LEGISLATIVE AS SEMBLY OF MA NITO BA THE STA NDING CO MMITTEE ON PUBLIC UTILITIES AN D NA TURA L RESOURCES Thursday , November 2, 19 89 TIME - 10 a.m. LOCATION - Winnipeg, Manitoba CHAIRMAN - Mr. Parker Burrell (Swan River) ATTENDANCE - 13 - QUORUM - 6 Members of the Committee present: Hon. Messrs. Connery, Driedger (Emerson), McCrae Messrs. Angus, Bu rrell, Chornopyski, Gilleshamm er, Harapiak, Harper, Mandrake, Uruski APPEARING: Mr. Wm. Emerson, President and Chief Executive Officer Mr. AI Ahoff, Vice-President, Finance Ms. lrene Hamilton, Vice-President, Licensing Mr. Don Lussier, Vice-President, Purchasing Mr.

Fred Johnston, Director, Retail Operations WITNESSES: Hon. James Downey, MLA for Arthur MATTERS UNDER DISCUSSION: The Annual Reports of the Manitoba Liquor Control Commission for the fiscal years ended March 31, 1988, and March 31, 1989. Mr. Chairman: Will the Committee on Public Utilities and Natural Resources please come to order? Today we are considering the Annual Reports for the Manitoba Liquor Control Commission for the fiscal years ending March 31, 1988 and 1989. Can the Minister responsible introduce his staff at this time? Does the Minister have an opening statement? Hon.

James McCrae (Minister of Justice and Attorney General): Good morning, Mr. Chairman, Members of the committee. I take pleasure in introducing to you this morning representatives of the Manitoba Liquor Control Commission: first, the President and Chief Executive Officer, Mr. Bill Emerson; Vice-President of Licensing, lrene Hamilton; Vice-President of Purchasing, Don Lussier; Vice-President of Finance, AI Ahoff; and the Director for Retail Operations, Fred Johnston. I am pleased to have these people here with me this morning and I would ask Mr. Emerson to begin by making a few remarks. Mr. Wm.

Emerson (Pr esident and Chief Executive Officer): I have here, for the benefit of any Members 42 who are not as familiar with all aspects of the commission as others, some what I think will be helpful papers which you could help distribute, Al. The purpose of these papers-and they are of course to take with you, I will not read the full content-is just to familiarize you with highlights of how the commission operates and its general responsibilities. Each of our Crown corporations has a mandate or a statement of purpose or mission.

Our corporate philosophy on page 1 expresses that in some detail, but essentially it points up our responsibility for the sale and control of beverage alcohol of high quality throughout Manitoba. The balance of page 1 simply expl ores what that responsibility entails. The commission is managed on page 2 reporting to the Minister of Justice (Mr. McCrae). There are two boards: the board of commissioners, which corresponds most closely to a board of directors in a private sector corporation; and the Licensing Board which deals with granting licences and infractions and changes in licensing.

Then through the president, the commission functions with five divisions: Licensing, Retail, Purchasing, Human Resources, and Finance with Internal Audit. I point out that Internal Audit reports to the president although functioning with the Division of Finance on a day-to-day basis . Chart 3 is not as complex as it looks. The three committees in the middle, Workplace Safety and Health, Retail Operations Labour-Management, and Office­ Warehouse Labour-Management Committees, these are the functioning committees through which, quarterly, the management of the organization meets with labour.

The upper boxes show the various employee groups and the particular committees on which they sit, and below each of the three committees, shows the significant management people who are involved in meeting with labour on a regular basis. · There is a point on this page regarding our training plan, which is always of interest to those dealing with labour matters. In the last year there were 112 courses offered to our employees, and we had just over 1,000 participants in those. That is how we deal with labour relations. *

(1005) Page 4 shows some significant com mission milestones over the years. I will identify them. In 1916 prohibition, it did not appear to work. In 1923 the Government Liquor Control Commission was first established. Another highlight was the Bracken Commission in 1954. Then over the next 33 years there was a lot of detailed policy and practice. Changes came about. Some of them are identified here: self-serve liquor stores, a reduction of the drinking age from 21

Thu rsday, November 2, 19 89 to 18, and most rece ntly, our intr oduc tion of a recycling prog ram for no n-deposit beverage alcohol containers. We sell a lot of product to the publi c through our retail store system, and 40 percent of our dollar sales are generated through those 50 stores across the pr ovince, another 52 percent through licens ees, restaurants and hotels and about 8 percent through 17 4 ind ependent liquor vendors. People have inquir ed, from time to time, as to what criteria we use in esta blishing store sites, as we review them annuall y where we feel a change in location is required .

How we relocate them, well these key criteria are reasonably obvious to most people, qemographic trends and changing access and egress depe nding on the particular highway or road that the store is on and making sure that the convenience of access and egress is there. We run a five-year plan on that, roll it over each year. Loo king at our current plan it includes the renovation of eight stores, and we will be relocat ing one store in Winnip eg dur ing that period, in fact next year, to imp rove the location for the bene fit of the publi c. We give, on comparable terms, pretty good liquor service to Ma ni tobans.

Thes e are some of the com parat ives that stores, which we own or lease­ there is one for every 15 ,500 Manitobans, that is a function of course of the numb er of stores per town or city. While we have 21 in Winn ipeg, with its population, and two in Brandon, other smaller towns have one store each in the 29 locations identi fied in the 19 89 Annual Report. Thirty-eight of tho se stores are leased and 12 are owned. We have 22 1 full-time and 80 part­ time people in the retail organ ization. 1 mentioned 17 4 liquor vendors.

At the Annual Report time there were 171, and that gives service in rural Man itoba a liquor vendor for every 1, 500 Man itobans in areas where liquor vendor s are located . There are 30 1 beer vendors. Those are hotel beer vendors, and that is out of about 328 hotels. So there is a beer vendor for every 3,600 Manitob ans, and of cou rse Canadian beer is also sold through our liquor stores. There are two duty-free shops, one at the border at Emerson and the one at the airport.

The one at Emerson was brought in a few years ago, and it has provided considerable service to people moving back and forth across the border. Im portant ly, all types of liquor are sold at un iform prices everywhere in the provi nce, so tha t if you live in the Nort h you . pay the same price for a bottle of liquor as you do if you live in Winnip eg. This shows a comparison of sales and net profit in the period fiscal'80 to fiscal '89. The upper line of sales shows how stee ply, at times, the sales dollars were increasing and how that has become more shallow in recent years, and simila rly with the net profit.

The shallow increase over the last few years is self-evident on the chart. Un fortuna tely, in fiscal 19 89 we dipped below the net profit of the preced ing year for the first time for various reasons which I will mention a little later. • (10 10) 43 This next chart on page 8 is int eresting. lt shows the differing contribution by product type. People are not always aware of the contri bution and how impor tant it can be of a group of products, and the change over the years. For instance, the percent of sales consist of the upper bars for the various produc ts. You will see that

whereas in 19 80 spi rits amounted to 52.5 percent of sales, in fiscal '89 tha t had decline d to 40.5 percent,

whereas beer has risen from 36.2 to 46.9. Wine relatively static, it has not changed very much over that period as a total of all sales which come to some thing like $370 million. The percent of gross profit reasonably follows those lines, but where we were dependent on spirit s for 65.2 percent in 1980, today that is down to half. As the markups vary among types of produc ts, product mix is a very im portant considera tion. On page 9 we compa red western provinc es in a couple of ways . We com pare ourselves, in terms of management, on ratios, because simple dollar amounts are too extensive.

We are essentially a cash busi ness. We contri bute some thing like 4 percent of provincial revenues. What is more im portant is at what cost. The right-hand bar, in the upper part of page 9, shows that our operating expens es were 6.3 percent of sales and our marg in of net profit was 40 percent and to the left you see the compa rative figu res from their annual reports for other western provinces. Those are the kinds of ratios that appear in our annual reports and on which we judge our effect iveness and I thought this one exam ple might be of interest to you.

The next page is simply a record for you of a 10 - year price comparison and these are the kinds of things we look at as we plan our activities. The first page, on 10, shows dom estic spirits, and without going into details you will note that in the bottom right-hand corner, in'79 at this particular identified month, October, a bottle of whiskey was $8. 13 and it is toda y $1 8.25. Very importantly we look at the provincial share and over at the left you will notice that the provincial share has changed from 55 percent in October'7 9 to 61 percent in Septem ber '89.

The supplier 's share has shrunk, down at the bottom left-hand corner, from 17 percent to 15 percent, and the federal share has moved from 28 percent in '79 to 24 percent in '89, but this is simply a breakout of the various components which make up the retail price at the store. The next page, 11 , does the same thing for beer and a 10 -year comparis on. Beer, un like spirits which had gone up some thing like double, has almost trip led in that period from $4.75 to $11. 75.

Again, I draw your atte ntion to the provincial share having been not only maintained but slightly increased and the brewers' share has decreased down at the bottom left from 44 percent to 39 percent. Again this is a breakout of the elements that make up a retail price at the store level. We look at comp arative pricing across the countr y on a continu ing basis. lt is not only im portant so far as our neigh bours are conce rned , but licensees are very aware of our selling prices and we like to point out where we have been able to achieve lower prices or prices that can stand up to exam ination.

On page 12 where we are looking at, this instance is Seag ram 's Five Star Whis key, which is a popular-

Th ursday, Novem ber 2, 19 89 what is a called a bar brand price- range of whiske y. Across the countr y there are four provi nces with higher prices. The dark line at the top sh ows Manitoba's $1 8.25 price. In our opinion, probably in a middle position in the countr y is about the best place, the most logical place given the dis cretionary income, the stabili ty of our economy here, that if our pri ces to the public are about midw ay, that is not an unreasonable position to be in.

You will note on the next page, 13, which is covering popular Canadian wine, there are actually five provinces which have higher prices for a com parable bottle. Rather than relate to the time of the annual report, I tho ught these figures would be most interesting as being of the current day. * (10 20) The next page covers bottled beer and here you have five provinces which are higher in retail price to the consume r.

Our price of $1 1. 75 is ident ified so you can see where they are higher and lower. - The bars have an interesting aspect in that the darker cross hatching at the bottom shows what we pay to the brewers for beer. In our case, we pay $6.21 and what the propor tion is on markup, and markup in sales tax, and you see that is 5.54 and you can see the com parable figur es. This indic ates that we pay the lowest price for dome stic beer of any liquor jurisdiction across the countr y.

No w, retail price is not the only negative effect on liquor sales of all types, probably lif estyle changes is the most impo rtant, anti-drinking and driving legislation is very important. There are other aspects, but we know the price is sign ificant and these charts on the following couple of pages show that in the case of spirits, on page 15, that the dark line, solid line as the retail price rose between fiscal'83 and '84, while it was affected the num ber of litres sold did not drop below.

At about that time, the law of dimi nishing returns set in to a conside rable deg ree, and you can see the trem endous effect on spirits. That has been the product most � affected by increased prices and you can see that the , gap in fiscal '89, in those graphs, is quite remarkable. On wine there did not appear to be the same effect. Wine, of course, as you kno w varies considerably in retail price range, but there you see that it was not really until fi sca l '88 tha t the li nes cross ed.

The introduction of coolers in fiscal '86, which are included with the se line figu res, had a positive effect in terms of litres sold, but the dim inish ing returns did set in. Beer has not been as dr amatic ally varied between the two lines of exam ination, but again you can see that while the numb er of litres sold in later years is declin ing but not at a sharp a rate. There is a spread developing and it just is not quite as sign ificant as particularly spirits.

Look ing at our product sales on a per capita basis on page 18 , we see that beer, and the per capita is worked out on all Manitobans irrespective of age. lt helps easy figuring in a province with appro ximately a million people, but these per capita s are worked out 44 on that basis. So you see, the top line of beer that people dra nk, close to 80 litres per person back in fiscal '80 over the extreme left-hand line, had dropp ed by fiscal '89 to about 73 litres.

I would point out that 73 litres or so represents 18 dozens beer, which means that each Manitoba n consumes annually 18 dozens beer. * (1 025) Moving down to spi rits. lt was some thing over nine litres back in'80, and tha t consumption has moved down to some thing over six. That represents eight bottle s of spirits. The wine line has change d not quite as much, a trifle over six to about five litres. That represents six bottles of wine. Coolers and ciders are very small, and you see that from the start they have achieved about one litre per capita.

If we average all that out, because the absolute alcohol within any prod uct varies from 40 percent in, say, whiskey to 5 percent in beer and lower in light beer, absolute alcohol on page 19 shows that the average Man itoban in fiscal'82, which was the first year we began to compute these figures, consumed close to 8.5 litres per person per year. That had dimin ished by fiscal '89 to about 6.5. That is the top line that everything averaged out to. lt shows that irrespective of product type, Manitobans have been drinking less absolute alcohol.

In the case of beer, the middle line, close to four litres in fiscal'82, about 3.5 in fiscal '89. Spir its, start ing again at the same place in fiscal'82 has dropped much more sharply to about 2.5. Wine has hardly changed from just under one to a little bit lower. lt has been quite level. All in all, the per capita sales of absolute alcohol have declined 21 percent sinc e fisc al'82 which is cer tainly very sign ificant for any line of produc ts. Moving to the control side of the Liquor Comm ission's responsi bility. Page 20 shows you what we controlled: 1 ,239 licensed esta blishments, 328 of which are hotels.

The pie chart demo nstrates how licences are held. There are about 40 percent for dining rooms. Beer vendors, beverage rooms and cocktail rooms each have about 13 percent. Other licenc es like private clubs hold 20.5 percent of licences. All in all, 2238 licences, and it averages out to some thing like two. In addition to licensed premis es, we provide permits for occasional permit functions to the num ber of 24,000 in fiscal 19 89. That num ber ha s been de clining somewha t in rece nt years.

Control of sale and consu mption of beverage alcohol is affected primari ly through education and inspection of licensees. We have The Liquor Control Act and Regulations. We have I think a quite clearly written licensee field manual so that our insp ectors or advisors can give the licensee on-the-spot explana tions in clear form . We have audio­ visual presenta tions, group sem inars, and a library of material for them, and that is adminis tered through 20 people in the inspection department.

We have resident auxiliary inspectors throughout the province who inspect occasion al permit functions, 20 of those indi vid uals. We liaise with law enforcement agencies, with the Alcoholism Foundation of Manitoba, with liqu or

Thu rsday, November 2, 19 89 suppl iers, and with the princi pal hospitality ind ustry associa tions, which are esse ntially cabarets, private clubs, hotels and restau rants. From time to time, we do custome r-satisfact ion surveys to see if we are succeed ing in our object ives, or if our customer s have objectiv es that we have not yet add ressed .

In the most recent one, which was a year ago, you would be interested to know and probably expect that our customers are apt to be you ng and affluent: 49 percent are under 35; and 31 percent had a household income of $40,000 or more, compa red with 21 percent of all Manitoba households. * (1 030) The top of mind perceptions of our liquor stores were, I am glad to say, overwhelmingl y positi ve, sugges ting favourable opinions about service, conven ience, and product selection. The questionnaire dealt very precisely with those elements.

We were delig hted that these high ratings did include rural and urban Manitoba and thr oughout age and in come groups. Peo ple of a particu lar geogra phic area or age group or sex did not feel that they were less well-treated or satisfied by service. We have not had floor displa ys of merchandise in too long before that particular survey was intr oduced; but the question was included: 74 percent of the respondents were aware of the floor displa y, and 57 pe rcent bought from them. Two-t hi rds of the respondents could think of noth ing negative.

The bigge st com plaint was about high prices, as you would expect: 14 percent. On the negat ive side park ing was not rated as highly as the other variable s tested. That was a signal to us to exam ine our parking circums tanc es and see, in certain stores, if we could arrange for imp roved parking, and that is what we did. Thank you very much for the oppor tun ity to tell you what the com mis sion essentia lly consists of and leave those with you for questions at any point. Mr. Chairman: Does the official Opposition Critic have an open ing state ment? Mr. John Angus (St.

Norbert): lt wou ld be my suggestion that while the 65th Annual Report deal ing with up to 19 88 is in front of us, I would concen trate any questions that I have on the 19 89 report. I think that the pr evious report is-t here may be some minor questions in comparis on, but it is not one that I believe we should rehash. This is a more current one. If that is agreeable with the other Party. As usual, there will be a numb er of questions that go beyond the specific fiscal responsibili ty.

There are a num ber of questions that relate to the annual report that I would like to deliberate on with the admin istration present. The very first thing I would like to do is express my concerns at the potential conflict of interest that I believe Mr. Emerson may have in relation to being part of The 45 Crown Accou ntabil ity Corporations Act and Chairman of the Liquor Control Comm ission which theoret ically anyway reports to The Crown Accountabil ity Act. While saying this, Mr. Chairperson, through you to the Min ister and Mr.

Emerson, in no way do I want to ind icate any lack of integri ty, or seriousne ss, or abil ity to perform his function in either capaci ty. That is not a specific question in my mind whatsoever. lt just seems to me that a boss who controls himself-in other words, one of the positions should be term inated . Having made that expression, Mr. Emerson is here and tha t is clearly a Go vernment decisi on. As I und erstand it, it is certai nly permis sible, so we will proceed to deal with it.

The questions that I will be asking concern arou nd and I have made a list of them, they are not in a chronolo gical order, or in an order of im portance, but they are issues that I would like to add ress: Recy cling bottles. There is some tax for the environmental protect ion that is being att ributed , but I would like to hear the comments and policies in relation to tak ing a more aggressive approach in terms of recycling, specifically liquor bottles. I wou ld like to address pricing policies. The potential im pact of the GST on the liquor control.

The potential for and/or discussion in relation to wholesale prices as it affects the indi viduals in the hotel and restaurant ind ustry and the gener al public. The ob servations and the policies that the board has add ressed. The import order opportun ities. I would like to discuss the dimi nishing return on that and get an ind icat ion of what actions are possible and what actions may in fact be taken. I would like to discuss the advert ising bans and the amount of advertising. Some of these of course will be policy Government decisions that the Minis ter will add ress, as opposed to the ad min istration.

I would like to add ress the free trade effect, particularly remarks and ind ications by Clayton Yeuter that the provinc es are all going to have to have to make some adjustments. I want to ensure that Canadian produc ers are as competiti ve as they can possi bly be. I would like to add ress the public partici pation process, the rights of ind ividual citizens who find themselves being potentially offended by liquor room operations and what rights of appeal and/or hearings, and/or public process where their input is available to them.

I would like to get a general feeling of changing tim es and directions that the Man itoba Liquor Comm ission in its licensing categ ories may take in terms of looking at estab lishing more family atmospher e and/ or English pub type of circums tances, which are perhaps between very costly full kitchen food providing facilities and more enter tai nm ent, faster food concepts. I would like to discuss the amount of mo ney and the efforts that the Manitoba Liquor Commission is putting back into educa tion. I would like to look at the Teenagers Again st Drunk Driving and the alcohol -free gr ad concept.

I would also like to look at programs tha t are designed to the yout h, to specifically high school

Thu rsday, November 2, 19 89 students, in rela tion to the potential vagaries of overi ndu lgence and consump tion. I would like to discuss the hours of operations and the policies. I have a num ber of questions that relate to the board in relation to the comm ittees that they have and, as I have indic ated, specific questions on the annua l report. lt seems that liquor revenues in terms of sales are going down and yet your expen ses are going up. I think that is someth ing the board should be specifically add ressing. With those minor open ing remarks , that is going to be my line of appr oach.

I am sure and I feel confident that the comm ission and its staff mem bers will be able to addr ess these. Mr. Chairman: Does the Secon d Opposition Critic have an opening statement? Mr. Bill Uruski (lnterlake): Mr. Chairman, I just have one question because there is obviously a numb er of issues that have to be raised here. I want to ask the � Min ister why the Chairperson is not here? Mr. McCrse: The Manitoba Liquor Control Commission, for the last little while has been without a Chairperso n. As of yesterday we annou nced the appointment of a new Chairpe rson, Mr. Charlie Birt.

Ha ving been appoi nted as recently as yesterd ay, the anno uncement having been made, Mr. Birt has his own sched ule to take care of. The fact that he is on his first day on the job, it was felt that perhaps the people that we have here wou ld do a far mor e than adequa te job of responding to the questions that will be raised tod ay. Mr. Uruski: I will have a numb er of questions on the various issues, perhaps we should go right into the questioning and get on with the comm ittee. Mr. Chairman: The Min ister would lik e to respond to the official crit ic's opening statement. Mr.

McC:rae: I think we will get into the various issues the Honourable Memb er tor St. Norb ert (Mr. Angus ) � has raised. I wanted to deal with the first item on the Honou ra ble Mem be r's ag enda , th at be ing the circumstanc es und er which Mr. Emerson now finds himself as chairman of the Crown Corporation Council president and chief executive officer of the Liq uor Contr ol Commission. The Honou rable Mem ber I think answered his own when he referred to Mr. Emerson 's integrity. There is no question in anyone's mind about the integrity of Mr. Emer son and the way that he cond ucts his responsibil ities.

Certai nly Mr. Emerson has now served with distinction three Governments, firstly the previous Conservative Go vernment, then the New Democrat ic Government, and now the present Govern ment. * (1 040) I can tell the Honour able Mem ber and assure him that I have had noth ing but total co-operatio n from Mr. Emerson and all of his staff. I have found that there is no question of int egrity when we are dealing with 46 this particular indi vidual.

In fact, the Government saw fit to appoint this person as the head watchdog, if I may use that expression, for all the Crowns in this province and that speaks well of the indi vidual. We also kno w that we are in the process of findin g a replacement for Mr. Emerson at the Manitoba Liquo r Control Comm ission. I do not think it does anybody much of a service for the Honourable Mem ber to raise the question in the way that he has. Mr. Emerson certainly knows where conflicts appear and knows how to cond uct himself when that happens, so I think that should deal adeq uately with that question.

I would like to now get into the other questions the Honourable Mem ber has and perhaps the staff people that we have here can answer his detailed questions in matters of the role that the Government has to play. I would answer those questions. Mr. Angus: Mr. Emerson, The Crown Accountabi lity Corporations Act calls for public hearings on Crown corporat ions. Have you , sir, had any of those publi c heari ngs, informa tional sessions to date and, if not, why not? Mr. Emerson: No, we have not had any to date.

Our public hearings will take place in Thompson on the 8th of Novembe r and in Brandon and in Winni peg on the 15 th and 28th of this month. Mr. Angus: Mr. Chairperson, in your capacity as the chairma n of the Man itoba Liquo r Control Commission, are you going to be in attend ance at those meetings, as the Chairman of Hydro is, as an exam ple? Mr. Emerson: Yes, I will be in atte nd ance at all- Mr. Angus: Sorry, chief executive officer. I am sorry. Mr. Emerson: Yes, certainly I will, accompanied by key division heads, but I will be in personal attendanc e. Mr. Angus: Mr.

Chairperson, I will only suggest to the Min ister that the sooner that a replacement is found for Mr. Emerson, the better everybody will feel about this. I am sure you as well, and I again do not want to sugge st any lack of sincere integrit y on the part of Mr. Emerson. I find it very, very difficult for an ind ividual corporation who reports to another corporat ion to have the same chief executive officer of both corporations being in charge . So we may have to agree to disagree on that principle, the Mini ster and I.

I believe I certainly would have tried to approach it differently, but I am not privy to all of the facts that he has, and I will not pursue that line any further, for the Minis ter's informatio n, regard less of what he says. Mr. McCrae: The Honourable Mem ber is correct that I assu me that he is not in possession of all of the facts. lt is common with him and his colleague, the Honourable Memb er for St. Jame s (Mr. Edwards), to proceed and make statements without being in possession of the facts. We know that happens. I guess we can only forgive them.

Th ursday, Novemb er 2, 19 89 Mr. Angus: Mr. Chairperson, on a new issue. Assuming of cou rse that the Min ister is going to share all of the factual information so that we can deal with these things intelligen tly, I would like to hear what the policy is in relation to recycling, and whether or not the board has reviewed those policies and consid ered any form of a recycling program, either with depots, and/or with a rebate system for the consu mer s on specifical ly spirit bottles. Mr.

Emerson: At the present time, an initia tive we intr oduc ed in June is a tie in with the Manitoba Soft Drink Recycling Corporation. At this point, it consis ts of 18 depots in Winnip eg and 13 in the rest of the province, with the encouragement of the larg est license es in Winnip eg to make special arrangements for their em pty wine and liquor bottles to be picked up and taken to be recycled. Those organizations alone, which numb er some 31, amount to a very subs tantial num ber of bottles per year. Right now, from zero before, some thing like two million pounds per year ann ualized is being crushed .

We do not have the figu res of plastic bottles. They are not as common as glass bottles. That arrangement seems to be work ing well and appears to be doubling in volume month over mon th, but it only got under way in June. We are satisfied at this stage. We have expanded plans. Most recently we have placed broc hures within liquor bags as people make purch ases, and we find that method of rea ching pe ople more effe ctiv e than advertising in the newspaper.

There are some 500 non­ profit groups which contribute their time and effort, and sup port their causes by picking up bottles and movi ng them over to the recycling depot. We intend to accelerate that, but we are still in the early stages, and we are pleased with what is happen ing at this stage. We do not have plans at this point of moving outside that area. We are studying a Private Memb er's Bill which dealt with that par ticular topic of recy cling and the environment, and at this stage have merely noted that there is considerable cost attached to the various measures suggest ed.

We are looking at that to see whether some elements of it can be incorpo rated or should. We are still in the study stage, having been provided with copie s of that Bill. Mr. Angus: Mr. Chairperson, I looked through the Annual Report to try and find the locations of these 18 de pots. I do not see it in there. That is the first question. The emergence of these drop-off centres, I am not sure how they work in a practical applica tion.

I wonder if you have given consideration to the same concept that is used in the return of beer bottles, where the consumer is penalized with an additional expense which is retu rned to him if in fact he does return the bottles. That is the general thrust of the recycling, and I wonder if we could just get Mr. Emerson or Mr. McCrae to comment on the considera tion of these. Mr. Emerson: Yes. We have looked at that, and that is part of our exam ination. The refunda ble beer bottle 47 return system is functioning very, very well at a high degree.

One of our princi pal concerns is that of cost and to apply it, because in general terms, whiskey bottles are not as bulk producing in a househ old, and therefore there is not the same sense of urgenc y, nor are they consumed as rapidly as beer. So therefore in any indi vidual household the numb er of bottle s is not as great, but we are looking at that. Our initial concern there, because the obje ctives are fine, is the rather tremendous cost .

The establis hment of certain depots in Alberta ran between two and three million recently, and the cost of putting a particular deposit on whi skey and wine bottles would come in the hundr eds of thousands of dollars initial ly, and then into the millions. So we are looking at that, but our initial reactions are that it would be extremely expensive, and we have been attem pting to contain the cost of liquor and wine. 1t make s a substantial contribution to provincial revenues which we wou ld not like to see red uced .

We have provided -a nd I would like to provide one to the Honourable Mem ber-the brochures which show the location and the hours of the recycling de pots, and those are distri buted in the areas, the town s, and they are available, as I said a moment ago, now with packaged liquor. Awareness is certainly building, and the people at the recycling depot feel that they have had a substantial effect in terms of the increases in glass that is being crushed. This is publ ished , it appears within our stores, and the brochures are placed within the liquor bags as the customer leaves. Mr. Angus: Mr.

Chairperson, I would like to just suggest, for the board 's considera tion, they are privy to an awful lot mo re informa tion than I have available, and they are also able to more specifically analyze the costs.

However, I think that with a little bit of vision and a little bit of creat ivity that the return on the investment of the dollars will be a hidden benefit to all of the citizens of Manitoba. * (10 50) In terms of mak ing a system of this natur e work by charging even a minimum fee of 25 cents a bott le, I can see ind ividual fu ndr .aising organ iza tions, or com mun ity clubs, hockey teams, ringette teams, boy scouts, girl gui de s making do or-to-door driv es to parents to try and collect bottles on a basis whereby they can re turn them and help fund thems elves to meet escalating costs.

I wou ld also like the board to gi ve serious consideration to permanent locations of-1 notice there are two in my area, and I know that both of these shopping cent res wou ld gi ve, I am sure, se rious conside ration to permanent drop-off boxes that could be left the re and picked up, as opposed to having a truck there and having it that I have to bring my one bottle or two bottles to the specific site at a specific time. I think it is incumbent upon the corporation to add ress the overall objectives: that is, cleaning the landscape

Thursday, Novem ber 2, 1989 of the literally hundr eds of thousands of bott les that are just discarded in the landfill sites and/or side s of highways and things of that nature to addr ess the practical application of a normal society in terms of co-operat ing and participating in this project . I will conclude on the recycling issue by sugges ting that if this was a private corpora tion, we as elected representatives would just not tolerate the abus e of the final product.

I bring to your attention various regulations and rules that are put in place for private corporations that are deemed to be polluting and encroa ching on the rights of people. So I think this is an area that should seriously be pursued and aggressively be pursued , and the amount of the investme nt would be well retu rned to the people of Manitoba. Mr. Chair person , I have obviously a number of different questions, but I want to be fair on specific issues. Mr.

Harry Harapiak (The Pas): I just wanted to ma ke a comment on recycling as well, because I am the sponsor of that Private Mem ber's Bill that came into the House. Our Party has been promoting recycling for quit e some tim e. I had the occasion to take some you ng people down to the recycling depot last Saturda y. I obs erved at that time that there were some glass bottl es being brought in but they were paying a cent a pound for the bottles. The people there, although there were some being brought in, said it was very discouraging that in adjacent provinces there is much more being paid for the bottle s there.

I am not sure if they were just guessing or that they were speak ing from fact, but they thought the re should be a much higher price. I think the Liquor Control Comm ission should look at the possi bility of a deposit, even if it is comp arable to beer bottles. I think it would be more of an enc ouragement for some of those non-profit organ izations like Boy Scout movements, Brownies and Girl Gui des, that they can do this as a fundraising venture. I think that it would be much better for the environment overall if we went into some sort of a deposit system . Mr. Emerson: Thank you for those comments.

We certainly will take those point s, and they are ones we do cons id er. I would point out that the prices paid by the non-profit organizations relate to fluctuating values. For instance, aluminum happens to be reasonabl y high right now, so aluminum cans crushed and provided to the de pots brings a much higher price than it might have two or three years ago. Glass, unfortu nately is very low in value and were we able to uti lize it here to a greater degr ee, in other words the distance the glass has to be trucked and where it can be used usefully, do vary from province to province.

I bel ieve tha t you are pro bably ref erring to neigh bouring provinces where there is a deposit and of cou rse that is invariably higher than the value per pound for coloured glass or aluminum. We are 48 considering all aspects of that. I si mply repeat my concern at the cost to the com mission, the public and the suppliers of quite a few million do llars is giving us considerable pause, but we are continuing to exam ine those matters you raise. Mr. Uruski: Is there an intent to estab lish further depots in the lnterlake?

I note that there are depots in parts of western, west central, north, and there is Selkirk, as part of the lnterlake. While it is in the lnterlake, one might consider it really a dorm city of Winn ipeg and whether Stonewall or Teulon or Arborg, in terms of the central locations of the lnterlake, whether there is a conside ration for add itiona l recyclable depots. Mr. Emerson: We do not have immedia te plans.

We will by the end of this year have performed the fi rst of annual reviews on the logical location of add itional de pots, and should know in the first quarter of next year when and where it is practical to esta blish further de pots. Mr. Uruski: One other question, in terms of glass, will tho se dep ots be prepared to take all other types of glass that may be crushed, besides liquor bottles? Mr. Emerson: Unfortuna tely, at this time there does not appear to be an easy solution for the recycling company to handle ketchup, marmalade and other bottles for health reasons.

Liquor, being relatively sterile, is not the same problem. However, there are interm ittent advertised times and depots where all bottles can be taken in, but those are less frequent. What we will do is determ ine the current status of that, but when we inquir ed we were told that was a princi pal proble m and the many hundr eds of people lining up at dep ots with these open, unwashed container s, unfortuna tely. We will again examine tha t th ough with the recy cling comp any. Mr.

Uruski: I kno w that all advertising or discussion that has been had on the issue of recyclable material from the food sector that have to be and should be washed and cleaned and those depots that have, at intermitte nt times, are they tied in with the soft drink recycling? Are they out of Winnip eg or where would those commodit ies have to be taken, like those . *

(1100) Mr. Emerson: I can determine that informat ion for you . The recycling compa ny that we deal with does not handle those for the problems I mentioned and I am not sure, I know that our family takes them to a different location than we take any liquor or wine bottles that we have, but we can provide that informa tion. I know the location is different. Mr. Uruski: Mr. Chairman, that is all I have on this issue for the present time. Mr. Angus: If I remember correctly, there was a 10 percent environ mental tax added to liquor. Ten percent may not be the accurate figure. Perhaps you can just

Thu rsday, Novem ber 2, 1989 tell me what the percentage is and how much mone y you intend to raise from that or expect to raise from that. Mr. Emerson: lt is my bel ief tha t it would be ann ualized about $1. 2 million, let me check - sorry, $1. 2 million. lt went into effect in August, $1. 2 million for the current year and $2 million on an annua lized basis. Mr. Angus: Mr.

Chairperson, is this money earmarked for gener al Government coffers and review, or is it the int ention of the board to try and put that back into cleaning up the environment with a progressive method of recycling unused or unwanted liquor bottles? Mr. Emerson: In its net form it simply accomp anies our additiona l profit and goes into gener al revenue s in its net form , but we do reduce those collections by the amount of mone y we spend on the recycling matter , which I think is currently around $14 0,000 per year. Mr. Angus: Could you just go over that agai n?

I either lost my train of thou ght or I was confused by what you were saying. Mr. Emerson: I am sorry. The funds which have now been ident ified as an environmental im pact tax as a part of our total profit, together with the balance of profit, go di rectly to the Department of Financ e and we have no jurisdiction over their dispos al. However, the amount of mone y from the environ mental impa ct tax which I am speak ing of is net and any expenses on recycling have been applied agai nst that tax mon ey. Mr.

Angus: If I can just paraph rase to make sure that 1 have it accurate, this year you antici pated raising $1. 2 million. Next year you anticipa te raisin g $2 million. Any of the direct expenses in relation to the current recycling program are charged against that 10 percent. The balanc e then goes into-Mr . Emerson, did you have any discussions with the Min ister and/or the Cabine t in relation to their intentions of the 10 percent and any sepa rate developments with it, or am I accurate in assumin g that you assumed that it was simpl y another method of genera ting additi onal revenue for the Government? Mr.

Emerson: Well, it is not additional revenue in that it is taken away of earlier revenue in most part because it is simply a dividing of what the former total net profit was and applying some agains t recycling matters. Mr. Angus: Mr. Chairman, this is a perfect example of how you could find yourself in a conflict between your role as the chief executive officer of the Manitoba Liquor Comm ission and your role as the chief executive officer of The Crown Corporations Accountabil ity Act.

If 1 was in your shoes, sir, I would sugge st that the Government has sent you a clear message of not simply genera ting additiona l in come and revenue for the coffers of the Government, but the y have said, add 10 percent to the cost of you r produc t and funnel that in to some sort of envi ron mental control program , some thing that is going to addr ess the envir onment. 49 For you to suggest that it is going to be hundr eds of thousands of dollars, and even a million dol lars or so, to do an adeq uate recycling job and then te ll me that you are raising $1. 2 million this year but you are just funnelin g it back in is some thing, sir, that if I was the chairman of The Crown Accountabil ity Corporations Act I would very seriously challenge you as the chief executive officer of the Manitoba Liquor Commis sion on.

I am not sugges ting any integrit y charge, I am just sa ying th at if I was your boss of The Crown Accountabilit y Corporations Act I would say, why would you not take that 10 percent and bud get and plan to put it into recy cling on a program that we have sugge sted ? Mr. Emerson: I would just like to see if there is any aspect that I have missed in providing you with that int erpretation. I do not think there was anything that I left out, but I did want to make it clear that this amount of mone y was a reduction from the originally budge ted profit, it was not over and abo ve.

Therefore, I assumed that Government, in its appor tioning of all revenues, would be considering environ menta l expenditur es on its own with perhaps some or all of those funds, but we ourselves set up our program. As a matter of fact, it was in advance of that particular tax, and the $14 0,000 that we had planned before agai nst recycling of cou rse, as we move into the budgeting process right now, will be exam ined in terms of plans for next year which may be expan ded. Mr. Angus: Let me see if I have this stra ight, Mr. Chairperson, through you to either the Min ister or to the chief execut ive officer.

They say, sir, that the price of alcohol was static and tha t the 10 per cent environmental protect ion tax was taken out of the current price, not added on top of the price. Mr. Emerson: Yes, that is correct. Mr. Angus: Through you , Mr. Chairperson, to the Min ister, was it the intention of the Government, has this been interpr eted correctly, and if so, are you now get ting into directing the types of expen ditur es that are made through the Crown corpora tions?

I was under the impr ession, sir, and I may have been inaccurate in it, tha t it was an add itional -10 cents or 10 percent to- 1 percent I guess it is- 10 cents per sale. I am just making sure I am clear on that. I do not want to co nfuse that, but it was my under stand ing that was on top of existing revenues. Mr. Mc Cr ae: The Honour able Mem ber has no t under stood this thing very we ll, and of course he is going to do his best to try and get himself off a limb that he has put himself onto in terms of irresponsible state ments he has made about the ch ief execut ive officer of the Liquor Control Commission.

The situation is that the consumer of beverage alcohol in Mani toba is not payi ng this as an additional tax. This is a 10 percent amount that the Commission is absorbing and directing in a different direction. The Honourable Mem ber is not und erstan ding the point

Thu rsday, November 2, 1989 and he is using his lack of und ersta nding of the point to try to suppo rt an argument that he has made, I sug ge st irresp onsib ly, and he finds hi mself in an emba rrassing position. That is his problem, not mi ne. Mr. Angus: I am never ever emb arrassed abo ut ask ing questions and l am read ily prepared to ad mit that i do not have all of the answers, Mr. Min ister. i resent your maligning of my integrity and /or my character in relation to doing what I consider a reasonable job. I have absolute confidence the admi nistration can clarify and answer these questions .

My question through the Chairperson is to you, Mr. Minister, is it now the Government policy to direct the expen dit ures of the Manitoba Crown corporations in thi s fashion? *

(1110) Mr. McCrae: The way we work, Mr. Chairman, is in consultation with the comm ission. For the most part, the comm ission does the work that it is suppo sed to 1 do in terms of re gulation and does the work that it is supp osed to do in terms of the proper retai ling of beverage alcohol in this province. We ha ve a com mit tee here for the purpo se of acco untabil ity. That is what we are he re for.

The Government has a role to play in terms of certain regulations that are passed, certain legislation that is passed, and a cer tain role to pla y in terms of consultation with the commis sion in its operations as welL Mr. Angus: Mr. Chairperson, with respect, Mr. Min ister, if I und ers tand you accurate ly, then it is wi thin consultation that you are going to be directing the Crown corpora tions to return the investment of mone y to certain areas to satisfy your agenda .

May I ask you, sir, if you are pleased and/or are you going to give them any more specific direct ion on the expenditur es of that $2 million to put in place some form of an effective recycling program? Mr. !1/icCrae: Mr. Chairman, yes ! am pleased, and se cond is, we wi ll continue to consult with the com mission on policy matters and on operations and on regulati on. The answer is, yes we are extremely pleased with the performanc e of this comm ission. Mr. Angus: Mr. Chairperson, I have a subsequent question in relation to the dir ect ion of expenditu res to the corpora tion.

Are you conside ring instructing the Man itoba Liquor Commis sion to invest any percentage of their revenues into re-edu ca tion , safe gr ads, teenagers agains t drunk drivi ng, high school educat ion programs on the pote ntial vagaries of overindu lgence and things of that nature? Mr. McCrae: Mr. Chairma n, we will continue to consult and be consulted by the Manitoba Liquor Control Comm ission in regard to any numb er of issues. The Honourable Mem ber's point about educat ion respecting abuse of a!cohol is well taken.

We agree 50 tha t is an impor tant part of the responsi bili ty of Government, and perhaps in consultation with the comm ission there will be decisions made in the future that will have the wishes of the Govern ment someho w built into them. The point is, as I told his colleague, the Honourable Mem ber for St. Jame s (Mr. Edwards) yesterday, and as I have told the Honourable Mem ber for Logan (Ms. Hem phill) on a few occasions both privately and in the House, Government has a role to play in all of this too.

The Man itoba Publi c Insu rance Corporation has a role to play; the Alcoholism Fou nda tion of Manitoba has a role to play; the Department of Educ ation has a role to pl ay; and also the Department of Highways and Transporta tion, as pointed out by the Honourable Mem ber for Assiniboia (Mr. Mand rake). We see this as a Government responsibili ty right across the board. Every aspect of Government has an int erest in this. Certainly the Mani toba Liquor Control Comm ission is inter ested in regulation; that is part of its job.

Reg ulation can also have an education aspect so that I can tell the Honourable Mem ber that he can be assured that we continue to take our responsi bilities seriously. Mr. Angus: Is the Min ister satisfied with the proposal that we have jointly made at this particular table, that some form of a refu ndable deposit tha t would encou rage and allow private citizens, whether they be non -profit organ izations like scouting and guiding and/ or commu nity club s that are trying to raise mone y, to actively partici pate in this type of a program? Mr. McCrae: Mr.

Chairman, we continue to explore all appropria te avenues to be environmentally conscious and responsible as well as conscious and responsible for programs that would help reduce the adverse effects of the consumption of beverage alcohol in the province. Mr. Angus: A further question on the environment al protection tax. May I ask you, Mr. Minis ter, why you felt it necessary to bring in

an Act to be supported by the Legis lature to di rect the corpora tion, if your lines of commun ication and your co-operative endeavours with the board are not sufficient, to be able to earmark specific amounts of mo ney to be di rected to the environ ment? Why did you feel it necessary to put

an Act in? Mr. McCrae: I can answer the Hono urable Mem ber's question in a general way. The Manitoba Liquor Control Comm ission has its responsibiliti es, so does the Minister of Fina nce (Mr. Manne ss). The Min ister of Finance's job is to ensure that the im portant programs of the Government are properly fin anced and that decisions in that regard are made in his office after consultat ion with various inte rested parties. Mr. Angus: Mr.

Chairp erson , in rel ation to the Accountabilit y Act and the representation of the board tha t you are res ponsible for , the Liquor Control Commi ssion, reporting to The Crown Corporations Accountabil ity Act, how do you believe that you are going to represent or how are they going to represent the ad min istration of this specific fund?

Thu rsday, Novemb er 2, 19 89 If the Min ister of Fina nce is putting it in to say that he wants the mone y for his coffers because of the general requirements to fund the province, and if you are sugges ting that you want to see it applied to environmental protect ion, how on earth is a Crown Accountabil ity Act going to be able to accou nt for some thing of this nature in any way, shape, or form? Never mind who is the Chairperson. Mr. McCrae: Would the Hon ourable Member just try that agai n? * (1 12 0) Mr. Angus: Mr.

Chairperson, the chairman of The Crown Accountabili ty Corporation Act and the chief executive officer of The Liquor Contr ol Board are conferring with each other in their mind as to how they are going to perform objectivity in relation to this. I can see the di lemma, and I am sure the Min ister can see the concerns that are being raised . How are you going to present a case? I am di recting these specifically to you, Mr. Min ister, because I do not want to put Mr. Emerson in that awkward position that you have put him in.

How are you going to explain to The Crown Accou ntabil ity Corpor ations Act the en viron mental protect ion tax? How are you going to account for it when you have one agenda, the Finance Minis ter (Mr. Man ness) of the Province of Manitoba has another agenda, and the Liquor Control Board seems to not be certain as to which agenda they should be following? Mr. McCr ae: The pol icy se tting is made by the Government and the various agencies have a role to play in carrying out the policy set by the Government.

The Honourable Mem ber wants to talk about the same CEO at the Liquor Control Commis sion also being the head of the Crown Accountabili ty Council. I think that in regard to everything- ***** Mr. Angus: Mr. Chairperson, on a point of order. The point of order is the fact tha t if Mr. Emerson was anybody else, I would ask him the question as to how he is going to report to The Crown Accountabili ty Act and fulfill those obligations in relation to this particular tax. The fact that he is the same person has nothing to do with the discussi on in my mind.

I want to make it absolutely clear, I am not tryi ng to malign the indi vidual. lt is a set of circumstanc es that is unfortunate. Mr. Chairman: A dispute over the facts is not a point of order. Mr. Angus: Okay, I apologize. Mr. McCr ae: The Honourable Mem ber does not need to apolog ize for raising a point that is important to him. Maybe it is not a point of order but it might be a point none the less. 51 ***** (Mr.

Harold Gilleshammer , Acting Chairman, in the Chair) The point that needs to be borne in mind is tha t the Honourable Mem ber should try to app reciate that it is impo rtant that the Manitoba Liquor Control Commis sion have the leadersh ip it requires during a transitional period to the naming of a new chief executive officer. The Honour able Mem ber makes much of a situa tion which is not expected to carry on inde fin itely. We have a process in place.

We are being assisted by a consulting firm in finding a new chief execut ive officer, so that many of the things that the Honourable Mem ber would like to make much of will really be quite mean ing less in the sense that we are in that transitional phase at The Manitoba Liquor Control Commission. Mr. Angus: I will share -this line of questioning may be wished to be pursued and/or the dir ection and leadersh ip of the whole corporation may be want to be pursued by the third Party. Mr. Uruski: Mr.

Acting Chairma n , I raised recently why the chai rperson had not been there and the Min ister ind icated that he was just appoi nted yesterd ay. Could the Minis ter tell me when the former chai rperson resigned from the commis sion? Mr. McCr ae: Mr. Acting Chairman, the pr evious chairman of the Manitoba Liquor Control Commission, Mr. Justice Mercier, as he now is, was appoi nted to the Bench on September 15, and imm ed iately we received a not ification from him that as of that mo ment he would no longer be able to serve as Chair. Mr.

Uruski: So, it is approxima tely a month and a half since, basically, the position has been vacated , of Chair. There has been no chai rperson. Mr. Acting Chairman, I just want to make a brief point to the Min ister. That is, philosophically I have no difficulty in the Government's appointing its polit ical people, former ML As or whatever, as chairpersons. I am sure that Charlie Birt will do a fine job in that position.

There is no doubt in my mind, but I find the Government being hypocritical in the sense that over the last numb er of years, when other political people, when other Parties were in power and other political people were appoi nted , somehow tha t was no t right and somehow the appointm ents were tainted. I just want to tell the Min ister, I have no difficulty with who you appoint. I think your appointment in this case is a good appointment.

I find the whole process some what hypocritical in the sense of appointing a political person, yet, going on ad nauseam several years ago at other politi cal appoint ments made by other Parties. So I just leave that there for the Min ister. Mr. McCr ae: Mr. Acting Chairman, the Honourable Member has left that there for me. I appreciate knowing his views on these matters and I do accept what he says about Mr. Birt. He is not making a personal attack on Mr. Birt because, my goodne ss, it is an easy appointment to defend, if it needs defen ding at all. The

Thursday, November 2, 1989 man has served as a Crown attorne y for five years, I think, of his career, so he kno ws a little bit about the law. As a matter of fact , many of my former colleagues in the court reporting busi ness had occasion to work with Mr. Birt as a Crown attorney just prior to my coming on board in 19 69.

Tha t kind of ba ckgr ou nd, und ersta nding The Liquor Control Act from tha t viewpoint, ha vi ng a general legal bac kgr ound, und erstan ding the im portant balance that has to be drawn in public affairs such as those which fall under the Liquor Control Comm ission , we think that he is very well suited , and I can only take the Hono urable Mem ber's comments as -1 think he just wanted me to hear them without any particular response and I have heard them. Mr. Uruski: Mr.

Acting Chairman, just on a new line, the comm ission was reviewing and studying the whole quest ion of cred it and credit availability and access to alcohol. Can Mr. Emer son or the Min ister ind icate what has transpir ed in view of the di scus sions or the prematur e announc ements, I guess it was earlier this year, about cheque ca shing privileges and the like in the commission? Mr. McCrae: Mr. Acting Chairman, I think Mr. Emerson may add some thing to what I am about to say, but the Honourable Mem ber refers to premature annou ncements, which is not quite the right way to put it.

In a wish to be open with the public and with the Mem bers of the leg isl ativ e Assem bly, cer tain docume ntary busi ness plans were made available, plans which may have some aspects to them that may never find their way into public policy in Man itoba but others that may. So it was on that basis that that came forward . lt was not a prematur e annou ncement. lt was a wish to be open with legislators that that material came out. The Honour able Mem ber referred to the word "cred it," and nothing in a cheque-cashing card has anything to do with cred it. I will leave the rest of the answer for Mr.

Emerson to make. * (1 13 0) Mr. Emerson: We provided applications in our stores last Monda y for cheque-cashing cou rtesy cards and sent releases to the newspapers to ind icate that was available. Approxima tely 30 have been picked up, of which 15 were from our own emplo yees. There is not a great deal of act ivity in that regard .

We expect , as we originally sugge sted , that the use will be minimal. lt will tend to be for those people who want to expand or supplement their wine cellars and will someti mes buy $2,000 worth of wines that it is more convenient for them to use a cheque than to carr y that kind of cash . At this point, I belie ve appr oxima tely 30 applications have been picked up for processing. Mr. Uruski: And tha t is in the last week? Mr. Emerson: Just this week, since Monda y. lt is just four days. Mr. Uruski: So, Mr.

Acting Chairman, that policy in fact that was in the commission's strateg ic plan has been accepted by the Government. Is that correct? 52 Mr. McCrae: Yes, that is correct . We feel that if you are basically opera ting a monop oly, it is our responsi bility to ensur e that service is inde ed up to the levels expected by the public. Our surveys of customer satisfaction show that we have a high level of satisfaction with the service we provide, and there is nothing to be ashame d of in regard to providing proper service here in the 19 80s and '90s.

The Honour able Mem ber and his colleagues tend to want to equate an adequate level of service with opening thi ngs up and encou raging more consum ption. The Ho nourable Mem ber was here, I bel ieve, at the beginning of the meeting today when the chief executive officer went over the trends in the use of alcohol in this province. There is really no issue here except that the Honourable Mem ber wants to make that kind of point, or maybe not this Honourable Membe r, but certainly his colleagues would like to make the point that someho w there is a liberalizing trend here.

The fact is customer service is inde ed that, customer service. The Honour able Member would be the first one to get after us if all of a sudden it turned out that there were complain ts coming out of our Liquor Control outlets about the level of service being offered. We can get into certain moves that were made during the tenure of the New Democratic Party, if we want too; but I do not think we need to do that tod ay. We have done that before. Mr. Uruski: What I heard the Min ister say earlier was that some plans may be imp lemented and some plans may not tha t appeared in the document.

I ask the Min ister no w, has the Go ve rnment accepted the comm ission strateg ic plan that was released in '89 for the years '89-91? Is that plan being imp lemented by the commission? I raised only one aspect of that plan to find out what in fact is the case, that is really my tender of question. Mr. McCrae: That is a perfectly fair question too, Mr. Acting Chairman.

The fact that there is a strategic plan that is made available by virtue of a wish to be open has the tend ency or could-a nd I sugge st not unfairly to the Honourable Mem ber and his people-le ad one to perhaps jump to a bunch of conclusions that are not necessar ily the correct ones. I am saying to the Hon ourable Mem ber that the ind ividual aspects of this busine ss plan will no dou bt come forward at one time or another in the next two or three years.

Each individual item will be looked at not only by the comm ission, but also by the Government, and decisions made on a one­ at-a-time type basis. lt is not a question of us saying, we accept everything in this busine ss plan. I have not looked at it in the last little while, but if it indeed says cred it cards, I am not interested in seeing the use of cred it cards. Maybe, if there is some succeed ing Governme nt of another particular persuasion they would want to look at the busi ness plan, perhaps the Honourable Member's Party would?

I think that should answer the question. lt is a matter of looking at the issues on an individual basis, and not sa ying that everything that is in that plan is Go ve rnment pol icy or the dir ection the Go vernment wants to see the commis sion go in each and every instance.

Thu rsday, November 2, 1989 Mr. Uruski: Mr. Acting Chairman, I want to go on with that plan just a little bit, it deals with a question of service to Manitobans and leaving aside the question of cheque cashing privileges. Essentially all that has been approved and accommoda ted at the present time is identi fication for people who wish to cash personal cheques through the com mis sion for sales, rather than carrying large amou nts of cash in the event that there are wine sales or whatever the comm ission may advert ise, is that correct? Mr. Emerson: Yes, .that is correct . Mr.

Uruski: Another area of the strateg ic plan calls for the reduction of costs of servicing some of the outlets that the commission has. In fact , I am advis ed that in my own area one outlet which is a com mis sion outlet is going to be closed . I want to ask the comm ission whether that is the case, and on what basis is the commission making its decisions for the closing of rural outlets? (Mr. Chairman in the Chair) Mr. Emerson: The location of that store is Fisher Branch.

At Fisher Branch a couple of thin gs coincide d ; it is a one-person store in terms of permanent staff and the mana ger has decided to retire in Jan uary; and within the last few months the town decided that it was anxious to have a pharma cy. A local resident, a pharmacist, applied to the town and got their sup port for building a new pharm acy. He then appl ied to have the liquor vendor department so the phar macy could offer that service and of course supplement the income of the pharmacy and assist in its viabilit y.

We discussed it with the town and they put forward a resolution that they wanted that to happen . I discussed the possibili ty with the union at the senior level, and the local people were also included in discussions, I mean local union steward s, and the investiga tion which we do on every prospect, busine ss backgrou nd, and other matters, came up very positiv ely.

The comm ission recommended to Government that with the supp ort of the town and the fact that the inv estigation pr oved to pr esent no di ffi culties whatsoever, that our oppor tuni ty to bring a pharmacy to Fisher Branch was sign ificant enough to close the store and trans fer the busine ss into a liquor vendor with the present manager offering to provide some assistance in the pre-opening period as he moves into retirement. Those are the circums tances. To the best of my knowledge the building is being put up for the pharmacy and the new pharma cist is ready to take on his new responsi bilities.

Additional ly, I personally commun icated those facts with the president of the uni on with whom I keep in at least quarterly touch. Our union emplo yees were advised of it and you already saw through the documents placed before you originally how we commun icate with the empl oyees on such matters. Mr. Uruski: Does the commission play a role in site selection? 53 Mr. Emerson: Very defi nitely, in the case of liquor stores. In the case of liquor vendors, and I am not sur e if the Hono urable Memb er is referring to a specific site within a town or village- Mr. Uruski: Mr. Chairma n , just so Mr.

Emerson is clear, I am speaking about Fisher Branch and I do not want to bring in any other issues. Mr. Emerson: That site had, I believe, been pre­ selected by the pharmacis t so we played no role in that. If in the investigation ther e was a clear unsuitabil ity, then we would discuss that with the liquor vendor. Most of them, while there are changes in location, it is infrequent. We did not to my knowledge play any role in the selection of that particular site. I will confirm that. Mr.

Uruski: Would the com mission not view it with some concern that the new site of the comm ission is right across the street from the school, in terms of the high school? No w albeit, the former comm ission office in downtown Fisher Branch was-1 guess one could also say across the street from the elemen tary scho ol, but would the question of drinking age, proximity and availability have been viewed or at least exam ined by the com mission? * (1 140) Mr.

Emerson: We went by the assurance of the local police authorities and the muni cipal authorities that they found the site satis facto ry, and it, bei ng a very small commun ity, we did not go past secu ring their, I mi ght say, quite enthusia stic approval. We did not personally comment on that particular site. Mr. Uruski: Mr. Chairman, could I ask Mr. Emerson whether Fisher Branch would have been closed as a comm ission out let irrespect ive of the application of the drugg ist in that com mun ity? Mr. Emerson: We had no such plans.

We reacted to the circumstan ces that seemed approp riate, but we had no particular plans to cl ose that store. Mr. Uruski: What criteria would the comm ission use in order to assess whether .or not a commis sion store would be trans ferred to a private vendor? Mr. Emer son: Ther e wou ld be a numb er of consid erat ions: the wishes of the local commun ity, and we would not consider acting without the app roval of Go ve rnment. We ha ve noti ced though in the appr oxima tely 23 locations where we have pharmacy liquor vendors that they are particularly valued by the commun ity.

That would tend to weigh heavily on a recommendation that we might prepare. There are some communi ties where man agers are not keen to be located far from home, they may have been used to a different size town, and if for exam ple, in a small location a mana ger was about to retire and we bulletined the job and there appeared to be very little interest in it, and it was quite small and we might

, Thursday, November 2, 1989 enhance a local business , then we would probably prepare a recommendation for consideration by Governm ent on closing that particular store. Mr. Uruski: Are there other stores that the commiss ion is considering clo sing? Mr. Emerson: We are not considering closing any stores at this particular time . We have simply identifi ed, and Fisher Branch was a mong them, those which were smallest and inefficie nt. The strategic plan that has been discus sed is a roll ing three-year plan .

There can be items within that plan that will appe ar in consecutive strategic plan s perhap s over a period of nine years with no implementation. In another case in the Town of Rivers we have a liqu or store . The community was initially interested in that store being turned over to become a liquor vendor in another establishment and putting the Canadian beer from the store into the local hotel vendor to help a marg inal hotel retain its viab ility- a hotel which unfortuna tely has since closed .

We had considered that , but when bulletining the job and talk ing to the council which subsequently changed its mind, we not only changed the plan and did not recommend it, but we have also since renovated it and have a manager in residence . That was one which we were close to the recommendation point of view and then backed off due to local circumstances . We have no specific plan at this point for any closures . Mr.

Uruski: When you spoke about Rivers , I am assuming that you would look at-one of the criteria would be total volume of sales in relationship to the overhead costs of either rental, or maybe the commission would own the buildings and I am not certain, maybe I will ask this question : are most of the rural outlets that the commission has stores in, are they owned by the commission or are they basically rented premises? Mr. Emerson: Over all we own 12 and lease the rest. It is my impression that we would tend to own more in Winnipeg , and I will see if we have that figure . All 12 that we own are in rural Manitoba.

The volume and cost considerations from a business point of view are always taken into consideration . Frequently , i t results in relocating a store that might be slipping because it is not in the right place, then we relocate . A store that might in our consideration be better off as a liquor vendor would have had the financial aspects considered in advance and would undoubtedly be one of the smallest. Mr.

Uruski: I am satisfied that from the commission at least at the present time , in fact , the commiss ion is indica ting that other than the Fisher Branch closure was, and I guess I do not know whether it is a- did the town approach the commission about this venture, or how did this come about? It is kind of interesting that the two were able to mesh and the like, knowing of course it was common knowledge in the community that the present manager was retiring-that has been there for quite a while. 54 Mr. Emerson: It is my understanding that we were approached by the town . Mr.

Angus: I am sorry I had to leave the room I wanted to just get some resear ch. I would like to finalize the discussion on the recycling issue if I may. I want to make sure that I have got my facts accurate. It was estimated that this year you are going to be able to raise $1.2 million with the ten cent-five cent surcharge that was implement ed August 1, 1989, next year it is $2 million . I find out from you , sir, how much money you have actually returned to the environmental protection that this money was earmarked for. Mr. Emerson : I would like to ask our financial Vice­ President to confirm or not what I say.

We actually raised addit ional revenues very little from the impact of the tax. It was a reduction in total profit by the amoun t of the tax to avoid increasing the price on the shelf to Manitoba consumers . We did add on, for instance , beer bottles that came in and that were not refundable 10 cents per bottle, 60 cents a carton . There would have been some funds, new incremental funds derived from that particular source. We divided the profit into an environmental impact tax portion and into the bala nce of profit . The budg ete d ant icipated environmental impact tax amount was $1 .2 million for this year.

To the best of my knowledge , we have spent about, or plan to , spend $140 ,000 out of that, but no new incremental money was developed in this year. It was quite modest. Mr. Angus: Thank you for clarifying that , Mr. Emerson. I just want to clarify as to whose decis ion it was in relation to the

interpretation, because in a news release put out by the Government in the throne speech references were made that as of Aug ust 1 an environmental protection tax will be placed on all alcoholic beverage containers where a deposit return system is not already in place . The tax will be collected by the Liquor Control Comm ission with funds used to support environmental protection initiatives. I would like to know specifically whose decision it was to take that tax out of existing revenues as opposed to applying it to the sale of alcoholic beverages? "'

(1150) Mr. Emerson: We took our direction from Government . Mr. Angus: The final quest ion on this is I suspect a difficult one to answer . Mr. Minister or Mr. Emerson, it seems to me that the role of The Crown Corporation Accountability Act , and you, sir, as chairperson, is designed to identify these specific irregularities in the accountability and the administration of accountability within these Crown corporations . In the throne speech , sir, I will quote to you that the environmental protection tax is to encourage recycling .

I challenge that spending $140,000 out of an estimated $1.2 million anticipated being collected is a violation of the intent of the legislation . I suggest, sir, that you call yourself on the carpet .

Thursday, November 2, 1989 Mr. McCr ae: The Ho nourable Memb er can make wha tever sugges tion he lik es. The fact is the Government of Manitoba is responsible for the spending of dollars that are taxed . The mone y goes to the Government and the mone y is spent by the Governm ent and the Government is quite happy to be accountable for the way it deals with tax dollars.

We would invite at any time to compa re our record of achievement with the raising and the spending of public mone y with the sugges tions being made by the Li beral Party in the last year and a half, for exam ple, $700 million additional spending to the amount we were talking about in the 1988 budg et. lt would be really int eresting to see how the Li beral Party will be accounting for its proposals in that period of time and many , many proposals sinc e which would be on top of that $700 million.

I really have no problem whatsoever comparing the record of achievement in terms of taxat ion and tax cuts unf ortuna tely not supported by the Liberal Party. Tax cuts, better spending and deficit reductions, money for programs and services for people in Manitoba, we would be very happy to com pare that with some of the sugges tions we have been gett ing from the Li beral Party in the last year and half. Mr. Angus: Mr.

Chairperson, I thank the Min ister for that very enlightening add ress to the topic that we are specifically dealing with right now. lt is never very difficult to tell when the Government is on slippery grounds because they totally change the subject and avoid dealing with the specifics of the issue. The Minis ter at the very best is mis lead ing the people of Mani toba, potentially derelict in his dut ies if not directly ind ictable with polit ical int erference in the management of a Crown corpora tion, som�thing that they have suggested they wanted to see at an arm 's length distance.

Either way it is my opinion and only my opinion at this particular time that the Government are big losers on their intent and their follow-throug h. I wou ld hope th at The Crown Accou ntabi lity Corporations Act will be able to review and direct the interp retat ion of this potential interference. I would like to move on to a different-this is not my last word, but I would like to move on to dif ferent thin gs. Mr. Chairman: Okay, we will listen to the Honour able Minister respond and then Mr. Harapiak has a question. Mr.

McC rae: Before the Honourable Mem ber moves on to his next point or we recogn ize the Honour able Mem ber for The Pas (Mr . Ha rapiak), it is alwa ys interest ing to hear the Li beral represe ntation in this place talk about polit ical inter ference when we, as a Government, want as much as is hum anly possi ble­ and our record shows it-Go vernment accou ntabil ity to the people, we want to be accou ntable to the people.

In wanting to be accountable does not mean that we want to take an att itude that we will let every agenc y in Gov ernment operate comp letely and totally in dependent from Go ve rnment, tha t is a poor und ersta nding on the part of the Honour able Mem ber about Government, and about public life and public 55 service. If things were to go wrong with an arm's-length agenc y the Honour able Mem ber for St. No rbert (Mr. Angus) would be the first person to compla in. Who could he be complaining about? He wou ld be complai ning about a Governm ent that he would like to see taking no

part in the public life of this province whatsoe ver. So I am not ready to take any lessons from the Honour able Mem ber about politic al interference, but I would like to give the Honour able Mem ber a few lesso ns about acc ountability and about proper responsibility for the handling of public mone y in this province. After all, it is not our mone y. The mone y the Honourable Mem ber is ta lking about does not belong to him and it do es not belong to me.

As I said onc e to a previous Government, and I would say to the present official Oppos ition, stop constantly wanting to get your hands into the pockets of the taxpayers of this province. There is a certain amount of respect tha t needs to be shown to the people of the province, the people who we are answerable to, we are prepared to be answerable. The Honour able Memb er wants to call it "politic al interference," that is his semantic game that he likes to play. The fact is the Honourable Mem ber is not ready to serve in a position of respo nsibil ity. He is not even in a very good position to criti cize. Mr.

Chairman: The final comment, Mr. Angus. Mr. Angus: Mr. Chairperson, it may not be the final comment because, through you to the Min ister, I am very comfor table in entering into this debate, sir . I am very prepared to discuss, on any level of intelligenc e that you desire, the effect ive carryi ng out of policies. If I was a Min ister and/or a mana ger of a corpora tion and I gave a clear ind ication of a policy that said, you will collect $1. 2 million and funnel that into recycling programs within your depar tment, and sir, that was not done.

If that was not done then I would call the chief executive officer of that corpora tion on to the carpet and I would ask him, why not? Do not try to teach me any lesso ns about management or dir ec tion to dep artments, Mr. Chairman. Mr. McCrae: The point is the mon ies that we are talking about are to be used for environment programs, recycling and other environ ment programs. There is nothing there tha t says they must all be driven by the Manitoba Liquor Control Commission. The Governm ent of Man itoba has a sign ificant record of achievement in regard to envi ronmental matters and we are quite proud of that.

To be able to clean up our environ ment and make Manitoba the best place in the world to live is going to take some mone y and it does not all have to be spent by the Manitoba Liquor Control Comm ission but the Manitoba Liquor Control Commission, as the Honourable Memb er well knows, is a significant provider of revenues to our Government. Mr. Angus: Mr. Chairperson, at the very, very least, as a simple man agement principle that collectible mo ney should be earmarked and di rected not int o general revenue where it is swallowed up, but to a specific area

Thursday, November 2, 1989 of budgeting control where it can be identified and can be controlled and accountable . Mr. Mccrae: The Honourable Member might want to make that point somewh ere else. Maybe he could tell that to his Finance Critic . •

(1200) Mr. Harapiak: Mr. Chairman , I wanted to address a bit the volume of sales which I n oticed in the report are down and the con sumption i s down too which I think is a very healthy sign for our society. Maybe everybody is becoming a little more conscious of the dang ers of drinking and that is why the consumption is down , but I wonder if the Liquor Control Commission has any reports from the RCMP on what percentage of this volume that is down may be accountable for liquor that is coming into the province illegally? Mr.

Emerson: We have estimates that there is a large quantity of liquor coming in, being smuggled. I have heard figures as high as 50,000 cases which might equate to $6 million or so, not verified. It has probably increased in recent years but it is difficult to determine what stays in Manitoba or moves throu gh and into other provinces.

However, it has been happening over the past several years and would not be significant in terms of the lower consumption as against lifestyle changes, concerns about drinking and driving, and matters of that nature, other elements of expenditure for entertainment, but it is a substantial concern of ours and the RCMP are addressing it but it is not entirely new. Mr. Harapiak: I am not sure if you have had the opportunity to take into consideration what effect the goods and services tax will have on this.

Will it make it a little more profitable for those operations that are going on illegally to incre ase their productivity? Mr. Emerson: At this stage we do not believe that it will enhance their opportunities of profitability.

Our calculations on the goods and services tax-and of course , there are many variables that can be put into the equation but if we take it on a basis of revenue neutrality at the provincial level, and if we remove the present 19 percent federal sales tax on liquor, and if we put in place at a different level of the equation the proposed 9 percent goods and services tax , the effect would be a bottle of spirits would increase by 25 cents , a bottle of wine by 10 cents and a dozen beer would increase by five cents . So on the assumptions that I mentioned, the difference would not be material. Mr.

Harapiak: There is one other area that you say there has been a decrease in use is occasional permits . I am wondering if that is again because of the lifestyle , or have you tightened up your regulations which is making it more difficult for organizations to get permits, or is the results of some lobbying by the hotel industry to eliminate some of the occasional permit users? Mr. Emerson: Lifestyle would probably be the most significant factor. The registration of organiza tions has 56 assisted in, shall we say, reducing the number of undesirable applicants for permits.

I did mention before that they have been reduced. However , let us take the year-to - date ending September. The number of occasional permit applications is down only 2 percent, which is not very significant . The amount of liquor purchased for consumption , as reflected in our markups from liquor, at those events is down 7, which would tend to indicate that people are drinking less at roughly the same number of functions . We have not been affected by any lobbying. Our regulatory attention has been directed at those hall operators who have not been running safe, or hygienic or properly supervised establishments.

We have paid attention to those and refused applications and , in fact, have considered withdrawing any applications for certain halls. Mr. Harapiak: What effect did the decision have that gave the applicants the ability to set the ir own prices? What effect did that have on the number of people making applications? Mr. Emerson: It did not appear to have a material effect. It did offer the oppo rtunity , to some organizations , to provide an enhanced profit to the causes they represented , but it in itself did not have a mate rial effect. I will just check that if you will excuse me. N o, that was correct.

It actually is not free prici ng. There is a maximum of an additional 35 cents per drink permitted, but it did not have a mate rial effect on applications. Mr. Harapiak: To the Minister , yesterday the new strengthened impaired driving legislation came into effect , which already has shown some result to the public . I am wondering if the Minister feels he is almost contradicting himself by having opened up or increased the advertising for use in liquor lifestyles . Mr. Mccrae: Not at all, and I thank the Honourable Member for raising this. This is an issue that I am happy to discuss with the Honourable Member.

His Leader raised the issue yesterday in response to the statement I made in the Legislature announcing the proclamation of Bill No. 3, the new tough drinking and driving l_egislation . I guess it is a difference of approach . We do not think we need to be the Big Brother here and say that because of a certain philosophical bet we take we should continue to discriminate , as we have done in this province for 20 years against the Manitoba broadcast industry. So that Bill, brought in in the first Session, removed that piece of discrimination that had been there for a long, long time.

I have reason to believe the previous Government of Manitoba was very, very close to moving in the same direction . Although, now that we have moved we hear different things being said . I guess it is the job of Government and the job of the Minister responsible for Liquor Control Commission to take as balanced an approach as possible . It is not always easy to wear two hats, one a regulatory hat and

Thu rsday, November 2, 1989 the other to be the monopoly distributor and seller of beverage alcohol in the province, and we felt that there was an awful lot of mone y leaving Manitoba in regard to advertising of beer and wine at certain hours of the da y. We felt it was ne ce ssar y to rem ove th at discriminati on. There are plenty of checks available, and Mr. Emerson can enlarge on them, as to frequency of the commercials and timing of certain types of commercials and types of audie nces expected to be viewing those commercials and all of that.

We have taken what we think to be a very responsi ble appr oach, but we canno t just allow dis crimation where it is convenient to us. I thin k discrima tion is discrimation and we have dealt with that. We have dealt with that openly and in the publ ic eye in the Legislature. We did that and we think it was the rig ht thing to do. We also know from studies that have been done that advert ising of beverage alcohol has more to do with brand choice than it does with consu mption.

The trends in the last year in Manitoba seem to demons trate that consumption is down. lt is not that we are trying to get consu mption back up because that is not happening anyway. As the Honourable Mem ber kno ws, in many centr es in Manitoba beer and wine adver tising was available for viewing coming through the cable system and our Manitoba broadcasters were clearly being discrimina ted against. *

(1210) In that regard I might just commend the broad cast indus try for the responsible way that it approaches the whole issue in work ing co-operatively with the comm ission and work ing co-operatively with the Government. You will note that the Honourable Memb er I know is a very busy man, but he may indeed have time to hear the radio once in awhile or see the television and he will see this good looking fellow on the screen saying, drinking and driving is wrong, do not do it.

Well the broad cast ind ustry has co-operated to the extent that a message suitable to what the Government is doing these days is the message that they are putting across thr oug h their public service annou ncement program . We are grateful for the app roach that they are taking. So in a sense they are tak ing a responsible attitude and so are other private sector ind ustries taking a very responsible approach. I refer to the brewing indus try and their drink responsibly campaig n.

I refer to other private sector agencies and ind ustries out there that are doing their part to put forward a responsible kind of messag e. They are playing the same role I am in that sense that they are regulating thems elves, but they have a vested interest obviously in the sale of commercials and the sale of beer and the sale of beverage alcohol. We should not be taking the big brother approach. I think that approach is betrayed in some of the positions that have been taken, for instance, about cheque ­ cashing cards.

Here we are in the busi ness of selling beverage alcohol and Honou rable Mem bers want to make a fuss about that, and here they are doing it agai n. I politely tried to warn earlier the Honourable Member for lnterlake (Mr. Uruski). 57 I could go through

chapter and verse those days dating right back to 1970 when an NDP Government was in office and the drinking age was reduced from 21 down to 18. Now what kind of message was that Government trying to send? The Hono urable Mem ber for lnterlake talks about age of majorit y, but they are really talking about different messages here. I think they ought not to get into this too much, because there is quite a record here of liberalizing moves made by the New Democratic Govern ment . lt had nothing to do with the age of majority, a numb er of these other things.

I do not need to go into those tod ay, because I d o not think that the issue is the one that the Honourable Mem ber is raisi ng. There is a certain level of reason that must prevail and a certa in level of modera tion and striking a balance that has to be taken in these matters. We are trying very hard to do that, to try to be respons ive to the legitima te concerns that Honour able Mem bers who represent thousands of Manitobans are bringing forward . We listen to what they have to say and we do the best we can.

I do not think the dis cussion about the beer and wine advert ising has a place in the context of our drinking and driving counterm easures. The count ermeasu res are there and the beauty of those countermeasu res are that you can avoid all the trou ble. There are three simple things to remember . You do not get your licence suspended for driving im paired if you do not drive im paired , so do not drink and drive. Numb er two, you do not get your car imp ounde d for driving suspended if you do not dr ive susp ended, so do no t dr ive suspended .

Third, do not let anybody drive your car until you know that they are a licensed driver. Mr. Harapiak: The Min ister is correct when he says that our Caucus was grappling with that decision when we were in Government. I know it was not an easy decision to make. There are many sectors of soci ety that were dead against increasing the numb er of hours for advertising of the use of liquor.

The age of major ity is a very interesting discussion that I have gone through on several occasions when I was a school trustee, which was probably an annual resolution to increase the age of drinking and driving or to increase the age for use of liquor. I think the decision was a right one when it was made to reduce it to 18 because it is the age of majorit y. They are treated as adu lts at every other part of society so they should be able to make that decision at that tim e as well.

One point I wanted to raise is, the liquor industry and beer ind ustry do a lot of sponsoring of events like the Trappers Festival, the Flin Flon Trout Fes tival, the Swan River Rodeo and the Thompson King Miner Days, and is some of that mo ney being reduced because of the adver tising they are doing for programs like safe grad and the program that you are involved in lik e asking people to not drink and drive? Mr. McCrae: I am not sure if I am understan ding the question.

Is the Honour able Memb er asking are there fewer sponsorsh ips going on because of some of the anti-d rinking and driving measu res tha t are going on, and the tig hten ing-up measu res, is tha t the question? Mr. Harapiak: No. Are they funneling their money into different areas now that there is some mone y bei ng

Thu rsday, November 2, 19 89 used for the advertising? Are they reducing the money that flowed into sponsoring these events in the previous years? Mr. McCrae: I think I would like to refer that one to Mr. Emers on. He may have better informa tion than I do on that. Mr. Emer son: In the broa dest terms, no, there has been no reduction in the numb er of events or the degree of partici pation by brewers since they became involved in Canadian media advertising.

However, I wou ld say that brewers do, not so much on sign ificant events such as you mentioned, but on certain small events, they move in and out of them as it suits their particular prod uct promotional approach. The sign ificant ones that you mention, there has been no change. 1 would not be surpris ed if there has been a little expansi on. I seem to have heard of one or two new ones in the last year, but no, there has been no change substantial ly. Mr. Harapiak: Just one more point, Mr. Chairman, when we were in Government, Mr. Penner was the Min ister responsible for the Liquor Control Commis sion .

I raised the fact that in many instanc es the staff was not as cou rteous as they are in some other jurisdictions in our adjoi ning provinces of Saska tchewan and Ontario. I know that there was a marked impr ovement a short time later in the courteous way the people were treating custom ers. Is there an ongoing program to make sure that the people who are working in those facilit ies do try and treat the public in a way that publi c servants should? Mr. Em erson: Yes, I can assure the Ho nourable Mem ber that there is an ongoing program of streng th in tra ining.

As pointed out in our strateg ic plan, it is one of our most im portant objectives and we are reaching a higher deg ree of satisfact ion with that as the customer survey ind icated. Mr. Angus: Could I just have the policy reiterated on advert ising at events such as-t here was a change and then there was some second thought on it if I remember correctly and I am not sure where we finally settled as to what the policies of the Liquor Control Board are? Mr. Em erson: There was a sportscaster med ia-led concern expressed that was in my opinion some what overblown that any events which - Mr.

Angus: What is the policy now? First of all, I would like to und erstand the policy. Then I can discuss it more intelligen tly, but when you start talking about people offending or defen din g a particular principle, then I do not know what it is. I am in the dark. Mr. Emerson: I wanted to assure the Honourable Mem ber that the concerns expressed were not valid.

We had not put forward at that time a policy, we have since developed a policy which is quite detailed and this regards motoriz ed events. * ( 1220) In brief, events spons ored by liquor supplie rs where it involves racing motor vehicles or the demo nstration 58 of power, it will be approved only if sanction ed by a bona fide racing association or other appr opria te registered motor vehicle association. These associations will be asked for adeq uate insurance and publi c liabi lity insurance and the satisfactory calibre of drivers. lt is quite detai led, is available for your study . I am just sear ching here.

The frequenc y and loca tions of advertisi ng are the same as were previously menti oned by the Min ister on radio and television. Nothing has changed in terms of banne rs and posters on site. Promotional material or advertisements for such events can not be approved unless at least 25 percent on the space of each poster has anti-dri nk ing and driving app roaches port rayed . Advertisers can place vehicles in floats and parade s pr ov iding that th ey carr y comm ission approved corporate identification.

We look at the advertising at such events in exact ly the same way we do at any other advert ising as to its appropria teness. Irrespective of media, the corpo rate name logo only may be used on advertiser trucks and vehicles, but may not include a slogan, so the brand name, but not a selling message. Now that is the essence of this page-and-a-half policy which has been introd uced and is in the hands of all .the associations and of cou rse the brewers, advertising agencies and people engaged in putting on motorized events. Mr.

Angus: Just so that I have it clear in my mind, I cou ld hold a snowm obile carniv al race if I wanted to in some remote location as long as it was sanctioned by an authori zed association. There could be ample bann ers iden tifying various prod ucts and snowmobile s cou ld in fact have product brand name s on their mach ines, riders could have it on their jackets, and the posters adver tising this race could say tha t it is spons ored by a particular corpora tion. There is no infri ngement or curtailing of any of that activi ty. Is that accurate? Mr. Em erson: Yes, that is accurate. Mr. Angus: Okay, good.

Thank you very much. I never, for the life of me, unde rstood the collation between advertisi ng -! assume that there would be quite a bit more responsibil ity that just because you advertise a particular product at a snowmo bile race means the people are imme diately going to go out, consume tha t particular beverage, and bob off into the suns et on their snowmobi le. There is just no collation to that in my mind at all, so I appreciate that. The pricing policies in the GST; you add ressed those. I just wanted to be absolutely sure tha t you could give me a dolla·r figure.

You mentioned figu res that sound collectively or ind ividually sma ll, 25 cents a bottle of spi rits. I think you said a specific figure on wine and beer. Have you done an accumulated dollar and cent value of the cost of the GST, in terms of the Liquor Control Board annual revenue? Mr. Emer son: Yes, we have. I do not have it in my mind at the moment. I will just see if one of my colleagues has ttiat. Approxima tely $4 million, on the assumption that volume remain the same.

Thursday, November 2, 19 89 Mr. Angus: I appreciate your candour , Mr. Emerso n. I bring to you r attention that the federal Govern ment is on the public record as sugges ting that it intends to make techn ical adjustments where necessary to at least preserve existing tax revenue from fuel, alcohol and toba cco. So you may, in fact through your Minis ter, have some sort of a bargai ning point to not have to pay that $4 million if it is possi ble. On the pricing policies, Mr.

Chairperson, there has been some sugge stion, discussi on, and I would like to hear comments on the concept of wholesale prici ng; a two-tiered system. That is tho se ind ividuals who are working in restaurants and/or beverage rooms and/or other areas of busi ness enterpris e who are employing ind ividuals and gene rating reven ue back into the economy in a numb er of different ways versus the home consum er. What philosophy or position has the board taken on this potentially volatile subject ? Mr.

Em ers on: We are intensi vely studying th ose circumstances as described by the Honourable Mem ber, particularly in view of a recent study done on the Manitoba hotel indus try. We have of course, as he points out, to concern ourselves with all people in the licensee field not only hotels, but we are add ressed in trying to ident ify areas, which could both com merci ally and through other app roaches aid that ind ustry, both from the point of view of Manitobans patronizing tho se prem ises but also the very im portant tourism aspect .

We have not comple ted th ose to the form of recommendations yet , but we are working on them. Mr. Angus: Ma y I assu me ac cu rately tha t the ad min istration is working on these proposals and then referring them to the board for deli beration and/or is the board working on these details and then referring them to the Min ister for deli bera tion? Mr. Em erson: lt happens both ways.

We tend to be active in considering problems and opportun ities and developing our own strategy and plans for them , but simu ltaneously we frequently, as was the case here, have that drawn to our atte ntion by the Government as an area requiring imm ed iate attention. So it was both. Mr. Angus: Mr. Chairperson, would this pricing policy and review consideration be some thing that would be in your opinion subject to scrutiny by the Crown Corporat ions Accountab ility Task Force or Comm ittee? Mr.

Eme rson: I would imagine at the time that the council would review that corpora tion, in this case the Liquor Commission, tha t an identifica tion of tha t different policy or different approach would be ident ified and that the council would exam ine it as to whether it was compa tibl e with the Act, and of cou rse with their own Act, but we would consider that an important considera tion, an im portant direction. Mr. Angus: Of course, reserving the right for the Government to invoke or not invoke the decisions on the policie s of that nature. Is that a fair assumption, Mr. Minis ter? 59 Mr.

McCrae: As I said earlier, I am not sure I understan d the direct ion the Honour able Mem ber is going here. Mr. Angus: Well, let me make it perfect ly clear then, Mr. Chairperso n, because I do not want any confusion on this. I want to know whether or not the Government is going to be reserving the right to implement policy decisions on pricing structu res with the Man itoba Liquor Control Board and/or whether they are going to be funnelling, laundering, altering, any of the policies before they go to the Crown corpora tions accountabili ty super board ? Mr.

McCr ae: The Government will be playing a role that is consis tent with its responsibil ity, consistent with what is contained in The Manitoba Liquor Control Act, and consistent with what is in The Crown Accountabil ity Act. Mr. Angus: Can I ask the Min ister who establi shes the policies on some thing such as estab lishing a wholesale price within the marke tplace, or who establishes the flexibil ity of allowing, under certain circums tances, some thing called "ha ppy hour." Who makes those decisions? Is it the Government or the admin istration? Mr. McCr ae: As Mr.

Emerson and I have both said, many of these decisions are worked out. Either the imp etus for it comes from the com mission, or if the Government has a concern, and lets the comm ission kno w what its conc ern is, thr ough th at kind of consulta tion process, decisions are arrived at. Mr. Angus: The wholesale prices as under review will go both to the accou ntability board as a prici ng alterna tive as some thing that was conside red , and it will go to the Government for deliberation.

The question in relation I brought up to "ha ppy hour," I question the logic beh ind some thin g that is specifically designed to entice people to consume copious quantit ies of alcoholic beverages dur ing a specific period of time at a reduced rate when we are on one hand trying to encou rage people to not do that and to act responsib ly. I am not sure who im plements the policy or who allows the policy and whether it has been reviewed or is consi dered to be reviewed. lt seems that there is a minor inconsis tency and quite frankly, Mr.

Minister, you have confused me as to who I should be talking to, either you as the Govern ment, or to Mr. Emerson in his two capacities. Mr. McCrae: Decisions about what is allowed and not allowed, in licensed prem ises, is certainly a matter for mon itoring and enforcement on the part of the licensing people of the comm ission, but changes in policy happen in concert and in consu ltation.

Here agai n, without comment ing on this particular policy, there have been occasions when it seems that the Li berals have wanted to join in with the NDP on being everybody's Big Brother and telling everybody how they should live. We set down ru les. As a Government we carry out the rules that have been set down, and I think the

Thursday, November 2, 19 89 general app roach of the Conservatives, as oppo sed to the Li berals, and the basic socialis t element of the province, the Liberals and the New Democrats, we do not see that we are Big Brother. We see that some segments of our society need the assistance and protection of Governm ents, but not all. We think that we have said very clearly this is what is going to happen if you get in a car and drive after you have been im bi bing. As a general rule we are not out there to be everybody's Big Brother like the Li berals and New Dem ocrats. Mr. Angus: Mr.

Chairperson, I resent the impl ications by the Attorney Gener al, and putting words into my mouth. The legitima te and honest questions that I am asking are based on a legitima te desire to kno w how 60 the policies are formulated and how we can effect posit ive change. What I would do or not do when I am in Government will remai n to be seen. Mr. Chairman: Commit tee rise. Is it the will of the comm ittee to consider the Annual Report for the Manitoba Liquor Control Comm ission for the fiscal years ending March 31, 1988 and 1989? Some Honour able Member s: No, comm ittee rise. Mr.

Chairman: The hour being 12:30, the commit tee rise. COM MITTEE ROSE AT: 12:30 p.m.