LEGISLATIVE ASSEMBLY OF MANITOBA Monday, 14 July, 1986. Time - 2:00 p.m. OPENING PRAYER by Madam Speaker. MADAM SPEAKER, Hon. M. Phillips: Presenting Petitions . . . Reading and Receiving Petitions ... Presenting Reports by Standing and Special Committees . . . MINISTERIAL STATEMENTS AND TABLING OF REPORTS MADAM SPEAKER: The Honourable Minister of Municipal Affairs . HON. J. BUCKLASCHUK: Thank you, Madam Speaker. I am pleased to table the Actuarial Report on the Group Insurance Plan for Employees of the Participating Municipalities in Manitoba as at January 1, 1983 . MADAM SPEAKER: Not ices of Motion . . .

Introduction of Bills . . ORAL QUESTIONS Brandon University - Perkins settlement MADAM SPEAKER: The Honourable Mem ber for Morris. MR. C. MANNESS: Madam Speaker, I direct my question either to the Acting Minister of Education or to the First Minister.

Two years ago when the Perkins ' firing was being discussed within the Assembly, Madam Speaker , I asked whether any public funds , either fro m the University of Brandon allocati o n, from the Universit ies Grants Commission, or indeed through surplus of any department at the Univers ity of Brandon would be directed to any in-court or out-of-court resolution for the Dr. Perkins' suit. As you can recall, Madam Speaker, I was stonewalled at that time by both the First Minister and the then Minister of Education.

My question: Did the Board of Governors determine through conversatio n with either the Minister of Education or the Universities Grants Commission or the Attorney-General's Office that they had it within their power to withhold the details associated with the out-of-court settlement with Dr. Perkins , that they had it within their powers to withhold this information from the public? MADAM SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Madam Speaker , the question raises matters pertaining to a number of various departments and I'll accept that question as notice and check it out . MR. C.

MANNESS: Well, Madam Speaker, if the First Minister is taking that question as notice , he may also then want to take the second one as notice .

Did the Board of Governor s or repr esentati ves of the Board of Governors seek information from either, again, the Department of Educ ation or the Universities Gran ts Commission or the Attorney-General's Off ice that they could strike an out-of-court settlement that would in par t absolve Erroll Black , who is a lecturer in the Department of Economics and a well-known prominent NOP Brandon East member, from any specific liab ilit y or action that may be taken against him by Dr. Perkins? HON. H. PAWLEY: The answer is no, Madam Speaker . MR. C.

MANNESS: Madam Speaker, could the Min ister then tell me how he would know the answer to the second question and not know the answer to the first question ? HON. H. PAWLEY: Madam Speaker , the Minister of Education responded to that last week. MR. C. MANNESS: A final supplementa ry then, Madam Spea ker. Did the Univers ity of Brandon Board of Governo rs communicate any of this settlemen t to the Department of Education or to the First Minister or any department of government before it was announced to the public , not the details but the fact that they had arrived at an out-o f-court settlement with Dr. Perkins?

Did anybody in government know about that before members of the public generally? HON. H. PAWLEY: Madam Speaker, certainl y not to myself ; I will take the question as notice inso far as other members of government. Brandon University - cutback of programs MADAM SPEAKER: The Honourable Member for Brandon-Wes t. MR. J. McCRAE : Madam Speaker, my question is directed to Act ing Minister of Education or to the First Ministe r.

In view of concerns expressed by nort hern Native band leaders about funding for the Brand on University Northern Teachers Education Program , the Brandon University Indian Leadership Prog ram, Projects for the Education of Northern Teachers and Inter-Univer sities North , can the First Minister tell the House how much, if any, of the accumulat ed surpluses used to the finance the settlement between Dr. Perkins and the Board of Governors was taken from surpluses earmarked for those programs? HON. H.

PAWLEY: Madam Speak er, I'll take that question as notice on behalf of the Minister of Education , but it's my understanding that there were no such funds. MR. J. McCRAE: Can the First Minister tell us whether the Minister of Education, or indeed the First Minister 1722

Monday, 14 July, 1986 has had further discussions with members of the Board of Governors over the weekend respecting making public the terms of the settlement? HON. H. PAWLEY: Mada m Spe aker, I've had no di scussion over the wee kend with the Board of Go vernors or representatives of the Board of Governors. I believe I did indicate Frida y, in the House - a copy of Hansard, indicating my preference that matters do be divulged to be forwarded to the board. MR. J. McCRAE: Mada m Speaker , I have a new question. I appreciate that sentiment on the part of the First Minister and I certainly agree with him.

I will direct my new question to the Minister of Education. Last week, Madam Speaker , the Mi nister said that the settlement of the lawsuit between Dr. Perkins and Mr. Erroll Black was not paid for out of public funds, and I ask the Mi nister how that ans wer squares with Dr. Perkins' assertion, as reported in the Winnipeg Free Press, that there is no coincidence . . . MADAM SPEAKER: Order please. That question is out of order. Would you like to rephrase your question? MR. J. McCRAE: Mada m Speaker, I would be delighted to rephrase the question if you could tell me in what respect it's out of order.

MADAM SPEAKER: lt is not up to a Minister to verify facts to the House. If the member has facts, it's his duty to ascertain the facts before bringing them to the House. MR. J. McCRAE: Ma dam Speak er, in view of the assertion by Dr. Perkins that the suit between himself and Mr.

Erroll Black, and the suit between himself and the Brandon Univ ersity Students' Union, in view of his assertion that those two suits were dropped at virtually the same time as the settlement with Brandon Univ ersity was no coincidence, can the Minister explain how that squares with his comments of last week that public funds were not used to finance the settlement with - or the dropping of the lawsuit against Mr. Black? MADAM SPEAKER: The Honoura ble Min ister of Education. HON. J. STORIE: Mada m Speaker , I can only assume that because Dr.

Perkins has more interest in the welfare of Brandon Univ ersity than does the member opposite. AIDS MADAM SPEAKER: The Honourable Member for Pembina. MR. D. ORCHARD: Thank you, Mada m Spea ker. Madam Speaker , my question is for the Minister of Health, and flows from the recently-tabled Annual Report of the Manitoba Health Services Commission. Ma dam Speak er, it is indica ted in the Health Services Commission Report that appr oximately 70 Manitobans have been identified as AIDS antibody positive in terms of the screening process, and that as of the date of the report some four Manitobans have contracted AIDS.

Those numbers have since increased since the March 31, 1986, tabling of this report. Can the Minister indicate whether the screening process that is being used on a voluntary basis at the request of physicians to determine the presence of AIDS anti body, or the AIDS Syndrome in terms of Manitobans, is the one and the same process that the Manitoba Red Cross is using to screen their blood donors? MADAM SPEAKER: The Honourable Mini ster of Health. HON. L. DESJARDINS: Yes, I believe it is. MR. D. ORCHARD: Mada m Speaker, I have a new question for the Minister of Health.

Last year, in the introduction of Estimates of the Department of Health, it was brought to our attention that the department had developed a new identification number system called the PHIN system, the Personal Health Insurance Num ber. That system, as explained by the Minister of Health last year, assured all Mani tobans of confidentia li ty in the use of tha t numb er for the development of health information on individ ual Manitobans.

Can the Mi nister indicate, given the assurance of confidentiality in the PH IN number system, whether the PHIN number system is currently being used in any identif ication of either Man itobans with AID S or Manitobans detected as carrying the AIDS anti body? HON. L. DESJARDINS: Mada m Speaker, I'll have to take that question as notice. Housing staff - active NDP constituency work MADAM SPEAKER: The Honourable Member for River Heights. MRS. S. CARSTAIRS: Thank you, Mada m Speaker. My question is to the Mi nister responsible for Busine ss Development and Tourism.

Can the Minister tell the House if any of the employees of her department, other than her executive assistant, are actively engaged in NDP constituency work? MADAM SPEAKER: Order please. Is the member asking the Minister about a subject within her ministerial responsibility? MRS. S. CARSTAIRS: Mada m Speaker, I would think her em pl oyees wou ld be within her ministerial responsibility. MADAM SPEAKER: The Honourable Minis ter of Housing. HON. M.

HEMPHILL: Mada m Speaker, I think that I have the normal complement of staff and that those people who are involved in the political arena matters are the normal staff that a Minister has. MRS. S. CARSTAIRS: Can the Minister explain why Mario Sousa, listed by her office as an employee with 172 3

Monday, 14 July, 19 86 a title "Ethnic Liaison Officer" would be in attendance at an executive meet ing of the NDP provincial constituency of Logan on May 27, 1986? HON. M. HEMPHILL: Ma dam Speak er, I would hate to think that anybody that was hired by any department in the Civil Service was precluded from involving themselves in the democratic process on their own time. Document, Tabling of MRS. S. CARSTAIRS: Ma dam Speaker , in light of your announcement and statem ent last week, I'd like to table the following document. Mada m Speaker , can the Minister explain why Mr.

Sousa was introduced as "a lia ison between the department and the community," and why he would participate in discussions of Logan's contribution to the next Provincial Council Meeting of the NDP, and why he would be listed in the Minutes as a good source of information for the preparation of September's presentation from the Logan constituency to the Provincial Council? HON. M. HEMPHILL: Mada m Speaker, it's very difficult to absorb all of the points that the member was raising without seeing the document which I would like to see and study so I understand all the points that she's making.

But I think in terms of . . . MADAM SPEAKER: Order please. Is the honourable member asking the Mi nister of Housing about an employee in her department? MRS. S. CARSTAIRS: Yes I am, Madam Speaker . HON. M. HEMPHILL: Ma dam Speaker, I think that it Y'Ould take me a little bit of time to read through the Minutes tha t she's referring to and I would want to do that so that I understand fully the point that she's making. In general, I think I'd like to make the point that Mr.

Sousa has been hired by the Department of Housing and that his job is a very important job. lt is a position that has not been filled before and that is, Madam Speaker, to get information about housing programs out to the ethnic community who often are in the greatest need and do not know what is available. They don't know there is Co-op Housing; they don't know there is Sweat Equity and we can't use the traditional forms of communication to get that information to them; so he has a very important role and one that I and this government need not apolog ize for. MRS. S.

CARSTAIRS: With a new question to the Premier, Mada m Speaker, will the Premier tell this House how many other ethnic liaison officers have been appointed by Ministers of his government and how many of them are engaged in active constituency work on behalf of his political party? MADAM SPEAKER: The first part of the question is in order; the second

part is not in order. Did the honourable member want to reph rase her question? MRS. S. CARSTAIRS: Well, yes, Mada m Speaker. Will the Premier tell the House how many other ethnic liaison officers that we have in the Province of Manit oba? MADAM SPEAKER: The Honourable First Minister. HON. H.

PAWLEY: Madam Speaker, if we were going to get into the subject matter of whether or not civil servants should be participating in political activity, then for an entir e year prio r to the last elect ion, the Conservative member who now sits in this Chamber, who had every right to do so, would not have been active in the Civil Service for a full year prior to the election, working properly within the democratic process to unseat this government, the candidate defeated by the Member for Ellice, the Conservative candida te Seech, would need some help, would not have been involved as a civil servant and a candid ate, a Conservative candida te, for a full year before the last provincial election.

Mada m Speaker, the Member for River Heights should be aware that legislation was changed back in 198 3-74 in order to provide to the public service of the Province of Manitoba democratic rights which we're proud to have been able to provide the civil servants of this province. MRS. S. CARSTAIRS: No one's denying the right of civil servan ts; we're denying them the right on government time. Will the Premier rid his government of this partisan, political activity on behalf of civil servants in Minister's departments and make a clear distinction between public service and narrow NDP interests? HON. H.

PAWLEY: Mada m Speaker , I would like to check out first the premise that the gentleman in question was working on government time. I gather it was in the evening, so it could hardly have been on government time. Election irregularities - Logan constituency MADAM SPEAKER: The Honourable Member for Pembina. MR. D. ORCHARD: Thank you, Ma da m Speaker . My question is for the First Minister. Could the First Minister indicate whether the office of Mr. Willis has been asked to investigate allegations of election irregularities in the constituency of Logan? HON. H. PAWLEY: Mr.

Willis, I believe, reports to the Legislature, Mada m Speaker. He doesn't report to me directly. MADAM SPEAKER: Order please. There is some uncertainty as to considering that the chief electoral officer is responsible to the Speaker and the Speaker cannot be asked questions, whether it might be best to refer any questions of that sort to the Legislativ e Ma nagement Commission. Although I'm sure that I would consider it to be in order if the honourable member asked the First Minister the question, and the 1724

Monday, 14 July, 19 86 First Minister answered that he was going to refer it to the Legislative Management Commission. lt is not within the admin istrative responsibility of the government, per se. Beef Stabilization Plan MADAM SPEAKER: The Honourable Member for Ste. Rose. MR. G. CUMMINGS: Thank you, Madam Speak er. My question is for the Acting Minister of Agriculture.

Given that the Beef Commission presented all the information to the cattlemen this spring that sh owed all the Commission payments and premiums based on historical information, and now the plan is being changed in the middle of the qua rter in a manner that was not foreseen by anyone who was making decisions at that point; given that we have mislead the cattlemen of this province, will the Minister now reopen the discussion with the Manitoba cattlemen regarding Manitoba's entrance into the Tripartite Program? MADAM SPEAKER: The Honourable Mi nister of Highw ays and Transporta tion. HON. J.

PLOHMAN: Well, Madam Speak er, I think the Minister of Agriculture has indicated quite clearly in this House that he was prepared to review tha t membership at any time that the benefits under the Tripartite Program equalled those of the provincial program. Th at is not the case, acco rding to the information that he has at the present time. If that should change, obviously, the Minister of Agriculture would be prepared to review it. MR. G.

CUMMINGS: The information that was brought to the House last week clearly was , once ag ain, misleading the cattlemen of this province because their net take home after their deductions . . . MADAM SPEAKER: Or der, order please. The honourable mem ber cannot accuse a Mini ster of misleading the House. MR. G. CUMMINGS: The information that was brought to this House was not complete inasmuch as the reductions of the premiums would virtually equal the same price as live cattle are on the market toda y. Information is also not available that the Manitoba . . . MADAM SPEAKER: Ord er, order pl ease.

The honourable member cannot: (

a) impugn the accuracy of information brought to the House by a Minister; and secondly, question period is not a time for delivering information, it's time for seeking information. Mr. G. CUMMINGS: May I ask a new question, Madam Speaker? MADAM SPEAKER: Certain ly. MR. G. CU MMINGS: Why was the Ma nitoba Cattlemen's Association not allowed to present the Tripartite information to the cattlemen's meetings that were held across the province this spring? HON. J.

PLOHMAN: Well, Madam Speaker, the member is seeming to indicate that the Minister of Agriculture is not interested in a National Tripartite Stabil ization Program . He has been the first to call for such a program over the years and it is simply because the Federal Government has not brought in a program that at least equals the benefits under the provincial program that, up to this point and time, he's - working with the cattlemen in this province - had to resist any overtures to join that program.

However, if there are chan ges made, the Minister of Agriculture has on many occasions indicated and demonstrated that he is willing to undertake the widest possible consultation and input from all int erested groups. And after having reviewed the information and the changing situations, if that indeed is the case, then he would be able to make a determination at that point, whether there should be a change in the policy that is in place at this time. MR. G. CUMMINGS: A sup plementary question , Madam Speaker , to the Acting Minister.

Because of the new information that now is coming forward and because of the fact that the letter that went out to the cattlemen of this province did not arrive in most households until the 10th, will have to be answered by the 25th of this month, will the Mi nister consider postponing the deadline that these cattlemen are faced with, making one of the most important management decisions of their lives, they've got two weeks to do it. Will the Minister reconsider? HON. J.

PLOHMAN: Well, Madam Speaker, if there are changed circumstan ces and it is not possible to have the decisions made and the information back within that period of time, I'm sure the Minister of Agriculture will extend that period of time. I will raise this matter with him. Airports­ federal cutbacks MADAM SPEAKER: The Honourable Member for Thompson. MR. S. ASHTON: Thank you, Madam Speaker. A qu es tion for the Mini ster of Highways and Transportat ion.

I'd like to ask the Minister if the Manitoba Government was informed or consulted about federal cutbacks in funding to airports, which will result in layoffs, reduced runway maintenance and reduced emergency services and training in those airports. HON. J. PLOHMAN: Well, Madam Speake r, it's rather ironic tha t the members opposite would be raising questions about reductions in spending in Highways, but the Member for Brandon West, for example, has never even raised the question of cutbacks of the airport safety in Brand on. He seems to be avoiding any issues, Madam Speake r.

MADAM SPEAKER: Order please, order please. May I remind the honourable member that he is not to cast 1725

Monday, 14 July, 1986 aspersions and, secondly, answers should deal with the matter raised and not provoke debate. The Honourable Mini ster of Hig hways and Transportation. HON. J. PLOHMAN: Madam Speak er, in answer to the question that the Member for Thompson raised, there was no consultation with the Provincial Government on the $17 million in cutbacks on airp orts across this coun try, and major other reductions in Transport Canada's budget that came out during the spring Budget.

We are going to be review ing the impa ct that these cuts will have with our own staff in airpo rts such as Thompson where there have been major reductions, as well as in Brandon, to determine what kind of impact it will have on safety. I have alr eady asked for a meeting with the new Federal Transport Minister, John Crosbie, and will be making representation on this issue, as well as a number of others when we have that meeting set up. MR. S. ASHTON: As a supplementa ry, Madam Speake r.

I'd like to ask the Minister what action the Minister intends to take in the case of the Thompson Airport, where a combination of cuts in hours of operation and a ban on overtime for snow removal could seriously affect the abil ity of the air ambula nce to use that airport in the winter? HON. J.

PLOHMAN: Madam Speak er, that is one of the specific questions that we will be raising with the Federal Minister, and it is one of the areas that I'm having the Department of Transportation here in Manitoba assess to determine other ways that we can provide for safe service of the air ambula nce at the Thompson Airport and other airports that would be affected by this action. lt's certainly of grave concern to us, Madam Speaker, because airport safety is one of the areas the former Minister of Transport federally has said is a primary concern.

Yet we are seeing his cuts falling and affecting the safety at our airpo rts here in this province. lt's not the case in Quebec where there are rather large increases in the airports in the Federal Prime Minister's riding. Highway construction and repair cutbacks MADAM SPEAKER: The Honourable Member for Pembina. MR. D. ORCHARD: Thank you, Madam Speak er, my qu estion is to the Min ister of Hig hways and Transportation.

Given his desire for consultation with the Federal Government and his desire to promote safety in the Province of Manitoba, and given the fact that more people are kill ed on the highways every day than are killed at ai rports through accidents, can the Minister indicate whether he has instructed his department to undertake a study as to the imp lications to the driving safety of Manitoba motorists and tourists in this province caused by the $12 million cutback to his Highway Program, which has allo wed his highw ays to become a sea of potholes, unsafe for the driving public? HON. J.

PLOHMAN: Madam Speaker, it's another case where the Member for Pembina and the Opposition Conservatives here are trying to protect their federal counterparts in Ottawa, instead of standing up for Manitoba. Instead of arguing against us, they defend the cutbacks of the Federal Conservatives in Ottawa, Madam Speaker , and they defend the inequities that we see where we see the Montreal Gazette reporting $74.9 million into small regional airports in Quebec and cutbacks here in Manitoba. That's the kind of equity tha t they defend.

Madam Speake r, let me just say tha t the New Democratic Government over the first four years, since 1981, has put more money into Highways than any government in the history of this province. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. The Honourable Member for Pembina. MR. D. ORCHARD: Thank you, Madam Speaker. Madam Speak er, a new question to the Minister of Hig hways and Transportation, my

preamble being simply that my concern in posing questions about highw ay cutbacks is entirely the safety of the Manitoba driving public and those people using the highways. Can the Minister indicate, in having his departmental budget cut back by $12 million for highway construction: No. 1, whether he consulted with the Federal Minister of Transportation; and No. 2, whether he has instructed his department to determine how many more people will die and be injured on Manitoba highw ays because of their lack of maintenance, their lack of reconstruction and their terrible and deplorable driving condition? HON. J.

PLOHMAN: Madam Speake r, there has been no reduction in highw ay maintenance in this province. We have expanded highway maintenance every year under this government and, as I've indicated earlier, there's more money going into highw ay construction over the period of our government, over the last four years, than in the history of any government in the Province of Manitoba.

Insofar as the Federal Government, I have consistently consulted with the Federal Minister to attempt to have him partici pate and have the federal level partici pate in highway funding in this province, in the same way that they do in other areas in Quebec and in the Maritime provinces, Madam Speaker , and they have consistently refused to do that. I will continue to make representation to see that the Federal Government recognizes its responsibility for interprovincial routes and the additional impact on provincial highways because of rail-line abandonment.

We hope that the Federal Minister and the Federal Conservativ es will have some lobbying done by their provincial counterparts as well here in this province to protect the rights of Manitoba and stand up for the interests of Manitoba. Beef Stabilization Plan MADAM SPEAKER: The Honourable Member for Roblin-Russell. 1726

Monday, 14 July, 19 86 MR. L. DERKACH: Thank you, Madam Speak er, my question is for the Acting Minister of Agriculture.

In view of the fact that in the spring round of meetings that the Minister of Agriculture had with farmers, he did not indicate to them any vast changes in the beef stabilization plan, and in view of the fact that the recent alternativ es that have been provided for the farmers have been surprising, will the Mi nister assure the farmers who choose the higher premium alternative plan that the support level for slaug htered beef will remain constant for at least six months to provide some stability to the industry which has been taken away? MADAM SPEAKER: The Honourable Mini ster of Highways and Transporta tion.

HON. J. PLOHMAN: Madam Speaker , I will take the specifics of that question as notice. But I can indicate to this House that the Minister has consulted, I think, widely during the time he has had discussions on the stabilization plan. The producers that are involved in that plan, which are the vast majority in this province, are quite aware of the various impl ications with regard to the unfunded liability of that plan at the present time and are prepared to get involved in ensuring that plan does remain the best stabilization plan in Canada. MR. L.

DERKACH: Then can the Acting Minister of Agriculture explain to the House and to the farmers of Manitoba why this particular letter of July 3 has caught so many cattle producers by surpr ise, if in fact there was such communication going on with the cattle producers? HON. J. PLOHMAN: Madam Speak er, I said I have taken the specific matters relating to the letter , I have taken that question as notice, and will discuss it with the Minister of Agriculture. Depo-Provera -hearings MADAM SPEAKER: The Honourable Member for Kildonan. MR. M.

DOLIN: Madam Speaker, my question is to the Minister responsible for the Status of Women. Given that the drug, depo-provera, appears to have been cancer-producing in la boratory animals, and also the fact that Women's Health Clinic in Winnipeg has been one of the leading proponents of review of the use of this drug; also given the fact that I understand that the Honourable Jake Epp, Federal Minister of Health and Welfare, is planning to hold some form of national review, will the women's groups in Manitoba have the opportunity to meet publicly around the use or potential use of this drug?

MADAM SPEAKER: The Ho nourable Mini ster responsible for the Status of Women. HON. J. WASYLYCIA-LEIS : Thank you, Ma dam Speak er. I'd like to thank the member for that question, because it is a very important issue. I've had a number of calls from women's organizations on this issue, the most recent of which was from the Manitoba Coalition on Depo-Provera, who have written to me asking me to urge the Federal Government to include consumer representation on the hearings that are beginning across this country.

I will be doing so, just as the Minister of Community Services and the Minister of Health did many months ago. I think it is important to indicate that members on this side of the House share the concerns of those women's groups, that the Federal Government is not ensuring that a consumer panel is part of these hearings and tha t the experiences of women, the very people who have used the drugs, are not being included in these hearings across the country.

I hope members opposite will join us in urging the Federal Government to reverse this policy and to ensure that their definition of open government is really a true and meaningful one. MR. M. DOLIN: A supplem entary, Madam Speak er, to the same Minister. Are these hearings the Minister refers to public heari ngs, or is the Mini ster reque st ing consumer input? Are they to be public around Canada? MADAM SPEAKER: The Honour able Mi nister responsible for the Status of Women. The Honourable Member for Lakeside on a point of order. MR. H.

ENNS: From time to time, Madam Speak er, you remind us about the Ministers having to answer qu estions within their area of ju risdic tion. My understanding the question of drug regulations, of whatever description, is entirely a matter for the Federal Government to consider and, while we enjoy listening to the Minister's responses, I believe on perusal of the question, you'll find the question is out of order.

MADAM SPEAKER: I remember a question a week or two ago directed to that particular Minister and it was made clear that because the question was dealing with her relationship with women's groups, and with representing their interests, at that time it was in order and the first question I took as being in order because it fell within tha t particular wide category. The second question, if the Minister is responsible for setting up the meetings, then I think she could answer the question. If the meetings are meetings that others are setting up, I think the question should be clarified.

The Honourable Member for Kildonan. MR. M. DOLIN: I would like to repeat the question. it's been some time since it was asked, the Minister may have forgotten what the question was. I would like to ask, the meetings that are being held regarding the drug depo-provera, will they be public or private, and will women in this province have the opportunity publicly to state their opinions regarding the use of this drug? HON. J. WASYLYCIA-LEIS: This issue certainly does fall in my area of res pons ibi lity as the Mi nister responsible for the Status of Women.

Giv en that women's organizations in this province are asking this government, and indeed Members opposite, to help 1727

Monday, 14 July, 19 86 ensure that these closed meetings, by invitation only, are opened up to consumers and to the very women who have experienced problems with the drug. MR. M. DOLIN: A new question to the Minister of Health on the same subject. Has the Minister of Health been in contact with his federal counterpar t to see whether or not these private, invitation-only meetings, as described, will be made public to allow input of the women of Manitoba? MADAM SPEAKER: The Honourable Mini ster of Health. HON. L. DES JARDINS: Madam Speak er, yes.

I did communicate with the Federal Minister of Health and requested that the public meetings be held, but I did not get a satisf actory answer. Manitoba Lotteries Commission - appearance before Committee of House MADAM SPEAKER: The Honourable Member for Charleswood. MR. J. ERNST: Thank you, Madam Speak er, through you to the Mi nister responsi ble for the Manitoba Lotteries Foundation. Is the Mini ster now able to table the Review Committee Report of the Lottery umbrella system before the House, in light of the fact that the Winnipeg Free Press app ears to have a copy of that report now? HON. J.

WASYLYCIA-LEIS: Thank you, Ma dam Speake r. lt's interesting that I am getting a question from the Member from Charle swood based on information from a Free Press

article that isn't correct, and no doubt is a result of the questions asked last week by the Member for Charleswood. I will repeat what I said to the member last week and thereby clarify the ina ccurate statement in the Free Press which said that I would only release this report when a legislativ e committee begins debating the Foundation's estimates.

If the member will recall, in response to his question on July the 8th, I clearly indicated that I would be releasing the report after I had fully consulted with the umbrella groups who are impacted by this report, and after I had given a copy of this report to my colleagues in government, to the Cabi net, so they could consider the recommendations being made and, at that point, make a decision about releasing this report. MR. J. ERNST: Madam Speak er, through you, then, can the Minister advise the House if she has indeed given copies of that to the umbrella groups? Has she received their replies?

Has she given copies of the report to all of her Cabin et, and government mem bers colleague s, in light of the fact that the Winnipeg Free Press now has their copy of the report? HON. J WASYLYCIA-LEIS: Madam Speak er, it's a matter of curiosity to members of this House how that report was leaked. lt sounds like the Member for Charle swood has more informa tion about it than members on this side. I want to inform the Member 1728 for Charl eswood tha t I have given copies of this report to every single umbrella group.

I have met now with the Manitoba Sports Federati on, the Manitoba Arts Counc il, the Manitoba lnter cultural Counci l, the Manitoba Community Services Council. I will be meeting with the United Way, the Manitoba Heritage Foundation, the Manitoba Medical Research Group and, once I have completed meeting with all of those groups, which is the courteous, intelligent way to proceed, I will then be sharing my recommendations, based on those consultations, with my Cabi net colleagues and it will be up to my Cabinet colleagues to determine the release of this report. MR. J.

ERNST: Madam Speak er, a new question to the same Minister. Would the Minister now consider bringing the Report of the Mani toba Lotterie s Foundation before a Standing Committee of the House so that it can be dealt with in a proper manner? Madam Speak er, in the past, it's been brought before Estimates Committee under the Minister's Salary. lt has not been brought forward before a Standing Committee of the House; it has not had the proper consideration by all members of the House; it does not have the staff members there; it has not had that information that should now be available.

Will she now bring it before a committee of the House? MADAM SPEAKER: The Honour able Mini ster responsible for Lotteries. HON. J. WASYLYCIA -LEIS: Madam Speak er, as I indicated earli er, there will be ample opportunity for questions during the Estimates process on the Manitoba Lotteries Foundation. The member should also feel free, as I've said before, to ask me questions now or at any point about this report so that we wouldn't be continuing the kind of ina ccuracies that are put forward in the Free Press.

The members perhaps should be reminded that this umbrella report was initia ted many years ago after the system was put in place by the Minister of Health because this government beli eves in open government, in consultation, and in improving the system based on public input and public participation. MADAM SPEAKER: The time for Oral Questions has expired. ORDERS OF THE DAY HOUSE BUSINESS MADAM SPEAKER: The Honourable Government House Leader. HON. J. COWAN: Thank you, Madam Speak er.

I would just like to remind members that the Standing Committee on Public Uti lities and Natural Resources will be meeting tomorrow at 10:00 a.m. to consider the Report of the Manitoba Telephone System. This is a continuation of the meeting that was held last Thursday. Then, Madam Speak er, I'd like to move, seconded by the Member for Ellice, that Madam Speaker do now leave the Chair and the House resolve itself into a Committee to consider of the Supply to be granted to Her Majesty.

Monday, 14 July, 19 86 MOTION presented and carried and the Ho use resolved itself into a Committee to consider of the Supp ly to be granted to He r Ma jesty with the Honourable Member for Burr ows in the Chair for the Department of Finance; and the Honourable Member tor Kildonan in the Chair for the Department of Business Development and Tourism. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - BUSINESS DEVELOPMENT AND TOURISM MR. CHAIRMAN, M. Dolin: Committee, come to order. We are considering the Estima tes of the Department of Business Development and Tourism.

Prior to entering into the specifics of the Estimates, we will begin with a Ministerial Statement. The Honourable Minister of Busine ss Development and Tourism. HON. M. HEMPHILL: Thank you, Mr. Chairman. I think at this point it's not my intention to make an extremely long presentation or to give a great deal of statistics or information in my opening statement.

I think that I simply want to say overall that I think the business sector in the Province of Manitoba is doing exceptionally well, and that all of the indicators we have tell us that is so. lt doesn't matter whether you're looking at the amount of public and private sector investment in the province, which is one of the highest in the country and almost two-and-a-half times the national level, or whether you're talking about the fact that we have had a larger number of business starts than any other province. Our businesses are up 19 percent; our bankru ptcies are down.

While bankr uptcies are never a good statistic that you can give, the fact that ours are lower than the national rate at the same time as we have a 19 percent increase in business starts is an indication, I think, that things are very healthy. Our capital investment in the province is projected to be 8.9 percent, almost double the national average of 4.6 percent. Manufacturing growth rate, much of it in small business, is expected to grow by 7 percent, exceeding the national average. Our new business formation is 36 per thousand, compared to the national rate of 30.7.

All of those factors say that we've got a fairly healthy business economy. We all know how important the small business sector is as an economic tool to our province, both to our small communities and to our province. The employees can account for more than 93 percent of all business establishments. They employ 30 percent of the workforce or 150,000 people.

I think the service sector, which is one of the sectors of the future where the growth is going to be, is made up largely of small businesses, and that's becoming increasingly important and is now accounting for more than 60 percent of the total provincial output and emplo yment, and the numbers continue to grow. lt looks to me as though we can say that while we wanted to work very closely with them and continue to make sure tha t we're helping and supporting small business and the business community in Manitoba with a number of projects and programs and policies that are designed to help them, and tha t we have a cooperative program worked out with them, where we're developing the new programs together with the business community, not developing them ourselves and laying them on them.

A good example is the Manufacturing Program that we're just bringing on board, where I've had meetings with the manufacturing sector that were very helpful and are going to help us make some changes and adaptation to the program, so that it will be better from their point of view and give them more help. So we want to work very, very closely in everything we do with the business community and have been working very hard to provide consultation resources, support, put on workshops, put on management train ing programs, give counselling, and support in that arena to the businesses in the Province of Manitoba.

I feel we're going to separate these; I think I'll leave my opening comments on Tourism for the point that we get to Tourism. So just in closing, Mr.

Chairman, I would just say that I think that the Government of Manitoba recognizes how important small business is to our province and our economy and, recognizing that, they have taken some clear steps to give support and help to them in a number of areas - and we'll be getting into them when we go into the specific Estima tes - and that we believe that all of the factors and indicators, wherever they come from, whatever the study is, or wherever the information comes from, indicates that Manitoba is one of the booming provinces and that our potential for growth and development is one of the highest in the country.

As Minister of Busine ss Deve lopment and Tourism, that pleases me a great deal. MR. CHAIRMAN: The Member for Portage la Prairie. MR. E. CONNERV: Thank you, Mr. Chairman. I want to thank the Minister for the suppl ementary information she provided me with. I think it's going to assist us in going through the Estim ates much qu icker; we'll be able to zero in on specific items. I am concerned with the department itself, first of all, the department that is sup posed to be assisting business and counselling business, itself is one of the worst departments in the government.

I would refer to the Aud itor's Report, where he states that the Department of Business Development and Tourism, and the Department of Industry, Trade and Technology have not submit ted satisf actory Expenditure Estimates data for both 1984-85 and 19 85-86, and that necessitated much other work. I think it's ironic the department which is trying to assist busi ness isn't able to run th e department itself. In the Estima tes we'll get into that area and we'll be discussing them. There are some very serious questions to be raised and we'll have an opportunity to look at some changes.

I think it's important within our industrial base that we have a very viable, a very healthy, and a very efficient business community, not just for the jobs it creates , but I think as ind ividu als we need the busi ness community to service us and if we don't have an adequa te busine ss communi ty with adequa te competition, then the public isn't well served . 1729

Monday, 14 July, 1986 The one concern I do have, though, is that the business development area should be more in the private sector and less in the public sector. An indication of this is say maybe MTS trying to get into retailing and other things tha t rea lly are private sector investments and actually are hurting some small business people. I think the priv ate sector has the imagi nation and will to develop new ideas and technology and will create new services and processes. I am pleased with the unemployment figures as was read out in the House yesterday.

One tempering figure is that we have to understand that 1, 684 of those jobs are with the Census and that after the 18th of July, I think is their wrap-up day, we'll find those 1, 684 people will now become unemployed so the statistics aren't as great for all of Canada - all provinces are the same - so we have to be concerned. The Minister said that she was very concerned about private investment and talking very much about the manufacturing sector. In real ity, the manufacturing sector, which really is the key to our provincial economy, along with processing and that, but manufacturing is down four percent.

What we have to recognize is that the manufacturing sector is the sector that is in the most trouble, and if we don't do some things to change it, we're really going to be in bad shape; we'll be looking for more transfer of payments from Ottawa because of that. An indication is like Tan Jay, because of government's unwillingn ess to get in on some labour laws and just some common-sense things, moved 400 to 500 jobs to Thunder Bay where they are better received. So I think that's an indication that the government has to take a look at some of the programs they've got.

I'm pleased ; I noticed the MMN Program is now in place. And if Elijah is here, I hope Elijah is aware of the MMN Program for Native business people. I think this is the area that, when I spoke in the House on that one Resolution, we want to try and move the Native people in to be self-sufficient and helping them establish their own businesses is a good way to do it. I think we have to be aware that 80 percent of all new firms fail in the first couple of years.

I think that is an area that when our programs are being developed that some methods of assisting these new firms to get through the first couple of years. Maybe there could be a stand-down on sales taxes or different things, some incentives, to get them beyond those first two years where they can then make good business tries; and also keeping in mind that 80 percent of all new jobs are created by small business, so job creation has to be in the form of small jobs. I would like to discuss in detai l, when we get further on, the Small Busi ness Development Program.

I hope the Minister now has the program in place that we can disc uss it. Th ere are some areas with the new businesses that maybe we can work with the program to assist them. I think the main thing that governments have to do is the clima te and the attitude within a province to enhance business, to lure business, to get business to expand. After listening to the Minister, I'm really quite concerned when she thinks that the investment sector is really doing well.

In effect, if we took away the new housing starts, and I don't consider housing starts to be investment in the sense of a business that is established; once you've built the house, that's all you're going to get out of it. I think there, if you take the housing starts away, really, from 1981 until last year, you have a net reduction in private sector investment, keeping in mind that the public sector investment has increased 50 percent in that period of time. lt went from around 30 percent of the investment to 50 percent.

The spinoffs from some of the large public sector has also been a reason why some of the private sector has expanded. We are not healthy in the private sector

section and I think we have to be aware of that. The Minister talks about meeting and talking with people. I don't know if she ha s met with the people from the CFIB, Canadian Federation of Independent Business, and I think tha t this business represents a large number of businesses in the country and they've done an awful lot of work. There's some excellent figures in here to show us where the problem areas are. I think this is what we have to do. We go with our strengths, but also understand where the problems are. We have the highest minimum wage in Canada.

I think this is a concern to young people who are trying to get a job, that the wage is so high tha t some businesses can't afford to hire them. When we go down as low as $3.80 and $3.75 in other areas , it's significantly different. One of the other areas that they were looking at was with the payroll sector and Manitoba, of course, rates with one of the highest in the problems with payroll and, of course, there's only Quebec, I think, and Manitoba that are on the payroll tax.

When they did a list of what are the things would be a reduction, would be most beneficial to your business, the payroll tax came out No. 1. Manitoba was 34 percent, compared to 18.5 percent for Canada. So the payroll tax is a significant factor here. Corporate income tax in here, of course, we're one of the highest ones, but not as much. What is the small business restraint in business and have you impo sed, due to the current busine ss recession, a reduction in the number of employees? Manitoba has come out poorly in a lot of these statistics.

So if the Minister hasn't a copy of these, I'm sure that they would be glad to - did Mr. Batting not meet with your group, because he said he had met with the government and I'm sure ... HON. M. HEMPHILL: When you finish your opening speech ... MR. E. CONNERY: . . . you were the Minister at that point. I think there's a good indication tha t there's a lot of things that, if the Minister is sincere about listening to what industry is sa ying, there's a lot of information. The Chamber of Commerce, of course, is another excellent avenue . . . HON. M. HEMPHIL L: I met with them toda y. MR. E.

CONNERY: . .. for good, solid information. lt's getting late in the season, with the programs being developed. Within our clima te that we're talking about, one of the areas that was badly challenged was the red tape 1730

Monday, 14 July, 19 86 and government regulation. The former Minister did quite an exhaustive trav elling and study of the red tape and I don't know if anything has come about to reduce it. So you can comment on that after. Our labour laws, of course everybody knows we've got the most restrictive labour laws in the country. If you're looking at job creat ion and busi ness development, we have to look at it in the sense of what it's doing to business. When you think it's creating jobs, as in the case of Tan-Jay, and they move to Thunder Bay because of labour laws, then I think you're wrong.

Workmen's Compensation is another area of concern where the businesses are really afraid that there's going to be a large increase in Workmen's Compensation costs and, when we look at what has happened there - I think we had a surplus of 36 million when your government took over to somewhere just under a 30 million deficit. So we're looking at way over 50 million that somehow has been frittered away in the last five years.

The payroll tax has been discussed and deficit reduction is definitely a concern of business, because they know if we don't bring the deficit under control we 're going to have some severe problems down the road. In the case of bank ruptcies that the Minister stated, when we look at the NDP record of bankruptcies versus the previous four years that we were in, we had maybe one-third or one-half the number of bankru ptcies that we experienced under NDP Government, and they said it wouldn't happen. ManOil was going to make everybody free and easy.

There'd be no farm losses, no bankru ptcies, and all that ManOil is doing is adding to it. Anyway, th ose are my open ing remarks, Mr. Chairman, and from that we can go to the Estimates. MR. CHAIRMAN: Thank you. If the staff would like to come forward please? We will begin with Resolution 22. Item 1.(

a) we will defer, and begin with Item 1.(

b) Executive Support - the Member for Portage. MR. E. CONNERY: Pardon me, I was interrupted. MR. CHAIRMAN: Item 1.(

b) Executive Support - pass? MR. E. CONNERY: No, we'll discuss it. MR. CHAIRMAN: Oka y, the Member for Portage. MR. E. CONNERY: I want to go to the chart. The overall department, one question I want to ask and it's right at the very top, the total amount was budgeted last year for $823,600 and it came out as only. 635,000.00. What is the reason for the humongous discrepanc y between what was budgeted and what was actually spent? HON. M. HEMPHILL: We're trying to find out where you are. MR. E.

CONNERY: Well, if you look at the Administration and you take last year's Estimates, when 1731 we did last year's Estimates you had estimated to spend $823,000.00. HON. M. HEMPHILL: In Administrat ion? MR. E. CONNERY: Yes, the total for the (a), (b), (c), (d). I'm looking at last years Estimates Book. There are lots of good things when you go back. HON. M. HEMPHIL L: Mr. Chairman, it's my understanding that's the adjusted amount in the adjusted Estima tes. MR. E. CONNERY: What were the reasons for adjusting it? HON. M.

HEMPHILL: We'll gather that information and give it to you as soon as we have it, if you want to go on with the next . . MR. E. CONNERY: I would assume, in looking over IT and T and Busine ss Development and Tourism tha t Finance and Administration is for both departments. You have a common Finance and Admini stration Department. HON. M. HEMPHILL: That's correct. MR. E. CONNERY: In my opening statement I discussed the report of the Auditor where he sh owed there were some serious downfalls or lack of information.

What is being done in this department, because it affects both, it affects the two most important departments as far as job creation and business that we have, and yet we have a common problem. HON. M. HEMPHILL: Mr.

Chairman, there was a full review done of the matter and there was a committee of deputies that worked to address it, and it's my understanding that we have addr essed the issues that were raised in cooperation with the Department of Finance to resolve the issues tha t were identified; and that there are currently actions under way to correct the identified shortcomings in the system, so I think we have met, we've reviewed and we've come up with

an act ion plan tha t is in the process of being impl emented to improve. MR. E. CONNERY: What other areas come under the Executive Support? You have the deputy and how many . . . There are so many books and supplements to keep them all . . . HON. M. HEMPHIL L: I know. MR. E. CONNERY: Page 9 or Page 10. What are the total staff. I've seen ... MR. CHAIRMAN: The member is looking for staff breakdown under . . . HON. M. HEMPHILL: Could you just indicate what the exact question is that you want, what information is it you wanted?

Monday, 14 July, 1986 MR. E. CONNERY: I just wondered what staff were in there. HON. M. HEMPHI LL: Is it what staff are in there? MR. E. CONNERY: And that's just supp ortive to the HON. M. HEMPHIL L: Yes, the deputy and myself and the office staff that goes along with it. MR. CHAIRMAN: Is the Member for Portage looking for the staff break down, their job titles? MR. E. CONNERY: Yes, it's in here now, as far as the staff breakdowns. We have it in the book so it's not a large concern. I think we can pass on that one. MR. CHAIRMAN: 1. (b)(1)-p ass; 1.(b)(2)-pass. No? - the Member for Portage; 1.(b)(2). MR. E.

CONNERY: When you were doing your overall strategic planning, the one thing that I . . . MR. CHAIRMAN: Excuse me. We passed 1.(b)(2). You're on 1.(c)? MR. E. CONNERY: No, we didn't pass ... Oh, 1.(b)(2), yes. MR. CHAIRMAN: 1.(c) - the Member for Portage. MR. E. CONNERY: Once again, the budget a year ago was tor $1 75,400 and you only spent $1 23,000.00. Not that I'm against the reductions, but what changes took place in there? HON. M. HEMPHIL L: Mr. Chairman, that was simply overall reductions. We delayed hiring people a little bit later and made overall reductions to reduce the amount.

Actually we've done this in a number of areas and I think most people are doing it, where you can just slow down a bit of hiring, or cut back on some of the expend itu res or when you're buying things; we're attempting to do that. MR. E. CONNERY: In your Strategic Planning what areas does this encompass? HON. M. HEMPHIL L: Mr.

Chairman, it includes the planning process; it includes research to make sure that we have information and analysis necessary for the Strategic Planning. lt includes the development and presentation of alternative scenarios, a three- to five­ year outlook, the exploration of specific topics or issues on request from the Executive Committee. In terms of planning, we're dev eloping a long-term planning program. In terms of achievements under this area we're looking at computer systems where we've upg raded the existing systems in software and additional systems in Small Enterprise Deve lopment Centre in Winnipeg.

We're looking at maintaining the Systems Consultant in the Tourism area to make sure that our software is compatible, and we have had a two-day Depart mental Planning Conference in February and March and a Strategic Program overview document for the fall Cabinet Planning Conference has been prepared. MR. E. CONNERY: Is the Jobs Fund involved with business development, money from the Jobs Fund being allocated? HON. M. HEMPHILL: Yes, we have, I think, it's about eight staff years and about $6.5 million in total that are actually for our department w hich are adding to the existing Estimates. MR. E.

CONNERY: $6.5 million. Is this allocated, like you know that you're going to have this to spend in business? HON. M. HEMPHIL L: Yes, we know we're going to have this and where it's going to go.

For instance, the Venture Capital Program is there; the Manufacturing Adaptation Program at $1. 2 million is there; Youth Entrepreneurship Program, which helps fund things like the Career Symposium and High School Student Symposium; the Emp loyee Ownership Program, where employees and emp loyers are looking at more of a sharing of productivity, of money between the employer and the employee we have a program under there; and a Limestone Coordinator whose job it is to try and relate programs tha t are going on in the community, business development in the community and Limestone and link the two together.

So those are all of the things that are our programs and activities that are being funded under the Jobs Fund; it comes to $6, 599,000 and eight staff years. MR. E. CONNERY: Why wouldn't those dollars be indicated in these Estimates? HON. M. HEMPHIL L: Mr. Chairman, because they're new initiat ives and so ... They're new initiatives under the Jobs Fund for long-term job crea tion. MR. E. CONNERY: But is this money only going to be here for one time or are we going to be having it for some time to come? HON. M. HEMPHILL: No, the program is a four- to five-year program.

So we're undertaking a major program in these areas, a major commitment. MR. E. CONNERY: So we're looking at $6.5 million over the next, well, I guess the term of the government then - whatever that is - to have, but it's not going to show in the Esti mates, it's just going to show in the Jobs Fund. HON. M. HEMPHILL: Well, it's going to show in Jobs Fund.

So I think that there are a number of departments where specific new initiative programs are coming through the Jobs Fund and when the Jobs Fund comes up I think we can go into any detail that you want about the business development initiativ es that are there, or even now if you want, I don't object. MR. E. CONNERY: Well, I would like to know where we're going with this Jobs Fund money and a better 1732

Monday, 14 July, 1986 break down. Mr. Chairman, I just can't conceive any business person reading this and saying, well you know, you people are doing a good job for us. Who would ever look and say, there's $1 56,000 in the Estimates but on top of that we're going to spend $6.5 million besides that when you show 15 6,000 in Estimates. Well okay, not in that sector but . . . MR. CHAIRMAN: Well, if I could just clarify for the member. Resolution 144 deals with the entire Jobs Funds which would include this item.

So what I would suggest to the member is perhaps the specifics on how that money is allocated, under what terms and to what departments is more appropr iate under Resolution 144 than und er Busine ss Devel op ment and Touri sm. Bus iness Deve lopm ent and Tour ism, the way the Estim ates are laid out is what you have here. The Jobs Fund is under Resolution 144 which deals with Jobs Fund all ocations to all departments, which I think from what the member is getting at in his question would be more appropria tely addressed under 144. MR. E. CONNERY: I can't disagr ee with you more whole heartedly.

We're discussing programs under Business Development and you're spending $6.5 million in this area and I want to know what is being spent on what area. MR. CHAIRMAN: I would suggest to the honourable mem ber tha t Re solution No. 14 4 deals with the particulars of the Jobs Fund. I would also refer the member to Rule 64(3) which states that the Chairman of the Committee will decide order in the business. I am suggesting that questions of specifics under 144 in the resolutions is not in order at this point.

If the Minister wishes she can answer that but if you're asking for specifics of 144 I would suggest that you wait until 144. Do you want to comment on that, Madam Minister? HON. M. HEMPHILL: No. MR. CHAIRMAN: I would also suggest that if you are going to reflect on the Chair, I would ask you to withd raw. But the fact is the Chair is att empting to run these meet ings as impa rtially as possible to allo w full clarification and investigati on. The Estima tes are set up in a manner to allow that.

Now if you do not agree with the way the Estim ates are set up, you should have brought that up with the Department of Finance where it would have been appropria te. But here we are dealing with Item 2(

c) and I would appr eciate you not reflecting on the Chair and sticking to the su bject matter at hand. The Mi nister wishes to make a response - the Minister. HON. M. HEMPHILL: Mr.

Chairman, I think that what he might be asking, and I'm not sure, just as a bit of an overview on what those programs are, and if he wants that, you know, for instance we could spend just a couple of minutes on the Ma nufacturing Adaptation Program, which is 1. 2 million, and this is one of our top new initia tives and the reasons that we have chosen it are exactly the reasons he said in his opening statement. it's one of our major sectors and it is falling behind; it's not capturing it's share of the market.

We're losing in the number of jobs, we're losing in our markets, and we have to improve the sectors and help the sectors that are there before we worry about going out and creating new ones. This is the key. So the Manufacturing Adaptation Program is designed to do that. And what its purpose is is to largely help them move from the production levels that they have now, with new tech nology, into being able to increase their productivity by adapting the technology that they are using and adapting using marketing procedures to make sur e tha t they have markets for the increased production.

When I said that I had met with them, I met with the manufacturing industry and had an excellent meeting with them. As a result of that meeting, we're going to be making changes in the program because they weren't asking for a lot more money, they weren't asking for a major change in the criteria, but they wanted us to be more flexible because they said sometimes the needs of small businesses aren't, for instance, for a big robotics machine, you know, which is very sophisticated and very expensive.

Ma ybe there are small businesses that can increase their production quite considerably by going to a higher level machine that is not what would be called at the highly sophisticated level. They also indicated to me that we needed to do feasibility studies and that small businesses needed help doing studies to see whether or not they should go into new technology and what it would be supposed to do. The other thing they want us to look at and talk about is the training and retrai ning of staff when you're changing and moving into technology.

So that's one example of a program that is coming under the Jobs Fund and that's one of the largest amounts of money at $1. 2 million. The other large amount is $4 million, Venture Capital. There we've got a $35 million commit ment by government overall for a five-year period. That's a major commitment to the Venture Capital Program. There is an area here in these Esti mates where we can discuss Venture Capital at a later date and get into any details you want there.

The Youth Entrepreneurship Program is a very small program - there are a few small programs in there - and it really is our help and support to the Career Symposium that takes pla ce out in Brandon; we give $6,000. We help young Manitobans who are applying for the government Youth Business Start Program, which is under Employment Services, but we help students apply and do an evaluation. I think that last year's evaluation indicated a very low failure rate so it looks like that program is going well. That's a very small program. Another program that gives $50,000 is the Employee Owner ship.

What is happening there is that we worked with I think something like 38 businesses, or quite a large number of businesses were looked at, and the purpose of looking at them was to try and identify those businesses. Oh no, that's Threshold. Just a minute. I was just going to tell you all about the Threshold compani es MR. E. CONNERY: We're both learning together; don't feel bad. HON. M. HEM PHILL: That's right. I was going to tell you everything you wanted to know about the Threshold companies, which I will tell you but another day. 1733

Monday, 14 July, 1986 This is a program where we are working on employer and emp loyee equit y, improving the benefits. What happ ens here is there is an agreement between the emp loyees and the employers to work together to increase production where there is an equ ity gain and sharing for both the emplo yer and the employee on the increase production. We have an example of a committee of a business and a cast where the employees are tremendously satisfied because they now have a lot more participation in saying what is going to be produced and how, and in contributing ideas for improving production.

They have increased their production tremendously and they are now benefiting from that increased production as are the employers. So that's a program that there are, for instance, about 26,000 firms in the U.S. that have developed an equity-sharing process. I think maybe it's one of the ways to go because if people are involved in participating in the job that they are doing, in ideas for increasing production, they're likely to do a lot better job, and that's showing in a couple of cases that we've been working with. it's a small program with a lot of potential.

Those, I think, other than the Limestone office in Norman, where I suggested that their job is to work and coordina te between the business development in the community and the business development tha t is coming about through Lime stone, to coordina te activities between the two, those are the major activities of the $6 million under the Jobs Fund. MR. E. CONNERY: There still must be some others because your two major figures come to 5.2, so there still would be 1.3 million somewhere along. I wonder if it would be possible for maybe tomorrow to have the remaining . . . HON. M. HEMPHIL L: There's another one.

Remote and Northe rn Communities is $270,000.00. I forgot to mention that. That's simply where we work with the northern and the remote communities to help them identify and develop businesses. The Venture Capital at $4,943,000 . . . MR. E. CONNERY: That's okay. HON. M. HEMPHIL L: Oka y, the 900,000 . MR. E. CONNERY: So you're down to the $4 million HON. M. HEMPHIL L: Yes. The Limestone office is 35; Employee Ownership is 50. I think that pretty well comes MR. E.

CONNERY: Why would this department be in the Remote Northern when we have the Communities Economic Development, or whatever the name of it is, mainly for northern firms? HON. M. HEMPHIL L: We largely provide consultant services to them. When they as k, we provide consultants. MR. E. CONNERY: Then is your department working with the Communities Economic Devel opment, or . . . HON. M. HEMPHILL: Yes, we do work with them. MR. E.

CONNERY: Because my concern, as we will see later when we get into some other parts of the Estimates , is that there is a danger if you're not working in consultation with each other, you're going to have people getting money from two departments that really maybe shouldn't be happening. So I hope that there are fair communications with them. MR. CHAIRMAN: 2.(c)(1)- pass? A MEMBER: No. MR. CHAIRMAN: No. The Member for Portage. MR. E. CONNERY: Would this be the area that . HON. M.

HEMPHI LL: The only point I wanted to make on the last one is that our people are working with communities, not individuals; so they're going in and helping communities. MR. E. CONNERY: Would this be the area, when you're working with business . . . MR. G. ROCH: A point of order, Mr. Chairman. We're on 1.(c)(1) now. MR. CHAIRMAN: 1.(c)(1), sorry. MR. E. CONNERY: Do you do a marke t analysis to determine where there is a market shortfall, where we could produce more? How do you go about deciding what thrust you're going to have in the business sector? HON. M. HEMPHILL: Yes, I think we do a variety of things.

We do a lot of consulting with people and we do gather information and have developed an overall strategy for the department over a number of years, identifying the sectors that we believe are the ones that we should be concentrating on. As the Member for Portage la Prairie suggested, the manufacturing sector is one of the key sectors.

This is the development plan for small business in the Province of Ma nitoba this year and for a number of years to come. lt sh ows the importance of manufacturing because we've identified manufacturing the industrial products and parts and equipment, manufacturing agricultural equip ment and grain-handling equipm ent, manufacturing electronic products, manu fact uring health care products and special needs products, as well as the service industry and technology transfer; so that one of the large areas that we have identified to move on is the manufacturing sector in all areas . MR. E.

CONNERY: Have you dropped some programs? HON. M. HEMPHILL: Mr. Chairman, I don't think we've dropped any programs, but I'm informed that we've changed our emphasis on some of our programs. So tha t he'll be happy to know one of the changed emphasis is to work more closely with the private sector, 17 34

Monday, 14 July, 1986 recogmzmg in fact , I think we ha ve always recognized, I think, the importance of the private sector - but are working to develop a system where we're providing support and resources to them that they need. We're working in th ree areas. Busi ness devlopment, regional community development and entrepreneurial development are the three areas that we have identified to work in with them.

I think I must say we know how important the private sector is, but we also know that there are pla ces where the private sector would not go, or businesses that would not receive any money or support, or people in businesses and organizations that would not have the opportunity if there weren't public sector involvement, too, to encourage investment. The Venture Capital is a very good example where, by putting up $5 million of the province's money, was able to release and get $9 million of private sector money put up and create 1, 000 jobs.

I think that there really is a role for both and that in these complex, difficult times there isn't any one group that can go it alone. The private sector could not meet all the needs of the business community, nor could government alone. MR. E. CONNERY: Do you have any pa rticular programs geared for rural Manitoba? HON. M. HEMPHIL L: Mr.

Chairman, the Rural Community Development Program, the RDC programs, which I think are close to $600,000 to $700,000 in the total budget, and service the six or seven economic regions in the province, it's $1.1 million, and provides resources directly into the rural communiti es. MR. E. CONNERY: Do they participa te in program development? When you're down at that stage, in Strategic Planning, would you call them in to see what returns the rural areas have? HON. M.

HEMPHIL L: We have a very close relationship with the RDC organizations and the previous Minister had a number of meetings and called them in and met with th em and talked with them while we were developing our programs. I think we see the community development, in whatever form it takes, whether it's the Tour ist Asso ciation, or the RDC's, tha t the commun ity development organi zations are very important. We intend to continue working very closely with them. MR. E.

CONNERY: The Federal Government is coming out with a new program called - well, it used to be LEAD and now it's Community Access, or Community Futures. I know our local RDC is working with them also. Is there going to be coordination between the Federal and Provincial Governments, that we don't have two groups running in the same area? HON. M. HEMPHIL L: Mr. Chairman, it's my understanding that the role we play ther e is that the RDC's make the initial decision, that they initiate, and that it's our job to give them help and support and to help them access to information or to the Federal Government program. MR.

E. CONNERY: Will we have an opportunity - where do we discuss the grant money under Busine ss Development? In Tourism, there's another section. MR. CHAIRMAN: No. 2 would seem to be appropriate. MR. E. CONNERY: I just don't want to have it pass and ... MR. CHAIRMAN: No. 2., Busine ss Development, right after this

section - the next section. The Member for Portage. MR. E. CONNERY: Are you involved with the Strategic Planning along with the Food Products Development Centre and the Tech Centre here in Winnipeg? HON. M. HEMPHILL: Mr. Chairman, that's under IT and T. MR. E. CONNERY: Yes, but a lot of small businesses still use it. HON. M. HEMPHILL: Well, we work with them but the lead department is IT and T. MR. E. CONNERY: I've got marked down here the Manitoba Marketing Network. What is the Manitoba Marketing Network? HON. M. HEMPHILL: We'll take that under No. 2. MR. E. CONNERY: Okay.

Are there still two members - that may be under 2. also - seconded to the core area development? HON. M. HEMPHILL: Yes. MR. E. CONNERY: Where will core area development be discussed? HON. M. HEMPHILL: Under No. 2. MR. E. CONNERY: Okay. The Main Street Program will be also under 2. then? HON. M. HEMPHILL: Yes. MR. CHAIRMAN: 1.(c)(1) - pass; 1.(c)(2)-pa ss. 1.(

d) Communications - the Member for Portage. MR. E. CONNERY: He has some questions first. MR. CHAIRMAN: The Member for Springfield. MR. G. ROCH: Wha t exactly does the term "professional consultation" mean? HON. M. HEMPHILL: I beg your pardon? MR. G. ROCH: "Communications provides professional consultation and support services to the depar tment." What does that mean exactly? HON. M. HEMPHILL: lt's getting professional advice to give us some help in designing brochures and 1735

Monday, 14 July, 1986 everyt hing on the table in the back, I'm informed,

whereas we brought in copies of all the brochures and materials and things that we put out, recognizing that you'd asked for that before under IT and T, and professional consultation jus t gives us advice on developing those. MR. G. ROCH: When it comes to communication with the public, is that what that means? Is it all those brochures there? HON. M. HEMPHILL: Yes, a lot of the brochures; some of the brochures are for the public and some of the brochur es are for bus iness and special target populations.

The Small Business Report, for instance, goes out into the business community and wouldn't necessarily be to the public at large. Other brochures and information would be available to the public. MR. G. ROCH: How many people are employed in this particular area? HON. M. HEMPHILL: Two. MR. G. ROCH: So this particular department, there would not be the same kind of commu nic ations personnel as we have in other areas of government? HON. M. HEMPHILL: I think they're the same kind but th ere's less of them. Yo u kn ow, there's two Communications people who basically have a job to do to pr ovide commu nications.

Some of it is interdepartmental, intergovernment, some of it is within field and some of it is with the public, and it provides communications services to my department, to my office, too. MR. G. ROCH: These would be strictly in the Busi ness Development portion of your department. Does Tourism have separate people for that same function? HON. M. HEMPHILL: Mr. Chairman, this is the overall Communications Department although, under Tourism, we have concentrated on marketing programs where the people, instead of broad communication, are doing specific marketing in the tourism area. MR. G. ROCH: That's fine. MR.

CHAIRMAN: The Member for Portage. MR. E. CONNERV: You were budgeted for $228,000 last year, and you only spent 91 ,000.00. Did you transfer staff? HON. M. HEMPHILL: Mr. Chairman, that's where we originally had more of these people in Communications and, by design, chose to move them into the marketing area, because we have found that concentrating on specialty markets and on advertising for those markets is a good use of communication money. So that's been a transfer from Communic ations into marke ting. MR. E. CONNERV: Do you do a lot of co-op adver tising? HON. M.

HEMPHILL: Under Tourism, we're doing a considerable amount of co-op advertising and plan to do more. MR. E. CONNERV: The "Report on Small Busine ss," which is relatively new, I think it's a very pretty brochure, but I have some concerns that it's more of a political brochure when I see three government M.P.'s or M LA's in here featured and, of course, the Minister herself with a high profile on the back page. lt's very well done but, when we're dealing with government money and promoting business, I question the rationale of spending so much money on a book like this to publicize . HON. M. HEMPHILL: 30,000.00.

MR. E. CONNERV: Then I gather you're still using a lot of consultants. How much of the Other Expenditures would be consultants? HON. M. HEMPHILL: About 25,000, Mr. Chairman. MR. E. CONNERV: And this is costing about 50,000.00. The rest of the money would go to the other brochures and so forth? HON. M. HEMPHILL: I'm sorry, I thought the answer was coming on that. lt was coming on the Core Area lnitiatiave, and I was trying to figure out what the answer was. Could you repeat the question? MR. E. CONNERV: What are the other monies spent on? Is it on just brochures? You've got 50,000 and 25,000, 75,000.00. HON. M.

HEMPHIL L: lt's in a number of areas. Some of it is just simply office supplies, equi pment rental, conferences, telephone, sundry things like that, fee­ for-service contract staff, computer-related charges, photography , the qua rterly Development publication. Just to mention the prettiness of the book that the member suggested, we're getting a lot of requests for that. I think it was probably quite appropriate that, in that, there be an introduction of the new Minister of Busi ness and Tourism to the industry, which is the purpose of that

article on the back page. That's basically what it's made up of. MR. E. CONNERV: lt's still the same Premier though, and the Member for lnkster is also highligh ted in here. I haven't ran across a Conservative yet. Maybe one feature, we'll do that. I'd have to have a look after at all the brochures, but . . . HON. M. HEMPHILL: That's why we brought them in. MR. E. CONNERV: To me, how many of the brochures are totally read and how many just go into "File 13"? Have you done a review to see the cost effectiveness of it? HON. M. HEM PHIL L: Mr. Chairman, it's my understanding that we've done a complete review of the publications that we're putting out on the tourism 1736

Monday, 14 July, 19 86 side, and we're in the process that we've undertaken a review of all the publications in business. MR. E. CONNERY: I think the Minister can understand and I know what the Minister and the government is doing with the brochure, but you can also understand when we get up and get a little excited when we see government people involved. You know, you're going to catch flak from it and, as long as it's there, we're going to continue to give you flak. I think, as a straight brochure, it has some information.

I question the cost for what benefit we are maybe get ting, because people that are interested in programs will go sear ching. I think we're ready to consider the resolution. MR. CHAIRMAN: Well, no, Item 1. (

a) is deferred, so we'll just pass 1.(d) (1) , 1.(d) ... MR. E. CONNERY: If we're on 1.(dX2), I move, seconded by the Member for Springfield, that we reduce the amount of Other Expenditures by $80,000, which was the amount that it was increased two years ago, as a cost-saving measure. MR. CHAIRMAN: That has to be put in writing, please. MR. E. CONNERY: Do we need the seconder on here? Is there a seconder required? MR.

CHAIRMAN: No, not in committee. lt has been moved by the Member for Portage that $80,000 be deleted from Item 1.(dX2) as a cost-saving measure as some brochures are used to a large extent for party promotion. MOTION presented and defeated. MR. E. CONNERY: We want to go now into the House and have a recorded vote. MR. CHAIRMAN: lt requires a request of two members. The Member for Portage, is ther e a seconder, a second member, okay. The committee is recessed, and we will go into the House for the vote. (Recess) MR. CHAIRMAN: The committee will come to order.

We are still now considering Item 1. (d)(2) - the Honourable Minister. HON. M. HEMPHILL: Mr. Chairman, just to put on the record, I mentioned to the Member for Portage la Prairie as we were breaking up that, in terms of the general point he was making with the resolution, !.quite agree that I don't want to spend unnecessary money on brochures or literature that is not useful or is not used, and have always taken a fairly hard line on that area where I've either changed them completely if they weren 't working or I've wiped them out or elimina ted them.

All I'm doing is letting him know that my basic feelings are the same as his in general, not that particular brochure which I think is very usefuL We will be reviewing, and I don't intend to continue spending a lot of money if the brochures aren't doing the job they're supposed to do. MR. E. CONNERY: I would imagine this is the sector we get into the grants to businesses. MR. CHAIRMAN: We're still on 1.(dX2). If you want to pass it, we'll move on. 1.(dX2)-pa ss. We're now on Item 2, Resolution 23, Busi ness Development - the Member for Portage. MR. E.

CONNERY: I guess everything else to do with business comes into this sector. MR. CHAIRMAN: Sure looks that way. The Member for Portage. MR. E. CONNERY: Going over the Estimates, like I said earlier, it made it a lot quicker. I had a chance to view a lot of different things. Of course, when you don't know what they are, you have lots of suspicions. When you have them, you can ... HON. M. HEMPHILL: Now you have less, don't you? MR. E. CONNERY: Well, it's going to save a lot of time. One area, this was under the Interest Relief Program. We've got a significant amount of write-offs.

Are there a lot more accounts that are in jeopardy, and what can the maximum loss to us be? The program, I believe, is now terminated, but we would still have some collections. HON. M. HEMPHIL L: Mr. Chairman, it's my understanding that there aren't any more businesses in jeopardy, that the program is completed. MR. E. CONNERY: There's no more money to be collected? HON. M. HEMPHILL: The amount that was identified is in the process of being collected, but we don't expect there to be any more than that which ha s been identified. MR. E.

CONNERY: One of the concerns in looking through the No. 4 category where they have sold the business but haven't been able to collect the money, I find that hard to understand. HON. M. HE MPHIL L: Mr. Chairman, I guess th e assumption is that wrapping up the business means that they've got money and that may not necessarily be so, or there may be money there and we may have to go to court to get it.

There's one point that I wanted to make about the Interest Relief Program, and that is we found that, out of over 600 businesses that were helped that were identified as being - I mean, the criteria was that they had to be in financial distress to be able to get the grant. By providing counselling and support and being able to identify those businesses that were in distress, I think we were able to give a lot of help. In fact, only 17 37

Monday, 14 July, 1986 10 percent of them, I think, in the end were completely lost, and the others were helped. So those are really fairly realistic figures, considering they were all in serious financial stress and only that percentage were lost completely. MR. E. CONNERY: Looking down the amounts on the loan left that were not repaid, there are an awful lot of even figures like $3,000 or $6,000.00. Were some of these never any amounts collected on? HON. M. HEMPHILL: Mr. Chairman, there were some loans where there was no money collected on. There were some loans where there was partial money collected. MR. E.

CONNERY: I'm not opposed to the program. I think that it had some merit. But what concerns me is, if they didn't make a payment, then why did they get the loan in the first place? To me, there were some investigations that should have said, these people aren't even going to pay anything. I can see them going a year or six months and runnin g behind on their payments but then not to have paid anything, and there's a significant number of them that just never paid anything by what I can see. HON. M. HEMPHILL: Mr. Chairman, I think there was investigation made.

What I said before is that they had to be in serious financial stress in order to qualify for the program. lt means that's a group where the grants that are going out are for people who are high risk, and the fact that a number of them were saved, I suppose, is another way of looking at it. The ones that were given counselling and help and that came through is maybe a better achievement or a more important achievement than the ones that went under. I have been informed that there is a two-year grace period before the payment is required, so it would depend on when their loans . . . MR. E.

CONNERY: That makes more sense. I don't have any more on that particular program. I'd like to go to the Grants sector, and we might get it in before the 4:30 p.m. mark. I don't know. This is now No. 11 , Small Busine ss In centive Payments, the Annual Report. You have IT and T, and you have Busine ss Development. Can companies work with both of them, or are they identified as being Small Busi ness or IT and T? HON. M. HEMPHILL: Mr. Chairman, under certain circumstances, they're allowed to. Usually the purposes are different, but they're getting money from each department. MR. E.

CONNERY: I have a couple of concerns and, being a nice wet weekend, I had lots of time to read. One company, Miconex, got an IT and T grant of $1 ,500 and a B.D. grant of $1 ,500 for the same year, 19 85. HON. M. HEMPHILL: Mr. Chairman, the information I have is that the money was for a conference, and that both departments partici pated in funding the conference. lt was the same conference. lt was $3,000, half of it coming from each department.

That we do reasonably frequently, interdepartmental ly, when the conferences overlap or are in different jurisdictions or departments, we share the support of a conference. MR. E. CONNERY: If the business is of an IT and T nature, they're large. I have some difficulty seeing where two departments would be sharing. lt should either be IT and T, or Business Development. HON. M. HEMPHILL: Mr. Chairman, we're both involved with the same people. MR. CHAIRMAN: The time being 4:30 p.m., it is time for Private Mem bers' Hour . I will int errupt the proceedings and we will resume at 8:00 p.m. SUPPLY - FIN ANCE MR.

CHAIRMAN, C. Santos: Committee of Supply, please come to order. There has been leave of the House granted that the discussion be divided into two parts, the first part being the discussion of the specifics under Budget No. 9 and 10 to be considered under Resolution No. 67 with the staff of the department present. Then when this is completed, we will move to the Minister's Salary proper in the second part, where the memb ers of the departmental staff will be excused. We are now considering the first aspect of the discussion of Resolution No. 67 with the staff present. The Member for Morris. MR. C.

MANNESS: Thank you, Mr. Chairman. Through you to the Minister, Mr. Chairman, the other day the Minister of Finance had indicated that his staff would attempt to secure an answer to the question posed by the Member for Kirkfield Park with regard to an income tax item change on form, in particul ar. I would ask the Minister whether or not his staff has a response, in writing, to that question of hers. MR. CHAIRMAN: The Honourable Minister of Finance. HON. E. KOSYTRA: Thank you, Mr. Chairman. No, that response isn't ready yet. I imagine it will be within a matter of days. lt's being prepared. MR. C. MANNESS: Mr.

Chairman, I'd like to refer to Page 54 of the Supplementary Information provided by the Minister, and spend a few minutes going through some of the detail associated with arriving at a figure of "Public Debt (Statutory)" of $322.3 million, the number that's published within our Estimates. I would hope that the Minister would follow maybe patiently through this exercise, so I can gain a greater insight into how that number that I have just given you is determined. Mr.

Chairman, right today we have a direct debt in this province, I'm shown within the Supplementary Information. lt says, $6.5 billion. lt says this on Page 31, Mr. Chairman, of the Supplementary Information, "services $6.5 billion of Province of Manitoba Direct Debt, acting as a transfer agent for 28 series." Now my question, Mr. Chairman, is this: is the total amount of debt that we're paying interest on now $6.5 17 38

Monday, 14 July, 1986 billion? Secondly, is all that debt outstanding in 28 bond series, 28 different loans? HON. E. KOSTYRA: Just a couple of comments, and then we'll see if we can provide more detail on the last comment. First of all, I just want to introduce the staff that are here. On my immediate left is Neil Benditt, who is the Assistant Deputy Minister of the Treasury Division; next to him is Gloria Kilosky, Director of Debt Servicing; and Barry Thornson, immedia tely next to Charles Curtis, who is Director of Debt Ma nagement. In terms of the total debt, it is $6.5 billion as outlined.

In terms of whether or not that's contained in 28 issues, it is not all contained in 28 issues, as a number of other issues are not serviced by the division directly. The full listing is on Page 3-5 of the Public Accounts, Volume 1, and this is going back to the March 31, 1985 year. The ones that aren't part of that 28 series are the ones payable in Swiss francs, European units of account and payable in Japane se yen, and payable in U.S. dollars. MR. C. MANNESS: Mr.

Chairman, then that begs the question, the 28 series that this document makes reference to on Page 31 then deals specifically with Canadian issues, I take it. I'm referring again to Page 31 on the Supplementary Information provided to me by the Minister. HON. E. KOSTYRA: Ifs basically Canadian and certain U.S. issues. I would just empha size what is stated here. lt says, ". . . acting as transfer agent for 28 series ." That does not mean that they're not involved with the other series that surround the rest of the 6.5 billion that aren't covered by that 28 series. They only act as transfer agent for 28 series.

MR. C. MANNESS: Well just as a point of information, Mr. Chairman, can the Minister tell me specifically how many issues, how many different arrangements have we entered into by way of contract? How many different issues do we now have on the books in all our borrowings? Is there some general answer to that question that can be given? HON. E. KOSTYRA: We don't have a firm total. We just simply have to tally up everyth ing that's listed in the Public Accounts. If the member wants that, we could provide it, but that's how we would get that information. MR. C. MANNESS: Mr.

Chairman, if it's all in Public Accounts, which I'm sure it is, then I can find that for myself. I would ask the Minister for a specific clarification as to this 6.5 billion of Province of Ma nitoba direct debt - (Interjection) - in answer to the Minister of Finance, I too wish it were in millions. I changed it to 6.5 billion. At one time, Mr. Chairman, I didn't think it included the amount that was guaranteed but then I see, with a further breakout under Page 54, it also includes reference to amounts of interest received from some of the self-sustaining Crown corporations.

So I just would ask for a little clearer definition of the term "direct debt." I understood it to be previously the debt assumed with the provincial operations, the deficits accumula ted in support of the operations of the Province of Manitoba not including those areas of government such as Telephone and Hydro, where indeed we paid interest in the form of our monthly rental agreements, or indeed in our monthly billings with respect to tho se organizations. So I would ask the Minister for a very precise definition of the $6.5 billion of direct debt. HON. E.

KOSTYRA: If the member looks at - if he's got the Bud get there - Appendix A-8 of the Budget. That is a listing of the direct debt payable, showing how it's payable in different dollars and then the purpose of the debt. All of the debt that's made in the name of the province, which does not necessarily mean just for the purposes of the Government of Manitoba, but also includes all of the Crown agencies, is what is referred to as a direct debt of the province. The only debt that is not listed here is the debt of the Manitoba Properties Inc. MR. C. MANNESS: So, Mr.

Chairman, in this context, with respect to No. 9, Public Debt (Statutory), reciting the Minister's words, this includes both all direct debt, in other words, for general government purposes, plus the guaranteed debt. All of it, excepting that which has been dir ected toward the operations of Manitoba Properties Inc., is now direct debt, and that's where the $6.5 million comes. - (Interjection) - I'm wrong again, according to Mr. Curtis, so I'll let the Minister explain again. HON. E. KOSTYRA: First of all, I want to correct some incorrect information that I gave the member previously.

The Manitoba Properties Inc. is included, if you look at A-8, is included in the "O ther." it's not part of the debt shown as General Government Programs. If we go back to the argument we had previously in the debate, without the existence of Manitoba Properties, it would have shown in there, but it's still shown as Guaranteed Debt. There really isn't any way to break this out other than going through manua lly.

If you look at the purpose of the debt, $2.9 million is General Gover nment Programs, which is all part of the direct debt payable, and also portions of the rest also comes under Direct Debt Payable, and other portions come under the Guaranteed Debt, which totals out on $1. 9 million, if you see the previous figure. If the member wants that detail of which fall into which categor y, we can provide that manually . We have that information with respect to the previous fiscal year, but it wouldn't relate to these figures, because that information is available here in another document. 17 39 MR. C. MANNESS: Mr.

Chairman, I should have better prepared myself in reviewing A-8 because now that I look at it, I see a lot of the questions that I had posed are clarified in some detail. The only thing missing is the rationale, for instance, and I'm using A-8, and taking the Manitoba Hydro-

Monday, 14 July, 19 86 Electric Board debt at $2.678 billion, and somehow, under some method, it's been apportioned between Guaranteed and Direct Debt. I don't need to see the manual breakouts of that, but I am curious about whether there's any hard rationale as to how it's separated and whether it's consistent amongst the number of Crown corporations, or arms of government that have debt associated, for which they're responsible. Hopefully, then, the Minister can tell whether there is a standard rationale or what is the reason that some portion is brought out on a guaran teed basis? HON. E. KOSTYRA: Mr.

Chairman, I understand that general ly, since 1976, all of the issues that have been raised have been direct debt issues by the province, where the province is guaranteeing that. The other alternative, the other way, would be for issues to be issued by the corporation directly. I'm told that since 1976, the market has not been attracted to that and thereby is the reason why they've been issued generally in the Province of Manitoba's name. As I indicated, since 1976, they've basically been all issued as a direct debt of the province. MR. C. MANNESS: Assuming, Mr.

Chairman, then, that this trend will continue, the portion that will be documented on the books and accounted for under the area of Gua ranteed Debt, will continue to diminish and that, indeed, when we deal with Estimates, when we begin to look at Direct Debt, that will then amount to a higher percentage over time of the total debt of the province? HON. E. KOSTYRA: Yes, unless conditions change. MR. C. MANNESS: Mr.

Chairman, then, moving back to the main argument, if we have $6.5 billion of debt and the interest on that debt is $636.6 million, roughly, last year for 1985-86, can the Minister then say that last year, on average, through all the loans, all the series that we had, that we paid close to a 10 percent rate of in terest? Is tha t a fair statement or is it too rudimentary? HON. E. KOSTYRA: The overall average cost of interest for 12 months ending March 31, 1986, based on the debt tha t was outstanding as of March 31, 19 85, based on Canadian dollar proceeds would be 11. 314 . MR. C.

MANNESS: Yes, I understand the Minister. You'd have to look at 1985 debt and then the interest payable on the year afterward to come up with those two figures. That begs the question, Mr. Chairman, then obviously this $803 million that's estimated as interest costs, associated with the public debt, that will be the amount that's owing on a debt of $6.5 billion, which was our direct debt as of Ma rch 31, 1986.

Roughly then, what will tha t rate of interest be once we ha ve gone throughout the fiscal year, and because most of these loans, virtually all of these issues, are locked into some rate of interest, we must be able today to tell what the effective rate of interest will be over the $6.5 billion. HON. E. KOSTYRA: The projections are not firm, but would be something less than that, on the basis of the mor e recent borro wings at a lower rate and the refinancing at lower rates than what the original loans would be, so it's thought tha t could be somewhere around the range of 10.75. MR. C.

MANNESS: Can the Minister tell me what the direct debt will be when we consider these Estimates a year from now? What will the direct debt be as of Ma rch 31, 1987? HON. E. KOSTYRA: lt will be approxima tely $1.2 billion higher. MR. C. MANNESS: So, Mr. Chairman, the Minister is then telling us that our total direct debt, net of sinking funds, on March 31, 19 86 will be . A MEMBER: No, no. MR. C. MANNESS: Not net of sinking fund. Would the Mi nister care to give me then a figure, net of sinking fund? HON. E.

KOSTYRA: There would be less, app roxima tely $17 5 million to $200 million, the results of the sinking fund, so it would be net, that figure. MR. C. MANNESS: Mr. Chairman, I just want to get this straight. Then it's close to $1 billion, net of sinking fund. So what the Minister is saying then, that a year from now - not a year from now, but Ma rch 31, 1987, when we look at the budget or the information provided therein - we will come across figures of total direct debt of roughly $7.5 billion.

Of course, there should be no change in guarantee, except it maybe should reduce somewhat because of sinking funds, but that the total net direct and guaranteed debt of the province will amount to a figure close to $8.3 billion. The Minister, for the record, Mr. Chairman, nods that I may be correct. I would then ask the Mi nister how it is tha t he will be able, his department and his government will be able, to keep Standard and Poor's from reducing our credit rating from a AA-minus to an A-plus? HON. E. KOSTYRA: The member asks how we can keep it. I can't respond that we will be able to keep it that way.

Tha t will be a decision that agency makes. What we will provide to them is information in terms of the detail that they're looking for, which would indicate that we are in a period of growth and of confidence in our province; and that we are working to manage the financial affairs of the province in a prudent and responsible fashion. Whether or not they decide to do that is a decision they will make, not the Government of Manitoba. MR. C. MANNESS: Mr.

Chairman, the Minister, and I'm sure the government, took some solace from the fact that members of the media took it upon themselves I believe to contact Moody's, who also put before us a credit rating, and have found out from that rating agency that, indeed, from their perspective, that they would stay with their A-1 rating. Would the Minister care to tell me how Moody's A-1 rating corresponds to Standard and Poor's AA-minus rating? 17 40

Monday, 14 July, 19 86 HON. E. KOSTVRA: Yes, that would be equivalent to one half-notch lower than the present Standard and Poor's rate. MR. C. MANNESS: So, in effect, Mr. Chairman, what we have now is Standard and Poor's, who have in fact a higher rating than Moody's, and if they were to bring it down to an A-plus, that would be at a level similar to what Moody's is at now, is that correct? HON. E. KOST VRA: Yes. MR. C. MANNESS: So, Mr.

Chairman, in effect then, Standard and Poor's, up to this point in time have had the highest credit rating of any of the rating agencies with respect to this province, and given that they are considering reducing, or at least have put us on a credit watch, that should they reduce that level of rating, we then would have the two ma jor Am erican rating agencies at a similar level. I think that argument has to be correct but, secondly, I would ask the Minister how the Canadian Bond Rating Service, which I believe also does a ra ting, where they have placed Manitoba on their scale of rating. HON. E.

KOSTVRA: it's a AA-Iow as they rate it, and that's the same as the Standard and Poor's is at this point in time. MR. C. MANNESS: Mr. Chairman, I would ask the Min ister again how he cont empla tes, or what his strategy may be, in order that this government will be able to convince Standard and Poor's not to reduce their rating. The Minister, I don't thin k, was totally forthright in his answers in the House the other day.

I would ask him whether or not he can disclose to us at this point in time what further information it is that he may provide to Standard and Poor's to prevent them, or at least to convince them, that it is not in their best interest to reduce the bond rating of the Province of Manitoba. HON. E. KOSTVRA: Well, I believe I was forthcoming on that in terms of my response, and I'll repeat maybe with a bit more elaboration.

We will provide and have provided them with information in terms of the overall economic progress in this province, and will continue to provide that information and stress it, and provide whatever information they are interested in, in terms of the debt of the province, and stress again there, in terms of the relative debt of Manitoba either on a per capital basis or on other basis rate to other provinces, indicates that we are not out of line with the Canadian averages.

We're also indicating to them, as we have to members of the House, and as we stated in the Budg et Address, that we still remain committed to dealing with the current budgetary requirements and capital budgetary requirements over the next number of years in the mid­ term. In saying that, I would just want to clarify for the member, because I've heard him use those terms back to me, and he interprets "mid-term" in terms of the mandate of this government over the next four or five years, my

interpretation of "mid-term" goes beyond that one analysis of mid-term or that one perception of mid-term. 1741 MR. C. MANNESS: The political definition of mid-term may be a little bit different than a market definition of mid-term, Mr. Chairman. I'm sure the Minister would concur with that. For the record, Mr. Chairman, I've secured today Canadian Government Issues rated by Moody, Standard and Poor's and the Canadian Bond Rating Service. I'd like to read some of this into the record as to how other governments and Crown corporations stack up vis-a-vis Canada.

Of course, this won't come as new information to the Minister, or certainly the Deputy or members of his staff. I found some parts of this somewhat interesting, Mr. Chairman. For instance, the Government of Canada has with Moody's a large "A", a double small "a", and I don't know how they rate that; I guess that's AAA, as Standard and Poor's also gives the nation AAA.

So I guess, in the minds of some, if a nation with a $200 billion-plus deficit, and growing rapid ly, or accumula ted deficit, can still achieve a AAA rating, then maybe that's, in the minds of some, an area to which we can go, given the fact that over 25 percent of the federal revenues are directed to servicing the debt. Crown corporations, Mr. Chairman, I notice that Canadian National Rai lway, the Export Development Corporation, Eldorado Nuclear Lim ited and the Farm Credit Corporation all have AAA ratings under Standard and Poor's.

When we move into the provincial and the provincial guaranteed areas, it would come as no surprise tha t Alberta, which is rated only by Moody's, has AAA. All Alberta Government telephones and municipal finance corporations also have AAA ratings. British Columbia has a AA-1 rating with Moody's and AA with Standard and Poor's. Then we come to Manitoba. Manitoba has an A-1 rating with Moody's as we've discussed; so does Manitoba Hydro have that ra ting, and AA-minus with Standard and Poor's, and, as the Minister has indicated, AA low with the Canadian Bond Rating Service.

Then we move into New Brunswick, and here, Mr. Chairman, is my concern, because once you hit New Brunswick, Newfoundland and Nova Scotia, you're talking about ratings, the highest of which is A-plus, and that's by Standard and Poor's, given to the Province of New Brunswick and New Brunswick Electric. Those are alm ost the highest ratings given of any of the bond rating services to the Provinces of New Brunswick, Newfoundland and Nova Scotia. Prince Edward Island has no rating other than a BBB under the Canadian Bond Rating Service. As a matter of fact, Mr.

Chairman, if you go to Newfoundland, they've got a BBB-1 with Moody's and an A-minus with Standard and Poor's; the same with Nova Scotia, A-minus. We move back to Ontario. We see where Moody's has Ontario a AAA; Standard and Poor's a AA-plus; one notch above ours at present. Quebec is in a situation similar to ours - that being A- 1 with Moody's and Standard and Poor's being at AA-minus but their last ratings have been confirmed as recently as March, 1985; Saskatchewan - Moodie's has them at AA and Standard and Poor's AA-plus. Mr.

Chairman, I won 't bother going into the municipalities because they are listed here also, other than to say that for those that have had a rating done

Monday, 14 July, 19 86 upon them - and there aren't that many other than by the Canadian Bond Rating Service - that most of them fall into the areas of, well, basically they're all high; they're all AAA's or A-1 's. No doubt there are the larger municipalities who have been to the marke t on several occasions and shown that they are reliable borrowers. So, Mr.

Chairman, I just wanted to read that into the record because, quite frankly, it's my point of view that if we begin to draw, particularly in light of the fact that our provincial debt is going to in crease by a billion, net of sinking funds, a year from now or less than a year from now, there doesn't seem to be any indication from the Mi nister or from the First Minister that this rate of increase of deficit is slowing down. Mr. Chairman, all of us realize that it can't be stopped in the period of one Budget.

As a matter of fact, as we watch our federal counterparts try to wrestle with the problem we realize how difficult it is to stop it, period. Well, our Federal Government, I think, attempted to reduce it some four or five billion over the period of a year and yet, Mr. Chairman, we have no indication that our deficit on a yearly basis, and therefore the accumula ted debt, is level, let alone beginning to increase at a decreasing rate. That's the concern we have, because it's galloping, Mr. Chairman, and it's moving more quickl y.

As I've said on this occasion, and as I've said in the past, there's been no statement made by the Minister of Finance nor by the First Mi nister that they realize the seriousness of the situation and, secondly, that they're prepared to at least arrest it and hold it level. When I say "it," I'm talking about the accumulating deficit. Hold it at a level where it's at least being held in a constant fashion and diminishing. We're up to, as I say, Mr. Chairman, $8.3 billion net of sinking funds. That'll be our total debt as of the end of this fiscal year.

I then would like to ask the Minister, and I refer him to Page A-7 of the Budget, and it shows, Mr. Chairman, the year 1987 where 220 million, for instance, of debt will come due. I would ask him how much debt is going to come due in 1986 and how the government will handle it, the net portion of it. Will it all be refinanced? HON. E. KOSTYRA: Yes, as the staff gets the detail for that specific question, let me just make a couple of comments in terms of the other matters that the member put on the record.

First of all, I found it interesting his comment about the credit rating of the country and the reference to the debt of the country and then making reference to the credit rating of Manitoba.

And if you would look at that relative position another way, then one should argue against the Federal Government reducing its deficit and putting some of that onto the backs of provinces. it's not only Manitoba that said that, because it would be obvious from that information that the member put forward to the committee that the Federal Government, if one accepts the rating agencies' analysis and rating of Canada as against the province, then obviously the ability of Canada to deal with that is much better than the Province of Manitoba, and yet we're seeing the reverse situation take place where provinces like Manitoba have to absorb more of that than we think is fair.

One other comment that I think bears mentioning in dealing with this issue, and I don't dispute in any way the issues tha t the member put on the record in terms of the various ratings because that is basically correct information outside of the fact that CN is now down to a AA. They've been downgraded by both rating agencies within the last short period of time. I think the member mentioned that they were AAA. They are now AA and that was made by both rating agencies. So a large organization like that is downgraded.

But I'd just like to point out to the member, and I know it's a document he doesn't care to use as a resource, but in the document that was put forward with respect to the Bill C-96, the document entitled "Setting our Priorities Straight," on Page 13 of that document there's a table that is not taken from a Manitoba source but it's taken from the Newfoundland Green Paper on the health care system. Wha t it is is a table that shows the fiscal capacities of the provinces across Canada, taking the national average at 100 percent.

Manitoba is considerably below the national average in terms of fiscal capacity by some 19 percent. We show as 81 percent, and we are in the sixth position there with Newfoundland, Prince Edward Island, Nova Scotia, all those provinces that the member made mention of below us; some close to us, but others, as an example, Nova Scotia is within nine percentage points of Manitoba, and Quebec is also just under Manitoba at 79 percent.

But other provinces that are ahead, and some that he used as an example there, the province of Saskatchewan as an example is 105 percent over the national average in terms of its fiscal capacity. Alberta is 200 percent, no big surprise, and British Columbia is 104 percent, and Ontario is just slightly under the national average. So the point is in Manitoba is that we don't have, even though we are, I think, slowly making gains, but given our relative position in this country we still have a long way to go before we're in to a similar situation to the major resource-based provinces to the west of us.

And I think that point bears thought when we deal with such issues as credit ratings, such issues as size of deficit, such issues as expenditures and such issues as rev enue. I think you have to deal with those factors. I'm not quite sure of the member's question; maybe I'll just review it. But the 220, most of it is payable in Canadian funds and just about all of it, other than a very small portion, is a self-susta ining debt. MR. C. MANNESS: Mr.

Chairman, early on in these Estima tes the Member for Pembina went through a discourse as to how he could see, in review ing Chart A-7, whereby the Province of Manitoba and whoever is in government at the time of, well, let's say the beginning of 1990, let's say the period 1990 to 1993- 94, would have some horrendous debt come due, many of those issues would come due at that time. I would ask the Mi nister whether the department, indeed the government, is put ting into place any contingency pl ans at this time to deal with the maturation of those debts because they just stand out. Of course, there's one way, Mr.

Chairman, the government could prevent them from standing them out and, of course, it's just to push more debt a little further down the road and then they won't stand out, they'll all be high. 1742

Monday, 14 July, 1986 So I would question the Minister whether there's any contingency plans in place dealing with the magnitude of the debt that is to be retired or refinanced during that period 1990 to 1994? HON. E. KOSTYRA: Well, as we've said previous ly, we certainly want to work in terms of reducing the growth in any general purpose debt in terms of the self­ sustaining debt, as that is dealing with areas that are sustai ning, dealing with the actual growth of assets of th ose Crowns where tha t self-sust aining debt is provided to.

Then there is no concern with respect to that debt, but it's certainly our intention in terms of the general purpose debt to work, as we have stated, to bring that down. MR. C. MANNESS: Well, Mr. Chairman, it's hardly a sufficient answer from my viewpoint. I'm just curious whether or not it was a major concern to the Minister. Other than in global terms, he doesn't seem to indicate any great concern in that time period, and that was the essence of the remarks made, I know, by my colleague the other da y.

He was hoping that the Minister may come a step forward and stand up and indicate t he saw it as a difficult time in the immediate term and something that indeed his very government, his very department today would have to begin to address, because we're really only three or four years from that period of time. Unl ess, in my view, plans are made today to add ress tha t problem, I see some massive degrees of refinancing. Well, Mr. Chairman, in 1993 alone, as of today, $5 11 million are to be repaid or refinanced.

Put that on top of the capital requirements of the province for that year and you could easily be in a level, if we're using funds similar to what we are today, of an accumula ted total of 1.5 billion, 2 billion that'll have to be refinanced. So I just wanted to determine whether the Minister and his staff were taking it in such a serious fashion that they thought that some steps had to be taken today to arrest and to minimize that problem as it comes forward then. I would ask the Minister, Mr.

Chairman, referring back again to Page 54 on his information provided, I notice that the government pays interest on trust and special funds. I know there's a whole myriad of them, Mr. Chairman, but I'd like specifically for the Minister to tell me or indicate two or three of the major trust funds that our province ends up paying interest on, which in thems elves do not provide levels of interest that would offset the level of funding required to support them. HON. E.

KOSTYRA: The details of that are the areas that are covered on Page 57 of the Public Accounts, Volume I, but the Manitoba Public Insurance - there's a list of around maybe 20-25 on that page. lt includes the Man itoba Public Insurance Corporation which is, I guess, the highest, and then it goes on into Manitoba Telephone Syste m. Hydro is next in line, but considerably lower in terms of magnitude. Well, just to give you an example, the Public Insurance Corporation was 370 million, the balance of March 31, 19 85, Public Accounts. The Telephone System was approxima tely 49 million.

Then it goes all the way down to include areas such as Cooperation Promotion Board, Emplo yee Charitable Deductions, Mani toba Beef Commission, Manitoba Centennial Corporation, on and on. MR. C. MANNESS: Well, Mr. Chairman, the Minister then says tha t these are surplus funds of these corporations. He seems to indicate that these are surplus funds certainly at the year-end as of March 31, whatever the year-end is, and that they are lodged as working capital for the use of the Province of Manitoba. Of course, then we pay interest on those levels.

Are they just lodged with us until they're needed by th ose various corporations? HON. E. KOSTYRA: No, in no way is the working capital for the Province of Manitoba just, in essence, deposited on a short-term basis with the province in terms of us investing that money on short-term notes. We do the investing for all of the related Crowns, but that money in no way is used by the province directly, other than some departments have trust account set-ups like Public Trustee, a few other examples of smaller ones like that. MR. C. MANNESS: Mr. Chairman, moving down on Page 54, I have no difficulty with it.

I'm now talking under the hea ding," Amounts of Interest and Other Charges to be received." This is that which the province is receiving and which are being used as an offset against interest that the province pays. I have no difficulty with the first two items. The third though, the Manitoba Housing Renewal Corporation, there's to be a significant increase in the amount of interest received from tha t corporation. Can the Minister explain why roughly a 33 percent increase?

I wouldn't imagine that corporation could loan that much additional money in the space of one year tha t it would have that major impact, particularly when you have interest rates that are generally reducing. So could the Minister explain why there's roughly a 33 percent increase in forecasted interest revenue associated with the Manitoba Housing and Renewal Corporation? HON. E. KOSTYRA: I'm told it's in relation to the increased activity with respect to that corpora tion's rental housing increase over the last year -and-a-half in terms of activity, but I don't have any other detail than that at this point. MR.

C. MANNES