again, 48 hours in 19 69. That was the standard work week in Man itoba , 48 hour s. It 's hard to bel ieve . No t a great di sparity probab ly with the stan dard work week 20 or 30 years before that and yet people sl avishly pay ho mage to technolo gy. Tech nol ogy and pr oduct i vity has br oug ht ... -(I nterject ion)- I'm sor ry, Sir, I didn't hear that. MR.

FERGUSON: I said have you ever trie d feeding cattle on a 40-hour week? MR. CORRIN: Have you ever tried feeding ca ttle on a 40-hour week? MR. FERGUSON: Yes, did you? Ther e's 16 8 hour s in a week. MR. CORRIN: I suggest that I am not co nt ending that work is wrong. I' m not sug gesting that we shou ld tell our peop le that there's something wr ong with work.

What I'm suggest ing is that th ere is a gr eat deal of differenc e in a ca se where a man has to work in an imposed cir cumstance , where he has to work regardl ess of the peril inv olv ed, rega rdless of the stress inv olv ed , regar dless of his physica l 543

Thursday, December 8, 1977 condition. When a farmer is tir ed - and I say so resp ectful ly, Sir- when a farmer feels that he is ill or he is ti re d or he is under that sort of stress, he may tu rn to one of his col leagues and ask him to do those types of chores and they don' t entail the same sor t of peril . But te chnolo gy has put a ... MR. FERGUSON: Wher e have you been? What's the highest accident rate in any ... if it isn't farming? MR. SPEAKER: Order please, order please. Order please. Order please. Now that we've had ou r conference, probab ly we can li sten to the Memb er for Wellingt on. MR.

CORRIN: I'm enjoying this a lot mo re now. We'v e been punching a pil low now for over two weeks and it's about time that somebody came up fighti ng. I say to yo u , Sir , that it's a trag ic irony, a trag ic ir ony that in the sameyear that this pro vi nce enacts a Workpla ce He alth and Sa fety Act, in the same year that that sor t of prog ressive le gisla tion can be brough t before this Ho use and passed by all memb ers, I presume -(l nterject ion) - A MEMB ER: No, ND P . MR. CORRIN: NDP ? I'm ashamed. Shame. If it were ju st the former government memb ers that voted for that, shame.

Because I say that in the context of tha t , to now tu rn around and encourage overti me,sncour age peo ple to work at their peril , is ir respo nsible . A MEMB ER: They're run ning true to form. MR. CORRIN: ... and I deplo re it. Now there's a lot been heard about the possib le negative repercuss ions to bu siness and this is of course the context of the enti re bill . We have to enhance our competitive positions, stimulate the economy, so we're very concerned about the rela tive position of busine ss.

As I said earlie r, we're not so concerned about the re lative po sition of the people who work for bu siness, we're mo re concerned about the rela tive economic condition, not the qual ity of life but always that quantity again. Fi nancial aspect. But, as I said earli er, don't worry because the or ganiz ed sector of la bour , they'r e not affected. They are still negotia ting; they' re going thr oug h the coll ective bar gaining proce ss ; they' re not going to be affected by this le gisla tion. Who are you hur ting?

You'r e hur ting the small fell ows, the fell ows that are work ing for the farmers perhaps, tha t's who you are going after. No w I do have som e sympathy for the small bu siness community. As I said earli er, I am a small bu sinessman myself and I do sympat hiz e. Costs are risi ng; I appr eciate that but I tell you, I' ve refle cted on this. Ei ght hou rs of overti m e only will yield - and this is on a weekly basis - eight hour s of overti m e will only yield a 5 percent incr ease in costs, costs re la tive to sala ry, the costs of la bour .

Tell me, and I presume there are many busin essmen on the other side. I hop e there are many busi nessmen on the other side because I wouldn't li ke to think that I was the only person in this debate that was a busi nessman, because you' re tr ying to pr otect me. I ask you, I ask you si ncerely , if you lo ok at that 5 percent escala tor, how many of your other costs haven't honestly risen mo re than 5 percent? Labour perhaps as a result of overti me, and overti m e is usuall y a by-product of prosperity. You don't work people overti m e becaus e you' re doing poor ly .

You work them overti m e because you're doing well . I'm su re when the Honour able Memb er for Wol se ley is repossess ing or sei z ing an automo bile , if he has a particu l arly busy week, he may have to work som e of his bail iffs overti m e for instance. A MEMB ER: He won't pay them overti m e thoug h. MR. CORRIN: Now I have also lo oked at some sta tistics. They te ll me tha t in Man itoba, did you know tha t among the small busi ness, 5,000 employers in this province have mo re than 10 employees? That asto u nded me.

That means that if every one of those employers works their employees, their 10 employees - we'll use the minimu m, we'l l just use that as a base, a floor -four hour s, do you realize that that would yield one jo b per emplo yer and 5,000 new jobs in Ma nitoba? Is n't that ast on ishing? We have unemplo yment.

Une mployment I thi nk now has reached the point where we have 28,000 of our fell ow Man itobans out of work and just by that sim ple initia tive, if we discouraged the intent of this Act and we didn't pr oclaim this, there is a pos sibili ty that we coul d create 5,000 new jobs and you sit there, yo u sit there, you have the audacity . A MEMB ER: The gall . MR. CORRIN: ... the gall , the audacity and the gall to pr ocla i m this type of le gisla tion, to at tempt to procla i m this type of le g isla tion.

Also, le t us take into consider ation - it's another interest ing aspect - tha t a lo t of worker s in our economy do not even work 40 hour s. They don't even do the ba sic minimu m. How about the garment workers? The stat istics show 38.5 hour s of work in 19 76. That's the average standard work week in the garment indus try so if you're tr ying to do those people a favour , the people that employ garment workers, you' re not doing them a favou r. Thank you but no thank you. I don't think they reall y want yo u r help .

You know, if all overti m e hou rs were avoided, there is a poss ibil ity of creating between 14,000 and 15 ,000 jo bs. If you look at the sta tistics for overti me, the Bu rea u of Statistics indicateshha t you could 544

Thur s day, December 8, 1977 create 14, 000 to 15, 000 jobs in Manitoba simply by alle viating all over time. I know th at's not possib le, because there is a need for overt ime, par ticu larly during the holi day period, and there's a need during emergencies, and I'm not sugge sting, by the way, that there shouldn't be emergency overtime . I'm sayi� g though tha t with that one exception, we should be discou rag ing it to the gr eatest degre e poss ib le .

So, I'm suggesting that quite simply - two simple expedients - the 5,000 emplo yers with ten or more emplo yees, by creating one job each, could have 5,000 new jobs created; and we can have another 14, 000 to 15, 000 simply by avoiding all over time hour s. So I'm saying, right the re , we' re well on our way to those 28,000 unemployed. I'm sugge st ing the resp onsib le cou rse of action in these circu mstances is to refuse and fail to proc la im this legisla tion and to give Man itobans an opp ortu nit y, give them the oppor tunit y to work, they deserve it. MR.

SPEAKER: The Honour able Min ister of Labour wi ll be closi ng debate. The Ho nourab le Member for Chur chill. MR. JAY COWAN: Mr . Speaker, I hesitated to stand this evening, because I see the side oppo site is feeli ng frisky, and chatt ering away. I thought perhaps they might li ke to stand and speak. But upon seeing the minister st and, I thought that I woul d try to get a kick at the cat in before she closedfebate. I don't stand this evening to pr olo ng debate, Mr . Sp eaker, and I' ll try to be brief. I know that the Hous e wants to get on with other busine ss.

But I don't feel that I could let this bill go by without inter j ect ing a few of my own comments. I tend not to speak to the cause of the bill , the prec ip ita ting factor , because I feel that this bill, the origina l bill and not the bill to repea l , but the orig inal bill transcends any particu la r instance, and I' m not going to stand in judg8ment of the drafting of the bill , what it says, that has been done by people far more abl e than I have, and the case has been made, or it has not been made, depending on how you feel about the sub ject to begin with.

I' d li ke to address my remarks - as did the Honour able Member for Well ington -t o the intent, to the effect of the bill , and in some spec ific terms, and I don't think that I have too much generall y to add to what has already been sai d. Yes, overtime is unheal thy , ther e's no doubt about that. Yes, over time creates unemplo yment, I don't think there's any doubt about that. But I woul d li ke to go into some more specifics. In one instance particu l arly , the unemplo yment aspect of over time.

I want to make it very clear tha t in my opinion, and I am coming in at a la te date, so to speak, that I don't bel ieve this bill was intended to bai l any particu l ar par ty out of a jam that they may have gotten themsel ves into, because I don't bel ieve that to be a function of government, regardl ess of the feeli ngs of the Member for For t Ga rry, or the Mi nister of Healt h, when he said ... -(I nterject ion)- No, no, I heard the debate quite well . I heard the debate quite well , Mr .

Sp eaker, and I think if I can paraph rase him for a moment, he said that we would have to, in certa in cases, isol ate the combatants , or the anta gonis ts. -(I nterject ion)- Thr ow them out, isola te them because the combatants ... -(l nterject ion) Remove them? Okay, remove them, I'm sorry. Thank you. The honour able le ader co rr ected me remove, and that's just as good a word. But when you say that you woul d remove the co mbatants or remove the anta gonis ts, I th ink he said, you are open ing up a whole host of prob le ms.

Fo r if we were to fol low his advice, in this spe cific case, to remove the combatants who are ly ing across the roadway, to remove the combatants would have had to be physica l. Are we going to place ou rsel ves in that sort of a pos ition? Will we have to physically remove the antagon ists and run the risk of flared tempers, adding fuel to an already deterior at ing situa tion, agg rava ting all the parties co ncern ed? And who, I might ask the honour able minister, who is going to make the decision?

Who is going to make the valu ed judgment, and he said, "When the parties are acting ir respo nsibly ." Well , who is going to decide when they're acting ir respo nsibly ? What's respo nsible , what's ir respo nsible, whe n does it become ir resp onsib le ? Because we would assume that the y would star t out acting in some sor t of respo nsible manner, and as tempers flared, they may become a bit ir respo nsible, but who is going to make that choice, who is going to make the valued judgment on when to act? Who in this Hou se has the wisdom of Solo mon? -(I nter jection) - Sh erman.

Ex cuse me, the Min ister of Healt h. -(I nterj ection)- Honou r able , yes indeed. That, Sir , would be open ing a Pa ndora's box of state interv ention that I would not care to see, and I don't think too many people in this Hous e would ca re to see. I don't think that was the intent of this bill , I think it's out of the question. It was not intended as interv ention, and I don't bel ieve, Sir , it was intended as a financial boon to the workers to add money to thei r pockets, I don't see how it would.

As a matter of fact, the Honour able Member for I nkster has reaffir med that and sai d, "N o, it wasn't intended." If I recoll ect his debate he said that it might co st them money in over time; now correct me if I'm wr ong, because it would be a deterrent ove rtime, and they would not be able to work that overti me. So it was not intended as a financial boon. Then why? Was it to reinforce the eight-hour day? Was it to reinforce the forty -hour week? Pe rhaps indirectly , because I think those are admirable causes. But tha t alone is not enough, that is not the cause, and there's no mystery.

I'm spea king next to last, or fairly la te on the li st, and people have said it before me. Ther e's no mystery. The object of this bill was a deterrent. But why deter over ti me? What is the prob le m with over time? Well, many members of this Hou se, and some spe aking this day, addressed themselves to the prob le m with over time. He alt h, safety reasons, soc ial reaso ns, keeping people away from thei r famil ies ... -(I nterject ion)- Mo stly it's wages. All are val id reasons. The shor t ening of the work week, , Mr .

Sp eaker, the shor t ening of the work day is a le giti mate goal of wor king people , and it's a le gitimate goal of this government to help in that sor t of a 545

Thursday, December 8, 1977 goal. But th ere are other reasons, more per ti nent reasons perha ps, more ti mely reaso ns, why we have this bill befo re us, and I th ink one of those reasons has occupied th e attention of this Ho use in the past couple of days, and that's unemplo yment. Mr . Sp eaker, we have a nationa l unemplo yment rate of 8.4 percent. And lo call y, shamefull y, shamefull y, we have an unemplo yment rate in Man itoba of 6.5 percent. -(I nterj ecti on)- Shame indeed, shame. That's 28,000 workers, Mr .

Sp eaker. 28 ,000 worker s in Ma nitoba are actively seeking work, and that doesn't take into account those who have been activ ely seeking work for some time now, and have not been able to find work, and who have give n up and res igned themselv es to the welfare role s, or resigned themselv es to livi ng off of other peopl.

That doesn't inclu de them, and it doesn't inclu de the young who, coming out of school, or coming of age, go out into the work force and find there are no jobs, tha t there are no jo bs for them, so they give up, and they aren't actively seeking work, so they aren't part of those statist ic s. So recent estimates show us that if we add one or two percent to the publi c figures , then perhaps we would have a truer picture of unemplo yment in the pro vi nce and unemplo yment in the country.

Well , that truer pictur e would give us 8.5 percent unemplo yment -7.5, 8.5. - it's a mute poin t, it's a tr ue pictu re, Sir , but a sad pictur e I might add. In the la st month alone, and those are the la test figur es we hav e, in the la st month alone, 6,000 people wanting to work were added to the unemplo yment li st. 6,000workers in the la st month alone can't find work. And we have a new pr ovi ncial gove rnment, sitt ing on that side of the Ho use, tha t was swept into office on the pr omises of jobs, new jobs, more jobs , better jo bs. - (I nterject ion)- Well , for whoeve r jobs.

What has happened, Mr . Sp eaker, is that they have watched jo bs fly away, and they have sat on the ir hands - 650 job s gone in Thompson. They've sat on thei r hands, or done a li tt l e deali ng themselv es. One-thousand jobs gone away Sundance, in Gill am, hundreds of jobs at Fl yer, hundreds of jo bs at Ve r satil e, ... Who knows how many civ il servi ce jobs? We're still tr ying to figuret hat out. (l nterjection)- 2,000 says the Honour able Member for Po int Doug la s, thank you. 2,000 he says. - (I nterjection)- The honour able minister, correct.

I stand to be co rrected by the Honour able Member for ln kster, and it used to be the other way around I understand .. At any rate, the li st goes on ad nauseam , job s gone. And the Fir st Mini ster , what does the Fi rst Minis ter do in face of all this unemplo yment, in face of the highest unemplo yment rate in Man itoba in decades? He says , "L et them coll ect unemplo yment.

Le t them eat cake." And the frost i ng on that cake, Sir , the fros ting on that cake tha t the Fir st Min ister is tell ing them to eat, is that they have a ve hicle in the time and thr ee-quarters, they have a ve hicle to help all eviate the situa tion, to help create jo bs. And what do they do with that ve hicle ? Do they try to build upon that ve hicle ? Do they tr y to suppor t that ve hicle ? A MEMB ER: No. MR. COWAN: You'r e rig ht. No, they don't. The Ho nourab le Member for Po int Doug l as says, "no, they don't ." And the Honour able Member for ln kster la ughs. Okay, I'v e got it righ t now.

A MEMB ER: Two in a row. MR. COWAN: Two in a row. Okay. I' d li ke some thu mps too if you can onc e in a while , Brian. Thank you. At any rate, what do they do? What do they do with a bill that woul d help those 6,000 new workers , part of 28,000 new workers -le t's not forget the overall pictur e. They bring it forth to repeal.

They repeal the only deterrent to ov ertime which is help ing to create unemplo yment that we have before us, and a good deterrent it would be .The Honour able Min ister of La bour agrees, and in her presenta tion of the bill she said, and I quote, "if the time and th ree-quarters is all owed to become law emplo yers might be relu ctant to req uest their emplo yees to work ov erti me." Well , Mr . Sp eaker, that is exact l y what woul d happen and that is exact l y what should happen.

But don't take my word for it, don't take our word for it, or even don't take the Honour able Min ister of La bour 's word to r it. Le t's li sten to what an emplo yer has to say about it. An emplo yer, Mr . Ralp h King, appearin g before the In dustria l Rela tions Committee la st year, on spea king on the time and thr ee-quart ers and overtime bill , who happens to be a garment manufacturing entrepreneur in the pro vi nce of Ma nit oba emplo ying app rox imately 300 workers according to his own estimate, and is also, I might add to his credentials, Vi ce-President of the Canadian Chamber of Commerce.

He doesn't li ke the idea of time and three-quar ters either and I'll quote, "b ut I would li ke them," and he's speaking of the gove rnment. Mr . Speaker, "I would li ke them to le ave the time and th ree-quar ters, which is a deterrent , alone.' We also know some th ings about Mr . King's operations and I think perhaps we should go in to that His emplo yees work over time. That's why he'd li ke us to le ave the time and th ree-quarters alone there's a catch there, he wasn't just coming in off the street as a concerned citizen. His emplo yeef work over time, and a lo t of over time. So much overtime, Mr .

Sp eaker- and these are his esti mates so much overtime that in 1976 alone they worked 12 ,567 hour s of over time. -(I nterjec tion) - Well how it breaks down is one of his firms worked 6,647, another firm worked 947 , another firm workec 4,973 . Those are appall ing figures, Mr . Speaker. In the garment industry, garment industry worken average about 35.4 hour s per week. Ar e th ose corr ect, the Member for Well ington? Cl ose to. ThosE are th e la test figures, in 1976, at le ast. So they work 1, 840 .8 to be exact, hour s per year, on an averagE stat isticall y speaking.

That 12 ,567 hour s of over time that his emplo yees worked la st year, would havE created, in the Manitoba economy, would have created 6.82 full -time job s. It doesn't sound li ke a lo t 546 e w s d a s e . " . , s , d s e e e ,

Thursday, December 8, 1977 Mr. Speaker, right off the bat, but overtime in his plants, the 12,000 some odd hours of overtime robbed, and I do say robbed, seven people of this province of their right to a productive full-time job. Seven workers are on the unemployment rolls, they are out of work because - and it's my opinion, Mr. Speaker - because the management of that company cannot

schedule properly. It cannot manage their production properly. As a matter of fact, he tells us again - and he didn't seem concerned at all about the matter- he said that one of his plants worked overtime on a four-month basis, scheduled overtime for four months in 1976. Now, Sir, I too am not against emergency overtime when necessary, but I don't see how that �ould have been construed as an overtime. As a matter of fact, Mr. Speaker, his employees voted on 1t. They voted to work that overtime.

Therefore, there must have been enough time, and it was a union shop, there must have been enough time to set up a proper election, to go through the whole procedure of voting, counting them, not an emergency, Mr. Speaker. If they had the advance notice that allowed them the time to vote it could hardly be called an emergency. But again, don't take my word for it. Let's accept Mr. Henning's definition, a person addressing the Industrial Relations Committee again, and he was representing four aerospace firms.

He implies that companies use overtime for two reasons. (1) and I quote "A company has insufficient workers available to work in regular time, or

(2) Because a sudden change in work load makes extra work necessary on fairly short notice." Let's go back to Mr. King's case. Was it fairly short notice? No, he had time to vote on it, he had time to work them for four months. It wasn't in a one-day period or an extra four hours tacked on to the end of a day during a week or a month, which could be understandable in certain instances. No, it wasn't on fairly short notice at all. And it wasn't a sudden change. What then could be the reason? According to Mr. Henning, not me, but according to Mr.

Henning, speaking against the time and three-quarters at the Industrial Relations Commite e, representing four aerospace firms, not the employees, Sir, but the firms, according to him, it was scheduled overtime because they had insufficient workers because Mr. King wouldn't hire the seven workers who were out on the streets looking for jobs now, living off of the state when they don't have to be. Time and a half in this case, and that's what he paid his employees for that overtime, time and a half was not a deterrent. It was not.

And here's why it wasn't a deterrent, if I can get a bit technical and I'll try not to get too technical. Fringe benefits - fringe benefits are costed out on the basis of an eight-hour day or a 40 hour week. The Thorne Group Limited, a management consultant firm, did a study in 1973, not that long ago, and they discovered in surveying a group of 101 firms that statistically, averagely, the fringe benefit package equalled 28.13 percent of the payroll. And just as an aside, Mr.

Speaker, to show how the fringe benefit package has grown, which enters into the argument later, it was 15.10 percent 20 years earlier in 1953, so in those 20 years it had nearly doubled. But let's get back to the case at hand here. We have a worker who makes, say $5.00 an hour. That's an arbitrary number we'll pick, $5. 00 an hour. The fringes on that $5.00 per hour amount to $1.40 an hour, but, Sir, they are only paid on the eight hours. They are not paid on the overtime. Usually, and I say usually because there are exceptions, no cost or fringes are applied to overtime hours.

So instead of having to pay those employees $6. 40 an hour he's paying them $8. 50 an hour, but it is still left than the $5- if I can transpose that. We'll start again I got too technical for myself here. At any rate let's forget the technics. The fact is that the fringe benefits influence the amount of money. Another factor, Mr. Speaker, is the overhead costs of operating that garment factory. There is the rent or the mortgage or whatever the case may be. There is the upkeep of the equipment, the machines - the sewing machines, the cutting machines, etc. There is equipment depreciation.

There is the upkeep of the plant itself, the office staff, the clerical staff that have to sit in the office. Usually in an eight-hour day even if the employees are working those twelve hours, when they were working that four months scheduled overtime I would assume in most cases the clerical staff were still only working their eight hours, so they're still only costed out on the eight hours.

And there's the normal operating expenses of lights and heat and insurance - those don't substantially alter whether you're working an eight-hour day or a twelve-hour day - maybe the lights a bit but not substantially we're talking about pennies here. Okay. So whether that plant runs eight hours, or 12 hours, or 24 hours, these costs are constant. Then they are costed out on non-continuous operation, which this one was - a non-continuous operation being one that doesn't run 24 hours around the clock seven days a week. They are costed out on the basis of an eight-hour day, or a4 0-hour week.

So after the normal quitting siren rings, Mr. Speaker, those people who stay behind to work overtime, even though they're making time and a half, are being paid on a basis that does not encompass any fringe benefits and does not encompass any upkeep on the plant. And in an overhead intensive operation, Mr. Speaker, overtime at one and a half could conceivably- and I admit I am stretching a point - but could conceivably be cheaper than straight time. And the Honourable Member for lnkster shakes his head so I must not be stretching the point that much. -(I nterjection)- He agrees.

So the four months of scheduled overtime that Mr. King subjected his employees to, the four months of scheduled overtime might conceivably - and I'm assuming - might conceivably have been cheaper than hiring new employees. And even if it was it was more advantageous to Mr. King because he did have a choice of hiring those seven new employees if he wanted. So there is no deterent in time and a half.

And if we are to believe- and I'm quoting members of the business community for the benefit of the members opposite, the government opposite because those seem to be the people that they would listen to far more than they would listen to me. So I'll do it one more time. I'll quote the General Manager of Burns Meats, Manitoba division, and he says, Mr. Speaker, that packing plants do not

schedule overtime unnecessarily. And he says they don't-and I 547

Thursday, December 8, 1977 quote - of "because one check is clear the costs associated with them." Well, are we to believe that, Mr. Speaker, or are we to believe the figures he supplies? In 1976, again the last year of record, Burns' workers, his workers, worked 83,000 - 8-3-0-0-0 - hours overtime. There's 815 employees in that operation on an average. That meant that they averaged 97. 6 hours overtime that year. And let's run through the same example with them as we did with Mr. King's operation. Food industry employees averaged 37. 7 hours per week. That means, to be exact, they averaged 1,960 hours per year.

Eighty three thousand hours of overtime, Mr. Speaker, would have created 42 1/3 jobs in 1976 for the Burns' employees, so the question, Mr. Speaker, if time and one-half is such a deterrent, if the costs '' associated with time and one-half are clearly so punitive as the manager would have us say, then I would like to know why did Burns Meats subject itself to 83,000 hours of financial punishment in 1976 alone? They did so because there was obviously no punishment, Sir, and they were either bad managers or bad schedulers or the overtime was not costly to them . But a more timely example, Mr. Speaker, I NCO.

I'm checking to see if the Honourable Member for Roblin is in again before I start on INCO. I see not, okay, well someone will have to tell him what I said because he gets quite uptight at these times. So on INCO, they're cutting back 650 workers. Okay we know that, 650 workers. But, Sir, I just talked to the president of the union in Thompson not too long ago, a couple of days back, and he informs me that they are still scheduling overtime, Sir, on a regular basis. It is scheduled overtime; it is not emergency overtime, it is scheduled.

Smelter workers at INCO are working - and there are approximately 100 employees - are working one day of scheduled overtime per month, Sir. Every one of them is working one day of scheduled overtime per month and in 1976 again, the mining industry workers averaged 40.3 hours per week. As an aside, Sir, on that 40.3 hours per week, in 1975 it was 40 hours even, so here we have widespread layoffs across the entire country. Falconbridge just announced some today. Sherritt-Gordon has cut its workforce almost by a third in Lynn Lake and Leaf Rapids. Falconbridge in Wabowden closed.

We've had widespread mine closures; widespread mine layoffs, and they have increased the average hours that they work per week to above the 40, Sir. But at any rate, to get back to the point in hand, if they work that 40.3 hours average per week, then they average 2,095. 6 hours per year. So the scheduled overtime in that one department alone, one department alone, Sir, and there are 10 departments of that nature according to their contract, the scheduled overtime in that one department robs 4.62 jobs from the INCO workforce.

And I et's assume that they also work that amount of overtime in the other departments; that would be 40 jobs. I'm not talking about the spinoff jobs that are lost to the Thompson economy because those jobs are no longer available on an individual basis, I'm just talking about the 4.62 jobs in this case.

Maintenance workers - and I asked the Honourable Minister of Labour if she'd received some notification from INCO on layoff because I'd heard that they were forcing maintenance workers to accept a job at a loss of pay of approximately 80 cents to $1.00 an hour underground as mine beginners to go from their trade which is electrician, welder, mechanic-to go back underground at a wage loss because they were overstaffed on maintenance workers and they didn't want to just come out and lay them off because that would have meant they would have to report.

There were 50, 60; 70, 80 of these people, somewhere in that area, and they would have had to report it to the government, so they tried a little side manoeuvre on trying to force them underground where they know they'll quit. They're doing this to those employees, and again, somewhere in the area of 60 of them, and yet last week maintenance workers at INCO, the ones that were left on the surface, were working double shifts. They were working overtime while their brothers and sisters are being forced underground at a cut in pay so that they will be forced out of that workforce .

That's what overtime is doing, Sir. Also in the north, the Winnipeg and Manitoba Building Trades Council reports that at northern construction sites, 30 to 35 percent of all hours worked are overtime hours, Sir. Thirty to thirty-five percent. That's a deplorable situation. And there may be all sorts of reasons for them, Sir; I won't go into that now.

But I think in times of unemployment of 6.5 percent and 8.4 percent nationally, I think that we should take one hard, long look at the reasons they are working that many hours and the number of hours that the new jobs that could be created from those and set our priorities right. This is at a time when the trade unions are forecasting - and this is the Building Trade Unions - are forecasting 35 percent unemployment among their membership this winter, and in the north they are working 30 to 35 percent overtime. Cutbacks in Sudbury, new cut-backs today, and this was quoted in a Free Press

article I believe. A MEMB ER: Watch the Free Press. MR. COWAN: I read the Free Press, will it help to watch it? Does it do tricks? At any rate ... a little aside there. It does do tricks, the Honourable Member for The Pas says. See I got you on record today. I figure you should say something in the House. At any rate, Sir, Martin Matthew, the Vice President of Mine, Mill and Smelter Workers in Sudbury, the Falconbridge mine .. . there, Sir, which just laid off 750 I'm not going to use a specific number- laid off hundreds of employees and put his whole staff out on seven weeks' layoff this summer .

Today they announced that. He was quoted earlier this week as saying, "companies are getting production through overtime without hiring new workers. " In Manitoba, Mr. Speaker, "laid off bus worker claims, why are people on overtime?" We're talking about jobs, we're talking about creating jobs, we're talking about alleviating the disasterous unemployment situation we have and we have people working overtime while their brothers anc sisters are being laid off' Sir. And I'll read - "Herb Perkin who worked his last day at the government-owned company,' 548 s w e s d "

Thursday, December 8, 1977 government-owned company, Sir - and I think it should stay that way, as an aside, if I can. At any rate the government-owned company this week said -( Interjection)- Run by the public. A MEMB ER: Owned by the people of Manitoba. MR. COWAN: Owned by the people of Manitoba. A MEMB ER: Sounds better. MR. COWAN: Sounds better, okay. I'm not going to acknowledge who said all those remarks- I don't have that much time left, but thank you at any rate.

The government run, owned by the people of Manitoba Flyer Bus Company, okay? - but seriously, this week he said that the call for workers to put in overtime was issued Tuesday just before he walked out of the shop for the last time because he'd been laid off. "This I can't understand, it just doesn't seem right", Perkins says. Well, Mr. Speaker, I happen to agree with Mr. Perkins, it just doesn't seem right. A MEMB ER: It's her fault. MR. COWAN: It's her fault? I'm not going to place any fault at all, Mr. Speaker.

One of the members, and I'm not going to identify him for the record, but one of the members is pointing across the House and saying it's her fault. I don't care whose fault it is, Mr. Speaker, the situation is deplorable. The situation is deplorable, that we have 6.5 percent unemployment in this province and that a business we have the power to do something about is working its employees overtime and laying off the rest. That is deplorable, Mr.

Speaker, and whose ever fault it is, and I point no fingers, whose ever fault it is, I wish they'd do something about it - not for me, I've got a job. -(lnte rjection )- A MEMB ER: They're trying to sell it. MR. COWAN: I hope they don't do that. I don't want them to do that for me, Mr. Speaker, but I wish they'd do it for people like Mr. Perkins; for the 6,000 new people who were added to the unemployment rolls this month, for the 28,0 00 people that are on those rolls already, not to account for the hidden statistics. I wish they'd do something for those people. A MEMB ER: Double. MR.

COWAM: Double time to start, triple time later, okay. Very good. That was the Honourable Member for lnkster, so the record is straight there. He said, and we're talking now, not about the Honourable Member for lnkster, we're talking about Mr. Perkins at Flyer. He said, "O vertime is required nearly every night and for half a day on Saturday although last week a full Saturday was worked. " He couldn't definitely say how many workers were usually involved although he estimated 20 or 25. Mr. Speaker, that is deplorable.

I say again that is deplorable, that that man should be right now out on the streets, perhaps not now but during the day, looking for a job while Flyer Industry is working 20 to 25 people every night and half for full days on Sunday. Deplorable. Companies use overtime, such as Flyer, such as Falcon bridge, such as INCO , such as Mr. King's company, they use overtime because in the long run it is cheaper than hiring the workers. I believe that one of my colleagues is going to explain that in a bit more detail and I won't steal the thunder from him.

But you'll have to take my word for the time being that it is cheaper than hiring new workers. And the employers don't want to see time and one half tampered with because for them it's a good thing. And we can listen to Mr. Hennings again, representing the four areospace firms before the Committee on Industrial Relations. And what does Mr. Hennings say about those firms. Well those firms, Sir, like overtime so much, that last year an average of one thousand workers in those firms, and these are his figures, put in 60,000 to 80,000 hours overtime.

Now I just, for the life of me, Sir, cannot understand how all that -( Interjection)- overtime could be emergency. Mr. Speaker, I would like to thank the Member for Roblin for notifying me that he's back in the House and I will tone down my remarks a bit so that he doesn't get too upset this evening with me again. -(l nterjection) l've just been passed a note, Mr. Speaker, to lighten the subject ... let's not have a quarrel here because I haven't got that much time left and I have a lot of figures left. I said I was going to be brief but obviously I exaggerated.

I just have a note here from the Honourable Member for Kildonan who says, "Conser vatives are true to form making us MLAs work overtime too, 10 :00 a. m. until 10 :00 p.m. five days a week." At any rate I wonder how many new jobs would be created if we didn't work overtime. Then maybe we would have some new elections and we could get some more members on this side and make the votes closer. At any rate I'm sure that's not their intent. Back to the aerospace firms, the ones where one thousand workers are putting in 60,000 to 80,000 hours of overtime a year.

The general average for that industry, Sir, is 39.6 hours per week, or we'll extrapolate again, it's 2,05 9.2 hours per year. Now using their low figure of 60,000 hours overtime in the year, Sir, 29.13 jobs would have been created. Using their high figure of 80,000, 38.85 jobs would be created. But being a compromising sort on occasion, we'll use our 70,000 figure which is sort of 549

Thursday, December 8, 1977 in between; well exactly in between, the 70,000 figure means that 33.99, or effectively, 40 jobs would have been created by that overtime that was worked. Sir, overtime is definitely, there can be no doubt, definitely adding to the unemployment problem in this province, the unemployment problem in this country. And how does the industry view that overtime? Why are they so up-tight about it? Why do they not want us to tamper with the one and one half time? Well let's listen to industry speak a little bit on overtime. And again I believe it's Mr. Hennings.

He says, "We hold to the view that it is better to askun employee to do something than to order that employee" - and he's speaking of overtime, Sir. Then he goes on to say, "We also hold the view that an employee has a responsibility to exceed to the reasonable requests of his employer as in regard to working overtime". So they'll ask, and you have a responsibility to say, "Yes sir, I will work the overtime." A ME MBER: Or else. MR. COWAN: Or else, Sir, yes. The Honourable for Flin Flon knows the "or elses" for sure.

He told me a story - I believe it was the Honourable Member for Flin Flon - no, excuse me, it wasn't the Honourable Member for Flin Flon, so I won't tell the story. I'll tell it another time in this House. - (Interjection)- What story did you tell me, the Honourable Member for Wellington? At any rate rate, Sir, his industry does not want its employees to be able to refuse overtime because that overtime is beneficial to them, Sir. And it is cheap to them, it is cheap overtime at one and one-half times. The industry wants that overtime, they want cheap overtime and he wants his workers to havsto work it.

As a matter of fact that same person came in and said before the committee, "I'd like to see a clause added to the Labour Relations Act in this province." And that clause was, "the refusal individually or collectively to work overtime in an attempt to force the employer to exceed union or employee demands should be added to the definition of a strike in this province." That's how much time and one-half overtime means to them. They're willing to ask nicely, if you're willing to say yes nicely. If you're not willing to say yes nicely then they're going to legislate you to work the time. A MEMB ER: It's a shame. MR.

COWAN: It is a shame, Sir, it is a shame. The Honourable for Flin Flon says it's a shame. I agree it's a shame. He's a very astute gentleman, the individual who wanted to put that clause in, very astute. But his vested interest in overtime betrays the advantages he sees to overtime. It is profitable. It is easy. It is convenient for the employer.

They can be the worst schedules possible, they can be the worst production managers possible, as long as they can tell you to stay an extra four hours to make up for their mistakes, five days a week and half a day or a full day on Saturday, overtime is convenient to them. And as long as they can do it at time and a half, Sir, it's cheap to them. So it's profitable, it's easy, it's convenient, it's cheap, but it's damaging to the economy, Sir, and it's a travesty to the unemployed.

In good times, Sir, if these were prosperoue times, Sir, then there would not be the urgency to deal with overtime in such a manner because, Sir, then we would have full employment or near full employment. We would not have people out walking the streets like those seven people that the garment industry employer has put out in the street because he works his employees overtime. We wouldn't have them on the streets.

So I say that in good times, prosperous times, there would not be the urgency, Sir, but no one in this room will tell you that they're good times right now, and the 6.5 unemployment rate for this province betrays the fact that the times are not good. Bluntly, Sir, these are bad times, and repealing time and three quarters, facilitating job-robbing overtime will make them worse, they will make the times worse. And at a time, Sir, when we should be encouraging the hiring of new workers by the repealing ... MR. SPEAKER: Order please. I just want to inform the honourable member he has five minutes left. MR.

COWAN: Sir, I had one sentence to get in and I wanted to get it in, my apologies. I'll stand up again, and I didn't get a thump like the Honourable Member for Wellington ... there's my thump, thank you. And at a time, Sir - I'll start all over again- at a time when we should be encouraging the hiring of new workers. By the repealing of this bill we are accommodating the over-working of all workers. Thank you, Sir. MR. SP EAKER: The Honourable Member for The Pas. MR. McBRYDE: Mr. Speaker, I just want to make a few comments on this piece of legislation.

I die make some public comments before the session started, my feelings or my opinion on the overtimE legislation, and I think that at that time, Mr. Speaker, I said the reason that employers work thei1 employees overtime is that there is no extra cost to working them overtime. Mr. Speaker, I think that made a mistake. I think that I was wrong in that assumption or that statement that I made. The more see of the figures and the more I see of the facts, it's not that there's no extra cost for overtime, there ii in fact a cost benefit, or a profit benefit to employers to work their employees overtime.

But, Mr Speaker, the main concern that I emphasized at that time, and my colleagues have so abll emphasized, is the fact that what we have here is - in the bill that was past by the previow 550 p e l d e r I I s . y s

Thursday, December 8, 1977 government, time and three-quarters -a simple, logical practical way to proceed, to try and reduce the amount of overtime in the province of Manitoba, to try to reduce the amount of overtime and increase the employment of people in the province of Manitoba. But, Mr. Speaker, I would like to quote briefly from an

article that I believe appeared in "The Challenger" entitled "Why the Boss Likes Overtime" which I think demonstrates that I was incorrect in my statements before the session started. "People often wonder why employers go to so much trouble to force workers to work overtime even though they have to pay time and a half for overtime hours. Wouldn't it be more sensible to hire extra workers and to install more machinery at straight time? The fact is that the company makes more profit on overtime hours than on regular hours, in spite of time and a half.

The main reason for this is that the boss has certain costs -wages, fringes, overhead - which are paid for by selling what the worker produces in the first three hours of the worker's production. Anything the worker produces after that is clear profit. Therefore the longer the working day the more the profits. A typical factory of 1,000 workers tells the story. In the last four hours of a 12-hour day the company pays time-and-a-half, but it doesn't pay anything for fringes, for example, pensions, hospitalization, et cetera.

So if you count fringes in with wages for the first eight hours the company pays only one and one-fifth as much to the worker during the four overtime hours. And look what he saved in those last four hou rs- rent, real estate taxes, interest on debt and much clerical and administrative work is no greater for a 12-hour day than for the 8-hour day because the white-collar staff only works eight hours. So essentially the company has almost no overhead during the last four hours. We see that this means that for an 8-hour day it takes the first five hours of production to cover costs leaving three for profits.

In a 12-hour day it takes two hours longer, seven hours tocover costs, leaving five hours for clear profit. Any way you measure it the company makes more working the workers overtime than it would hiring additional workers and buying more machines at normal straight time." Mr. Speaker, my colleagues have summarized that and said that in various ways. They've looked at that argument and I think, Mr. Speaker, as I said earlier, it's just sort of a practical and feasible measure - it just makes logical sense. That's what I tried to point out earlier, and that's what I tried to point out this evening.

But I don't think there's going to be much listening on the other side because the other side is tied to a rigid philosophical position, or a rigid ideological position. They have a theory that whatever makes companies, whatever makes companies happy is going to help produce jobs. And I think if you look at the facts, if you look at the figures, this doesn't bear out. The figures that my colleague for Churchill just mentioned, and I think that other colleagues have mentioned, show that in fact increased overtime creates unemployment and not vice versa as the Conservatives would have us believe.

So their basic philosophy is that what is good for INCO is good for Manitoba; what is good for Burns is good for Manitoba; what is good for Ralph King is good for Manitoba; what is good for the aerospace industry is good for Manitoba.

That is why they won't listen to plain, simple, logical arguments in regard to this bill. -(lnterjection)-Without quoting Marx, as the Minister of Highways wants to ho Iler out across here now and he does like to take his ideological position, but by quoting from industry leaders in the province of Manitoba who made submissions to the Industry Relations Committee it can be shown that it is to their advantage to work people overtime.

It is to their advantage to help create unemployment by working people overtime and the rigid ideological position of members opposite prevents them from dealing with the matter practically. They are the ones that are rigid in philosophy; they arethe ones that are rigid in ideology. Mr.

Speaker, I don't think that even though we presented pretty careful and well researched facts and figures that show that the changing of the overtime legislation, that passing the bill before us will in fact create unemployment, I don't believe members opposite are going to listen to that argument because they are stuck in their ideological position . MR. SPEAKER: The Honourable Member for Point Douglas. Are you ready for the question then? The Honourable Minister of Labour. HON. NORMA L. PRICE (Assiniboia): Mr. Speaker, I've been up and down so much I can't realize my time has arrived.

I would just like to make a few closing remarks about Bill 6 which proposes to repeal the one and three-quarters overtime rate provision and revert back to the generally accepted one and one-half overtime rate. I have listened with interest to all the many obversations; however, I haven't heard anything to really alter our position as we indicated in remarks when the bill was put before you two weeks ago. We strongly believe that the time and three-quarter provision would not have been a benefit for the employers or employees and would have a negative effect on the economy of the province.

Our general aim is to encourage the expansion of employment, particularly in the private sector, by creating a genera! economic climate favorable to expansion. The time and three-quarter provision was simply not consistent with this general aim. In fact, it is a negative factor in terms of trying to create a healthy economic climate for opportunities for job creation. I would like to ask my honourable friend for Wellington what happens when work programs such as snow clearing or pouring cement or repairing bridges, laying tile - what happens when these things must be done at any time or any day?

I don't think the taxpayers would be very pleased if they 1ad to pay sixteen and two-thirds more overtime because of this legislation. Another example would be the Manitoba Sugar Company . They work four months of the year but ju ring those four months they have to work 24 hours a day, seven days a week. What would we do, 551 c a t h d

Thursday, December 8, 1977 drive them out of the province? A MEMB ER: Nobody works 24 hours a day. MRS. PR ICE: The Manitoba Sugar does, Sir. I would also like to emphasize once again that we are against the time and three-quarters because it wasn't asked for by employees, employers; it was not asked for by any of these groups, not even the labour groups, because it is not a major concern to them nor was it in their best interest to have such a provision in the statutes. Also, as I indicated before, no other jurisdiction in North Americahas this kind of legislation.

We can't afford to havehhis and put us out of a comparable area with the rest of Canada or our members from across the line. Across the line they have a lower minimum wage. They don't have one and three-quarter overtime. We believe that most overtime is either requested or required - it's not planned or scheduled overtime as is suggested by my honourable friends opposite. Generally, it is usually required on occasion because of a seasonal work or because of the weather conditions and I can see no reason why employers should be penalized by imposing a higher overtime rate.

Higher overtime rates that are imposed on employers who are out of necessity required to use overtime can have other adverse effects. For example, it could result in higher prices for consumers or higher taxes for the taxpayers because of the increased cost to employers or governments. It could also, as I indicated earlier, put some Manitoba employers in an uncompetitive position by increasing their cost in relation to the costs of competing employers in other areas. I would also like to mention - is the Honourable Member for Churchill still here? Yes, he is.

I would like to ask him if he is giving us the full blame for the high unemployment when we have only been in office five or six weeks? He has had eight years to improve the situation. Sir, I have no hesitation in recommending this bill to the members of this Assembly and asking for the unanimous support in passing this legislation. QUESTION put, MO TION carried. MR. SIDNEY GREEN (lnkster): Yeas and Nays, Mr. Speaker. MR. SPEAKER: Call in the members. On the proposed motion of the Honourable Minister of Labour,

an Act to amend the Employment Standard Act (Overtime Rate of Wages), A STANDING VOTE was taken the result being as follows: YEAS: Messrs. Anderson, Banman, Blake, Brown, Cosens, Craik, Downey, Driedger, Einarson, Enns, Ferguson, Galbraith, Gourlay, Hyde, Johnston, Jorgenson, Kovnats, MacMaster, McGill, McGregor, McKenzie, Mercier, Minaker, Orchard, Ransom, Sherman, Wilson, Mrs. Price. NAYS: Barrow, Bostrom, Cherniack, Corrin, Cowan, Evans, Fox, Green, Hanuschak, McBryde, Malinowski, Miller, Parasiuk, Pawley, Schreyer, Uruski, Uskiw, Walding. MR. CLERK: Yeas 28, Nays 18. MR. SPEAKER: I declare the motion carried.

May I ask now if it is the intention of the Government House Leader to go into Committee of th1 Whole House? The Honourable Minister of Finance. MR. CRAIK: Mr. Speaker, I move, seconded by the Minister of Health and Social Development tha Mr. Speaker do now leave the Chair and the House resolve itself into Committee of the Whole t1 consider and report the following bills: (No. 3) -

An Act to amend The Gift Tax Act (Manitoba) an1 The Succession Duty Act (Manitoba); (No. 4) -An Act to amend The Mineral Acreage Tax Act. MOTION presented and carried and the House resolved itself into a Committee of the Whole with th Honourable Member for Roblin in the Chair. COMM ITTEE OF THE WHOLE HOU SE BILL NO. 3 - GIFT TAX AND SUCCESSION DUTY ACTS (MANITOBA) MR. CHAIRMAN, Mr . J. Wally Mc Kenzie (Roblin): Bill No. 3 -

An Act to amend The Gift Tax A1 (Manitoba) and The Succession Duty Act (Manitoba).

Part 1, Amendments to The Gift Tax Ar (Manitoba), 552 , e at o d e ct ct

Thursday, December 8, 1977

Section 1-pass;

Section 2( a}. MR. GREEN: I wonder if the minister, in dealing with that, would care to make a prediction as to by what degree we can expect in a period of eight years, or less than that actually -f our or fiveyears that there will be $1 billion invested in the province of Manitoba by virtue of this legislation. Will it be $200 million this year, $200 million next year, or $100 million this year and $500 million next year? Could he care to indicate the ra te at which this $1 billion over a period of four years will be invested as a result of this legislation? MR.

CHAIRMAN: The Honourable Minister of Industry and Commerce. MR. BAN MAN: Well, Mr. Speaker, the answer to one of the questions is would he care to - no , he wouldn't care to. Probably the second question is, can he? The answer is probably in definitive terms "no." I don't know what the third question was, but I'm sure that in eight years, like all of the other things that happen in a democratic society where you place your bets and you hope for the outcome further down the line, whether you're imposing taxes or whether you're re leasing taxes, there is no clear-cut answer to these things.

I'm sure that you will find the Galbrait hs and the others who will give you economic models that will tell you undoubtedly in pretty clear terms exact ly what's going to happen. I've seen many people in Manitoba who've also come on the scene, and they've alwa ys talked about something that's far enough over the horizon that they're never here quite long enough to have to live by the consequences of their decision. But Mr. Chairman, I wouldn't go quite so far as to say exactly how many jobs are going to be created, or how many millions of dollars are going to return to Manitoba.

All I can tell the Member for lnkster is that the indications that have been given about the flight of capital, so called, from Manitoba over the period of the last two years , I believe ha s been very significant in terms of reinvestment capital in this province.

I'm told from people who are in the legal business and in the accounting business that it's likely that significant amounts that would have left will not leave and that some that did leave will return, but I wouldn't go quite so far as to try and answer his question and say there's going to be X millions of dollars returned to Manitoba in the next eight years. MR. GREEN: Well, Mr.

Chairman, I'm sorry I used the term "eight years" because I think th at the second succession duty laws changed only five years ago and it's been suggeste d by a minister of the Crown - I guess we have to listen very carefully-that over that five year period we've lost $1 billion, and I would therefore think that with the laws changed that in the next five years we can expect to gain back $1 billion. I just wondered whether the honourable minister could indicate at wha t stage s this is prepared to come back and he's been fair enough to say that he wouldn't care to, nor could he.

In view of the fact that it was announced at least on October 11th that these taxes would be removed, and therefore it is now much cheaper to die in the province of Manitoba and there should be investment, and in those two months we've seen unemployment increase by roughly 2 percent to the highe st rate that we've had since 1940, I believe, which indicates that at least it hasn't been abated thus far. How long does he expect the people of Manitoba to put up with this doctrinai re, ca pitalist experiment? MR. CHAIRMAN: The Minister of Finance. MR. CRAIK: Well, Mr.

Chairman, I have to tell you that - and perhaps repeat- that the re's more than one reason for the removal of the Succession Duty Act. One of them is the so-ca lled experime nt, not necessarily in capital ism, but to create the checks and balance of society that I think many people believe in in this House and which I also happen to think that the person sitting on the left of the Member for lnkster happens to believe.

Otherwise I don't think he would have been delving around, wondering whether this Act should have been repealed itself or at least modified substantially to create and encourage the formation of private pools of capital in the province of Manitoba for investment or reinvestment. So Mr. Chairman, I think the member has had his games and I've.re plied accordi ngly, and I think that's where the story ends. I fully expect that there's going to be reinvestment of capital.

I don't think tu at in the total picture that the $5 million is going to substantially change what he's trying to attribute to being the cause of unemployment, or at least alluding to the fact that the existence of this tax, or its non-existen ce, has something to do with the unemployment picture. I don't think that the Member for I nkster would want to go quite so far as to indicate that the amount of money collected from this tax is going to make a substantial difference.

This government and the former government is quite prepared to look at the amounts of money collected in this tax towa rds fighting a temporary unemployment program, but let's not pretend that in the long term this is going to make a substantial difference. MR. GREEN: Well, Mr. Chairman, I agree, and I'm going to try to terminate my questions on this, but I didn't intend that the $5 million would be the stimulus to investment.

What I was talking ab out is the psychology referred to by the Minister of Health and the great change in cl imate that's going to take place and should have taken place on October 11th, but apparently hasn't, except it's got very :::old - I mean, I don't think we've ever had as cold a winter . What I was suggesting, Mr. Speaker, was that we would reverse this suggested trend . We're not talking about $5 million. We're talking about $1 Jill ion over a period of five years and if we put inflation onto that $1 billion, it's probably $1.5 billion. I 553 t t c t b

Thursday, December 8, 19 77 want to know, what is the expectation as to reverse that trend so that in the next five y�a.rs, and I hope it doesn't last that long, the experiment that I referred to, that we are to get back $_1 .5bllhon as a r_esult of the change in cli mate and what the estate tax has cost us over the last f1ve years? It w1ll be interesting to tabulate those figur es as they come in. MR. CRAIK: Mr. Chairman, 1 have no hesitation in joining with the Member for Inkster several years from now and tabulating the results of this chang e.

I do want to point out at this junc ture as well that having checked the records and in view of some of the debate that has taken place in this House as to the impact of this on the agricultural commun ity, there has over the past four years been about 28 percent of the forms or the appl ications of thi s Act have applie d to the agricultur al community, to farms - approximately 28 percent, 30 percent, in that range. MR. GR EEN: In forms, but not in dolla r value. MR. CRAIK: In dollar value, the figu res are somewhere of the same order, but not sig nificantly different. But the ... MR.

GR EEN: I said $1 .5 bil lion. MR. CRAIK: Well, Mr.

Chairman, there has been some ind ication that this somehow didn't apply, by one of the members of the opposition; there's somehow been a sugge stion on this side of the Ho use that 1 was misleading the House in some terms in over-emphasiz ing perhaps the impact on the agricultur al commun ity. 1 want to tell you that the review of the statistics over the past four years would indic ate that approximately in that range- 28 to 30 percent of the applic ations of this Act have been to the transfer of farmlands from one party to the next, whether it is from husband to wife, or whether it has been from generation to gener ation, and not usually the other way around, from the wife to the husband . 1 want to point out also that it has come to my attention as a resul t of the discussions that have gone on in the last few days, that there have been a number of appli cations where it has not been people that you think are the people with the sort of land, estates where they have mountains of money or property at their ready di sposal, but has come about as a result of insu rance policies that have come about as a result of an accident in thefamily where the parents may be kil led in an automobile accident and the money, in attempting to pass on to the childr en of the su rvivors, if you wanted to use a dramatic example, also becomes subject to this particular tax.

If you want to use a dramatic example. The usual example is the farm example because, as I say, it is affecting 28, 30 percent of the application to this Act is in the farm ins;� commu nity. The rest is in those categories, and, Mr. Chair man, it applies in cases where the estates m this day and age are not that large. lt applies in the case of parents passing on to chi ldr en estates of $1 00,000 or less, where if you have parents kil led in an accident, the childr en become the beneficiar ies of an ins u rance policy.

If it is a young famil y, I don't think even the members opposite want the condition to exist where the state is taking any part of that, when that $1 00,000 or whatever it may be, has to go on to see them through their education and on. Now, okay, that's not the typical case but it is a ca.se that can exist, and the more typical case is the case of the family farm passing from generation to generation. That is the most typical case. MR. CHAIRMAN: The Honour able Leader of the Opposit ion. MR. SCHRE YER: Mr.

Chair man, I had intended to wait u nti I thir d reading stage of this legislation in order to address the House with respect to the subject matter but si nce it has been raised here in committee stage under somewhat more informal rules, I'm qu ite prepared to proceednow.

The Min ister of Fi nance, havin� brought my name into it - I'm qu ite happy to join in - and begin by saying to the Min ister of Fmance that he's qu ite wrong when he says that the Member for Inkster, having raised the questions and he having answered, that it is "the end of the story." As far as I'm concerned, Sir , and many, many Manitobans, the great majori ty of Man itobans, this is merely the beginnin g of the story because the story that will unfold in the next few years- and I qu ite agree with the Min ister of Fi nance, it is only right in the de{l)ocratic system that one group, having contended success fully with certain argu ments to the public should have an opportunity now to demonstrate whether there is valid ity to their hypothes es or not, and we are in a position, perhaps even better position to sit back and wait to see whether our view or their s is in fact the one that prevails in actual .fact.

And it is actual fact that I would lik e to dwell upon this evening - not the kind of flight of fancy, flight of capital the Mi nister of Indu stry said - it was a flight of fancy more than a fligh t of capital that's at issue with his document, or what pu rports to be a document. I have it before me and the only thing that is recognizable in this document is the heading in embossed letters, "Capital Fli ght." Ther e is no letterhead to thi s document, no indic ation as to the office from which it emanates, no sig natu re, and one Keynesian and one pre-Keynesian hypotheses.

It's right in here and I intendtotake thet ime to read it all and to comment as I go along, and then havi ng finishe d with this rather fanciful document whic h deals in rumour, supposition, hearsay, nothing that would be accepted under rule s of evidence in any cou rt, I then propose to deal with actual fact as provided by Statistics Canada Catalogue 61 -205 and 206, which deals with the facts of investment in this province as it unfolded and took pla ce from year to year all through the 19 60s and all through the 19 70s. lt is easier for some tha n others to work up a head of steam, Sir , but it is relatively easy for me to work up considerable .

I 554

Thursday, December 8, 1977 indignatio� with respect to the kind of si mplistic, childish nonsense that the Minister of Industry putbefore us in the past 24 hours. Maybe this will edify some honourable members - I doubt it but it's worth the effort. "The investment decision " - I'm quoting now from the document -· "The invest ment decision" -speaking. in the abstract- "is the cu .lmination of a complex, not often explicit joint evaluation of risk and profit.

On"'. of t.he factors �ons1dered in the evalua tio n of profit is taxation ." I feel that this is second year un i_ver�1ty ec �nom1cs, lntro�uct� ry 202 - per.haps first year. "The com mon assu mption that the evaluat ion 1s a rational process implies that taxation reduces investment because it ha s no negative impact on risk, but does reduce profit. The cost to the society is the investment in self andthe . efforts o.f the entr e:preneur. Estimati �g the economic im pact of these losses or costs raises two ma1or questions. One involves the behav iour of entrepreneu rs. " -n ow we're getting into sociolo gy.

" Do such peopl� ac .tually re:duce their et.forts in investment? The othe r involves the working of theeconomy - 1s its size that 1s the output in employment it generates, simply sm aller, but the growthrate the sa.me, or are both reduced so that the cost increases over ti me? However impla usible the firstloss, !hat 1s, the loss of the .efforts and investments of entrepreneurs, is in a closed system, theques.t�on beco .mes. merely (sic) a problem of measurement when entre preneurs and ca pital enjoymobil ity.

That 1s, given an open system there can be no disagree ment on the direction of the changein i�ves�ment. " - There has been no esti mation of the impact may I repeat, Sir- "the reha s been noest1mat 1on of the im pact of Manitoba's tax differential made public and in fact, the measureme ntproblem is so formidable that it is unlikely the discussion or debate following the release of such a�tudy cc:>uld ever move beyond the estimate of the change in investme nt to conside r the policy1mplicat 10.ns.

Nevertheless, one quantitative indication of the magnitude of the change has come tothe attention of the department - a principal of the Winnipeg firm of" - then it's deleted, blank -Charte�e� Accountants affirms that clients of theirs have over the last five years, moved in excess of$1 00 m1ll 1on out of the province to escape succession duties. He affirms that $20 million have beenmoved in 1977. There are some 120 chartered accountant firms in the 1977 Winnipeg Yellow Pages.

The total transfer re mains anybody's guess " - I guess this is where the guess came from the "guesstimate " - "but suppose nine other firms - blank, and then a deletion, and blank - "s eems reasonable, " and im plies that "a transfer of $1 billion at a ra te of $200 mil lion annually is conservative. " Yes, that is a Conservative - with a capital C- "guesstimate, even allowing for those straight sales of existing assets. This paper will present two approaches : (1) the multiplier as developed by Keynes " -t hat's about the only thing in this paper that surprised me, Mr.

Chairman, to have a docu ment released by a Conservative minister of the Crown in Manitoba that would make open reference to Keynes - "nevertheless, Manitoba's multiplier is probably below two. Using two, this would predict the impact of a decrease in investment of $200 million annually to be a $400 million decrease in the Gross Provincial Product. Then there is the pre-Keynesian or capital stock method. " Perhaps honourable members will excuse me if I just don't carry on reading, because this is obviously, Mr. Chairman, a most academic type of docume nt. But let me quote one more sentence at least.

"Policy issue s, quite apart from any discussion of the empirical issues, are two: (1) are the benefits of the inter-generationa l equity being accomp lished worth the reduction in the size of the provincial economy and the tempora ry dislocations implied, and (2) should the Crown su pllement investment to co mpensate for tue decrease in private investment. " Now, Mr.

Chairman, I'm going to ask the Minister of Finance and the Ministe r of Industry to indicate whether they read this document carefully enough to ask themse lves the question, -w hen there is reference made to decrease in private investment, the question must be asked, "Decrease in relation to what?" because, quite apart from this conjectural document, when one looks at Statistics Canada Catalogue 61 -205 and 61 -206, one finds that there has been a stea dy, measura ble, significa nt increase in invest ment in this province over the past 15 years.

And back in the days when the Conservatives were in office, I mean the Roblin Conservatives, there was no inter-provincial co mpetition with respect to succession duties. There was a succession duty in Canada , in all of Canada, levied by the government of Canada. I believe that at that time the exem ption thresho ld was $50,000, unlike today where it is now in the order of $250,000 exe mption, so thatthere could not have been this inter-provincial co mpetition bleeding off potential investment from Manitoba.

In fact, if there was any lack in the pace of investment in Manitoba in the 1960's, it must have been for reasons, whatever they be, other than that of inter-provincial co mpetition for invest ment by virtue of playing games with, or reducing, or elimi nating succession duties. Now, what do the actual facts show, Mr. Chairman, as opposed to this chi ldish, simp listic conjecture? Rumoured conjecture. A chartered accounting firm says this, and it implies further more - may I add as an aside - that the movement of capital in 1971, 1972, 1973, 1974, an d 1975 from Manitoba was because of the succession duty. Mr.

Chairman, do the honoura ble members opposite not realize that there has been movement into and out from Manitoba going on since Confederation, and it has ebbed and flowed, it has fluctuated from year to year? But even in the 1960's, when my honourable friends were in office, capital was moving from Manitoba - not some thing about which to push the panic button, but it was moving in an open society, open economy it does move.

I know of entrepreneurs in this province who moved capital from this province to establish factories, warehouses, in such places as North Dakota, Minnesota, Wisconsin, Alberta, Ontario, the Lakehead Ontario, Saskatchewan, and vice versa. So that any attempt to measure the movem ent of capital in one direction only, and then to quantify the movement, or attempt to quantify it as being attributable 555

Thursday, December 8, 19 77 all to one factor is the most crass kind of di shonesty. The re is no other word for it. Wh en a manufactur ing firm in Winnip eg in the 19 60's decided to spend $1.8 milli on to build a facili ty in North Dakota, that was a movement of capital. When a Winnip eg investment house decides to buy up $33 milli on worth of bonds issued by Imperial Oil, or Standard Oil of New Jersey, that's a movement of capital. And that has been happ ening from time to time, over decades.

That all seems to be convenie ntly forgotten by my honour able friends opposite, or else they were never aware of it in the first place. · Now, whe n I say it's only the beginning , the Min ister of Fi nance responds to my colleague, the Member for Inkster, by saying, "Th at's the end of the story." l say, "That is the beginning of the story," because I want to now outl ine to my honourable friends, again from Stats Canada Catalogue 206, the following information. "Pri vate sector investment in Manitoba ...

" Ju st to show the remarkable consistency of the pace of private investment in Manitoba over the past 20 years, may I put the foll owi ng information on the record, Sir . "P rivate sector investment in Manitoba, 19 58, $296 mill ion." And some members, I'm sure, will be really intrigued to get this. It happ ened to be 54 percent of total investment - the balance was public sector investment. And th is, Si r, was 19 years ago.

The next year, "$346 milli on" - 53 percent private sector; 19 60, "$339 mill ion" - 52 percent total investment was from the private sector - but did you notice, Sir , there was an actual drop in investment of $7 mil lion?

So my honourable friends opposite cannot feel that people are so naive and sill y as to expect that governm ents every yearS in successi on, without exception, must witness an incr ease in investment or there is something fundamentally wrong with the phi losophy of the government, as they're trying to imply, because in more years than one we witnessed an actual net decline in the amount of pri vate investment in Manitoba compared to the previous year when they were the adminis tration of this province in the 19 60's.

And I want to take enough time to put it all on the record, ,. ·.,· Sir : "19 61 , $290 mil lio n investment by the pri vate sector" - it went down another $49 milli on decli ne, so they did not witness the slow and unint erru pted growth in investment in this province, let alone in the private sector.

Some years it actually decli ned; "1 962, $294 mil lion" investment by the private sector- .it actually incr eased by $4 milli on dolla rs, would you bel ieve, for a total of two percent; "1 963, $333 mil lion; 19 64, $380 mil li on; 19 65, $41 4 milli on; 19 66, $465 mill ion; 19 67, $483 mil lion; "19 68." the last full year in which they were in office, "$501 mil li on," and may I update here again, Sir , by pointing out that in the entire decade when they were in office - and those who are really intrigued with this phenomenon of balanci ng public and pri vate sector investments so as to attempt to obtain for our people the greatest poss ible stabil ity of economic development and growth - and they are pu tting so muc h emphasis these days - they're tel lin g the world that all the problems of the economy of our socie ty must be solved by the private sector - isn't that what they're saying?

Weil l want to tell this House that in 11 years, the ratio of private investment to total investment in this provinc e went from 54 percent in 19 58 to 49 percent in 19 68. Who are they trying to kid? Who in the world are they trying to kid that the private sector is going to bail us out all by itself? I believe that I have a rig ht, Si r, to say that I believe in the efficacy of the pri vate sector at least as much as anyone on that side who is reali stic.

To those who engage in flights of fancy, who believe that the private sector in and of itself will cur e our problems, I say - well, I can't say what I'd li ke to say, Sir- it would be unp arl iamentarz. -(In terjection)- My honour able friend - well, I should n't allow him to dis tract me from the main point here, Sir .

The main poi nt being that - and it's nothing to brag about - on the other hand, it's nothing to complain about - but that in the entire 11 years in which the Conservatives were in office, the quantum, or the ratio, I should say, of pri vate sector investmentS to total investment chan ged - well it chang ed by a couple of percentage points only, and that happened to be downward.

Now, the ei!i)ht years in which the New Democratic Party was the government of this province, we started out wtth a ratio of private investment to total investment of 49, say 50 percent, and we are, in the year of our Lord, 19 76, the last full year for wh ich we have figur es available, at 54 percent. The irony of it, Si r, is that the 54 percent happens to be the same figure as the Conservatives started out with in 19 58. So the old phi losophic expression that the more the world changes, the more it is the same certainly would seem to apply here.

They started pri vate investment being 54 percent of the total investment in our province in 19 58 - they ended up at 50 percent, and we started at 50 percent, and we ended up at 54 percent, which coincid es with the 19 58 figur e. A MEMBE R: What did we do wrong? MR.

SCH REYER: Now, of cour se, in a way that is perhaps an ind ication, perhaps the greatest concr ete or tangi ble indic ation that perhaps we could have done better, but, qu ite seriously, Sir , it does demo nstrate that in attempting to govern in a society which more or less accepts the notion of a mixed economy with a jud icious combination of both private and public sector, that things just don't change that qui ckl y, and that governments are engaging in a kind of self-delusion to think that they can, by such measures as the one that's before us now, the Su ccession Duty Tax, it's going to gi ve such a dramatic incentive to the private sector that all of a sudden, after 20 years, that the pr ivate sector is going to go from 50 or 54 percent of the total investment in our province up to 60, 65, 70, 75, and beyond that to some di zzy heig hts.

That, Sir , has got to be blatant nonsense. My honour able friends, of course, have a right to say for a whil e -I won't presume to say how long - perh aps three months, six months, maybe even a year - that it's too early to tell whether their grand strategy, their grand strategy of out-Co nservativing the Conservative administration of the 19 60's is going to pay off. And when I say "p ay off," Sir , I sup pose we all have the same meaning in mind, namely to pay off in jobs. Isn't that what is it's all about? I mean, Sir , ift his measure does not pay 556

Thursday, December 8, 1977 off in jobs, we happen to believe that it will not significantly do that, but if it doesn't do that at all, and to go into this, to sponsor this legislation thinking in advance that it may not have a dramatic effect in terms of creating jobs, then, Sir , it borders on the unconscionable to even bring it here in the first place, because there can be no pretense that it has any other virtue. If it has any possible virtue, it is that it may somehow, despite 20 years of empi rical evidence to the contrary, that it may despite that somehow result in creation of more jobs.

But I th ink I heard some honourable gentleman opposite say that he didn't think it wou ld have all that significant an impact in creating jobs, in which case it has to be denounced as being tota lly without virtue, because the other consequence of it certainly is the very opposite, the very antithesis of that which has to be strived for most in any tax measure and that is equitability. My honourable friends, even those in that relatively tight-knit, pre-Roblin, pre-Keynesian Conservative outfit that we see across the aisle, they are not monolithic.

Some of them are supporting it because they think it may create jobs - and I'm being kind - I'm giving them the benefit of the doubt. Some are supporting it because they really believe, in their own strange way of reasoning, that it is right that there be no taxation on the succession into wealth on earned increments. And I suppose there is a third group that feels simply plain uneasy about it, but are riding along because they feel that it's sort of the thing to do for a Conservative.

And I suspect there's a fourth group who are for this measure because they see that we are quite a bit against it, and therefore to make sure that they aren't tainted with what they would call socialism, and indeed they describe the existence of this tax as a socialist measure.

I want to say to them without apology for repeating, that upon checking again this afternoon with a state capital or two, I find that in the United States, not only is there a federal estates tax covering the entire nation of the Un ited States of Ame rica, but also a second tier of inheritance tax covering the majority of states of the Un ited States. Now it takes a caveman to say, a caveman Conservative to argue that this is inherently a socialistic tax. -(I nterjection)- Well, indeed, the Republ ican legislature in No rth Dako ta did vote last April, but do to do what, Sir?

Not to abolish the state succession duty tax, but to increase the exemption from where it had been all along in recent years - $60,000 exemption -( Interjection)-Yes, that is all - up to $200,000.00 I say to my honourable friends that they could have at least taken a more rational appr oach if they felt that the exemption threshold is too low, to have increased it perhaps to $300,000, $350,000, $400,000, but not to drop it entirely and then to use as an argument that we do not have it in Canada because the federal Liberal government in 1970 or 1971 introduced a capital gains tax and that, therefore, it constitutes double taxation.

Well, Mr. Chairman, capital gains tax has existed in the Un ited Sta tes for decades, and in addition to it, in parallel with it, an estate or succession duties tax exists nation-wide in the US and at the same time a local state-imposed inheritance tax. But obviously, I can see, Mr. Chairma n, that this is obviously not going to persuade my honourable friends in the short run, since they are pinning their hopes for this legislation in the long run.

I am equally, in the lon� run, placing my hopes and being ultimately able to persuade them that it's the wrong thing to do. lt IS a kick in the gut in terms of trying to achieve a greater sense of social harmony in our society.

At a tim e when , with wha tever degree of opposition, disgruntlement, so many numbers of Canadians were brought under the affective aegis · of the anti-inflation program, many Canadians suppor ting it, including myself, to have simultaneous ly with that, and the reaffirmation of that agreement, the legislation to abolish taxation of any kind on unearned increment reprehensible increment is absolutely in terms of any thought ot equitability and greater social harmony. But my honourable friends oppo site, I'm sure, are not interested in that, they are more interested in facts.

So am I. empir ical data. empirical evidence. So -(I nterjection)-no not my facts, I wouldn't ask anyone to take my facts any more tha n I certainly would ask anyone to accept my honourable friends so-called facts. I would ask simply that they read catalogue 61-205 and 206 of Statistics Canada. What is the actual fact of increases in investment in our province over the past 20 years under two sets of circumstances. Yes, now I am arguing on their grounds, their grounds bein� that something changed in 1971 or 19 72 when we retained the succession duties tax , and

whereas tn the 1960s there was - I repeat for the sake of empha sis - there was no inter!)rovincial competition in estates tax tax since all provinces were under it. Well, we find that in the first year in which my honourable friends were in office, the very first year, there was an 18 percent increase in total investment. The next year there was a 1 percent increase in total investment and the third year 1960 to 1961, because of admittedly factors in our local economy, nothing helped, Sir. There was an 11 percent decrease, actual decrease, in total investment.

The next year a 2 percent increase, between 1962 and 1963 a 13 percent increase. A MEMBER: You mean 72-73. MR. SCHREYER: 1962-63. 1963-64 a 6 percent increase in investment. 1965 over 64 a 2 percent increase in investment. The next year a 17 percent increase and that was, by the way, an unprecedented surge in investment in our province, unprecedented in the whole decade of the 1960s. $126 million increase in investment of wh ich 49 million of that increase was in the private sector and 77 million was an increase in public sector activity but it was investment nevertheless.

The fact that this public sector investment took place durin� a Conservative administration does not make it any the less justifiable in my eyes, Sir , because it d1d go to create the kind of assets, hopefully of long duration, that will serve the public good and benefit of this province and its people well to the end of th1s century and beyond. Then the next year a 10 percent increase in investment and in 1968, 557

Thursday, December 8, 1977 Sir , a 7 percent. Now what is the agg regate affect of all these figures, Sir ? It is to indicate, that between 19 60 and 19 68 there was an agg regate of $16 1 million incr ease in the level of annual investment in the priva te sector. Now, my hono urable friend the Hon our able Member for Mo rris will say, and I really appr eciate every time he asks and makes the point, how much of that is inflation?

That is indeed a very valid poin t so I want to say that the deflater has been applied and so in this period of 19 60 to 19 68 $16 1 million dollars incr ement in the level of pr ivate investment, over that eight year period , 20 percent of that is the agg regate amount of inflation, so the real increase in real dollars in pr ivate sector investment in the 19 60s was 12 9 million. Noth ing to write home about, but at least it was a plus .

No w then, we come to the 19 70s and the five year period which we have experienced as being the period in which we had a pro vincially levied succession duty, what is the empi rical evidence, what are the actual facts, not this cr azy supp osition we get in this two-page document? We have the following facts that in 19 71 the amount of pr ivate sector investment was 568 million.

The next year 657 million, the next year 778 million, the next year 948 million, the next year 987 million and 19 76, the last year $1 .141 billi on. -(I nterjec tion)- No w the Member for Mo rris will say - and I always give him full marks for ra ising the point because it is someth ing that we all too often ignor e - what about inflation? All right, the deflater has been appl ied and as a result - in the five-year period in the 1970s - there was in nominal dollars, with no adjustment made for inflation, an incr ease in pr ivate sector investment in the pro vince of 573 million, an incr ease.

Now, Sir , that is an incr ease of three and a hall ti mes or 350 percent over the amount of incr ease in priva te investment in the 19 60s. But I want to accommodate the Member for Mor ris and to sq ueeze the inflation out so we apply the deflater and as a consequence the real incr ease was not 573 million but 31 5 million. No w the 31 5 million in real dollars sti ll happens to be two and a half times as much as the amount of incr ease in real dollars in the 19 60s. I can conclude from this, ther efore, Mr .

Sp eaker, that if my honour able friends opposite are not impressed or satisfied with the level of incr ease in pr ivate sector investment in our province in the 19 70s - and I wouldn't expect them to write home about it - nevertheless I would expect that the� would acknowledge at least this much, that it was at least twice as good in real dollars as was the case in the 19 60s. MR. CHAIRMAN: Or der please. The hour of adjour nment having arrived shal l the Com mittee ri se'i Cal l in the Sp eaker. 048 The Chairman reported upon the Committee's deliberations to Mr. Speaker, and requested leave to sit again.

IN SES SION MR. SPEAKER: The Honour able Member for Robl in. MR. Mc KENZIE: Mr . Speaker, I move, seconded by the Hon our able Member for Swan River, tha the report of the Committee be received. MOTION presented and carried. MR. SPEAKER: The hour of adjour nment having arrived, the Ho use is adjourned and stand: adjourned until 10 :00 a.m. (F riday). 558 r f o s e e e y e ? e t s

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Collection	Manitoba — Debates (Hansard)
Citation	31-1-19b
Type	hansard
Volume / chapter	31st 1st hansardpdf 19b.pdf
Language	en
Format	pdf
Source	PROVINCIAL
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