LEGISLATIVE ASSEMBLY OF MANITOBA Monday, 7 June, 1982 Time - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - EXECUTIVE COUNCIL MR. CHAIR MAN, H. Ha rapiak: We're on Executive Council, No. 1. Ge neral Admini strat ion; 1. (

a) Premier and Pre sident of the Council 's Sal ary. The Leader of the Opposition. HON. S. LYON: Mr . Chairman, we were talking earlier about the mee tings that the Fir st Min isters had with the Pr ime Min ister and with the other Premier s and the Prime Min ister on economic matters. The qu estion ar ises out of the statement s made by the Mini ster of Mi nes and Energy, who is here tonigh t, that he is off to Al berta.

As I unde rsto od, the repor t was to explain to smaller oil companie s in Al berta but they're welcome to continue their ex plor ation in Manitoba, and that ManOil, the projected govern ment oil company, will not be any thr eat to them. I take it that statement and tha t polic y, as expr essed by the Min ister of Mi nes and Ener gy, represents government pol icy. Does it, Mr . Chairman? MR. CHAIRMAN: The Mini ster of Energy and Mi nes. HON. W. PARASI UK: Si nce I made this state ment and I'd like to just clarif y for the Leader of the Opp osi­ tion what I said.

I said that the response from the small oil companies tha t oper ate in Manitoba was very posi­ tive toward the est ablish ment of a Crown oil and gas company. The y said th at their cash flow situa ti on was very di ffi cult, that they receive very li ttle in the way of tax expenditure inc entiv es from the Federal Govern­ ment which is the major instru ment of these types of tax inc enti ves. The big companie s said that their overhead was such that they tended not to oper ate in areas of small potential lik e Mani toba because our pools are small.

Si nce the response from the exis ting oil companies was so positive, I though t that it would be use ful for me to talk to other junior companies in Alber ta and even Saskatchewan to ind icate to them wha t our long term pol ic y was and wha t role a futur e Crown oil and gas company could play in the way of joint ventu res. I felt that since the res ponse was so positive from tho se alr eady in Man itoba that the res ponse would be just as good from th ose who al ready are oper ati ng in Al berta but perhaps don't know that much about Manitoba.

I think tha t the oil ind ustry in Man itoba wou ld benefit by having more people here rath er than fewer people here. We belie ve that we can be a cata­ lytic role in that respect and I think tha t the response to date from the private sector has been very positive. So tha t would be the general th rust of wha t our pol icy is. MR. CHAI RM AN: The Leader of the Opposi tion. HON. S.

LYON: I was merely going to sug gest to the Fir st Mini ster that, gi ven the statements by the Mini s- ter of Mi nes and Energy previously made in the Com­ mit tee of Suppl y, and his capsule vers ion gi ven here tonigh t, would n't it be in everyone's benefit if the Min ­ ister and/or the Pr emier did not have to go to Al berta or Saskatchewan or anywhere and defend or explain away ManOil ? Why do we have to bother with ManOil when we have such a high level of expl oration alr eady going on? Wha t is to be gained by ManOil? HON. H. PAWLEY: Mr .

Chairman, I didn 't sense from the comme nts by the Mini ster tha t he was going to Alber ta to explain away ManOil. Tha t is, I think, the least of the Min ister's concerns. All that the Mi nister is interested in doing, the gov ernment is interested in doing, is encoura ging oil devel opment in Manitoba, and if the Manit oba Oil and Gas Corp oration, when formed, assists in inst rume ntaly establ ish ing fur ther oil develop ment in Mani toba, so mu ch the better. HON. S.

LYON: The Fi rst Mi nis ter, I take it then, does not regard ManOil as being in the eyes of the private sector, that is the entr epr eneurial people in the oil ind ustry, as a preju dice to their continuing oper ation in Mani toba. HON. H. PAWLEY: Mr . Chairman, not if it's on the basis of a vol untary joi nt ventu re. Ind eed, it may be that in the case of some of the smaller companies that they would welcome the par ticip ati on of Ma nitoba Oil and Gas. The y migh t be unable to proceed on their own otherwise.

The oil companies have cert ainl y, this last while, been having some increasing dif ficu lty, capital accumu lation wise. HON. S. LYON: Mr . Chairman, we are all agreed that the cash flow of oil companies from, I gue ss, Dome on down is something that Mr. Trudeau's national energy pol icy has prejudic ed in a very severe way.

The fur ther qu estion arises, gi ven the words of sup port tha t are uttered from time to time by members of this govern­ ment about PetroCan, has any di rect or ind ir ect entreaty been made to the Prime Mi nister or any of the Min isters of the Govern ment of Canada with respect to PetroCan joining in oil expl oration in Mani toba with either ManOil or as a partner of some yet to be born agency fund ed by taxpayers' dol lars? 3116 HON. H.

PAWLEY: Ju st so tha t I can be qu ite accu­ rate , ins ofar as the repor ting on this, and si nce the Mini ster is present, I would ask the Mi nister if he would respond to that qu estion . MR. CHAI RMAN: The Mini ster of Energy and Mi nes. HON. W.

PARA SIUK: Yes, when I met with the Fed­ eral Min ister of Energy, I ind icated to him that Petro­ Can was involved in oil expl oration and dev elopment in other parts of Canada and that they had n't been involv ed to date in Manitoba, and we asked if they wou ld gi ve consider ation to being involved in Ma ni­ toba, Tha t commun ication has been passed on to Petro-C anada. The y are a Crown corpora tion. They, I hope, are considering it. I don't know if they will be

Monday, 7 June, 1982 movi ng or not, but they indeed have some thing in the order of a $900 million bud get for this coming year and we cert ainly wou ld like to have some of that spent in Manitoba, rather than havi ng it all spent in Nova Scotia or Newfou ndl and or the Beauf ort Sea or Al berta or Saskatchewan. We beli eve that we have some potential here in Man itoba as well. so we have asked them to consider doing some explor ation work in Man itoba, just as we've asked some of the large companies to consider doing some explor ation work in Manitoba.

We hav en't received any defi nitive answers from any of them yet, but I am hoping over the cou rse of the next six months or nine months or a year that we will, in fact, receiv e some defi nitive action from some of these large companie s. be they a Ch evron or an Esso or a Petro -Canada. HON. S. LYON: The Min ister may not be aware of the dif fer ence between Ch evr on, Esso and Petro-C anada, but many of the people of Canada are.

The y're becom­ ing more and more aware of it, as interest rates remai n high, as part of the pr ice for Canad ianizing the oil ind ustry, which the Federal Government has gotten into. If my honour able friends wish any fu rther cor­ roboration of tha t may I sug gest that they read the recent add ress given to the, I think it was, the Cana ­ dian Club in Toronto by the Pre sident of the Bank of Mo ntreal.

It will maybe make soci alis t hear ts feel warm and fl uttery to see maple leaves all over gas pump s in Canada. but it's at a price; and part of the pr ice , of cou rse is the mai ntenance of high inter est rates in Canada because it has led to transference, as Mr . Mu lholland and others have tried to point out, a transference of forei gn equ ity into foreign debt, which has had a very bad effect on our forei gn exchange situation, and has di rectly contri buted to the mai nte­ nance of high interest rates, agai nst which all members of the NOP Government allege they are opposed.

Tha t bei ng the case, or that being an aside I should say, did the Fi rst Min ister, Mr. Chairman, have di rect conversa tions with the Prime Min ister about Petro­ Canada and his willing ness to want Petro- Canada to expl ore for oil in Manitoba? HON. H. PAWLEY: Mr. Chairman, I didn 't have any di rect conversa tions with the Prime Min ister in con­ nection with the involve ment of Petr oC an, but as is earl ier ind icated, we would still welcome partici pation. HON. S. LYON: Does the Fi rst Min ister, Mr .

Chair ­ man, feel tha t it's necessary to offer any special incen­ tive for PetroCan to come and explor e in Manit oba? HON. H. PAWLEY: No. I would expect that the y would, if interested, come on the same basis as any other company that migh t be interested in partici pat­ ing on a joint basis with Manitoba. Also, I would hope that, at some poi nt, they wou ld consider deve lopment on their own, in their own righ t, just as any other oil company. HON. S. LYON: Has PetroCan ever bid on any of the oil leases that are up for bid in Manitoba? HON. H. PAWLEY: No, they haven't, not to this poi nt. HON . S.

LYON: The y have the same fre edom as any other company in Canada. If they expr essed an inter­ est or if they had an inter est in Manitoba, to come her e and bid for oil righ ts the same as Omega or any of the other smaller companies that are doing qu ite well in sout hwestern . . . HON . H. PAW LEY: Or Sasko il tha t has done su ccessfu ll y. HON. S. LYON: They have the same right? HON. H. PAWLEY: Yes. HON. S. LYON: Yet, they haven't seen fit to do it. HON. H. PAWLEY: No. Ther e are other companies that haven't seen fit to, to the present time.

I gather Esso and some of the other large companies haven't to this point. HON. S. LYON: Is n't it a fact that Shell and Gulf and some of the companies tha t have had rig hts for some tim e in sout hwest Manitoba, the se righ ts are being taken over by the small companies who are capable of operati ng 1O to 50-barrel wells a day, and have gained a certa in exp ertise in the exp loration and devel op­ ment of these wells and are taking them over and doing thing s that the large companie s wouldn't do, PetroCan inclu de d. Isn' t that a fact? 3117 HON. H. PAWLEY: I could n't speak for all cases.

Probably, in some cases, it wou ld be and I wou ld hope, Mr . Chairman, that in other cases that the larger companie s would demonstrate some interest. HON. S. LYON: Perhaps, I could ask then the general qu estion, because the Min ister, who happens to be her e, has said that he has made subm issions with respect to PetroCan coming to engage in explor ation in Manitoba. Wha t other lar ge oil companies has the Mi nister made dir ect contact with in the same vei n in order to encou rage them to come to Manit oba along with the tax sup ported company, PetroCan? MR. CHAI RM AN: The Min ister of Energy and Mi nes.

HON. W. PARASIUK: We have talked to Esso; we have talked to Mohawk ; we have talked to Chevron, which has large holdings in Mani toba but which haven't been doing that mu ch to date. We have talked to them and I hope that, over the cou rse of the next one to two years, their activity will incr ease sign ifi­ cantly. I hope to talk to some of the other large com­ panie s over the cou rse of the next two to th ree months. HON. S.

LYON: Is the Fi rst Min ister or the Min ister, in the cou rse of these conversa tions with the large oil companies, including I presume PetroCan which has to qual ify in that category now even though it's a tax supp orted company; I take it that ass ur ances are being gi ven by the Min ister and/or by the Fi rst Mi nis­ ter that the royalty syste m, which the previous gov­ ernment broug ht into being and which res ul ted in a large increase in oil exp lora tion in Manit oba and some

7 June, 1982 devel opmen t as well, I take it that he's giving ass ur an­ ces that royalty system will be mai ntaine d and that ther e will not be a return to the confisc atory royalty system that obtained in Man itoba prior to 19 77 and which saw a virtual dr ying up of oil exp loration in this provin ce? HON. W. PAR ASIUK: We have said that we want volu ntafy joint ventu res. If we get involved, we said we're interested in HON. S. LYON: I'm not talking about joint ventu res. HON. W. PARASIUK: Okay, I'm getti ng to the answer, though, fine.

I also said that we didn' t expect any chan ges in royalties at this particular time; that we were int erested in the long-term development, that we felt that a sim pli fied royalty system did have an im pact and I had said that before in the commit tee. I also indi cated that I thought that the new oil reference price had a pretty profound im pact as wel l in terms of the explor ation.

The thir d factor was that some of the companie s di scovered oil at levels that they did n't expect to dis cover oil at and this has created a flu rry of new activity as people are now reasse ssing some of their old seismic tests and some of their old drill sites. All of these factors have contribu ted to an incr ease in attenti on in Manit oba. One other factor being that oil companies drilling in Manit oba have a probabil ity, if the y find anyth ing, of finding oil. Tha t's in contrast to Al berta wher e they have a probabil ity of finding gas.

When companies are stra pped for cash fl ow, finding oil is muc h prefera ble to finding gas, so tha t's why a lo t of them are turning their atte ntion. The se are some of the factors tha t I hope to commun icate to some of the jun ior s and even some of the lar ger companie s through the cour se of the sum mer and I'm hoping that this will lead to an even greater increase in activity than we have wit ­ nessed over the last six months. HON. S. LYON: Tha t's encour aging, Mr.

Chairman, and, given the fact that this interest is conti nuing in the sale of Crown oil leases, which the Mini ster him ­ self was heard to be trumpeting a few weeks ago as something that he was very proud of and so on, and poi nted out by the Memb er for Tur tle Moun tain that this is a progr am that when it was brought in, however, un less my memory is mistaken, was describ ed in some way as bei ng some sort of a resource giv eaway.

Does the Fir st Min ister st ill hold that vie w tha t the ch anges in the royalty system for oil - which he, as I recall, voted agai nst - are some sort of a reso ur ce giv eaway now that he's going to maintain them? HON. H. PAWLEY: I don't recall the context tha t the Fi rst Mini ster is ref erring to. I think that, given the circums tances, that the present arrangement is qu ite sati sfactory and cert ainl y we're not unhapp y with it. HON. S. L VON: Wel l, isn' t it a fact, Mr .

Chairman, that when in Op position the Fir st Min ister and his col­ leagues, when we reverted to the system of Crown land oil lease sale s, desc ribed tha t as a form of resource gi veaway? HON. H. PAWLEY: I cannot recall any comme nts of my own on the su bject. Maybe the Leader of the Op position can refer me to some comments, but I do n't reca ll at that time. In any event, we've had oppor­ tun ity to examine the syste m, to witne ss the res ult this yecir of what is happ ening, the incr eased activity, and it's my view that it would be less than wise to make any change . HON. S.

LYON: Then I take it that it would be less than wise, verg ing on foolha rdy, to make any change in the royalty stru ctur e to cause it to revert back to the confi scatory royalty structur e that was im posed by the Sch reyer Government of which the Fir st Mini ster was a prominent member. HON. H. PAWLEY: Mr .

Chairman, I ind icated tha t cir ­ cu mstance s change, and I think what we must do, regard le ss of wha t party we belong to, is be prepared to recognize those chang ing circums tances, and cer­ tainly the cir cu mstances are much dif ferent in many res pects now than they were a number of years ago, and we are prepared to recognize that. HON. S. LYON: I am the fir st to adm it, Mr.

Chairman, that cir cu mstances are di fferent than they were a few years ago, because prior to 19 77 ther e was hardly any oil expl oration going on under the reg ime of royalty taxat ion and under the conf iscatory back-in arrange ­ ments that that NOP Government had im posed upon the oil ind ustry, with the res ul t that they abandoned Manitoba in terms of explor ation.

Our gove rnment came in and changed it, agai nst the angu ished cries of the NOP at that time who talked about resource gi veaways and all such slo ganeeri ng, and now that they are in office the Fi rst Min ister is sayi ng, but the system that we have now that we brought in is a good system. Is he prepar ed to say now tha t the system that was brou ght in und er the Sch reyer Govern ment which resulted in no expl oration was a bad syste m? 31 18 HON. H. PAWLEY: No, Mr. Chairman, as I earlier indic ated , the cir cu mstances do change.

What we do beli eve though, and which the Leader of the Opposi­ tion is not prepar ed to endor se, is that there should be greater public participation and tha t's why we are proposing to esta blish a provincial Crown corpora tion. I am more posit ive toward the joint partici pation on the part of the public alone or in partner ship with the pri vate oil sector than in chan ging the exis ting royalty levels. HON. S. LYON: Well, perhap s we can get another defi nition changed. My honour able friend uses that ubiqui tous term "on behalf of the public.

" Can we not have an under standing around the Table that when a government expr opria tes or joins in a joint ventur e with a company, it is not the public who is engaged in that joint venture, it is the politicians of the day and the y are bu rea uc rats. The public have very li ttle to say about it.

Tha t's part of the problem with national iza­ tion, and so if we can just rid ou rselves of these euphemi sms about the public being involved, then we can get down to cases and und ers tand that the Fi rst Min ister is st ill sayi ng, notwithsta nding the rather dis ­ astrous experience of Manitoba Mi ner al Corpor ation

Monday, 7 June, 1982 in oil explor ation in the period 19 69-77. tha t he sti ll favours joi nt ventu res with taxpayers' dol lars going into such a high -risk ventur e as oil explor ation, pray tell on what basis? HON. H. PAWLEY: Mr. Chairman. this is where I do beli eve there's a very di stinct di fference in phi loso­ phic and economic approach between the Leader of the Opposition and ou rselves on this side.

I do not for a moment accep t the premise that the Leader of thf Op position has subm itted that to be involved in a pub lic way is restricted to the govern ment and to a few top bur eau crats. that a public Crown corporation such as Hydro. such as the Telephone System. such as the Man itoba Public In sur ance Corpo ration is accou ntable. In the final analysis, the accountabil ity is to the public at large through the el ected representa­ tives.

If the elected representatives manage the Crown corpor ations poorly, then it is the public that have the final say as to change in govern ment. the red ir ection of polic y so that there is account abi li ty. In sofar as the joint ventu res. I'm rather su rprised to hear the Leader of the Opposition's comments because it seems to me it was the Leader of the Opposition, while Premi er. his government that entered into a joint ventur e pert aining to Trout Lake.

I believe it was the Leader of the Opposition. whil e Premier, along with his Mini ster of Mi nes, that was prepared to enter into a joi nt ventur e pertai ning to potash devel opment. and I'm cert ainly not critical of tha t. but I'm rather sur ­ prised at the tenor of the Leader of the Oppo sition 's remarks a few moments ago in regard to joint ventur es. HON. S. LYON: Mr.

Chairman, I'm rather su rpr ised at the tenor of the Fir st Min ister's remarks because he's talking about join t ventu res as being the "be all and the end all, " wher eas sensi ble people und ers tand that is an instr ume ntal ity to which one reverts when there is need in the pub lic interest to do so.

It doesn't become a way of lif e, which I'm sur e tha t the ideologi­ cal precondi tioning of my honour able friend would lead one to beli eve is desir able. notwithstan ding the fai lur es over the last 15 0 years sinc e the ide a was first conceived, but we can carry on that argument at another time so long as my honour able friend can assu re. Mr.

Chairman. the committee. but more par­ ticu larly the people of Manitoba. that this Gover nment of Manit oba will not be forag ing around with the tax­ payers' dollar look ing for ways to expend the taxp ay­ ers' dollar on high risk oil expl oration in Manitoba when ther e are private companies sup ported by the private sector. by private investors, who are willing to put their money into such high -risk ventu res, who will do that at no risk to the taxpayers of Manitoba. and the taxpayer of Manit oba is sti ll gu aranteed that he or she will receive a fair and equ itable ret urn by means of a royalty system brought into place by the previous govern ment which is fair, equ itable and competitive with other provi nces.

HON. H. PAWLEY: I think the onl y res ponse to tha t is that the Leader of the Opposition has a fixation ins ofar as the method of owner ship and the method of approach. Cert ain ly, the experien ces that Mani toba has had in regard to Sa skOil dev eloping la nds, oil wells in Manitoba and Crown lands has been relatively su ccessfu l. I do n't know whether that makes the results any more unp leasant as far as Manitobans as a whole are concerned. Ther e has been oil dev elop ment taking pl ace. Mu ch of the benefit from that has accrued though to the benefit of the people of Saskat­ chewan.

I see no reason why, if SaskOil participa tes in modest de velopment in Manitoba, that li kewise the Manit oba Government wou ld not want to do some partici pation espe ciall y when we're dealing with our own Crown land s. HON. S. LYON: Well. Mr. Ch air man, we're not her e to answer for Sa skOil or for its balance sheet. HON. H. PAWLEY: It 's a pretty good example though. HON. S. LYON: Wel l, I don't know that it is a pretty good example .

Th ere's a Royal Commis sion that's just been struck in Saskatchewan to look into all of the Cr own corps, to tell the facts abou t them. so we 'll find out in due cou rse whether it's a good example or not. In the meanti me, I think all we can know for a cert ai nty is that Sas kOil bid on certain Cr own oil leases in Manitoba. was the hig hest bidder, was al lowed to par­ tici pate in that bidding along with all other private sector companies and has proceeded with their expl oration progr am.

That doesn't mean that we accept unto ou rselves the particul ar ideologic al fetish of the government which spawned SaskOil. HON. H. PAWLEY: Wel l. I think that. in fairne ss to Prem ier Devine of Saskatchewan, the Leader of the Opposit ion should not leave a though t behind that Premier Devine migh t be inte nding to di smantle Sas­ kOil because sh ortly after the ele ction. as I recall his state ment. it was one of reaf firma tion of the sup port for all Crown corpor ati ons in the Pro vince of Saskat­ che wan, including SaskOil.

So I think the Leader of the Opp osition would n't lik e to leave on record any im press ion that the newly elected Premier of Sask at­ che wan, Mr . Devine , is intending to dismantle the very suc cessful operations of SaskOil. HON. S. LYON: I would n't want to leave that on the record, Mr. Chairman. any more than I'm sur e the Fir st Mini ster would want to leave on the record his pre­ su mption that SaskOil is a su ccessful company. 3119 HON. H. PAWLEY: Well. Mr.

Chairman, it ap pears the Leader of the Opposition and myself have been in somewhat different worlds because the inf ormation that I' ve received is that SaskOil has been qui te suc ­ cessful in its oil deve lopment work in Manitoba. HON . S. LYON: In Mani toba, Mr. Chairman. but can't ... HON. H. PAWLEY: I can't talk for Saskatc hewan; I'm talk ing for Manitoba. HON. S.

LYON: Nor can I, and I think tha t ther e are other jurisdictions who can look after that better than us, but the fact remains that my honou rable friend seems to have this preoccupation verg ing on a para­ noia about Mani toba havi ng its own oil explor ation company, realizing as I'm sur e he must from what

smatteri ng of busi ness expo sur e he's had, that the oil exp loration busi ness is one of the hig hest risk busi­ nesses going and real izing, if he would look at the figu res of Mani toba Mi neral Explor ation Company in Manitoba, that their ventu re with about $1 million, roughly, of taxpayers' money into the oil busine ss dur ing the time he was a member of the Schr eyer Government in the '?O's and so on, was nothing sh ort of bei ng a fa ilur e. Now why would we want to repeat a fai lur e in Ma nitoba under the name of ManOil or whatever? HON. H. PAWLEY: Mr .

Chairman, all I can say to the Leader of the Opp osition, I have much more confi­ dence in the oil potential of Manitoba and the abil ity of Mani tobans -( In terjec tion )- yes, the abil ity of Ma n­ itobans to col lectively maxim ize their retur ns from oil deve lopment than obviously the Leader of the Oppo­ sition enjoys in the futur e of Mani toba. HON. S. LYON: Mr. Chairman, my honour able friend is becoming something lik e the Minis ter of Financ e; he's becoming a master of non sequitur s. No body's talking about the oil pote ntial in Ma nitoba.

We all hope that the oil potential in Ma nitoba will be greater than it is even at the present time. Wha t we di ffer up on, and my honour able friend sur ely has the intel lectual honesty to admit th is, what we di ffer about is the best method by which to develop that potential so, non seq ui tur s notwithst anding, I'm no t going to be dr awn into tha t kind of childi sh ar gum ent.

I merely say to my honourable friend that hi story, if not the his tory of the world, if not the his tory of Man itoba, demo nstrates that ManOil, based on the example of Ma nitoba Min ­ eral Exp loration Corp. in the period of the Schr eyer years when the y got into the busine ss, their intrusion into the oil busi ness was nothing less than a di saster for the taxpayer.

Sur ely to God the Fir st Mi nis ter should reconsider so tha t we won' t be repea ting social ist di sasters after socialis t di sasters jus t in order that we may feel ideolo gic ally flut tery because we've got an oil company in Ma nitoba which may make Markx fuel happ y, but it does damn li ttle for the tax­ payers of Manitoba. HON. H. PAWLEY: Mr . Chairman, I don' t know ju st where we're head ing by way of this arg um ent.

Obviously, the Leader of the Op position and myself, I think we respect each other's views, but we have a di stinctly dif ferent point of view in regard to the best appr oach of maximi zing retu rns from natu ral resour­ ces in any gi ven jur isdic tion. It's my view that the Cr own corporation route can be one of a numb er of instru ments that can be used in gi ven circums tances. HON. S. LYON: Mr. Chairman, if the Crown corpor a­ tion route has the effect of causing disi nterest among priva te corpora tions in the rest of Canada, I sup pose that doesn' t matter either , does it?

Is that why the Min ister has to go out to Al berta and explain why we're having a Crown corporation in Manit oba? HON. H. PAWLEY: Well, Mr. Chairman, unfortuna tely the Leader of the Op position mu st have missed the comments by the Mini ster of Energy and Mine s. Ther e's been a very lar ge increase si nce the change in 7 June , 1982 govern ment, so ther e doesn't appear to be any fright ­ ening away or losi ng interest. Ther e's much more interest, as I und ers tand it, at the present time than there was say a year ago. HON. S. LYON: Mr .

Chairman, in the cour se of the brief that was presented to the Govern ment of Mani­ toba by the Ma nitoba Federation of Labour ju st a few days ago, ther e was a sug ges tion made in the cou rse of the brief - and I'm jus t tryi ng to put my finger on it her e. It seems to be at (1); it seems to be supp ortive of the posit ion that the Fir st Min ister is taking with respect to ManOil, notwithst anding the pragmatic track record of govern ment inv es tment in oil in Mani toba.

Quoting from page 18 , the quo te reads as follows: "Public inv est ment criteria mus t oversee the devel­ opment of the economy if the pub lic interest is to be met. Pr ivate enterprise may pla y a prominent role, but government is the only institution which holds resp onsi bil ity for the public interest." 3120 Would the Fir st Mini ster, Mr . Chairman, say that his apparent desi re to charge ahe ad with a state-o wned oil company at the expense of the taxpayers is part and parcel of that state ment by the MFL that public investment criteria mus t oversee the devel opment of the economy?

Does he not think that in the last 10 0 odd years thi s provinc e has done pretty well under the private sector without some su per commissar look ing after the dev elopment of the economy in Manitoba? HON. H. PAWLEY: Mr. Ch airman, it seems to me that in the past 10 0 years - in fact I think it's true in most parts of Canada - we've had a major injection of public funds and public enterprise. I would hate to think, Mr. Chairman, indeed, wha t would have been the case if there had been a dog matic doctri nair e view that, under no circu mstances any public invest ment.

Need I refer the Leader of the Opposition to the roads, to the schools, to the Man itoba Hydr o Syste m, to the Mani­ toba Telephone System, to the Manitoba Public Insu­ rance Corporation that are, I think, demo nstrating a model example to the rest of Canada by way of cover ­ age of insur ance, so that public invest ment has been a very im portant instru ment of economic dev elop ment in Mani toba for many decades and I gue ss it's trans­ cended all types of govern ments and all political phi losoph ies. HON. S. LYON: Mr .

Chairman, I think the Fir st Mi nis­ ter perhap s, and my read ing may be at fault for that, overlooked the operative word in the sentence. Pub lic investment, which nobody argue s about, indeed, one of my prede cessors as Premier back in 19 08 nation al­ ized the Bell Comp any in Mani toba and I doub t if he cou ld even have spelled "M arx." He did it because it was in the pub li c interest to do it, so we need be read no lec tur e on the advisabil ity of utilitie s from time to time being in the public sector.

But here is the quote from the MFL which seems to find favour with my honour able friend: "Public invest ment criteria mus t oversee the devel opment of the econo my" - oversee the development of the economy. Does the First Mini ster sub scrib e to the vie w tha t pub lic invest ment, the decisions that he and his col­ league s make around the Table, mus t oversee the

overall devel opment of the economy in Manitoba? HON. H. PAWLEY: Mr . Chairman, I'm not interested really in get ting into every nuance that's in any gi ven brie f presented to us at any gi ven time. I certai nly am of the vie w tha t govern ment does have a responsibil­ ity, a very im portant responsi bil ity, by way of its man­ date to provide economic dir ection, to provide eco­ nomic energy and complementing the role of the co-operative and the private sector in the econom1. No w, if that is wha t the MFL is saying, that's whar I would say. HON. S. l YON: Tha t, Mr.

Chairman, I take it is another instance wher e the First Mini ster did n't inter­ rup t the read ing of the brie f the other day and say, "Do you really mean tha t our government should oversee the economic development in Manitoba?" HON. H. PAWLEY: Mr. Chairman, I wonder what the record would be if we ch ecl{ed whether or not the previous Conservativ e Govern ment in Manitob a res ponded to last year's MFL brie f? In fact, I'v e heard some reports that ther e was no res ponse to that brief on the part of the previous government. Wha t we were interested in doing, Mr .

Chairman, is lis tening to the su bmission just as we would li sten to any and all brie fs. I find that this indeed was qu ite a comprehensive and well articula ted submi ssion. At some gi ven point we will have an opportu nity to fur ther review and to re spond, but I belie ve from the repor ts I have received that the Fir st Mini ster and his previous col league s didn 't res pond to last year's brie f. HON. S. LYON: Wel l, I'm only going from memory, Mr.

Chairman, just to set the record strai ght and put my honour able friend's mind at ease, my recolle cti on is that last year the MFL di dn't do the gover nment and the people of Manitoba the cou rtesy of coming to deliver their bri ef, the main reason being that their brie fs of pre vious years had been so full of "can 't" and mis state ments and they had been res ponded to in terms of correc ting the facts that the MFL, in my esti­ mation and my recol lec tion, cou ld n't stand the heat of the truth and cho se not to come before the govern­ ment; that's the only reason they didn' t come. HON. H. PAWLEY: Mr .

Chairman, I gue ss here's where we do have a legitima te dif ference of approach.

When a group comes to make a presenta tion, and I beli eve it was 10 :30, 10 :35, and I beli eve they had one-an d-a -ha lf hour s to present their brief and, as the Leader of the Op position can see, it's a brie f whic h covers qu ite a number of pages, it's my view that the Cabi net is ther e to li ste n, to not become involved in an unne cessary hassle and argument; but we're a gov­ ernment that maybe we have learne d from previous ti mes - and I would sug gest the Leader of the Op posi­ tion maybe migh t as well - that maybe it's more im por­ tant to do mo re li stening and less hassle in trying to arrive at the truth.

HON. S. LYON: Mr . Chairman, I'm qu ite happy to accept advice from the Fi rst Min ister in the spirit in which it's gi ven and I'm sur e that he's equally happ y to accept advice from me with a lit tle bit more experience 7 June, 1982 3121 in this busi ness than he has had, and tha t is this, that any honest man standing sti ll in the face of mi sstate­ ments which affect the public interest of Manitoba is not ser ving the public interest of Manito ba, and I'm sur e that he'll take that in the same spir it in which he was giving advice to me. HON. H. PAWLEY: I can't HON. S.

LYON: I "can't" and missta tement have no place. HON. H. PAWLEY: I am just wondering if the referen­ ces tha t the Leader of the Opp osition makes to a previous MFL brief as bei ng full of misstate ments and "can't," etc., really are not the result of simp le dif fer­ ences of opin ion that a large public body had with the previous govern ment and, rather than accept it as a dif ference of opinion, the Leader of the Opp osition is not castigating them as havi ng been spread ing a mis­ statement and "can't." HON. S. LYON: Mr.

Chairman, wher e the Man itoba Federat ion of Labour says that the private sector has its place and, in their view, it's a very dimini shed pl ace in the economy of Man itoba, and that gove rnments should not be rush ing in to prop up the lo sers, I bel ieve, is the statement that is made in the cou rse of the brief; I can find it here specifically.

I wonder, when that state ment was made, if the Fi rst Min ister did n't im media tely ask the person read ing the brie f whether or not the MFL had any objection to the Gove rnments of Manitoba and of Saskatc hew an, Alb erta and Canada giving grants to the CCIL farm machin ery company. Do you sup pose that was an example of the governm ents rush ing in to prop up losers that they were referri ng to in their brief or did that example never occur to anyone on that si de? HON. H. PAWLEY: Mr .

Chairman, I have ever y confi­ de nce that if the economy is impr oved over all and we do estab lish a sane int erest rate pol icy at the federal level that there's no way CCIL is a loser. I have every confidence that the Co-op Im plem ents can be a suc ­ cessful imp lement company in Manitoba and I regret, ind eed, tha t the Leader of the Opp osition is more or less in a blanket way condemning a very im portant ind ustr y in Man itoba as being a loser. I think it's very unfair to that ind ustry and the many thousands of farmer s that are mem bers of that par ticular co-operative. HON. S. LYON: Mr .

Chairman, my honour able friend can conti nue tr ying to put words into my mouth. The record will sho w tha t those were not my words, but they are the words of the Manitoba Federation of Labou r- and I found the quo te now on page 20 - "Even worse, they" - meaning govern ments - "rush in with incentiv e grants to prop up failing enterprises in a bid to save jobs and end up su pporting all the losers in the province. Inc entiv e deals end up passing the risk onto the public shoul ders and lea ving the profits in pri vate ha nds.

Stud ies show that public handouts have li ttle effect on the lo cati on decisions of most ind ustrial firms. The y are lit tle more than a sou rce of extra reve nue, a wi ndfal l, agai n."

Monday, 7 June, 1982 ����- -�����- My very sim ple ques tion to the Fir st Mi nister was did he ask the MFL , when they were ta lking about prop­ ping up losers. whether or not they supported the grants gi ven by our governm ent, the Governm ents of Saskatc hewan, Al berta and the Federal Government and the current NOP Govern ment to CCIL; did he bother to ask them, or did he just accept this as an example of their overall wisdom witho ut pointing out that th ere are occasions when govern ments have to move in to gi ve assista nce to legitima te industries, or did that even occur to him? HON. H. PAWLEY: No, Mr.

Chairman. As I said a few moments ago, I don't consider the CCIL as be ing a loser and, therefore, why would I ask the quest ion? HON. S. LYON: Wel l, perhaps then, Mr . Chairman, when my ho nourable friend is respo nding to the MFL he will ask them, as I think somebody around the Table in our gove rnment would have, to describe who are the losers? Who are the losers that are being propped up by government? Saunders Air craft, King Cho y Foods; we can think of a few of those. HON. H. PAWLEY: Mr. Chairman, if the MR.

CHAIR MAN: I would ask the members to wait to be iden tified because this is bei ng recorded for Hans ­ ard and it would be di fficult in di sti nguish ing who 's speak ing. HON. H. PAWLEY: Mr . Chairman, I am sure the Mani ­ toba Federation of Labour would have been thinking of, for example, the prudence tha t was demo nstrated by the Mini ster of Economic Develop ment in not sub­ mitting to the requests for financial assistance to Sekine. The Chamber of Commer ce, by the way, I believe commended us in that approach.

I am remi nded tha t it was the Chamber of Com merce that has indeed made simi lar representa tions to us as the MFL along this line. HON. S. LYON: Mr. Chairman, I have no further ques­ tions for the moment. MR. CHAIRMAN: The Memb er for Pembina. MR. D.

ORCHARD: The Fir st Mini ster over the past year or so and, I suppose, particularly as speculation of an ele ction was upon all Manitobans, includ ing the now Fir st Mini ster, duri ng the ele ction the Leader of the Opposition made a num ber of commitme nts to agr i culture and to the farm commun ity and a number of them app ear in their pol ic y dir ections, the poli cie s of the New Dem ocratic Party. If I mi ght take the Fir st Min ister's time, I would lik e to have him enlarge on some of the se prom ises and commitment s that were made to agriculture.

No w, the Fi rst Min ister made reference to Mani toba farm fami lies bei ng squeezed off the land. I think sta­ tistics will sho w that in the past thr ee months ther e has been an alarm ing increase in the number of farms tha t have been forced to sell out. They have been fore­ clo sed on or they have chosen to go out of business because of pu nishing high interest rates, another ref­ erence tha t the Fir st Mini ster has made.

The Fir st Mini ster made a commi tment to tho se farm ers that would not be the case under hi s govern ment, yet, we see the statistics showing that cle arly, since his admin istration has taken office, ther e has been a dra­ matic increase in farm bankruptcies and loss of farms. All ind ications are that may indeed conti nue. Wher e are the poli cies coming from that are goi ng to save these farm bankruptcies? HON. H. PAWLEY: Mr .

Chairman, unfor tunately the Member for Pembina was not here duri ng the very thor oug h and very comprehensiv e di scuss ion that we had this afternoon between the Leader of the Oppo si­ tion and I pertaining to monetary polic y. If the Memb er for Pembina had been present he would have had the answer at that time. Was he present? MR. D.

OR CHARD: You know, I am very sorry that I wasn't here because I would lik e to have the Fi rst Mini ster tell us just what his government has not been able to deliv er th at they promis ed to the farmer s of Mani toba, in tha t the y promis ed tha t ther e would be no farm foreclo sures, etc. What is it that they have not been able to del iver to the farm commun ity of Mani toba? HON. H. PAWLEY: Mr. Chairman, this govern ment has not failed to provide anything that it committed itself to do ins ofar as the farm commun ity is con­ cerned.

It is my under standing that we were gi ven a five-year mandate, that we are six months into our mandate and al ready, it is my und ersta nding - I wish the Min is ter of Agric ulture was here with the exact statistics, but I heard them only a few hours ago - interest rate relief has al ready been provided to a very large number of farmer s in the Provinc e of Man itoba.

I am sure during the que stion period tomorrow, or maybe even before the even ing is out, we can obtain that inf ormation but there has been a very substa ntial number of farmer s that have received int erest rate relief from this gover nment. 3122 Seco ndly, I would lik e to emp hasize to the Member for Pembina because he may not fu lly grasp the nature of the com mitment, it was to deal with emer­ gency situa tions rela ting only to int erest rate inf lu en­ ces. The Int erest Rate Progr am has been established; it has received appl ications.

I belie ve the figures - ther e were 283 farmers have su bmit ted applica tions and had same appr oved. So ther e has been very sub­ sta ntial advance done in respect to that in but six shor t months out of a five-year mandate. MR. D. ORCHARD: Mr. Chairman, that's very nice of the Premier to tell us just exactly wh at he has done. Woul d he care to tell us ho w many of the between 200 and 300 farm sales that have taken pl ace in the months, pri marily of April and May in the Pro vince of Ma nitoba in 19 82, how many of those 200 - 300 farm sales were caused by high interest rates? HON. H. PAWLEY: Mr .

Chairman, I think the member woul d have to sub mit an Or der for Retu rn. I don' t know whether that is information in the possession of the government or not. We could ascer tain whether we could obtain that informati on.

Monday, 7 June, 1982 MR. D. ORCHARD: You see, Mr. Ch airm an, that is why I am asking these qu estions of the Fi rst Min ister, because his Min ister of Agricu ltur e does not know that kind of information. I was hoping that the ultima te repository of knowledge was indeed with the Premie r, in that he could provide us with that kind of informa­ tion when his Min ister has failed to be able to provi de that kind of information for us. The Fi rst Min ister undertook a nu mber of commit­ ments to the farm communi ty and it wou ld seem tha t, in retrospect, those commitme nts he had no intention of fu lf il ling.

The y were simpl y ele ction commitments made to attempt to sway a cer tai n numb er of votes and, in fact, after the fact, when we see the nu mber of farm sales this spring, that the Fi rst Mi nister was not really spe aking knowledge ably when he said that he was going to develop programs to prevent farmers from being sque ezed off the land, as he said in his ele cti on prom ises. Is that not correct, Mr. Fir st Min ister? HON. H. PAWLEY: Mr .

Chairman, I und erstand the obvious di sappointment that the former Mini ster of Transpor tation and the Member for Pe mbina has, that this government indeed in six short months has al ready moved consid erably towards achie ving its program. A nu mber of steps have been undertaken. The time has been lim ited, but there have been sign ifi­ cant and su bstantial moves to provide assistance to the farm commun ity. It 's regrettable that some of those moves were not taken some time ago, earli er. MR. D.

ORCHARD: I detect a tone in the Fi rst Mini s­ ter's voice tha t he wou ld li ke to say tha t these farm bankru ptcies are a carr y-over from the prev ious admin istra tion. I hope that is not qu ite true because he has another, he says, five years of mandate. With the ass istance tha t he is providing to the rural communi ­ ties, to the farm community, that trend of increasing bankrup tcies is going to be with him to haunt the words he is saying tonigh t because, Mr .

Chairman, statistics will be out probably in the next several months that will cle arly demo nstrate that farm bank­ rupt cie s and farm clo su res incr eased dr amatically this spring, desp ite the promise by this Fi rst Mini ster and his govern ment that such foreclosures would not occur if they were elected; tha t the y would have an Interest Rate Rel ief Program that would assist and prevent farm clo su res from high interest rates. HON. H.

PAWLEY: I don't know wher e the Memb er for Pembina has been these past few weeks and months, but ther e is an Interest Rate Rel ief Program and I, just a few moments ago, indi cated that there had al ready been 275 to 300 appl ications tha t had been received and appr oved. MR. D. ORCHARD: Mr . Chairman, that mus t be more recent information than we got last Thur sday nigh t from his Min ister of Agricultur e because I belie ve the numbers then were something lik e 10 3 approvals.

No w, cou ld the Fir st Min ister indic ate wh eth er the 30 percent of the farmer s who are not eligib le for the Int erest Rate Relief Progr am, if any of th ose would be going out of busi ness becaus e of the high inter est rates? HON. H. PAWLEY: Mr . Chairman, I don' t have that information in front of me. MR. D. ORCHARD: I wonder if the Fi rst Min ister, along with his Mini ster of Agricul tur e, migh t attempt to provide that information at a later date? HON. H. PAWLEY: We would have to see what we have by way of informa tion.

The Memb er for Pembina ou ght to realize and he could ind eed help us a great deal by joining with us overa ll because we have always said this is a lim ited program at a provi ncial level to assist us in reg is tering some message to the Federal Government insofar as over all monetary pol­ icy is concerned. Maybe the Member for Pembina would be more effective if he wou ld red ir ect his atten­ tion to where the real basic problem exists.

In the meantime, we should join together to do what we can in the limi ted financ ial and jurisdictional means that we have availa ble to preserve as many farms as we can in the province until we do enjoy some greater degr ee of sanity in Ottawa in inter est rate pol icy. MR. D. ORCHARD: Do I determ ine from tha t last comment that is wher e the real problem that the Fi rst Min ister refers to li es? HON. H. PAWLEY: I never thought ther e was much qu estion as to wh ere the real responsibil ity for the high inter est rates rests. 3123 MR. D.

ORCHARD: I can onl y comment how qu ickly thi ngs change from a government of federal co­ operation to one of fed-ba shing; it's amazing. HON. H. PAWLEY: Mr . Chairman, I would li ke to respond to tha t. I would lik e to assist the Memb er for Pembina because he apparently doesn't understand th e dif ference between gove rnme nts scra ppin g and qu arrelling over usel ess debates involving jurisd iction and hone st di sag reements between government s as to basic polic y.

We will have our dif ferences of opin ion with the Federal Governme nt pert aining to fiscal transfer payments, in respect to inter est rates, in regard to Crow rate; I don't consider that fed-ba shing, I consider that to be fre edom of expr ession within our dem ocratic society as to di ffering poi nts of vie w; tha t is quite dif ferent than fed-ba shing , provincial bash­ ing, interf eri ng with the del ivery of programs. MR. D. ORCHARD: I hop e the Federal Government recognizes that sub tle dif fer ence that the Premier has all ud ed to tonig ht.

In the polici es of the Mani toba New Democr atic Party, the Fi rst Min ister indi cated by state ment here that, whil e the Conser vatives sat on thei r ha nds, al most 40 percent of Manitoba ho g pro­ du cers left produc tion. Would the Fi rst Min ister care to gi ve us the sou rce of that information, the back- up that al lowed him to make that kind of a state ment avail able to all Mani tobans; I as sume, a factual statement? HON. H. PAWLEY: Mr. Chairman, that information could be obtained. We don't have it with us this even­ ing, but that could be obtai ned.

Monday, 7 June, 1982 MR. D. ORCHARD: Mr.

Chairman, I wou ld very mu ch appr ecia te the Fi rst Min ister providing me with that information tha t led to this state ment in his pol icy docu ment, because it does contrast qu ite sta rkly to the 17 th An nua l Repor t for the year ende d December, 19 81 of the Mani toba Hog Prod ucers' Ma rketing Board, wh erei n the Chairman, one Bill Vaags, says, "To my surpr ise and that of many exper ts, Manitoba held its. production base almo st constant." Th at's qui te a dif fer ence from the, presu mably factual, 40 percent reduction in the production base that the Fir st Min ister told all Mani tobans was part of his researc h.

HON. H. PAWLEY: Mr. Chairman, we are deal ing with a conside rable period of time and I want to tell the Member for Pemb ina , because maybe he did n't note but I did, that indeed farmers in general in the Pr ov­ inc e of Man itoba were rec ognizing the fact that many hog produc ers had gone out of busi ness over a period of tim e in the Province of Man itoba. It was not news to the farm ers of Man itoba. It may have been to the Member for Pembina, but it certa inly wasn't to the large number of farmers that I spoke to over the past year. MR. D.

OR CHARD : It's sort of interes ting that great grasp and knowledge of the hog ind ustr y that the Fi rst Min ister has was not sh ared by Bill Vaags, the Chair ­ man of the Manitoba Hog Produc ers Ma rketi ng Board. It's very interes ting that the Fi rst Min ister has a greater knowledge of the ho g indus try than the chairman of that ind ustry does. HON. H. PAWLEY: Mr. Chairman, I didn 't think any­ body had made any such sugge stion. If the Memb er for Pembina wants to go down some devious cou rses in his conclusions he arriv es at, he's welcome to do so. MR. D. OR CHARD: Mr.

Chairman, I sugge st that the devious route was taken by the Fi rst Min ister when he sign ed and del ivered to all Manitobans polici es of the New Dem ocrat ic Party. I think that was when the devious route was taken, not tonight when I am asking him where he got his facts fr om, where he says, "40 percent of hog produc er s left production here," and the Chairman of the Hog Ma rketi ng Commis sion says, "The base remains al most constant." The devious route was taken by the Fir st Min ister when he was Leader of the Opposition campai gning for re-e lecti on in the provinc e, not by myself. Mr .

Chairman, prior to the election and during the electi on, the Fi rst Min ister made a numb er of state­ ments abou t the need for a beef income stab il ization program and I think, if I can paraph rase some of the often made statements by the Leader of the Opp osi­ tion whi lst he was campa igning and by the Premier ­ elect after the elec tion, he said that his govern ment would not wait around stu dying the situa ti on, that there wou ld be a beef st abiliz ation program for the beef produc ers of the pro vinc e in a matter of weeks and the y would n't sit around and wait for months.

It wou ld onl y be weeks before they would have a beef stab il ization program. Now, I full well realize that the Fi rst Min ister is going to tell us tonigh t that, yes, indeed, his Min ister of Agricul tur e is in the mi dst of dev eloping a beef stabili - zation program. Bu t, it has now gone well into six months, as the Fi rst Min ister says, and he did indi cate that it would not go beyo nd weeks before he had a beef st abili zation progr am. One of the problems his Min ister of Agricultur e has with his Beef Stabil iza tion Program is its six -year te,· m, number one, and that isn' t the bigge st problem.

The big gest problem is the compu lsory marketing aspect of that Beef Income Ass ur ance Plan. Is the Fir st Min ister going to ins truc t his Min ister of Agricul­ tur e, after he has had his review group of prod ucers, to dr op the compu lsory marketing aspect of the fi rst proposed plan so that he can get on with delivering one other promis e to rur al Manit obans, that being a meani ngful beef stabil ization prog ram developed in true consu ltat ion with the beef produ cers and not in consu ltation with Bill Ja nssen and some of the recycled agricultur al bu reaucr ats of 19 77 and prior . 3124 HON. H.

PAWLEY: Mr. Chairman, I know that the member for Pembina has his own particu lar hangup s as to the kind of program he would li ke to see evolve. Wha t the Min ister of Agricul tur e is doing, and I com­ mend him for doing it, is that without dela y he com­ menced consu ltat ion with the beef produc ers in Mani­ toba. Dear me, there was a long time prior to November 19 81 that they should have alr eady commenced that kind of consu ltati on, the unfolding of that kind of program for Manitoba farmer s; unfortunately, nothing had been done.

We took govern ment November 30th and my Min ister of Agricultur e, I think, without unr eas onable dela y commenced a process of consul­ tation. He is now doing his maximum best to work out a program that is fair and satisfactory and equitable to all concerned. MR. D. ORCHARD : You know, that sort of flie s in the face of the im media te action that was promised, not in months but in weeks, by the Fi rst Min ister , by you rself, immedia tely after the elec tion. You have al ready had your Min ister of Agricultur e hang you out to dr y for an additional six months, whi lst you prom ised immedia te action.

So far, the act ion of your Min ister of Agricul­ tur e has been a couple of very interes ting thing s. Fir st of all, he fi red the commit tee that was st udying beef income program; that was the fir st thing he did. Then the next thing he did was dev elo ped a program that the majority of the beef produc ers don' t want anything to do with. My que stion to you was, Mr.

Fi rst Mini ster, are you going to have your Mini ster of Agr i­ cul tur e dr op the compuls ory marketi ng requir ement of any beef inc ome plan that he's going to bring in, or are you going to li ve and die by hi s insis tence on that marketing commis sion tha t the majority of the beef produc ers do not want? HON. H. PAWLEY: Mr. Chairman, fir st and foremost, the commitment was to immedia te consu ltati on, not to a program within weeks, but im media te consu lta­ tion.

Ins ofar as the natur e of the program, tha t is the process that is und er way at the present ti me, to develop that program in consu ltation with beef pro­ duc ers. Obviously, there will always be some dis ­ agr eement wh en any government attempts to do any­ thing. I su ppose, our best cou rse of action would have been to have sat by and done nothing, like the pre-

Monday, 7 June, 19 82 vious governm ent did for one year, and then ther e would be no debate this evening about the natur e of the program becaus e there would be none to di scuss. MR. CHAIRMAN: The Min ister of Agricultur e. HON. B. URU SKI: Mr . Chairman, it appear s that the Member for Pembina , in his usual self, is trying to bring forward not only red herrings but information that isn' t qu ite as one mi ght put it, especially in his terms. Mr.

Chairman, the Member for Pembina indi­ cated that the information brought forward, insofar as the constancy of production of hogs in Man itoba, had remained cons tant in the year 19 81 . HON. H. PAWLEY: That's wha t he sai d, yes. HON. B. UR USKI: While one doesn't disp ute the fig­ ur es of the production of hogs being constant, Mr. Chairman, but the Man itoba Hog Producer s Ma rket­ ing Commi ssion du ring their sur vey in the first thr ee months of 19 81, prior to finally HON. H. PAWLEY: Is that the same report the member was reading from? Well! MR. B.

UR USKI: .. finall y ind icati ng tha t whil e pro­ du ction remained fairly constant the numbers of pro­ du cers declined su bstantially. In fact, Mr . Chairman, if one -(I nterjec tion)- Well, he said it remai ned the same. Mr. Chairman, if one looks at the Annu al Repor t which the member quo ted from - I think its the same colored report, the 17 th Annua l Rep ort - when one looks at the numb er of uni ts that are quo ted in the report sh own for 19 80, and I qu ote from that report on page 6, "4,352 active production units in 19 80, and a total of 3, 759 active uni ts in 19 81 ," Mr. Chairman.

The se uni ts would have been the family farm uni ts, the smaller units admi ttedly so, that I am advised that he was talking about, Mr . Chairman. It is exactly that type of mental ity, the Cons ervative mental ity over the four years, tha t the people of Mani­ toba really saw thr ough and made sur e tha t their ver­ di ct was very cl ear on November 17 th, Mr . Chairman. The Member for Pembina - they finally announced a program in April of 19 81 for $10 milli on.

In fact, the former Min ister of Fi nance is silti ng in this committee where, when they annou nced this $10 million pro­ gram and several weeks later, when we were di scus ­ sing the Estima tes, ther e was no provision for the $10 milli on; th ere was provision for a $5 milli on figur e. At that moment in time, even before the program was dev elop ed and the program di dn't come into pla y until September of that year, Mr .

Chairman, until Sep­ tember of 19 81 when the program came into being and they an nou nced it in April, and in May, when we were di scussing the Esti mates, the former Mi nister of Finance ind icated then al ready that they did not think tha t the y would requir e the funds as a res ult; they did n't need those fund s. While they originally made a $10 million annou nce­ ment and they were only asking for autho rity to spend $5 milli on, lo and behold, Mr .

Chairman, before the end of the fiscal year, this government had to make provi sion to provide lo an gu arantees through the Manitoba Agricultur al Corp oration to, in fact, li ve up to the commi tments that the Torie s did n't li ve up to, to their own prod ucers, to the producer s of Manitoba, in the Ho g Stab il ization Program that they heralded as being the savi our of the hog ind ustry in this provi nce. They cou ldn 't even get their numbers str aig ht, Mr . Ch airman. Tha t is the kind of well though t out, well planned, well financially executed programs that they were del ivering, Mr. Chairman.

In 977, the then Leader of the Op posit ion, the former Premier of this provinc e, ind icated, when there was a vote called on the beef marketing plan in the Pr ovince of Manitoba, and told farmers tha t they were being coerced because they were gi ven a vote on the beef marketi ng plan. He ind icated in 19 77 that it would be his govern ment that wou ld come into power and work with the produ cers, the beef . MR. CHAIRMAN: Point of Order . MR. B. RANSOM: Mr . Chairman, I'm not qu ite cl ear of the proced ur e tha t's being fol lowed here.

I belie ve that it's customary, when we are deal ing with the Esti­ mates of the Executive Council, that normall y members of the Legisla tur e have an opportu nity to qu est ion the Fir st Mini ster and others wishing to speak normally get on a spe aking li st. I bel ieve, Mr . Chairman, tha t ther e may be others on the spe aking li st pr ior to the Minis ter of Agricultur e. MR.

CHAIRMAN: I belie ve tha t the Member for Pem­ bina asked a qu est ion in the agricultur al field and the Fir st Min ister asked -(Interjec tion )- well, I belie ve he deferred it to the Mini ster of Agr icu ltur e which I bel ieve is perfectly in order. The Mini ster of Agricu ltu re. MR. B. RANSOM: Fur ther, on the point of order then, Mr. Chairman.

The proced ur e that we're follo wing now, accor ding to you r ruling which I beli eve has not been foll owed in my experienc e, is that the Fir st Mini s­ ter is going to ask the Min isters to respond on his beh alf with respect to que stions and such as are in the area of agricultur e. 312 5 MR. CHAIRMAN: The same point of order. HON. H. PAWLEY: Ju st on the point of order, I think Ha nsard will ind icate that I did n't ask the Mi nister to partici pate, but all members from my recol lection and from the Ru les are entitled to par tici pate in the Est i­ mates.

The Member for Pembina made some serious al legations involving the oper ations of the Agricultur e Min ister. Is he su rprised that there would be a desir e on the part of the Agr icultur e Min ister now to inter­ vene in the debate. MR. D. ORCHARD: Thank you, Mr . Chair man. The news tha t the Min is ter of Agricultur e brough t us that the Fir st Min ister didn 't have was rather refre shing. MR. CH AIRMAN: Point of privilege. The Min is ter of Ag ricultu re. HON. B. UR USKI: Mr. Chairman, on a point of privi­ led ge.

I was not fin ished my remarks when I was inter­ ru pted by the Memb er for Tur tle Mou ntai n. Mr .

Chairman, when the Memb er for Tu rtle Mou ntain rose or ind icated a point of order, I was not fin ished my remark s because the Memb er for Pembina has made certain statements in this committee. MR. CHAIR MAN: I recogn ized the Minis ter of Agr i­ cu ltur e and I belie ve tha t, as the Chairman, I can reco gnize wh oever pu ts up his hand. It very clearly states that I can recognize people with opposing views. I am sur e that it wou ld be opposing views from the Member of Pembina and the Mi nister of Agricultur e. MR. B. RANSOM: On a fur ther point of order , Mr .

Chairman, may I ask you then the method of operati on that you are using? No rmal ly, in this commit tee, the past practice has been that the Chai rman has main­ tained a li st. When someone wis hes to speak they so signal to the Chairman. The Ch airman acknowledge s it and their name goes on the lis t and when their name comes up they have an opportun ity to speak. If that is not the proced ur e that is being follo wed, Mr . Chair ­ man, then I would lik e to know. MR. CHAIRMA N: Previously I had kept li sts, but this evening ther e did n't seem to be mu ch par tici pati on so I did not keep a li st.

So I have no li st this evening. MR. B. RANSOM: Mr . Chairman, perhaps you wou ld acknowledge that I had signal led my intention to sp eak in this de bate prior to the Mini ster of Agricul­ tur e coming in? MR. CHA I RM AN: Yes, I wou ld acknowledge that you raised your hand to partici pate, prior to the Mini ster of Agricu ltur e coming in. HON. B. UR USKI: Thank you, Mr . Ch airman. MR. CHAIR MAN: I had recogni zed the Mi nister of Agricultur e and I beli eve he should finish his comments. HON. B. UR USKI: I am sur e that the Member for Pembina will want to conti nue the de bate, Mr . Chair ­ man.

As I was ind icating in my rema rks, that in 19 77 the former Premier of this province, the then Leader of the Opp osition' had prom ised Man itoba cattle pro­ du cers tha t if they tu rned down the vote on the Be ef Marke ting Board, it wou ld be his pledge that hi s gov­ ernment wou ld sit down with beef producer s. He was quo ted in the paper, in the Wi nnip eg Free Press, wh e­ rein he ind icated that he would sit down with the beef produc ers and work out a mutually accepta ble plan for the benefit of beef produ cers in this provi nce. That state ment, of cour se, in that program never came about.

In fact, in the sum mer of 19 81 when the Member for Ar thur, the former Mini ster of Agricultur e, was approached by the Cattle Producer s Ass ociation asking him for assis tance, he ind icated to them ther e was no assistance to be had to the cattle indus try and that they were turned down by tha t government. MR. D. ORCHARD: Poi nt of order, Mr. Chairman. MR. CHAIRMAN: Point of order. 1982 MR. D. ORCHARD: Yes, Mr . Chairman, I belie ve the Min ister of Agr ic ul tur e was attempting to stra ig hten out an ind ication of 40 percent of Manitoba hog pro­ duc ers left produc tion.

He has seemingl y done that by reference to this report and I sug gest that he is not qu ite in order to the point he was tryi ng to stra igh ten out on behalf of hi s beleagu ered Fi rst Min ister. If you would kindly end his conversation - we have heard all this before - so we can get on with the Estima tes. MR. CHAIRMA N: The Min ister of Ag ric ultur e says he is lead ing up to the qu estion that you had asked. MR. D. ORCHARD: On the hogs. MR. CHAIRMAN: The Min ister of Agricultur e. HON. B. URUSKI: Mr .

Chairman, the member may not li ke my comments that I am making today, but the fact of the matter is while the Annua l Repor t is year­ over-year - and I will get back to that Annual Repor t - but I mentioned earlier with respect to the numbers of produc ers who left hog prod uction in the first three months of 19 81, it was in the figure of approxima tely 1, 500 produc ers had ceased prod uction du ri ng that period of time. Those figur es were gi ven to us by the Man itoba Producer s Hog Ma rketi ng Board dur ing the fir st qu arter of 19 81 .

Those are the figur es that were us ed in terms of the numbers of produc ers who ceased prod ucing hogs in the Pro vinc e of Mani toba in the 19 81 period. Ther e was a net reduction of appr ox­ ima tely 600 prod ucers from year-to-year, wher e they ceased complete year-over-year, Mr . Chairman, but the fact of the matter is that dur ing the fi rst quar ter of 19 81 , ap proxima tely 37 percent, al most 40 percent, of producer s ceased prod ucing hogs in the Pr ovinc e of Manitoba.

Those fig ur es were supp li ed to us by the Manitoba Hog Prod ucer s Ma rketi ng Board du ring the fir st qu arter of 19 81 . 3126 Specifically, Mr. Chairman, with respect to the firing of the so-called committee deal ing with beef that the Member for Pembina made mention of, I want to indi ­ cate to the honour able member that no one was fired in terms of the committee. The committee was called during the th roes of the elec tion campaign set up by the then Conservative admin istration to look into the beef ind ustry and make reco mmendations.

The com­ mittee was set up as all members of the MCPA and I want to indi cate to the honour able member that we have asked for inpu t. The y have, in fact, gi ven us recommen dations of two members and in fact th ree members of their association now sit on our Advisory Board, actu ally an additional member than they had ori gin ally reco mmended to sit on the Advisor y Board to work out the beef plan. So, Mr. Chairman, they are involved in the- process.

No one was fired, but I did not accept that one commit­ tee made up of a single group in society would be the onl y commit tee that wou ld be used to develop a Beef In come Assurance Plan in the Province of Manitoba. We wanted the wide st representation possi ble from all groups in the ind ustry and we have, from prod ucers, cho sen as good a gr oup as any and as a wide - ranging group, in terms of views, in the indus try as any gov­ ernment could to provide him with information in the development of this program.

Monday, 7 June, 1982 MR. CHAIR MAN: The Member for Pembi na. MR. D. ORCH ARD: Thank you, Mr. Chairman. I have another que stion for the Mini ster of Agricul ture. How many pu blic meetings have been held to explain thi s program, number one, to the cattle produ cers in the di fferent di stricts, and MR. CHAIR MAN: I think now we are get ting really off the beaten path. MR. D. ORC HARD: Well, isn' t that new, Mr . Cha ir­ man? Is n't that new? Mr . Chairman, I take it I am not to ask the Mini ster of Agricu lture any qu estions? MR. CHAIRM AN: No. MR. D. ORCHARD: Thank you, Mr. Chairman. I appr eciate that.

Now, if I can ask a que stion of the Fir st Min ister as I started out doing tonig ht? Mr . Ch ai rman, the Fir st Mini ster in this election docu ment, "Pol icie s of the New Democratic Party of Manitoba," ind ic ated that Manitoba Ne w Democr ats would introd uce a program to assist young farmers entering agricultur e.

Now, my que stion to the Fir st Min ister is that, in view of the fact that there are no longer any appl ications being accepted from you ng farmer s for the pur ch ase of land by MA CC, and I beli eve that's at the dir ection of this Mi nister of Agri­ cul tur e, would the Fir st Mini ster ass ur e this commit­ tee and the people of Manitoba that he will not allo w his Mi nister of Agricultur e, between Ses sions, to introduce the Land Lease Program without proper scrutiny and alternate policy deve lopment to be pres­ ented by the Op posi tion; that he won't wait for the Session to be over and sneak the Land Lease Program in the back door ?

Will he gi ve us that ass ur ance tonig ht? HON. H. PAWLEY: Mr. Chairman, I think I would be most unwis e to make a commitment of tha t natur e to the Member for Pembina. Obviously, it's a time of flux and of change in regard to the agricultur al communi ty and I think we have to be in a position to res pond to the needs and the req ue sts of the farm commun ity. Obviously, at the same time any program that we do impl ement of any natur e, between now and the com­ mencement of the next Sit ting, as long as we have legisla tive auth ority for same, we are accountable to the Opposition at that time.

So I do n't see why I would make that kind of commitment this evening at all, based up on some concerns tha t the Mem ber for Pem­ bina and his col league s are expr essing this evening. MR. D.

ORCHARD: Then, since the Fir st Min ister is unwilling is gi ve this committee and the House that ass ur ance, then would he try to gi ve us this ass ur ance that if his Mini ster of Agricu lture, after the Session pror ogue s so that he is beyond the scrutiny of que s­ tion period and mem bers of Her Majesty's Loyal Opposition in the Hous e, if his Min ister of Agr icu ltur e tries to bri ng in the Land Lease Program, will the Fir st Mi nis ter also insi st that he offers a parallel program of long-term mortgage monies avai lable to those same you ng farmers, with a dis counted inter est rate which would reflect the kind of subsidy provided by the Pro- 3127 vincial Government in writing down the yearly rental on land- lease lands; and offer that same kind of sub ­ sidy in a lar ger interest rate reduction to tho se same you ng farmers because the costs to the people of Ma nitoba are id entical whether it's a sub sidized lease of land under land lease or a sub sid ized interest rate, the only di fference being that in the lon g-term mort­ gage with the young farmers owning the land?

Tha t's the basic di fference. The government doesn't own it; the young farmer does. So would he gi ve us the ass ur ance that if his Mi nis­ ter of Agricultur e brings in land lease they will offer a compar able sub si dization to the interest rate appl ied to long-term loans so that the you ng farmers of Mani­ toba can ch oose between the govern ment owning the land and they own the land, all to the same cost to the taxpayers of Manitoba? HON. H. PAWLEY: Mr .

Chairman, I really do believe tha t it would be less than wi se to be tos sing together a program tonight or making commitment s based up on hypothetic al situations that may or may not occur over the next six months. MR. D. ORCHARD: Mr. Chairman, this is not a hypo­ thetical situation unle ss the Fir st Mini ster intends on breaking another one of the promises to Manitobans that he made in this, because he has said in her e that Mani toba New Democrats would introduc e a progr am to assist you ng farmers enteri ng agricultur e.

Ther e is no such program now because his Fir st Mini ster has elimina ted long -term land mortgage s to young farmers. So, if he's going to carry out this promise in this, "P oli cies of the New Democratic Govern ment," I want the ass ur ance from the First Min ister that if he brings in land lease after he's beyond the scrutiny of the Opposition, will he also offer young Mani tobans a written-down interest on a long-term mortgage at the same cost to the taxpayer and gi ve the young farmer the choi ce between the government owning the land and him owning the land? Tha t's all I ask.

I don't want any behind the scenes manoeuve ring and manipu lat­ ing by hi s Mini ster of Agr icul tur e to the detri ment of agricult ur e and, parti cula rly, to you ng people enter ­ ing agricultur e. HON. H. PAWLEY: Mr . Chairman, I will get the state­ ment that I issued dur ing the campaign. In fact, wha t the member is asking me to do, the Mi nister of Agricul­ tur e will obtain same. What the Member for Pembina is atte mpting to get me to do is contr ary to wha t I com­ mit ted myself to do dur ing the campaign.

I said in Vita dur ing the campaign tha t we wou ld not lend money to farmer s for purposes of pur chasing land. That was dur ing the campaign that I made that state ment; it was du ly reported. MR. D. OR CHARD: Then I take it that the only way that the Fir st Mini ster intends to keep his promis e of int rod ucing a progr am to assist young farmers enter ­ ing agricu ltur e is via the land lease program then. Is that what he's telling us tonig ht? HON. H. PAWLEY: No, Mr. Chairman. It will be of assis tance to the Memb er for Pembina because I do have the state ment that was issued during the cam-

pai gn and the emphasis was upon monies for Debt Consolidation. MR. D. ORCHARD: Mr . Chairman, Debt Consoli da­ tion will be available to th ose who are al ready in farm­ ing. Your promise, Mr. Premi er, and I read it to you again is, "Man itoba New Dem ocrats would introduce a program to assist you ng farmer s entering agricul ­ ture," not in agricultur e and needing debt consoli da­ tion, enter ing agric ul tur e.

Do I read between the lines as to wha t the First Mini ster is tel ling us tonigh t in that he is going to refuse long- term money through MACC to young farmer s - next year, the year after, the rest of this year - and only allo w new farmer s entering agri­ cultur e to do so via the Land Lease Progr am and not gi ve them the option of owning their own land? HON. H. PAWLEY: Mr . Chairman, there obviously is some di fficu lty on the part of the Memb er for Pembina and what he is readin g, wha t he is under standing.

The program annou ncement involved monie s for debt consolida tion, monies for opera ting capital and equ ip ment. Maybe, it wou ld be of assistance to the Member for Pembina that's havi ng some trouble if we went onto something else and I was able to provide him with that statement that was issue d during the campaig n.

Second ly, I would re mind the Member for Pem bina that we will not be rushed into a program that the farmers of Manitoba wou ld find not satisfactory, that we will be devel oping our program over the four years of our mandate, five years of our mandate, which is the commitment that we gave to the people of the Pr ov­ ince of Manitoba. MR. D.

ORCHARD: I would li ke to remind the Fi rst Min ister that on Sep tember2 9 of 19 81, in a report from the Legisla tur e to his constituent s, he indic ated, and I would take it that he committed himself, as Premi er, to developing a comprehensiv e Int erest Rate Rel ief Pro­ gram tha t would assure tha t no farm, no home, or no busine ss be lo st due to high int erest rates. Tha t was prior to the ele ction in a legisla tiv e repor t by the then Leader of the Opposi tion.

During the ele ction cam­ paign, in the constituency of Spring field, whil st meet­ ing with a group of ho g farmer s and farmer s in the area, the press reported tha t once agai n the Leader of the Opposition ind icated that he would develop, if elected and form ing the government, a program to gu arantee that no farm, no home, no busi ness be lo st due to high int erest rates. Now, obviously, the Fi rst Mi nister believed that he cou ld do that suf ficien tly enough to sign this docu ment. I bel ieve he signed it; the Fi rst Mini ster mi ght want to confirm that's his signa tur e.

I belie ve it's his pictur e alth ough that's in question sometime s, but he ind icated in here, "With ManOil and Man itoba Hydr o, we can develop pro­ grams to guar antee that no Man itobans lose their home s or farms due to high inter est rates ." Now, in view of the fact that the Mini ster of Agricul­ tur e on Febru ary 5, 19 82, put out a press release in which he said , "Mr . Ur uski stressed the program is geared to assisti ng those hom eowners with low or moderate income and smal ler busine sses and farms in economic hard ship as a res ult of high interest rates." Mr .

Ur uski went on fur ther to say, "This is consistent with the govern ment's commitment that we would not be prepared to use tax dollar s except in hardship cases," not qu ite what the Fir st Mi nister had said in his report from the Legisla tur e, hi s ele ction promi ses and in this docu ment. Bu t, nevertheless, that's wha t his Mini ster of Agricultur e is saying on February 5, 19 82. Mr .

Ur uski goes on further to say, "The program was not intended to provide a general measur e of interest rate rel ie f to all, but onl y to th ose least able to cope with the cu rrent protracted period of high inter est rates ." My question to the Fir st Min ister is, did you know that your Minis ter of Agricu ltur e in developing the In terest Rate Rel ief Pr ogram was sta bbing you in the back and making your election promi ses null and void? HON. H. PAWLEY: Mr .

Chairman, I feel rather embar­ rassed tr ying to answer those kinds of questions, because I don' t know really whether the Member for Pe mbina is jus t tryi ng to be cute or is indeed sinc ere when he asks ques tions of that natu re. I will gladly provide to the Member for Pembina the state ment tha t was issued dur ing the campaign as well. Ther e is no inc onsis tency between the state ment by the Minis ter of Agr icultur e and the state ment that was issue d dur ­ ing the campaign. I am very pleased indeed, Mr .

Ch airman , as I menti­ oned, tha t su bstantial progr ess has been made in a very shor t period of time to deal with these extreme cases where people are losing their farms or their ho mes or their small busine sses solely due to interest. Th ere has been su bsta ntial prog ress and I wou ld have ho ped that, rather than tryi ng to score - I don't know - pol itical poi nts, tha t the Member for Pembina would be joining with us in provi ding some constructive proposals, if ind eed he has same, as to how the pro­ gr am can be better communic ated, how it can be better admin istered.

That would be much more use ful than really tr ying to - it is up to the Memb er for Pem­ bina as to how he performs - but he mi ght be much more effective as far as being accepted by the farmers of the Province of Mani toba if he wou ld. 3128 MR. D. OR CHARD: The Fir st Mini ster used a very key word, and I compliment him for it. He used the key word 'si ncerity' and that is exactly what we are trying to dete rmi ne; whether he, as Leader of the Opposi­ tion, was sincer e when he made these promis es. You know, it wasn't members of the Prog ressive Conserva­ tive Party that sign ed this docum ent.

It was you, Sir , as Leader of the Opposition and now Premier of this provi nce that sign ed this document that said, pro­ grams to guar antee that no Mani toban wou ld lose his home or farm due to high interest. You mentioned si ncer ity. I am asking you, were you sinc ere when you signed that, Mr . Premier ? HON. H. PAWLEY: Mr . Chairman, I think the people of the Pr ovince of Manitoba will pass their ju dg ment and I have no hesita tion as to how they will pass their judg ment.

In view of the very su bstantial efforts tha t we have under taken to provide assistan ce - you know, Manitobans are much more soph isticated than the Memb er for Pembina seems to recog nize Manitobans to be. I find them to be very soph isticated, very know!-

edgeable. very und ersta ndable, to know full well the limita tions that Pro vincial Government is up agai nst. I find also that they are very appr eciative of the efforts that we are under taking agains t very extreme odds to provide this kind of assista nce. I also know that Man­ itobans are gener ally rather ple ased that al ready some sign ificant prog ress has been made. Ofte n. gover nments will leave commitme nts to the second, thir d. four th or even the fifth year to fulfil!. This gove rnment has al ready made su bstantial pro­ gress in the first six months.

In fact, I think if there 's any criticism, maybe in some ways we have attempted to move too qu ic kly on some of our commitment s. MR. D. ORCHARD: You know, I won't belabour the points, but the Mi nis ter sti ll hasn' t indi cated whether he was sinc ere when he signed this docum ent, and I don't susp ect he will if he's . HON. H. PAWLEY: Mr. Chairman, all I need say to you, I am not depe nding upon the Memb er for Pem­ bina to judge my sinc erity or lack of sin cerity. I will depend up on the people or the Pro vinc e of Ma nitoba to make that sort of jud gment. MR. D.

ORCHARD: The Fir st Mini ster also cal led up on me to provide him with some construc tive cri ti­ cism. I wou ld do that right now and I hope he takes it to heart. Pl ease, Mr. Fi rst Min ister, open up your Int erest Rate Rel ief Program to farmers to include the majority of the 30 percent of the farm ers in Ma nitoba that you have excluded by your criteria. Tha t would be my fir st su ggestion to you. Secondly, in developing your beef marketi ng program, dr op your insistance on a com­ pulsor y marketing commis sion for all tho se enrolled in the program. Tho se are my two sug gestions . Mr.

Chairman, I have one other qu est ion of the Fir st Min ister. Once again, it follo ws up from a commitment made by the Fi rst Mini ster in the "P ol icie s of the Ne w Democratic Party. " The polic y basically is to take steps to relie ve the interest bur den facing famili es buying a home. When can we expect assistance of interest relief to Manitobans buying a home ? HON. H. PAWLEY: Mr . Chairman, tha t is a su bject that is under review by the Min ister responsible for Housi ng. MR. D. ORCHARD: Then we can poss ib ly expect an announc ement in the near futur e on that type of assistance HON. H.

PAWLEY: I would n't establish any date. We are work ing on put ting together an economic and social thr ust wit hin the best of our means and our commitments and that we are doing. MR. D. ORCHARD: Mr . Ch ai rman. I have no fur ther que stions at the moment. MR. CHAIRMAN: The Member for Tur tle Moun tain. MR. B. RANSOM: Thank you , Mr. Chairman.

I realize that the Fir st Mini ster is a bit rel uctant to go back and deal with some of the se state ments that were made 7 June, 1982 dur ing the elec tion, but on the other hand I know that he is interested in sinc erity and disp elling cynicism that sometime s devel ops in the pol itical arena. Tha t is why we are int erested in que stio ning the com mit­ ments that were made, knowi ng what was meant by them and how they are intended to be carried out.

Ther e are a few areas that I would li ke to gi ve the Fi rst Minis ter an oppo rtunity to cl arify for my benefit, and perhaps for the benefit of other s, ju st wha t was meant by some of the statements which he has made. The fi rst one tha t I would lik e to start with, Mr . Chairman, has to do with the deficit and the presenta­ tion of the accou nts of the provi nce. Sh ortly after assuming responsibi li ty for government, the Fir st Mi n­ ister said that he expr essed great concern at the size of the projected deficit.

He said or was quo ted in the paper as having said, "Cert ainl y, the pub lic was misled." Mr. Ch airman, I ju st would li ke to ask the Fir st Min ister how the publi c had been misled. Wha t was the basis for that state ment? HON. H. PAWLEY: Mr . Chairman, I cert ainl y think ther e was not a ge neral impress ion amongst the pub ­ lic at large as to the extent of the deficit that we were inh erit ing. MR. B. RANSOM: Mr. Chairman, cou ld I ask the Fir st Min ister, was he aware that the projected deficit in the Bud get of 19 81 -82 was $2 19 mill ion? HON. H. PAWLEY: Yes.

It was consid erably more than that when we inherited government. MR. B. RANSOM: Mr. Chairman, is the Fi rst Mini ster now sugge sting that the mislead ing of the public took pla ce somewher e in that range of di fference between the $219 mill ion that was projected in the deficit and the 252.8 that was projected at the end of the second qu arter, bearing in mind that the fi rst Qu arterly Repor t has not, in our practice, inc lu ded a projec tion of the def icit for the year? HON. H. PAWLEY: Mr .

Chairman, dealing wi th the very department that we're on, there are certa in items that had to be obtained by way of Sp ecial Warrant tha t weren't in the pri nted Esti mates. I made reference earl ier- I don't know whether the member was present - to $700,000 by way of Adver tis ing that was not includ ed in the original pri nted Estima tes, a fur ther 12 0 - a fur ther conside rable sum un der Other Expen­ ditur es, 2.(c). As well, there were su bstantial sums under the Health Depar tment that were not includ ed in the pri nted Estima tes. MR. B. RANSOM: Mr.

Chairman, has the Fi rst Mi nis­ ter had an oppo rtun ity to examin e the Quar terly Finan cial Repor t for the six months, April to Sep ­ tem ber, 19 81? 3129 HON. H. PAWLEY: I have not had oppo rtun ity to review that. MR. B. RANSOM: Perhap s then, Mr. Chairman, I could ju st draw to the Fir st Mi nister's atte ntion the fact that tha t Quar terly Re port, which was the last one put out by our government, pr ojected a defici t

of $252,800,000.00. Mr. Chairman, I could also dr aw to the First Mini s­ ter's at tention the fact tha t the Budg et tabled in this Ho use a few weeks ago, tells us now HON. H. PAWLEY: Mr . Chairman, if I could ju st for a moment, cou ld I ask the honour able member when that Qu arterly Rep ort was released to the public? MR. B. RANS OM: Mr . Chairman, the Quar terly Re port was released to the public at appr oxi mately the end of November, which is the normal ... MR. H. PAWLEY: After Nove mber 17 th, yes. MR. B. RANSOM : ... is the normal time for the release of the Qu arterly Financial Rep ort and the ... MR.

CHAIR MAN: Order , order. Or der. Ar e you fin­ ishe d your comments, Member for Tur tle Moun tain? MR. B. RANSOM : No. MR. CHAIR MAN: The Member for Tur tle Moun tain. MR. B. RANSON : Thank you, Mr. Chairman. I would draw to your atte ntion then on Page 11 of the Bud get, Mr . Chairman, wh ere the projected deficit, which the Min ister of Fi nance has now informed the Hous e what the projected deficit will be for '81 -82, is in fact $252 mill ion. So the Qu arte rly Repor t projected $252.8 mil­ lion; the Mi nister of Finance now informs us tha t the final deficit is expected to be $252 mil lion. Mr.

Chairman, it stri kes me that tho se two figur es are very close together, and tha t the talk about some $80 million of Special Warrants being requir ed to be passed by the new govern ment is simply mislead ing, because the Fir st Mini ster apparently is not aware and perhaps even the Mi nis ter of Finance was not aware, tha t in the projec tions for the spending of the govern­ ment, the antici pated req uir ements are taken into consider ation when the appr oval for the spending is gi ven by Treasury Board.

The Special Warrant is not passed until the money is actually requir ed and any transfers within the appr opriations has taken pla ce, then the Special Warrant is req uir ed. Tha t is why, Mr . Chairman, the Quar terly Financial Repor t esti mated a deficit of 252.8 and the final figur e is likely to be 252, because far from not taking tha t 80 million into con­ si der ation, the 80 million ha d been taken into consid­ eration before. I wou ld like to ask the Fir st Min ister one fur ther qu estion in this area, Mr . Chairman.

Wh at does he now antici pate tha t the final deficit figur e for 19 81 -82 is going to be? HON. H. PAWLEY: For '81 -82, I wouldn' t be able to provide that information tonight. I would have to MR. B. RANSOM : Does the Fi rst Min ister then accept the figur e which appears in the Bu dge t which says tha t the year end deficit will be $252 milli on? HON. H. PAWLEY: I would have to check tha t out. Mr .

Chairman, ins ofar as the 252 milli on, the member acknowledged hi mself that the quar terly state ment 7 June, 1982 did come out after the electio n, and ther e's no que s­ tion as to the fact tha t ther e were su bstantial sums of monies tha t were not in the pri nted Esti mates re Health, re my own department, many other areas - I can obtain all tha t - and cert ainly the amount of the projection was exceeded by a su bstantial sum of money, unle ss the member di scount s $35 milli on, $40 million as not being a sign ificant sum of money. MR. B. RANSOM : Mr .

Chairman, concerning the $252 milli on, it is a qu estion of whether or not the Fir st Mi nister accepts that. I see some que stion in his mind now whe ther he accepts that or not. I think the Finance Mini ster has ass ur ed us this will be the appr oxima te fig ur e, but the Fir st Mi nister persists, I think as recently as two or th ree weeks ago, of using a figur e of $300 milli on for the deficit for 19 81 -82.

I would appr ecia te the Fir st Min ister then examining and looking into the facts to see whether the Fi nance Min ister's projec tion is correct, tha t the deficit will be $252 mi ll ion, or whe ther the fig ur e of some $300 mil­ lion is the correct one. 3130 Mr . Chairman, I wou ld lik e to ask the Fir st Min ister then to su bstantiate wha t he consi ders to be any mis­ lead ing state ments by the prev ious gove rnment with respect to the deficit. Can he clearly iden tify any mi s­ lead ing information? HON. H. PAWLEY: Mr .

Chairman, fir st, the former Min ister of Finance ignor es the fact tha t a once- only, 25- poi nt-some million doll ars was taken out of the Muni cipal Reserve Fund. If that had not been done, we would have been looking at a deficit in the range of $275 milli on to $280 mil lion, 25 poi nt- some onto 252 milli on. Mr .

Chairman, unfortuna tely the false impr ess ion was created when the previous Conservative Gov­ ernment was elected in 19 77, they accused the then Sch reyer Gove rnment of spe nding money li ke arso n­ ists, and then others sugge sted we were spe nding money lik e drun ken sai lors, and ther e was a great deal of moral commitment cert ainly by way of the speeches tha t were gi ven that in some way or other the new Conservative Government wou ld balance the Bu dget and it wou ld run a very tight ship.

This was the com­ mitment and the und ers tanding tha t was gi ven by the then Conservative Party when it formed the govern­ ment in 19 77. Unfortu nately during the four -year period of time, th ose commitments tha t were gi ven by the previous Conservative Govern ment to Man ito­ bans were not honour ed - 19 78, 19 79, 19 80, 19 81 - we experienced ever -in creasi ng deficits. Now I want to very qui ckly -(Interje ction )- if the Leader of the Opp osition can show me any one of th ose years wh ere ther e wasn't a deficit, I'd be qu ite interested . HON. S. LYON: I can. Th ose weren't incr easi ng defic­ its.

The y were decrea sing deficits MR. CHAIR MAN: Order. Or der. HON. H. PAWLEY: Th ere is no qu estion tha t at the end of the term of the Conservative Government, their deficit was a record deficit; it was hi gher than any­ thing that had existed prior to and including the fi rst

Monday, 7 Ju ne, 1982 year they assumed office. Now, Mr . Chairman, I want to emp hasize a point tho ugh, so tha t I'm not misunde rsto od. We ha ve never said that there is anything wrong with deficit financing given any economic circums tance at any particular time as a party. It has not been our party tha t has claimed ther e is something vir tuous in a balanced Bu dget situation regardless of the economic situation.

Wha t we criticiz ed was for a party to prom ise to make a commitment to the pub li c of the Pro vince of Manitoba tha t in some way or form the y would ba'­ ance the Budge t, tha t they had some sort of monopoly on effective management of the affairs of the pro­ vinc e, fina nces of the province, and then to so com­ ple tely and tota lly permit tha t expectat ion to deterio­ rate. So there is a clear philo sophic di fference between our party and the previous Conservative Governmen t. We never for a moment have ind ic ated tha t ther e is anything virtuous in a balanced Bu dge t each and every year.

By the way, excuse me, if I could ju st very very qu ickly - I ha ve the release of No vember 5, 19 81 , dea ling with the qu estions raised by the Memb er for Pembina and in that release tha t was issued ju st a few days before the elec tion, it states: "It is a waste of lim ited pr ovincial funds to duplic ate the Federal Farm Credit Corp orat ion. We will provi de young farmers with MA CC funds for the activity which is not ade­ quately sup ported by other programs.

Specific aspects of the new program will include pur cha ses of li ves­ tock, buildi ngs, other permanent im provemen ts, land im prove ments, pu rcha se of equipmen t, start -up costs and gr ants for deve lopment of a farm plan.

The pro­ gr am will be part of a family farm act." And I also said here: "It will replace the Conservative focus on MACC activity on loans for the pur ch ase of farmland si nce the Federal Farm Credit Corpo ration provide s land pur ch ase loans." So to the Member for Pembi na, I' m jus t a li ttle sur ­ pr ised that thi s evening he would try to wring from me an agreement to do the very opposite, to breach a commitment tha t I gave very cle arly on November 5, 19 81 . I'm ju st a li ttle puz zled by the double sta ndard tha t the Member for Pembina seems to be injecti ng into the Estima tes. MR.

CHAIRMAN: The Memb er for Tur tle Mou ntai n. MR. B. RANSOM: Mr. Chairman, th e Fir st Min ister tries to make thi s into a phil osoph ical debate about the pros and cons of deficits. Tha t's not the que stion at hand, Mr . Chairman. The qu estion is tha t th ere was an allegation tha t the people had been misled, and this was not even an allegation tha t was made dur ing the elec tion; this was an al legation tha t was made after the ele ction. The Fir st Min ister was then the Fir st Min ister.

He had an oppor tun ity to consu lt with his Minis ter of Fi nance and with staff and he made the al legation tha t the public ha d been misled. Now think tha t is a rather seri ous cha rge to be made and I think it's one that needs to be su bstantiated and so far, Mr . Chairman, I haven't seen any su bstantiation prese nted. He ma kes reference to a $25 milli on Specia l Mu nic­ ip al Loans Fund. Mr . Chairman, the House was never misled abou t the $25 mil lion Special Mu nicipal Loans 3131 Fund. It was fi rst raised in Public Accou nts and I bel ieve the Me mber for Lac du Bonnet was ther e.

The Member for Seven Oaks raised the qu estion: how does the govern ment intend to treat this $25 milli on in the Special Mun icipal Loans Fund? The Dep uty Mi nis­ ter of Financ e answered at the time: it would be my intention to recommend to the government that money be tal<en into general reven ue, and ther e the su bject dr opped for the sake of Pub lic Accounts. Sub se­ quently, that was done in the Budge t. It was presented forthr igh tly. Ther e was never any misunder standing , never any attempt to mislead anybody.

Now, the char ge has been made that ther e was an attempt made to misle ad and I simply wou ld lik e to know, specifically, whether ther e were things to which the Fir st Min ister was referri ng, or was he simply engaging in al lowing the ele ction to lapse over a li tt le bit into the post-e lection period and perhap s his rhe ­ toric l1ad gotten away with him a bit. HON. H. PAWLEY: Mr .

Chairman, I don't know whe ther the Member for Tur tle Moun tain and myself are look ing at the same figur es, but cert ainl y the pro­ jection is of the Budge t of 19 81 and the inf ormation tha t we had as of the date of the ele cti on, November 17th, and finally the Qu arterly Repor t, whi ch was issue d after the ele ction - not before the ele cti on, but after the ele ction.

I'm not saying that the Quar terly Rep ort was issued at a time tha t it should not ha ve been, but cert ainly Man itobans were not advised dur ­ ing the campaign tha t we are overspe nding by X amount beyond that which we had antici pated dur ing the Bu dge t of '81 , tha t the projected deficit of X amount is being exceeded by Y, so that Manitobans were not aware tha t th ere was a su bstantial di fference between the budge ted deficit and the final Bud get dur ing the campaign. MR. B. RANSOM: Mr.

Chairman, are we to assum e then that with the present govern ment we will get an up -date on the projected deficit of the government perhap s every month so tha t we will not be in a posi­ tion of being able to say tha t the government was mislead ing the people in terms of the ... HON. H. PAWLEY: Mr . Chairman, it's our intent to issue the Quar terly Repor ts as ha s been the practice. MR . B. RANSOM: Mr . Chairman, I think the Fir st Min ­ ister will be aware tha t the fir st Qu arterly Repor t doesn' t contain the proj octi on of the deficit.

It's not possi ble to do that in any accu rate way at the end of thr ee months. So if he is going to pur sue the same practice as was foll owed by the previous gove rnment, which I happen to think was a good one, the Fi rst Min ister termed that as mislead ing. Now, if the same practice is going to prevail then I assume tha t the same tag can be appl ied to the Estimate then. HON. H. PAWLEY: Mr .

Chairman, again I must re mind the Member for Tur tle Moun tain because he may have mis sed this informa tion; :he very depar tment tha t we're deal ing with, not ha ving to lo ok at any other depar tment, we have a total of some $850,0 00 by which the pr i nted Estima tes were exceeded by act ual expen ditur es. Adver tising alone was close to $700,000

that wasn't covered in the pr i nted Estima tes tha t had to be recovered by way of Special Warra nt. Maybe the Memb er for Tur tle Moun tain isn't conscious of tha t. This is one of the smaller spen ding depar tments alone; $1 25, 000 tha t had to be obtai ned by way of Spe cia l Warrant under 2.(

c) in the very department that we're deal ing with. So right with in this depar t­ ment, we're deal ing with $850,0 00 appr oxima tely, tha t was not covered by way of pri nted Esti mate in the smalle st depar tment spending -wise, of the entir e government. You ha ve tha t example confronting you; the ver y dep artment tha t's relevant to our di scussion now. MR. B. RANSOM: Is tha t wha t the Fi rst Mini ster con­ sid ers to be mislead ing? HO N. H.

PAWLEY: Let's deal, for instance, with this particular item if we could - 2. deal ing with Other Expendit ur es: the 19 81-1 982 vote was 12 7,300; whe­ reas the year before, the level ha d been 225,500. We ha d to Special Warrant $1 26,300 to bring that up with the expend itu res, wh ere it ought to have been very, very cl ear tha t ther e would have been no way that Other Expenditur es would ha ve been halved. You know, this is an example tha t you have right in front of you in thi s very dep artment without looking to any other depar tme nt. MR. B. RANSOM: Mr .

Chairman, my qu estion then to the Fir st Min is ter is, does he consider that to be mis­ le ading? Was tha t a mislead ing accounting practice, finan cial pr actice, fol lo wed by the pr evious govern ment? HON. H. PAWLEY: I certa inl y think it is very mislead­ ing if you have an expe nditur e in one year, that's 19 80- 81 , the year of the election. Th en when it comes in after the elec tion, you find you ha ve thi s Sp ecial Warrant for monies tha t were spent that one should have expe cted wou ld have been spent on the basis of the previous year's spe nding. I do n't know wh at you would call that. MR . B.

RANSOM: How much money was involved there, Mr . Chairman? HON . H. PAWLEY: Deal ing with this very dep ar tment, 50 percent in that item alone. Ther e's another item deal ing with Adver tising wh ere we had to Special Warrant - th ere was two. Her e I'll gi ve more benefit of the do ubt because I do n't know whether it was, I su ppose, antici pated that only 2.3 mi llion would be needed. It tu rned out, I gu ess because of other demands du ring tha t election year, 683,000 had to be obtained by way of Special Warrant in order to meet the expens es from the adver tising for the fiscal year in qu estion.

So add 683,000 up, which migh t be somewha t qu esti onable as to whe ther it shoul d've been reasonably antici pated, and the $1 25,000 that ought to certa inl y have been antici ­ pated, you'r e looking at a su bsta ntial sum in a very small spen ding de partme nt. MR . B. RANSOM : Mr . Chairman, then wha t the Fir st Min ister is referring to as mislead ing are items that ha ve been und erest im ated in the est imation of expenditu res? HON. H. PAWLEY: In the one case, I think it's qui te clear. Leave it to the member's judg ment. MR. B.

RANSOM : I wanted to know, specifically, is tha t wha t he is referring to? Is the ch arge of mis lead­ ing? I want to know. Is tha t wha t he's referring to, that it's a situation wh ere the spen ding of government was unde resti mated? It su bsequently tu rned out to be larger. Is tha t, in the Fi rst Min ister's vie w, mislead ing? HON. H. PAWLEY: Mr . Chairman, the artificial keep­ ing down of expe nditur e levels is mislead ing. Peo ple cert ainly antici pated tha t the prin ted Estima tes would be roughl y equ ivalent.

Health was a major area wher e th ere were millions of dolla rs by way of Special Warrant. MR. B. RANSOM : Mr . Ch airman, the Fir st Mi nister then is saying tha t the Estima tes of the Health Depar tment were kept down artifi cial ly. Mr. Chair ­ man, is the Fi rst Mini ster aware of wha t the extra money was req uir ed for in the Health Services Comm ission? HON. H. PAWLEY: Mr . Chairman, I can get tha t brea kdown if it's necessary to do so. Obviou sly, the Health expenditur es were not accu rately projected. 3132 MR. B. RANSOM : Mr.

Ch airman, then is it fair to say that it can be consider ed misle ading if th ere are extra expe nditur es come in this year in the Ma nitoba Health Services Com mission or extra money comes in for the settlement of the salaries of the Manitoba Govern­ ment Emp loyees' Assoc iation? Will that be mislead ing too? HON. H. PAWLEY: Mr . Chairman, one mu st examin e the circums tances. We had th ree -(I nterjec tion)- I wonder if I can fini sh my remarks? MR. CHAIRMAN: Order. HON . H. PAWLEY: We had thr ee years by which the projected deficit was, indeed, less.

In the fou rth year, an elec tion year, the projected deficit was exceeded consi derably. Tha t information was not fou nd out until after the election, contr ary to wha t had been the pattern dur ing the fir st th ree years. Mr . Chairman, it's rather peculiar to me, if there were th ree years tha t th ere was, in fact, overst ating of the deficit to be fol­ lowed by a smaller deficit than wha t had been antici­ pated. In the fou rth year, we appear to deviate from the pattern sign ific antly. MR. B. RANSOM : Mr .

Chairman, the deficit in 19 77 was on Cu rrent acc oun t - it was a division between Cur rent and Capi tal - was projected to be about $25 million in the projection that was made at the time the Bu dg et was brou ght down. Tha t is the positi on tha t the Min ister of Fi nance continued to put forward through the sum mer and thr ough the elec tion, when que stioned. It su bsequently came to our attention on assuming resp onsibi li ty for gover nment that the pro-

Monday, 7 June, 1982 jected deficit on the cu rrent side was $12 5 milli on. Wou ld the Fir st Min ister consider that was misle adi ng? HON. H. PAWLEY: Mr. Chair man, ther e are a nu mber of factors tha t are reflected in the 19 77 sit ua tion as I recall -(Int erjec tio n)- it's the Member for Tur tle Mou ntain tha t wants to go back five years. As I recall, cert ainl y it was called mislead ing by the then Conser­ vative Party.

In addition, it seems to me tha t a great deal of the dif fere nce consis ted of miscal cula tion on the part .)f the Federal Government ins ofar as revenue flows fro m the Federal Gove rnment to the province. Also, th ere were monies that had to be expended because of the unemplo yment situa tion that was devel oping in '77. That was clear on record.

Pr ogr ams were annou nced, as I recal l, for all and sundr y to know tha t monies had to be spent on unemplo yment and ther e were other factors tha t - I regret tha t the Member for ln kster is not present who had done conside rable research as to transpo sing that took place. MR. DEP UTY CHAIRMAN, A. Anstett: The Memb er for Tur tle Moun tain. MR. B. RANSOM: Mr. Chairman, I am not deb ating why these thing s occu rred.

I'm si mply pointing out that, under tho se cir cums tances, the Min ister of Fina nce of the day continue d to insis t tha t the pro­ jected deficit was the same as he ha d projected in his Bud get right through until the time of the elec tion. I wou ld point out for the record, Mr. Chair man, tha t during the past ele ction, the issue was never raised with myself as Min ister of Fi nance as to wha t the deficit was. No member of the media inquir ed as to wha t the deficit would be and it was not a sub ject of politi cal debate during the ele ction. One or two other qu estions in respect to defic its, Mr.

Chair man. Ther e was a leaflet put out by the Leader of the Ne w Democratic Party in April of 19 81 in which he said, among other thing s, "Four Conser va­ tiv e Bud gets ha ve produ ced four defici ts compa red to only one deficit in eigh t NDP Bud gets." I wonder if the Fi rst Mini ster could tell us whic h year of the eight NDP Budge ts in the Schr eyer years, in his view, had a defi cit ? HON. H. PAWLEY: I don't ha ve that information in front of me. MR. B. RANSOM: Perhap s, Mr .

Chairman, then I cou ld place it on the record tha t in 19 71 -72, the deficit was 16 .4 mil lion; in '72-73, it was 17 .9; in '73-74, it was 4.3; in '74-75, it was 52. 7 mill ion; in '75-76, it was 93.6 milli on; in '76-77, it was 76.6 mi llion and in the year in which we took over responsibi li ty for governm ent, it was 19 1. 3 mill ion. -(I nterjec tion)- yes, that's on a combi ned Current and Capital. HON. H. PAWLEY: Mr . Chairman, I do want to say MR. DE PUTY CHAI RM AN: Order . Order ple ase. The Member for Tur tle Mo untain ha s the floor. MR. B. RANSOM : Mr .

Chai rman, tha t is on a com­ bined Cur rent and Capi tal basis, which is the way tha t 3133 the defic its are being calcu lated now. It is the only comparable way to sho w figur es from tha t period or from the fou r years to our governme nt or from the period of this govern ment. Was the Fi rst Mini ster aware at the time that, ind eed, th ere were defic its du ring more than one year of the previous government, compa red to the th ree or four years of the Co nservative Government to whic h he was making a comparison at the ti me? HON. H. PAWLEY: Mr .

Chairman, wha t the Member for Tur tle Mountain hasn't poi nted out, of cou rse, without bei ng responded to by him from qu estions tha t hi s calcu lations are based upon the combined Cur rent and Capital. The method of calc ula ting deficit in the period 19 69-77 was on a split basis, Capit al and Cu rrent. Tha t was the appr oach tha t was used during that period of time. The honour able member now can' t go all the way back through the pre vious Bu dge ts and ascrib e now a dif ferent deficit to each Bu dget than tha t whic h was ascribed during the year in qu estion.

We cou ld do tha t back thr ough the Roblin period when then Premier Robl in very adequa tely def ended the basis of ensuring that Curr ent and Capi­ tal accou nts were separated. MR. B. RANSOM : Mr . Chairman, is the Fi rst Min ister now sayi ng then that it's com parable to use figur es that in the one case separated out Capital from Oper ­ ating and in the other case combined them?

If that's so, does he now intend to sepa rate Capi tal from Oper­ ating again so that he can once again show a lower deficit for his admin istra tion as compared to the four years of the Conservative admin istra tion wh ere nor­ mal accounting procedu res and accepted accounting proced u res for most of the province s of Canada were follo wed? HON. H. PAWLEY: Th ere has been no decision to do that, but I mu st say to the member I have consi derable sympathy for the argumen ts as presented by the former Prem ier , Duf f Robl in, as to the ratio nale for separa ting Cu rrent and Cap ital account s.

It seems to me, Mr . Chair man, that it is rat her unwis e to include within the deficit the Capital portion of the deficit which is indeed monies tha t are being spent, not ju st for the benefit of one curr ent year, but for a numb er of years. Now, we have not even made any decision, but I ha ve been im pressed by the logic tha t was then expr essed by the former Premier, Duf f Roblin, of this provi nce when he explai ned why he felt the present system of accounti ng was inde ed not accur ately reflec ting proper financ ial reporting. MR. B. RANSOM : Mr.

Chairman, does the Fi rst Min is­ ter acknowledge that the system of accoun ting intr o­ duc ed by the Conser vative Government was tha t which was calle d for by the Pro vincial Aud itor? HON. H. PAWLEY: I am not aware whether the Pro­ vincial Audi tor requested the change in 19 77-78. It is my underst anding tha t the Pro vinc ial Aud itor is pre­ pared to accept either form of accounting, dep ending up on the repor ting system tha t's utili zed. MR. B. RANSOM: I wish I could refer the Fi rst Mini s-

Monday, 7 June, 1982 ter then to the Aud itor's report from the years prior to our gove rnment and to the di scussion of it in Public Accou nts this year. Mr . Chairman, the Fi rst Min ister has also made statement s to the effect tha t the financial capacity of the gove rnment was imp air ed during the four years of the Conservative admini stra tion. I wonder if the Fi rst Min ister would el aborate a bit on that position. HON. H. PAWLEY: Mr . Chairman, th ere are a nu mber of areas tha t I wou ld dr aw the honour able member's attention to in tha t respect.

Fi rstly, they had made a commitment tha t I think was seriously taken by Ma n­ itobans on the whole tha t the y would be balan cing the Budge t du ring their term mandate. Tha t did not take place. I would think tha t in any assump tion of res pon­ sibili ty, a commitment of tha t natur e being made does to a consi derable degr ee imp air cred ibil ity, yes.

Secondly, the kind of programs tha t flowed from the fi rst two years, at least two years if not part of the thir d year, of the former Conservative Govern ment also contrib uted toward s an imp ai rment of the financial cir cums tance of the Pr ovince of Man itoba. A more st imul ative appr oach du ring tha t period of time wou ld have prevented some of the slide whic h took pla ce overall. MR. B. RANSOM: Could the Fir st Mini ster gi ve me some ind ication of how the fi nancial capacity of the government was imp air ed? In wha t areas was the financial capacit y of the gove rnment imp ai red?

I am not talking about the economy; I am talking abou t the financial situation with respect to the Government of Manitoba. HON. H. PAWLEY: Mr . Chairman, you can't sep arate the economic and the financial. The economic has an influence upon the financial affairs of the provin ce. Cert ai nly, the econo mic opera tions of the province adversely affected the financial. MR. B. RANSOM: Mr.

Chairman, the Fi rst Min ister has said on nu merous occasions since the elec tion, tha t his abili ty as a gover nment to do thi ngs, to be active and to take initia tives is im pair ed because the financial cap acit y of the government had been imp air ed by the previous admin istra tion. I am seeking information as to how the capacity of the govern ment was im pair ed; how the gove rnment was in a less advantageous position to res pond when the New Democr ats ass um ed gove rnment in 19 81 , as com­ pared to when the Conservatives assumed res ponsi ­ bil ity for government in 19 77. HON. H. PAWLEY: Mr.

Chairman, ther e have been th ree areas tflat have made it much more di ffi cult for the new gove rnment to undertake its efforts and I think Man itobans in gener al recognize the th ree fac­ tors tha t have made it much more dif ficu lt. One is the in heritance of a very large deficit and the de ficit, in itself, I'm not criticizing tile previous governm ent for as per my origina l state ments, but it is a sizable and a large de ficit tha t the new gove rnment has in herited.

Numb er two is the fiscal transfer cutb acks and th ree is the state of the economy and the red uce d flow by way of income and corp orate tax revenues to the Provin- cial Government. Mr . Chairman, my statements about im pai rment flave related to all th ree factors: (

a) the defici t tha t the new government inhe rited; (

b) the very, very sharp fiscal transfer cutb acks from Ottawa in the natur e of some $700 mi llion more than would ha ve been the case under the old agr eement, and (

c) the sharply reduced flow of cash as a result of the deepen ing economic recess ion. I do n't think ther e is any que s­ tion tha t the ability of the new government to do that which it wou ld like to do has been imp ai red by these thr ee factors combined. MR. El. RANSOM: Mr. Chairman, was the Fi rst Min is­ ter aware prior to the elec tion, tha t ther e were lik ely to be cutbacks in federal trans fers? HON. H. PAWLEY: Ther e was specu lation that ther e would be, as I recall. I do not recall, Mr .

Chairman, any information as to the extent of tho se cutb acks at all and I must say tha t I was qui te surpri sed when Mr . Mi ller returned from tile Fi nance Min isters' meeting sh ortly after our being sworn into office and advis ed us as to the extent of the cut backs. I would be cur ious as to whe ther the former Min ister of Fi nance was aware before the election was calle d as to the extent of the cutbacks. He was in a much better position to know than th ose of us tha t we1e tflen in Opp osi tion. MR. B. RANSOM: Mr.

Chai rman, if the Fi rst Min ister would care to refer to the Bu dget of a year ago, he will see wher e reference is made and a wa rning is gi ve n. The figur e is perh aps not as high because the Federal Fi nance Min ister would not ind icate until hi s Budg et on the 12 th of Novem ber, as to wha t the package would be, but ther e was ample warn ing gi ven tha t th ere would be cutbacks in the area of health and post- second ary educ ation funding from the Feder al Government.

It strikes me as unu sual if tha t should have come as a su rprise to the Fir st Min ister, because I think ever yone else was aware of tha t, Mr . Chairman. HON. H. PAWLEY: Mr. Chairman, then I 3134 MR. DE PUTY CHAIRMAN: The Honour able Member for Tu rtle Moun tai n I think MR. B. RANSOM: I'll let the Fi rst Min ister resp ond. HON. H. PAWLEY: Mr . Chairman, I ind icated the extent was a su rprise.

I don't know jus t to wflat extent the Member for Tur tle Moun tain was priv y to more detailed information and flard facts after the spec ula ­ tive comments in his own Budge t in the spring, wha t additional information he had by the time the ele ction was called. I leave tha t to him if he wis hes to respond. MR. B. RANSOM: Mr. Chairman, I can tell you th ere was no addi tional information, but it turns out tha t the information of the projection gi ven in the Budge t of a year ago was appr oxi mately accu rate for the fi rst year, but not over the long run of the fiv e years because tha t wasn't known.

We were spe aking at that time of a two-year cu tback. HON. H. PAWLEY : Mr. Chairman, we wou ld have

Monday, 7 June, 1982 been very happ y if the proje ction for the fir st year ha d indeed been all that we had to be confronted with, rather than the $700 millio n for the five years tha t we have sh ort-failed from the original agreement. MR. B. RANSOM: Mr . Chairman, the Fir st Mini ster said tha t the deficit which he in he rited was a larger deficit than we had in herited.

Would he acknowledge that to be com parable, to be able to weigh the one agai nst the other , that it real ly would be necessary to take inflation into consider ati on and look at the pur ­ chasi ng val ue of the dol lar, 19 77 to 19 81 , and that it should be looked at relative to the size of spending, that sort of thing? HON. H. PAWLEY: Mr. Chairman, ther e are other fac­ tors.

I mu st say to the Memb er for Turle Mou ntai n, given the economic cir cu mstances of 19 77, as a gov­ ernment I would have preferred to ha ve those eco­ nomic circums tances along with that deficit of '77 as to the de ficit tha t we inhe ri ted with the very grim economic cir cu mstances accompanying same. MR. B. RANSOM: Mr. Chairman, it becomes more and more evident tha t perhap s the Fi rst Mini ster is not esp ecially conversant with some of the econo mic fig ­ ur es tha t prevai led.

I cou ld point out to him, for insta nce, tha t in 19 77 the Conference Board sti ll esti­ mates that the gr owth in the Manit oba economy was 0.8 percent; wher eas their most recent esti mate for 19 81 is 3.6 percent. I cou ld also point out that pla cing the deficit on a comparable basis in terms of making the 19 77 dol lar s comparable to 19 81 dollar s tha t the deficit of 252 million in '81 -82 put the '77 deficit on the same basis; it comes to 275 mill ion. So by any kind of reasonable measu re, the deficit tha t we inher ited in 19 77 was $275 mil lio n as related to the deficit of 19 81 -82.

I can also point ou t, Mr. Chairman, tha t of that 275, if you put it on tha t comparable basis, 57 percent of tha t was for Cur rent - that percentage doesn't change no matter wha t the figur e was - 57 percent of the deficit in 19 77-78 was to cover cur rent expen ditur es. Of the $252 million deficit this year, onl y 25 percent is to cover Cur rent expenditur es. The deficit, as a percen­ tage of the governme nt's expenditur e in 19 77, was 12 percent. As a percentage of expenditur es in 19 8 r -82, it's 1 O percent.

The debt, as a percentage of the gross provincial prod uct in 19 77, was 42 percent and is now 36 percent in 19 81 . So, Mr . Chairman, my qu est ion to the Fir st Min ister is, wha t areas really was the gove rnment finding that the financ ial situation of the govern ment ha d been im pair ed by the Cons ervative Govern ment. Now, this is the charge, Mr . Chai rman. We didn 't hear much about Mr . Reagan or Mr. Trudeau havi ng an effect. It was the Prog ressive Cons ervatives in Manitoba. Per­ haps he'd jus t lik e to clear up some of tho se poi nts. HON. H. PAWLEY: Mr .

Chairman, again I have to repeat my earl ier answer. Our reference has been persistent throu ghout that