Manitoba Hansard — Sitting 50B (33rd Legislature, 2nd Session)

33-2-50b

Manitoba — Debates (Hansard)

LEGISLATIVE ASSEMBLY OF MANITOBA Tuesday, 19 May, 1987. Time - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - INDUSTRY, TRADE AND TECHNOLOGY MR. CHAIRMAN, C. Baker: Committee, come to order. We're on page 106, Appropriation No. 2. We haven't passed it yet? A MEMBER: No, we're on 2.(b)(1). MR. CHAIRMAN: 2.(b)(1) - the Member for Sturgeon Creek . MR. F. JOHNSTON: Mr. Chairman, I was questioning the expected results that are shown on page 26 . When we talk about the 1,300 jobs obta ining $100 million of new private sector investment, can the Minister give us an estimate of how many industries he's speaking of?

MR. CHAIRMAN: The Honourable Minister of Industry, Trade and Technology. HON. V. SCHROEDER: We would be expect ing roughly 300 jobs in new companies, about $25 million; about 400 jobs in expansion of existing firms for $40 million; about 400 in retention of jobs that would otherwise be gone, $25 million; and the estimate includes roughly 200 entrepreneurial immigration jobs at $10 million of investment, a total of 1,300 jobs at the $100 million.

I should say that, just on the first establishment of new companies, there was an announcement on Friday - I'm not sure the member saw it - of Chemfet who are expecting to be up to 300 people within several years. MR. F. JOHN~TON: There is no estimate of the number of companies regarding the new jobs, the number of new companies or the number of companies that will expand. HON. V. SCHROEDEi/i: No, Mr. Chairman, we don't have a specific estimate. Of course , these are, as the member knows, estimates. We're hoping they will be exceeded, but there are no guarantees . MR. F. JOHNSTON: Mr.

Chairman, I don't remember a time when the department didn't have a list in front of me of people who were being negotiated with or had shown interest in the Province of Man itoba. We didn't ever expect to get them all either, and I didn't say that I wanted any firm figures. I just said an estimate of approximately how many companies does the Minister figure we may be getting in Manitoba. HON. V. SCHROEDER: Mr. Chairman, at the current time, there are roughly 60 companies we're dealing with that we consider to be in an active position in terms of coming to the province. MR. F.

JOHNSTON: If I may, you said 400 retention. Is the department estimating there are going to be 400 jobs that would be lost unless the government gives assistance to these companies? HON. V. SCHROEDER: Mr. Chairman , a good examp le of that might be Manitoba Sugar. There are instances where, without some assistance - there's one examp le, for instance, I won't name the company - but they're under an order to clean up the environment, and they have now received a federal proposal for assistance for that. They're coming to us and we're evaluating whether or not they would go ahead without our assistance.

If they wouldn't go ahead without our assistance, then we will consider possibly some assistance. So there are, quite frequently, those occasions where retention becomes fairly significant. MR. F. JOHNSTON: The 200 jobs after retention, was that Hong Kong? HON. V. SCHROEDER: Yes. That was entrepreneurial immigration. Almost all of it is from Hong Kong, but needn't be entirely. MR. F. JOHNSTON: Mr. Chairman, the transportation industry in the Province of Manitoba, we have some very large companies here.

Are we working to have expansion for those companies in Manitoba, and are we looking to have an expansion of the transportation industry in Manitoba, because it is naturally right? Is the research being done, and is there work being done with companies in this particular industry at the present time? HON. V. SCHROEDER: Mr. Chairman, that's an important area for Manitoba, and we are in discussions with actually both of the bus companies, with Flyer and MCI, as well as with other organizations. There's one new company, Cargo Trailer , who are building truck bodies and appear to be doing quite well.

They were on the list of the 50 fastest-growing companies in Manitoba recently in one of the local business magazines. We've been having some discussions with them. MR. CHAIRMAN: The Member for Portage la Prairie. MR. E. CONNERY : Well, last year, the Minister was quite pl eased that maybe something good would happen with Canada Packers , and of course something good did not happen with Canada Packers. I wou ldn't doubt that a lot of it is because of the government policy and some of the payroll tax and labour laws.

But the Minister was also, last year, quite thrilled with Springfield Farms , that they would be going ahead in the Town of Neepawa. Then after they did go into 2147

Tuesday, 19 May, 1987 operation and Canada Packers closed, the Minister was then blaming the Federal Government. So we have some contradictions with the Minister as to how he was feeling last year, as to how he's feeling this year. Burns, though, it looks like they might take up some of the slack of Canada Packers . Can the Minister fill us in on what he knows about what Burns is doing, and is there going to be some provincial or federal money in it to help them expand? HON. V. SCHROEDER: Mr. Chairman, we would expect that Burns will be looking at the opening in the industry right now.

As the member knows, Canada Packers had applied for assistance to the Federal Government to do their expansion and were turned down . They were asking for 17.5 percent; they got 35 percent in Prince Edward Island, zero in Manitoba, and the member blames the Provincial Government. That is a little bit annoying, quite frankly. I don't think it's fair, and it doesn't deal with history in a responsible manner .

We would have liked to have seen Canada Packers stay but we knew then, as the honourable member knew and knows, that was the last of the multistoried packing plants in Canada for Canada Packers, the last of nine . That one stayed open in 1982-83 because they were approached by the Provincial NDP Government and the Federal Government to keep this one open, because something would be just around the corner, if they applied for their consolidation here and they closed Edmonton instead, even though it initially indicated they were going to close down here .

Then, when they applied to the Federal Government for assistance, they were turned down . Just about a year later, the Mulroney Government gave a 35-percent grant to an operation in Prince Edward Island, which Canada Packers is operating and also gave a grant to Neepawa. We've never been able to understand quite why Canada Packers was treated in that fashion. MR. E. CONNERY: What did the province offer Canada Packers in the way of assistance? HON. V. SCHROEDER: That was never something that we got to final numbers on, because we didn't get the federal money in.

There was a letter, there was an offer which was of course, as always, subject to the federal participation by DRIE. MR. E. CONNERY: He didn't fully answer if he knows what Burns is doing and if the Provincial Government is working with Burns . HON. V. SCHROEDER: We indicated some time ago that we're looking at all proposals from the meat packing industry in Manitoba as to expansion plans to fill the void left by Canada Packers. I would expect that there will be an announcement in due course . MR. E. CONNERY: The Minister says that the Federal Government gave money to Springhill.

I think it was in the area of just over $800,000.00. But it should be acknowledged - and I think rightly so - as I said earlier, that the Provincial Government put in somewhere over $3 million into Springhill Farms in the way of infrastructure, sewer and water, and so forth, and yet blames the Federal Government for Canada Packers because they supported Springhill for Canada Packers going out of business. So I don't think that's a good shot. Last year, we talked abou t the North American telemetry business . How is that one progressing? HON. V. SCHROEDER: That one is one of those that didn't work out for now.

There's nothing happening there. I should say, in case there's any misunderstanding, that the Provincial Government did not put a penny into Springhill Packers . The Provincia l Government put infrastructure into the municipality , just as it has done in Portage la Prairie or other parts of the province when there has been industrial expansion , and that is expected . MR. E. CONNERY: So the North American telemetry for now , with their $14 million and the jobs that they were going to create, is there any hope of it reviving or is it gone? HON. V. SCHROEDER: We're not counting on it.

There are people still interested, but we're certainly not adding that one into our numbers right now. MR. E. CONNERY: Are there any of the other ones that looked so promising last year that didn't succeed? Maybe give us an update on the ones that did succeed and the ones that didn't? The Minister was going through in Estimates . HON. V. SCHROEDER: I, quite frankly, don't have a list of what I was going through last year in front of me. I had given a number of the companies where there had been investments announced over the last year.

Could we maybe just have the member ask - do you have any specific companies that haven't been referred to that you're interested in? MR. E. CONNERY: Well, maybe I'll go on to some of the others. Cereal Implements, now that was one that went into Portage, and I'm very pleased to see it go. It's also keeping Co-op Implements afloat. Are they doing as well as what was projected and are the job numbers up? HON. V. SCHROEDER: Yes. MR. E. CONNERY: The overall farm machinery industry, we're pleased that Versatile is being kept open. Manitoba is a large shipper of farm equipment.

What are the numbers in comparison to other years? How is this industry surviving? I know, in some of the figures that I have, exports are down. HON. V. SCHROEDER: We would expect, Mr. Chairman , that with Versatile reopening, we should be at about where we were last year, maybe a bit above overall. That's been the real dropper . MR. E. CONNERY: Is there anything new in the food industry that could be on the horizon opening, any expansions or new businesses? Are McCain's looking at doing anything different in Portage? They've often 2148

Tuesday, 19 May, 1987 considered going into the frozen vegetables . Have there been any thoughts along this line? HON. V. SCHROEDER: Mr. Chairman , in the potato area, we are discuss ing wit h McCain's a large frozen potato operation - I 'm sorry, a frozen vegetable operation. As the member knows , there was the recent arrangement by Carnation, and certainly that's an area that's pretty important. We'd like to see some further expansion there. MR. E. CONNERY: I guess I'm excited about some of that happening .

On the other hand, I have some concerns and I don 't know if the Minister has talked to the Minister of Municipal Affairs , because Portage la Prairie has a real problem with sewage treatment, and, of course, there's a freeze on any expansion . Has the Minister discussed with the other Minister to see what progress is being made to get rid of the problem that we have with sewage in Portage so that we can undertake this expansion if it comes along? HON. V. SCHROEDER: Yes, Mr.

Chairman , IT and T staff sit on an interdepartmental committee dealing with thos e kinds of concerns, and certainly we're making people aware of what's coming down the pike or potentially . Of course, the water problem down there is a real concern . MR. E. CONNERY: It's more the sewage than the water problem. I think we have a reasonable supply of water, but the sewage situation is not going to be resolved, unless they move very quickly , within a year or two. Of course, if the McCain plant is ready to go, they might go somewhere else.

We know that a juice segment of their operatio n went to Alberta, which we could have probably had in Portage la Prairie, and all the jobs that go with it. So we can't be dilly-dallying too long with getting that plant into operation, or the sewage plant upgraded that we can handle, because Portage is a logical area for processing and especially for vegetables . It's one of the best vegetable-producing areas in the country and goes down into the Carman-Morden area, so it augers that the Minister should be encouraging the Ministe r of Municipal Affairs to improve the sewage treatment. HON. V.

SCHROEDER: I understand one of the elements involved is a dispu te over technology. Certainly, Manitobans would agree that' s a fine place to grow vegetables. There are some arguments over what is required to make sure that the problem doesn 't recur, and I guess that's being debated now. MR. E. CONNERY: We discussed the status of the CGE, the Canadian General-Electric agreement with the Limestone . Has anything come to fruition yet? The agreement calls for it to be completed by 1991, a $10 million investment in the province, and I think there's been one small one up North.

Have there been any others in the last year? HON. V. SCHROEDER: Mr. Chairman, ther e are currently four northern Native businesses they are involved with . They're on track, in terms of their contract , on Manitoba content. So far they haven 't reached any specific agreements on offset investment in Manitoba, but there have been a number of dicussions, some with brand-new companies, other discussions with existing Manitoba companies . We think they're working hard to come up with something that will meet their needs and ours, and we have no doubt that something will occur within the time frame of the agreement.

MR. E. CONNERY: Is the Minister aware of - I can 't think of the name of the company, Timmer or Zimmer or something along that line - of upgrading wood and we're looking at - it was a very highly electronic equipment to take Nos. 3 and 4 wood and upgrade it to No. 2 or whatever, and it was looking at Portage . HON. V. SCHROEDER: Mr. Chairman, that's one of the offsets that CGE did look at, and it' s our understanding that they won't be proceeding with that. They made a decision not to go with that particular one, that's Zeiner (phonetic) . MR. E.

CONNERY: When we get into the Trade sector , we'll deal with the trade. But one of the disturbing things that I found when doing some research on free trade, that we've got statistics on just about every cent of material that moves out of the province into the foreign market, but very little import stats to tell us what's coming in. And of course with industry, it can be large or small but , all the way through the book, it took a long ways before we get into our book to find out we're talking about import replacement . And to me, a large part of our business could be import replacement.

But if we don't have import stats, how do we target our industries to replace imports? Are there not viable import statistics - and I've got a copy of the department saying that detailed import statistics are not presently available and would require special run via MDS . There 's also no viable information on the interprovincial flow of goods and services . That disturbs me somewhat that, if we don 't know what is being imported into the province, how do we target industries to go for import replacement? HON. V. SCHROEDER: Mr.

Chairman, a lot of those statistics would be practically impossible to get even if we did everything possible to get them. As an example, interprovincia l - and I'm talking about interprovincial now. There's no way of knowing, nobody has to report anywhere on what they bring into the province.

When it comes to international , there's a lot of confusion with a lot of numbers because a lot of the statistics indicate port of exit , so that some things that leave the country out of Thunder Bay show as an Ontario export as opposed to a Manitoba export and sometimes products come from Saskatchewan, say, lumber to Winnipeg and goes out through Pembina and shows as a Manitob a export. The statistics are very difficult to gather.

There are certain areas where we're working individually as a province, for instance, the health industry initiative where we're going to the hospitals, getting an idea as to what it is that their big ticket items are and trying to determine with either local 2149

Tuesday, 19 May, 1987 companies or local individuals who might have the skills whether we could see about import replacement . The same thing is happening on the federal scene, where in fact the provinces are getting together tomorrow to discuss, not only procurement, but also import replacement on procurement items so that as a country we get a better handle on what we possib ly could produce here as opposed to bringing it in, because we don't know that we might be competitive .

Also, a lot of the things we export never do show up on paper, not because of ports, but because they are things like, say, financial services. You won't find anywhere the work done, for example, by people at Great-West Life. Hundreds of people work on U.S. business out of Winnipeg. And it simply doesn't show up as a statistic from here. Similarly, we're importing those kinds of things and they don't show up either. So those statistics are becoming less and less reliable, the more we move into the information age . MR. E.

CONNERY: The bills of lading usually indicate the origin of the province and, if they're coming into Saskatchewan to eventually end up in Manitoba, that will be on the bill of lading also. So surely that must be recorded. The horticultural industry, which is not supposed to be as sophisticated, we have the imports by foreign countries and by province from where they originated and what city they're going into. So in our industry, we know what is being consumed in the prairie provinces, so we can target that import replacement which we have done.

But I would like to just tell the Minister that the 2.5 percent payroll tax on our farm will cost us about $15,000, and we're not able to pass that on to anybody because we're dealing with the interprovincial market and international marketplace. That's $15,000 a year that we're not going to be able to expand our operation or be as competitive in the faraway markets, such as Alberta, when we're competing against B.C. and Washington and Idaho.

I think the Minister has to be aware that that payroll tax is a tremendous deterrent for Manitoba companies to be competitive and it's a tremendous deterrent from having companies come into Manitoba. HON. V. SCHROEDER: Well, if we're into the Health and Education Levy at $15,000 that's, as the member knows, roughly 2.25 percent of payroll. That works out to somewhere less than 10 percent of the cost, or maybe around 10 percent of the cost of the health and education of his workforce, and that has to count for something.

Even in the days of slavery, people had to pay for the full 100 percent of education and health. There may not have been very much education or very much health, but the employer had to pay for the full shot. I think that the employer has to recognize that there is an obligation on them in this country as well as on others. As the member well knows, his $15,000 he can deduct from his taxable income. So it's a "before tax" kind of a tax. If he was in - he mentions B.C. and Alberta. There are Medicare premiums there and, as a good employer, I'm sure that he would pay those.

In Ontario, they tell us 80 percent of the Medicare premium is paid by the employer. The Medicare premium is somewhere in the range of $700 a year per employee. That's over $500 a year, and that's probably more than what the Member for Portage pays in Health and Education Levy for his employees . So I think one has to not only look at the tax in Manitoba but look at the taxes in those other areas . And when you talk about U.S. taxes, yes, you have to also look at the fairly significant taxes that are levied on employers down there . I was recently at an opening of a glass operation in East Kildonan .

They have over 300 people working there. They're adding on another 20 people or so and the discussion came to location, and the manager of the place was telling me that he'd spent some time trying to run part of the operation in Saskatchewan. He said it was a very, very frustrating experience. The difficulty with getting parts was one thing; difficulty with the skilled workforce was another thing. All in all, they were just very, very pleased to be in Manitoba with the overall environment here. And that's something you have to look at.

You can't look at one specific item and jump up and down on it, and say that this is the one thing that's going to make my decision to come to Manitoba . You look at overall costs . You look at the workforce and its abilities and skills and the stability, and the stability of the environment around you and, when you look at all those things, we do pretty well. MR. E. CONNERY: Well, the Minister lives in Alice in Wonderland Fantasy Land.

He doesn't know how many jobs too that are eliminated because of the payroll tax, and how many times does an employer look at trying to decide whether he's going to mechanize a segment of his operation or not. The payroll tax cost on a labour intensive industry can be the deciding factor. I know in our operation it was the deciding factor this spring to mechanize part of our carrot packing, which is going to eliminate four or five jobs for eight or nine months of the year, and sadly so, but we have to be competitive with other areas. Other people and other industries are facing the same decision.

So while you say it's helping your health and education if you have people on unemployment, what does that cost the industry? And we look at the welfare rolls and how much they've climbed. So you know, there are two sides to that story, and the Minister is only looking at one side. HON. V. SCHROEDER: Well, Mr. Chairman, the member talks a pretty good talk. He's in here, as he has been all Session and as the Opposition has been all Session, telling us we're not spending enough on Highways; we're not spending enough on Agriculture; we're not spending enough on Health; we're not spending enough on Social Services.

There have been suggestions made, although not that vigorously, that maybe we should be putt ing more money into this particular department. We're not supposed to tax; we're not supposed to have a deficit. Well, quite frankly, we're not magicians and we can't pull it out of thin air. I want to make the point to the member that, in this current year, our spending as a proportion of the economy is roughly 2150

Tuesday, 19 May, 1987 the same as it was - in fact , just a little lower than it was in 1982. Our deficit as a proportion of the economy is roughly in that same vicinity as well, in fact, quite a bit lower than 1982, and not that much above where it was in 1981, very little above where it was in 1981. You might ask then , why do we have to increase tax es.

I tell you it's time that you stopped and thought about what we're saying for 11 months of the year when we're talking about what's happening with health and education payments by the Federal Government , equal ization payments by the Federal Government, procurement, and regional economic development decisions by the Federal Government , all of those things when they pull back.

Every time they pull back and we don't cut back on spending and every time they pull out of a program where they expect us to pick up half of it or a third of it, and tht Opposition screams in chorus with the Federal Government, yes, pick up a third of it, that puts more onto the Government of Manitoba and that means the next time there's a Budget in Manitoba, there will either be an increase in the deficit or an increase in the taxes. Employers will not escape their fair share of those taxes. If the members want to go back to the good old days, back to before 1982 , then let 's do it completely.

Let's go back with the same kind of numbers in equalization , the same kind of numbers in health and education; let's go back to the same proportion of federal procurement we had back then in the bad old days of close to 4 percent as opposed to less than that now; and let's go back to the days of regional development when it was stronger for the regions than it is now. I'm not blaming the present government on that. I blame the Liberal Government for their change from OREE to ORIE.

But that has had a very profound effect on the Maritimes, on Manitoba, on Saskatchewan , on Alberta, and it has strictly benefited Central Canada and all the numbers show that. Those things do eventually wind up taking money out of the pocket of a vegetable farmer in Portage la Prairie. MR. E. CONNERY: In the industrial package, where are you keying to the rural part of Manitoba? What emphasis or what thrust have you for rural Manitoba as a direct program or policy direction? HON. V. SCHROEDER: Mr. Chairman, about half of our development agreements , as an example, have been done in rural Manitoba.

We've been keeping a keen eye on food processing, on the agricultural manufacturing sector in Southern Manitoba, and on some other kinds of manufacturing. Vicon, yes, that's in Portage - I'm sorry, that's Agricultural Implements . Toro is the one in Steinbach. There is a fairly large project in Brandon and so on, so we don 't have someone designated for Winnipeg or rural as an example.- (lnterjection)- Sorry, there you are, you're getting some brand-new updated information.

The department is proposing that the new person - I'd indicated to the Member for Sturgeon Creek earlier that we had created a new position in the food-processing area . The new person, who will report to Mike Wallace , will be exclusively working on the rural food processing, especially trying to build up the smaller operations around the countryside. That wouldn't mean that Wallace would be out of the whole rural area , but this would give him the opportunity to have someone especially strictly dealing with the rural area. MR. CHAIRMAN: The Member for Sturgeon Creek. MR. F.

JOHNSTON: The Member for Portage touched on an industry that might have gone to Portage la Prairie by General Electric. The arrangement to buy the General Electric generators without tender in the Province of Manitoba indicated at that time that Manitoba would receive General Electric manufacturing facilities of some kind; that they would produce as many jobs in the Province of Manitoba as it would take to build the generators elsewhere. Can the Minister bring us up to-date as to what General Electric has done in the Province of Manitoba since that arrangement was made? HON. V.

SCHROEDER: Well, I just indicated they've assisted and invested in four businesses, northern Native businesses up in Northern Manitoba. They've stayed on track with their Manitoba content. They have not, as of yet, made the specific investment decision which could be anywhere in the province. They have been looking at specifics, such as the Member for Portage raised, and a number of other specific investments that so far have not been acceptable to them. They're still working on exactly how they're going to go about fulfilling that commitment that I expect they will fulfill. MR. F.

JOHNSTON: The Member for Portage la Prairie just said "expects," and I say the same thing. The Minister "expects" they will fulfill it? We've bought the generators and he "expects" that they will fulfill it? I think the people of Manitoba deserve better than that on an arrangement to buy generators without tender. HON. V. SCHROEDER: Well, Mr.

Chairman, if we want to go back into history, the member will recall why we went into a contract without tender and the "why" was a contract with respect to Bi-pole Two, back more than a decade ago, when the Federal Government provided loan money to Manitoba on the understanding that the next set of generators would be built by a Canadian manufacturer . We agreed to that and successive governments began negotiations, including the Lyon Government , with I believe there's a maximum of two Canadian manufacturers of generators.

So we decided that, rather than play the game of having a tender with only two people possibly involved, we would negotiate it. Before we did that, we talked with a lot of people in the private sector and gave them the facts and asked for opinions. The opinions I believe unanimously came back - you're probably better off trying to negotiate something where you know exactly what you're going to get - so that's what we did. We wanted a low price. The price was way below what Hydro engineers had anticipated the price would be; and secondly, we wanted jobs in Manitoba. We got the commitment by them to 2151

Tuesday, 19 May, 1987 have a large proportion of Manitoba content , far larger than we've had in the past on the contract itself. Thirdly, we wanted, for every job they couldn't produce in Manitoba, as the member has indicated, for every job it created elsewhere in the country, we wanted a job in Manitoba by them. They've committed themselves contractually to do that. We expect that they will live up to their contractual obligations.

If they do not live up to their contractual obligations , then the contract stipulates that they will owe the people of Manitoba liquidated damages in the sum of some $10 million , depending on how much. If they've done nothing, it's $10 million. MR. F. JOHNSTON: The Minister made a very good point when he said that he was advised to negotiate it because he would know exactly what he's going to get . The Minister doesn't know exactly what he's going to get . We don't know what jobs we're getting in the Province of Manitoba .

We don't know - if they owe us $10 million, that doesn't give us jobs, that just puts money back into Hydro or the general fund of the province. It doesn't give us jobs . When I think of the times in the defence of this contract that was brought up in the House, and the press announcements - and I don't have them with me at the present time - on the benefits that were going to accrue to the Province of Manitoba because of this arrangement, and two years later because we've discussed it last year, or a year-and-a-half, or a year and eight months later, we still don't know what we're going to get.

Is somebody really believing that in General Electric, the size of the company they are, cannot make a decision as to what investment they could put in the Province of Manitoba? Are you telling me this department hasn't got a recommendation for what they should maybe put in the Province of Manitoba? HON. V. SCHROEDER: Mr. Chairman, it's an interesting comment . What the member seems to be saying is that CGE would sign a contract and ignore it.

He seems to be so impatient to have CGE make their investment decision, he can't stand the suspense of waiting another year or two years for those investment decisions to be made . They will be made. I've pointed out that there is no company in the world - I haven't pointed that out, but I've said that it's going to cost $10 million to CGE if they don't do the investment, if they do none of the investment. I know of no company that would not take a chance on some investment rather than to see $10 million go down the drain.

If they did put $10 million of their money down the drain, that's an additional $10 million off the already very low contract price for constructing the generators for Limestone for which we would have had no Manitoba jobs created without this particular agreement. It would have been out for tender . We have already got several small businessess , admittedly small businesses, in the province operating as a result . We've already got Manitoba content to the extent that's specified in the contract , and I would suggest that the member be patient. We expect that we will have CGE live up to the contract.

They're hoping, as any other corporation would, that they will also be able to be involved in any further construction that happe ns in the province . They know full well that, if they were to simply pass on the $10 million and not do what they said they would, that would not be something that Manitobans would look on kindly. I don 't think that they will do that. MR. F. JOHNSTON: Mr. Chairman , the Minister says that I'm impatient and I guess I am when I take a look at the figures that I quoted earlier that we had dropped 11,000 manufacturing jobs in this province since 1981.

The Minister, in his own admission and in his own discussion here today, has said that investment is down in the province, that manufacturing jobs are down in the province and, with all of that piling up, the seriousness of manufacturing jobs and investment in the province, here we have an agreement with somebody with generators that are going to go in. It's all very well to say there are only two. If it hadn 't have been General Electric, maybe the other company could have done the same .

There might have been just as much Manitoba contact with the other companies, but the point still remains, we haven't got obviously anything near to what General Electric is supposed to do and , quite frankly, it doesn 't appear as if we've got any indication as to what they are going to do. HON. V. SCHROEDER: Well, Mr. Chairman , I've indicated that there have been a number of proposals which have been brought forward . When there 's one that meets the criteria, one that will provide long-term jobs in Manitoba, I'm sure CGE will move.

I don't feel that it would be appropriate for us to be jumping on their backs telling them you must invest in Zeiner, even though their numbers show that it won't work . That makes no sense. We can get some kind of initial investment and, a few years down the line, we have another CFI or something. I don't think that's in anybody's best interest .

The member uses numbers but he doesn't use the overall numbers, the fact that we have a rate of employment growth since we took office larger than the Canadian average, and that's surely a good measure of how we're doing, much larger than Saskatchewan since the Conservatives took office in Saskatchewan, far larger than Alberta . B.C. is barely back to where they were in 1981 in terms of employment, while we've grown by over 8 percent since then in employment in Manitoba .

That's a little bit of an answer as well to the Member for Portage who is bemoaning the Health and Education Levy as though that somehow meant that nobody was creating jobs in Manitoba anymore, when in fact we're creating more jobs in Manitoba than in most other provinces, more jobs than the Canadian average and, if at this time CGE is taking its time in creating its investment in the province, quite frankly , I think that probably this is one of the best times for them to be taking their time and we will be getting our investment. Let's go back to the fact that this particular dam is coming in way below budget.

That's not something that's been happening on previous dams . That is something that is happening with this one , and not only that , practically every single bid came in way below engineer's estimates , and that's not something that happens all the time . Things are moving relatively well 2152

Tuesday, 19 May, 1987 there . We have a much larger Manitoba content than in the past, and the members just don't seem to want to acknowledge that. MR. F. JOHNSTON: Mr. Chairman, I'm not here to argue about what tenders came in with the Limestone project. HON. V. SCHROEDER: You raised it. MR. F. JOHNSTON: I don't recall bringing it up. I just merely said that we had purchased generators without tender . I was told it was the best way to go, because you hadn't received advice on the best way to go.

I'm saying that you have an arrangement with a company, after you 've made that arrangement with them , to invest in the Province of Manitoba and they haven 't done it yet, nor do they seem to know what they 're going to do. The Minister says to me that he would rather see them not do anything than invest in something that isn't going to work . I'd only ask the Minister if he knows how big General Electric is, how many plants they have, how many products they've made, how many little widgets or gizmos that they can put together in plants all over the world?

I can tell you this , that if they haven't made the decision as to what they can do in Manitoba now, 60 miles from the United States border in Central Canada, someth ing seems to be wrong . They've obviously got the order and they haven't fulfilled their obligation to us as yet; something is wrong. So they don 't spend $10 million or it knocks off the price of the generators . I don't recall discussing that. I'm very aware of how much money is being spent up North and, as I told you earlier, when it ends, there's nothing to replace it.

When the Minister comments on the economy of the jobs in Manitoba, yes, the figures are there , but it's mostly government money and that doesn 't look good for the long term because, as I said earlier, all of the government money comes from taxpayers, and the taxpayers of Manitoba are finding that out very bluntly at the present time . Mr. Chairman, I have nothing more on that section. HON. V. SCHROEDE R: Mr. Chairman, the Member for Sturgeon Creek says he didn't talk about what price things came in at Limestone.

No, he didn't; but he suggested that somehow we 'd done something improper by negotiating the agreement and not having a tendered contract. We started out with this thing, and the Tories have had a phobia about the fact that we've negotiated that contract. I point out that was a successful negotiation for Manitoba . I point out to him that it is not fair to say to CGE that there is something wrong with what they 're doing , when they are perfectly in accordance with the con trac t they've entered into up until today . If they were in defaul t today , my attitude would be completely different.

They are not in default and, as long as they're not in default, it is improper to say that there is something wrong with them not having made their decision up until now. The position they are in right now was contemplated at the time the contract was entered into, so it seems to me that when someone has a contract where they have time to make a proper decision one should .allow them the time to make that proper decision without suggesting that there is something wrong with them or with us. MR. F. JOHNSTON: Mr.

Chairman , if he wants to talk about the te ndering system, given time , I'll go downstairs and get the Hansards or the paper reports where Ed Schreyer said that we will never, as an NDP Government, harm the tendering system in this province. That is when we were talking about the generators and the equipment that was going to go in Brandon at that time. If the Minister wants to say now that's fine and dandy to say that we think it's not a good idea to have a negotiated contract, fine; I wasn't arguing with him on the point. I said it was not a tendered contract , and it was not ; that's fact.

Anybody who says any different is wrong . That's fact , and it obviously wasn 't a good arrangement with General Electric . If they 're not in default now, they should be. It's a year-and-a-half after they signed the contract, and it's time they were telling you what they were going to do in this province. So maybe you made that deal. HON. V. SCHROEDER: Well, Mr. Chairman , with a tendered contract , we probably would have been in the range of 20 percent higher in our payments than we got . We'd have got no jobs back in return . We wouldn't have those businesses working right now.

We wouldn't have the Manitoba content. The reference to Ed Schreyer and the tendering process , it sort of blew right past my head. I thought we were going to be getting into the CF-18 next. MR. CHAIRMAN: The Member for Arthur. MR. E. CONNERY: I have one question on CGE . MR. J. DOWNEY: Mr. Chairman , if he wants to ask another question . MR. CHAIRMAN: The Member for Portage la Prairie . MR. E.

CONNERY: Well, the Minister should know that CGE, for every year they don't put their $10 million into Manitoba , they're saving $1 million a year on interest, and the Minister should know that, every year they don't put their $10 million into Manitoba, it 's jobs that aren't being created . He should also know that with inflation by 1991 $10 million isn't going to be the same investment that it would have been on Year One .

While the contract might not be in default , I think the Minister should be a little bit excited and a little bit concerned about getting that money into Manitoba and get it working as soon as possible. The Minister, obviously, doesn 't have a grasp of what his department is and what makes things tick. He's quite happy going along with the deal. He thinks he's got a good one, but it could be a better one if we had that $10 million at work in Manitoba now , but he doesn 't care . HON. V. SCHROEDER: The Minister would prefer to have a job for every job, which is what was agreed to in the contract.

The Minister would prefer to have something solid and long term, instead of garbage , 2153

Tuesday, 19 May, 1987 like, well CFI. That's the kind of thing you're saying we're supposed to, and CGE is supposed to jump at the first investment opportunity that comes along. I think they have every right -(Interjection)- Yes, garbage . When you enter into a contract with someone you don 't know, you go across the sea to Switzerland to sign the contract, you don't remember you were there and you wind up having people taking tens of mill ions of dollars out of the province, I don't know what else to call it other than garbage .

I don't expect that CGE will operate like that, and I do expect that CGE want to make a long-term investment that will be beneficial to them and beneficial to the people of Manitoba . The contract deliberately contemplated the idea that they would have time to do that. We didn't say we're going to rush you into coming up with the first investment decision that comes along, or the second one . MR. F. JOHNSTON : Mr. Chairman, I don't recall mentioning CFI in my discussions . HON. V. SCHROEDER: I did. MR. F. JOHNSTON: But if the Minister would like, I will go to Hansard . I will give you a book written by Mr.

Newman in which he refers to everything that happened in CFI, documents about all of the places that he refers to very carefully . The documentation is all available. In Hansard, when we left office, there was $10 million spent on CFI and, in Hansard, right in that room that we all sit in every day, Ed Schreyer stood up in front of that room, in front of the President of CFI and the companies that we were dealing with and said, "I have just renegotiated the whole contract for CFI. Everything is now going to work marvellously." From that point on, it went down the drain and it's documented .

The Minister seems to forget that I've been here longer than him and I remember those days but, if he wants to bring up those types of things, all the documentation is available to be shown, that the NOP over the CFI conflict were very, very deeply involved with the mess that it's in and it's documented. (lnterjection)- Then , Mr. Chairman, Mr. Schreyer misled the House on the day he stood up and said that. Are you suggesting that he did that? Thank you, that's all I want to know. HON. V. SCHROEDER: Mr. Chairman, this reminds me of the Kelly scandal during the construction of the Legislature .

I think a couple of points to be made - and the question has to be asked, was the renegotiation something which improved the contract for the people of Manitoba or would we have been better off with the contract signed by Sterling Lyon with Mr. X at a time when he forgot that he'd gone to Switzerland to sign it? MR. F. JOHNSTON: Mr. Chairman, that is why, when we changed office between Walter Weir and Mr. Schreyer, during those two weeks it was approved by the new government that came in to change the funding arrangements and the spending arrangements of CFI, which is documented, changed by the NOP Government.

MR. CHAIRMAN: The Memb er for Arthur . MR. J. DOWNEY: Mr. Chairman, I want to get int o a couple of areas I'd like the Minister to respond to, dealing specifically with the loss of the agricul tura l processing industry in Manitoba, dealing with particularly the concern about the packing-house industry with the loss of Canada Packers, one of the major meat processo rs in Western Canada and its location here in Winnipeg , the loss of Centenn ial Packers, which was certainly a lesser of that and established in 1981.

I'd just like to go through it and see if the Minister could - and I know that this government isn't particularly happy to help the farm community . It's demonstrated by their past policies and programs .

The Minister of Agriculture, as I would assume, would go to Cabinet saying that the Beef Program , which he would introduce, the $40 mill ion or the numbers of millions of dollars , which would be put into the beef industry would assure the employees of Canada Packers and the packing industry that there would be sufficient product to put through the industry and that everyth ing would be all well and good, but something went wrong .

One of the things tha t went wrong is that nobody took a look at the Minister of Agriculture and closely scrutinized him to see what he was going to come up with at the end of the program.

He came up at the end of the program with a fairly large deficit in the Beef Stabilization Program , a packing-house industry that saw fit to withdraw from the Province of Manitoba - and it isn't because Canada Packers didn't have money to leave in Winnipeg because, as soon as they sold their Canada Packers meat processing plant , they immediately went to Alberta and used the capital to buy into an oilseed-crushing business or took the Alberta Wheat Pool, I believe it was , out of a share of a major oilseed-crushing plant .

So it wasn't a matter of not having the capital or the desire to leave it invested in an agr icultural processing industry, but they saw fit to redirect it out of Manitoba, No. 1, because I'm sure the climate here wasn't conducive to maintenance of a large packing house industry. They didn 't have the product, the program that his colleague, the Minister of Agriculture , sold to Cabinet, and the fact that they'd be able to have slaughter cattle to kill here in Winnipeg. It didn 't work, and there's $40 million or so there that the producers are on the hook for.

We've lost 850 jobs or will be losing 850 jobs, and I'm extremely upset that the Province of Manitoba, the City of Winnipeg, have lost. The Minister may go back and say, well , I was the Minister when Swift Canadian closed their doors . Well, I'll just put that on the record , Mr. Chairman. For those people who have moved here from other jur isdiction s, whether they be foreign or local , Mr.

Chairman , for information what I would put on the record is that, under the New Democratic Party of Ed Schreyer and the former Sam Uskiw as Minister of Agriculture , there was a regulation brought in that stopped the flow of hogs from Saskatchewan into Mani toba . That was done prior to our election in 1977. The City of Winnipeg , the Province of Manitoba , traditionally killed about 250,000 hogs from Saskatchewan, which vi rtually dried up when the 2154

Tuesday, 19 May, 1987 regulation was brought in by the NDP that all products had to flow through the Manitoba Hog Marketing Board . I want that information on the record so that when he comes back and says - by the time we got in, Mr. Chairma n, the pattern had changed . The processing of the hogs had moved to other jurisdictions and they were lost to Manitoba . Swift's particularly were one of the major processors of those hogs and hog products . So it was an NDP Government that caused the loss of the Swift Canadian plant but, again, we now see the failure of an NDP administration and we lose Canad a Packers.

I am deeply concerned, Mr. Chairman, because I wou ld have thought - of course we've never heard any long -term policy c ome from this Premier or this government - that there would have to be a long-term policy or should be a long-term policy to encourage the increase of food processing, such as was done during the years of PC administration for diversification with the Harrowby oilseed-crushing plant, with the tax changes, their tax incentives to allow Mohawk to come into Minnedosa to use agricultural commodities to produce alcohol for the extension of the gasolines. HON. V. SCHROEDER: What else? MR. J.

DOWNEY: Mr. Chairman, there were several initiatives put in place to encourage the expansion of the Altona oilseed-crushing plant during our term of office and I would say that, dealing with agriculture, I could go into other areas dealing with the Alcan aluminum smelter where there'd be some 800 jobs, the use of our hydro power right here in the Province of Manitoba rather than exporting it for jobs and job creation outside of the Province of Manitoba, those kinds of policies that create employment and the use of our resources right here in the province. I guess, Mr.

Chairman, what I would like the Minister to respond to, does he currently have any proposals or does he have any programs that would encourage food processing or the food-processing industry to expan d o r is he looking in any particular areas that are of significance to the province in that area at this time? HON. V. SCHROEDER: We've ploughed this ground before, but we'll go over it again for the member . Interesting concept, the Schreyer government didn 't allow 250,000 hogs a year to come into the province until 1977. Then in 1979, two years later, Swift's closed.

That's a nice rewriting of history ; it won't wash. It didn't wash then and it won't wash now. The member talks about Canada Packers and its desire to move out of Manitoba into some other area in Alber ta, into oil. What he remembers , if he has been involved at all , he knows full well that back in the early'80's there were only two multistory , meat-packing plants left in the Canada Packers system from about 9 or 10 they'd had, and everybody knew they were going out. The one in Winnipeg was scheduled for closure in the early 1980 's, after we had taken office .

We went down there, talked with them, talked with the Federal Government. They agreed to retain their plant in Winnipeg; they shut down the plant in Edmonton, the multistory plant in Edmonton . There was an understanding that they were going to be dealt with, with respect to a grant from the Federal Government, but the Federal Government refused to give to them when they finally put their application in, refused to give to them, even though a short while later the Mulroney Government was prepared to give 35 percent to a plant in Prince Edward Island - 35 percent for PEI, zero for Manitoba .

A short while after that were prepared to give 17 percent or something like that to Neepawa - 25 percent to Neepawa, and zero to Canada Packers . And here the member is suggesting that it is the Provincial Government who had offered Canada Packers assistance at the same time, that it's somehow our fault that Canada Packers went down. We knew that , if they weren't going to get their money to do that at that time , they were gone . That is really regrettable , it's really unfortunate that the Federal Government chose to take that kind of route.

Now the member seems to totally forget about what has been happening in food processing in Manitoba over the last few years, as though all that we have is a down. He mentions Centennial Packers , all of 20 people, every one of whom it's too bad we lost, we have to do something to replace it and so on. But no mention at all , no mention of an increase in the tens of thousands of acres in potatoes at Carberry, no mention at all. He seems to think that's nothing. Every single investment in Manitoba, we're supposed to go and bow to Ottawa.

Are we supposed to thank the feds for bringing Oerlikon near Montreal, even though there was a consultant's report saying Toronto was the place. The place for potatoes in Canada, my friends, is Manitoba. The place for potatoes for trench fries is Manitoba, we're proud of that . We don't say that, just because we're in Manitoba, we should be treated differently from other provinces when it comes to economic development. We should be treated no differently from Prince Edward Island or Quebec or other provinces when it comes to economic development.

It doesn't mean we shouldn't say thank you for the money from the Federal Government, and we said that , and we also put provincial money into it, no more than we thought was necessary to make sure we got the plant, but we put some provincial money into it. But the member totally ignores that and refers to a fairly small packing house of 20 people, and doesn 't refer to all kinds of areas where we have new jobs in the food-processing area. Tai Foods has a $250,000 investment; Chemco has $185,000, 10 jobs; Granny's Poultry Co-operative Limited, $115,000, 4 jobs.

You add them all up together , and there's more jobs there in those little ones than in the one that you're referring to, and Instant Foods in Winnipeg, noodles, 18 jobs - but not a reference to that from the members on the other side. They just try to find the ones where there were difficulties, don 't recognize the problems that their friends in Ottawa have put us to. Yes, we are talking with the meat-packing industry . We' ve gone quite public with the fac t that we're prepared to put up some millions of dollars to help to rationalize the industry in Manitoba .

I've indicated to the critic that we're probably going to be making some announcements along that line soon . We'~e talking with potato and vegetable processors, seeing ways of expanding those areas. We, as well, have added a 2155

Tuesday, 19 May, 1987 position. The member probably knows Mike Wallac e who's our expert in the area of food processing. There 's a new position been added on, reporting to him, dealing with rural food processors. We will be continuing to slug along in the area . MR. J. DOWNEY: I don 't want to prolong this, Mr. Chairman . I compliment the Minister in his employing of Mike Wallace in this area . I feel that he's a very capable individual in this regard. How much money is being put into Burns Foods? HON. V. SCHROEDER: There are discussions , as I'm sure he's aware of.

If and when the announcement comes , I'll let the member know. MR. J. DOWNEY : I'd apprec iate it. So in other words , it really isn't feasible at this time to suspect that anything is going to happen; he says, if and when. So really, we 're at a stage where it's very hypothetical at this point that anything may happen with the expans ion of Burns? HON. V. SCHROEDER: I' d put it from another perspective. I would be very surprised if the offer fo r money isn't taken up by one or more companies in the meat-packing industry. MR. J. DOWNEY: Mr.

Chairman, what I would like to know is: How many other grants or loan guarantees has his department handed out, say, in the last two years? Has he got a list that he can table of all of loan guarantees, or direct grants for industries coming to the province? Has that question been asked? HON. V. SCHROEDER: That's in the last year? MR. J. DOWNEY: Last two years . HON. V. SCHROEDER: Last two years. MR. J. DOWNEY: Mr. Chairman , I'd like to know the grants, loan guarantees and interest rate subsidies on programs . All of them would be appreciated . MR. E.

CONNERY: Maybe the Minister could give us that tomorrow or the day after . Would that be okay? MR. J. DOWNEY: Oh, yes, you don't have to read it off, that would be a waste of time . Just prov ide a list will be fine in the next day or so. HON . V. SCHROEDER: Yes, okay, we will get a list for you . It's not a long list. MR. J. DOWNEY: One area that I'm interested in, Mr. Chairman, was a $50,000 grant to Continenta l Grain Company, I believe it was. I'm sorry, Allstate Grain Company for fish production . Can the Min ister give us an update as to the current status of that program or that industry?

Are there other people ; would he entertain other people who are interested in that business, under the same kind of a program, a smaller corporation or a larger one, it doesn 't matt er? Is he into the business of providi ng grants to people inte rested in developing the fish ind ustry in this province? HON. V. SCHROEDER: On the second part of that, we would certainly entertain it. We're looking for the spec ific information which the member, I know , had asked me about some time previously.

This was , I believe, an exceptional opportunity because of the availability of that building and the particular vessels and so on , the water supply and sewer and so on, but if someone had something that made economic sense without huge amounts of government assistance , we'd certainly look at it. This is the status report I have , th at the project is at full speed, but they expect construction of the fish trough to finish by the end of June. Potential private levered funds could reach a million if the projec t is successful. So I guess there's no fish in there yet. MR. J. DOWNEY: Mr.

Chairman , I th ink just from reading and observing what's taking place elsewhere, there is a tremendous potential in that industry and the Minister has indicated he would entertain other individuals who may be interested in putting a proposal forward in this regard. Is that what I understood him to say? HON. V. SCHROEDER: Yes. MR. J. DOWNEY: I thank the Minister for that information. Mr.

Chairman, I don't have the specific numbers, but I am under the impression, because of the increase of consumption of our poultries , whether it be broiler chickens, whether it be the whole of the process, the turkey industry parts, a breakdown of that kind of a commodity, that there is a pretty good opportunity in Man itoba to expand the processing of poultry products , whether they be the traditiona l types, the broilers - and I don't have the breakdown of the numbers as I said - I'm under the feeling that there's an importation of quite a bit of processed product for the fast-food chains because of shortfall in supplies.

Is the Minister prepared to endeavo ur to expand, to some degree challenge the Minister of Agriculture to make some changes that would enhance the processing of the Marketing Board products? Not to say that I'm advocating destruction of them, but I'm aware - because I was the Minister responsible when it was signed - that the broiler .industry, for example, in Manitoba can produce product outside the Marketing Board, both provincially and nationally, for export product, for international markets. I don't think it's ever been carried out and, to my knowledge, there's never been a change in the regulation.

When we signed the National Broiler Marketing Agency, one of the stipulations we signed under was that we could produce product , processed here fo r the international market, that the quota restrictions didn't apply to them. Has the Minister looked into, or is there any major opportunity for expansion of the poultry processing industry, because you don't have to read a lot of papers or do a lot of research work to see the tremendou s increase in poultry consumption in the fast-food 2156

Tuesday, 19 May, 1987 business? I think it's unfortunate if we're being .overly restricted, because of our ability to produce ; under the Marketing Board restrictions, not to take advantage of that for job opportunities.

I say I'm not sitting here advocating that we trample the rights of those prod ucers who have their tradition al quotas , bu t I think we are not maximizing the opportunities for industry and job opportunit ies in this province, both in the feed industry, the processing industry, and the marketing end of it if, in fact , there isn't some pressure from the Minister of Industry, Trade and Technology to press for this . Is there any update or any renewed interest with the increase in consumption in the poultry industry? I know we talk about the hog business.

That's expanding, and there's accommodation to process an increased number of production here in Manitoba. What 's happening in the broiler industry and what is the Minister's position on it? HON. V. SCHROEDER: I'm told that probably there's not all that much processed poultry, chicken or turkey, coming in. There may be the chicken nuggets, or McNuggets, whatever, those kinds of things may be coming in from the outside. Certainly in the area of import repl aceme nt, we are talking with several of the packing houses in Manitoba, and they are looking at further processing of turkey.

I'm not sure about chicken, as well. We probably would have - and I recognize the member's point in terms of having those products for export of market. Even with that, we would probably have a real difficulty getting our product competitive enough to get into the U.S. I know price s in North Dakota for chicken are somewhere in the range of 35 cents a pound right now. That's pretty tough to compete with for our growers. There 's just one other area.

We do have, roughly , as the member probably knows, about 12 percent of the eggs across the country, even there we're having trouble with some of our local processors not being able to get enough, on occasion , to keep their egg-breaking plants going . MR. J. DOWNEY: I don't want to prolong the debate on this, Mr. Chairman. I think the Minister who's responsible for Industry , Trade and Technology should take a look as to why some of those products can be bought for less money. We're going to be selling hydro into that market that they're going to be producing that cheap product.

Their feed grains are relatively the same. You know, why aren't we able to compete? I guess , Mr. Chairman, one would have to come back and say the climate in this province is not conducive to competition in the international market, and that does not augur well for he and his department in government policy. We had a major international marketing program going under former governments, and I would think that one would not want to give up and return into that climate where we could be competitive, both in the Pacif ic Rim countries, which has a tremendous potential, as well as in the United States.

But if the Minister has given up on being competitive, it doesn 't say much for he and this government. Thank you , Mr. Chairman. HON. V. SCHROEDER: Mr. Chairman, I know the member is having fun . You should keep in mind - I just pointed out to him and to members of the committee - that we have about 12 percent of the eggs in the country . That' s three times, almost three times, our population proportion. That's because we do have efficient producers, as opposed to other parts of the country, and we do have an area where we can do well.

But trying to compete in a totally unregulated system with the Americans would be an interesting game to play. MR. CHAIRMAN: The Member for Morris. MR. C. MANNESS : Mr. Chairman , I would like to ask the Minister how much private investment there will be in Manitoba in 1987. And I refer to page 26, before he may wish to answer the question, of his Supplementary Information for Legislative Review , under Expected Results, page 26 . It makes this statement, and I won't ask the question dealing with the 1,300 jobs.

But, in the first sentence, it says: " . . . obtaining $100 million of new private sector investment ." Now you may have covered this, Mr. Min ister, but I'm wondering indeed, is that the global figure of private investment that's going to be in this province this year ; or indeed, is that the portion specifically associated with any development directly, or indirectly , associated with the department? HON. V. SCHROEDER: Yes, it's the latte r, just what we're involved with . There are all kinds of other things going on. MR. C.

MANNESS: Well, just to put that figure then into perspective, can the Minister then tell me what other global figure of private secto r investment is forecast for the province in 1987? HON. V. SCHROEDER: Mr. Chairman, it's a Conference Board forecast, I don't have it in front of me, but I'm sure the member could find ... MR. C. MANNESS: Mr. Chairman, is the Minister of Industry, Trade and Technology telling me he doesn't know that number? HON. V. SCHROEDER: Mr.

Chairman , I've long since learned that I do not give out specific numbers unless I know exactly the number, and I don't believe that it would make a great deal of sense for me to be running around with a specific dollar number in my head in terms of gross private investment, as opposed to total investment , as opposed to total public investment, as opposed to federal investment, as opposed to provincial investment, as opposed to manufacturing investment, as opposed to housing investment. I'm not going to get into that; life's too short . I prefer to have my mind working on important things. MR. C. MANNESS: Mr.

Chairman, I don't know why this Minister is so testy, quite frankly. The question ... HON. V. SCHROEDER: That's because l'm referring to this area for the third time now in a matter of several hours . 2157

Tuesday, 19 May, 1987 MR. C. MANNESS: Well, the quest ion was pretty specific, Mr. Chairman . I was led to believe that indeed the specific question in this area , hadn't been asked . And so if the Minister wants to take some exception to that and lash out for some reason when the question was meant by way of good intention , well then so let him. His words will speak to his character, quite frankly, Mr. Chairman . HON. V. SCHROEDER: Mr. Chairman , I answered, specifically , the first question saying it can be found in StatsCan numbers, did so politely .

The member jumped up at me and suggested that I should have the specific number in my head . And if he expects that sort of service from me, he's got the wrong department. MR. C. MANNESS: Mr. Chairman, this department is seeking expenditure of $8.9 million. I don't know how many figures the Minister carries around in his head, quite frankly, but certainly one of the major areas is investment; indeed, the whole thrust , the major thrust of this department is directed towards investment and job creation within this province, and I would think that he would have some type of handle.

I'm certainly not going to hold whatever he puts before me as sacred with respect to global investment within the province, Mr. Chairman . Now he says I can go and look up the Conference Board Report and find the figure myself . Well, if he's not going to provide me with a number, I suppose that is what I will have to do. Mr. Chairman, I was just trying to put into perspective two things; firstly, the public sector investment . I can recall from the Budget, and I do not have the Budget in front of me.

It seemed to me that the figure was $850 million, thereabouts, and I wanted to compare that with private sector investment. I know the Minister has the number . I know he has some feeling for that number, and I find it absolutely reprehensible that he's afraid to share it with me. Thank you. HON. V. SCHROEDER: Well, Mr. Chairman, it just so happens I've found it. Total gross investment in the province $3.639 billion .

And if the member and I take his - I don't have the number for the public sector investment - if he says that it's $850 million, that leaves somewhere in the vicinity of $2.8 billion of private sector investment. That includes housing at $967 million; government - it's claimed here - $665 million, but I imagine that utilities are partly; government services are $600 million; primary $417 million; manufacturing $174 million; utilities $817 million. And I should say those numbers are from Statistics Canada, as I indicated .

I have here the Manitoba economic outlook from the Investment Dealers' Association of Canada. On gross capital investment, they say: "Investment spending provided a major boost to economic growth in Manitoba during the 1983 - 1986 recovery period, increasing annually by an average of 13 percent a year. By comparison, national investment growth averaged only 4 percent a year in this period." A major part of that period is before the Hydro development that we've heard so much about as having been somehow the engine of the growth .

And that reflects itself in the fact that we have about 50,000 more peop le working today than we had in 1981. MR. C. MANNESS : Thank you, Mr. Chairman. MR. CHAIRMAN: The Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, I wonder if the Minister would provide - if he doesn't have them tonight - the four northern Native businesses in Manitoba that General Electric has invested in, and the amounts , please. HON. V. SCHROEDER: We don't have the amounts. We could get the names , but we'll get the whole package to the member . MR. F. JOHNSTON: Pass. MR.

CHAIRMAN: 2.(bX1)- pass; 2.(bX2)-pass. 2.(cX1) Trade - the Member for Sturgeon Creek. MR. F. JOHNSTON: The Trade Department, it's noted here that it has the capacity to find - if I'm reading this right - products in other countries or provinces that are made in Manitoba, that can be exported to those other provinces - and I believe my colleague has the figures, that the foreign exports in the Province in Manitoba , have been dropping fairly steadily. Well, the exports in Manitoba , when we're only a million people, has always been a very, very important part of our economy, especially our manufactur ing exports.

The service industry doesn't export all that much, but the situation where we can't possibly use everything we have the capacity to make in Manitoba , and yet we find that our exports in the province generally are down . Has the Minister had his department give him any analysis or reasons for the exports in this province to be down? HON. V. SCHROEDER: Mr. Chairman, the reasons for the decreases - and they have not been large - but the reasons for the decreases have been the decreases in grain prices, the decreases overall in farm agricultural equipment, and the shut-down of Versatile Farm Equipment. MR. F.

JOHNSTON: Mr. Chairman, the Minister put grain prices in there with agricultural manufactured equipment. I know we export grain, and I don't believe that the export of the grain resource is usually - well , it can be - taken into consideration when we're talking about manufactured products in Manitoba being exported, unless he's speaking of something that is produced from the grain and being exported. HON. V. SCHROEDER: Mr.

Chairman, my numbers , the member may be operating from a different data base, my numbers are, the last year I have numbers here for is 1985 when we dropped by about just over $4 million to $2.164 billion from 1984. Those statistics had been adjusted by the Manitoba Bureau of Statistics for'85 to include all out -of-province shipments of grain , which is $444 million , and oilseeds, which was $163 million, destined for foreign countries. 2158

Tuesday, 19 May, 1987 The adjusted figures represent the actual price paid to Manitoba producers for cereal grains and oilseeds, so that's one part of it. The farm machinery, I'm not saying that it dropped in price , of course. I'm simply saying that there's not as much of it exported to the dry land farming areas which suffered economic decline and there was just less purchasing. MR. F. JOHNSTON: Mr. Chairman, how many trade assistance programs were provided with the cost sharing program to individual companies, to help them participate in trade shows? HON. V.

SCHROEDER: There were approximately 80 companies assisted in going to trade shows . MR. F. JOHNSTON: And that assistance comes out of the $587,300 shown in (1) - I mean, not the five - $479 ,800 in (c)(2)? HON. V. SCHROEDER: Yes, Mr. Chairman . MR. F. JOHNSTON: Well, I'm going from a list. Then you have the "Organizes and manages group participation in Manitoba firms in recognized international trade shows," participation in trade shows outside of Manitoba , then you list international trade shows . What is the difference between them? HON. V.

SCHROEDER: There are some inside Canada, and I think they're designated in a slightly different way because of the PEMD , Program for Export Market Developm ent of the Federal Government, so that there are some differences in terms of how we fund them within Canada . MR. F. JOHNSTON: Well, of the 80 figure you gave me then, where it shows outside of Manitoba are all in Canada? HON. V. SCH ROEDER: They are primarily in Canada, yes. MR. F. JOHNSTON: How many are there internationally? HON. V.

SCHROEDER: The number of 80 that I used previously, that's referring to assistance for individual companies going to trade shows, as opposed to missions of groups of companies. I'm told that roughly 40 percent of the companies assisted are for international activities ; 60 percent would be within Canada. MR. F. JOHNSTON: How many missions were orga nized , and what have they planned for this year? HON. V. SCHROEDER: We had 12 missions last year, and we are planning 11 for this year. MR. F. JOHNSTON: Where are the missions planned for? HON. V. SCHROEDER: Mr. Chairman , I'll get a list of them to the member .

There 's an agricultural equipment show in Chicago; there are a number of institutional visits, that is, to the World Bank, to the U.N., and to CIDA . We've becoming active with CIDA in the last six months or so . We 've got a number of Manitoba companies quite interested, and CIDA's been here in Winnipeg several times making an effo rt to give our local companies a chance to get involved with some of their programs . MR. F. JOHNSTON: Well, the Minister is going to give me a list of his plans for this year.

I wonder, could he give me a list of the 12 missions for last year, where they went and who went and who were the groups that went or the people that went on them . It's obvious that you 're taking groups of businessmen or somebody from the economy. I would ask also how much does the government pay towards the expens es of the businesspeople that go. HON. V. SCHROEDER: Mr. Chairman, we pay the air fare; they pay everything else. I will get the information to the member . I do have a list of our outgoing missions for 1987 which I'll give to the member .

In fact , it also shows some of the proposals we already have for 1988 - that's 1987-88 fiscal year. We don't have included in that list the people who went last year, and where we went last year, so we'll get that for the member. MR. F. JOHNSTON: Well, I'm getting back to just following these down . For most, the capabilities which exist in Manitoba in manufacturing, professional engineering and consulting services, the department is now working or has been working with engineering firms to sell the engineering capacity of those firms and the consulting service capacity of those firms? HON. V.

SCHROEDER: Yes, Mr. Chairman. For example UMA, we worked with them, they got a contract for a water project in, I'm sorry, a grain storage project in Egypt, a fairly large contract, 30 million . There are several other firms who met with the federal people in CIDA just within the last few weeks on some other - I.D. Engineering got a supervisory contract in China so there's some activity and a fair bit of enthusiasm by those people for those kinds of projects . MR. F. JOHNSTON: Just to clear up. The UMA grain in where? HON. V. SCHROEDER: Egypt. MR. F. JOHNSTON: Mr.

Chairman , to assist the development and coordination of programs and activities , to maximize the benefit occurring to Manitoba for major projects taking place in the province, this is just to relate that the manufacturers in Manitoba as to what jobs are going on in the province? HON. V. SCHROEDER: Yes, that's basically it. MR. F. JOHNSTON: That's basically Hydro , Core Area and Jobs Fund . HON. V. SCHROEDER: There are things like say monitoring the industrial benefits portion of the Carnation Agreement , as an example. 2159

Tuesday, 19 May, 1987 MR. F. JOHNSTON: I asked this question last year and the Minister said that they were hoping to have an increase in business with the CPR projects that were working to the west of us, the double-tracking, the tunnelling, etc . that has been going on by CPR. What does the Minister feel that the Manitoba companies have received from that? HON. V. SCHROEDER: Mr.

Chairman , we've probably received a much greater proportion of the CPR work going east than going west but there are offsets, maybe offsets isn't the correct terminology, but the G.M. announcement recently with Western Engine Works to do the locomotive work for C.P. here in Winnipeg would be an example of some work for Manitoba . But I really don't know of specific contracts let west of Manitoba where Manitoba companies have been involved. MR. F.

JOHNSTON: Is the source . . . arrangement of jobs that are going on in the other provinces in the west of us, with the western provinces - we used to have an arrangement where we advised them of the large jobs going on in our province and they advised us of what was happening in their provinces, that's in the three prairie provinces. And we were then able to work with our manufacturers and advise them what was happening and also advise them on what they may be able to quote on. Is this arrangement still working between the three prairie provinces? HON. V. SCHROEDER: No, Mr.

Chairman , there are discussions about a reinstitution. We are working on, as the member knows, with the free trade arrangements . We're attempting to cut down on interprovincial barriers but quite frankly in the last few years, barri ers have been going up very, very rapidly and especially on the Saskatchewan border . A couple of examples, the member mentions getting information on big projects. We're told by people in the steel industry as an example, that if they don't have facilities in Saskatchewan for the Nipawin Dam, they're not going to get a contract.

It doesn 't matter how low their bid is, it doesn 't matter what happens, they simply will not get a contract. And those kinds of things have been happening , especially west of us. Ontario has probably remained as open as any province but , to the west of us, more and more of those barriers have been going up as times have gotten tougher . MR. CHAIRMAN: The Member for Portage la Prairie . MR. E. CONNERY: Mr.

Chairman , I'd like to go back to the trade and I did a fair bit of work for my speech on free trade, and unfortunately one set of statistics which expanded on this particular set I can 't find, and I don't know where they went but I'll reproduce them . But Manitoba 's position in trade is an absolute disgrace . If we weren 't getting transfer payments from Ottawa , this province would soon be broke . We're looking at , in 1985, Manitoba recorded an overall trade deficit of $798 million in trade . Now trade is the sector that this Minister is involved in, $800 million.

We also had a trade deficit in tourism of $110 million and some $200 million in interest payments and the dividends and also the decline of the Canadian dollar versus other cur rencies . So we're way over a billion dollars in trad e deficit. If we take a loo k at, Mr. Chairman , in the agricultural sector , we have somewhere in the area of a $500-million surplus. In one sector alone, which I think is the mos t important one, is the end products inedible , we have a trade deficit of $159 million. And in that particular sector, from'83-85 , we have a 50 percent incre ase in imports .

Now , how this Minister can say things are going well, it proves the point that Manitoba is working in a bubble, created by Limestone, North Portage , the Core Area and a housing boom that took place because of interest rates . Now , how does the Minister justify the fact that our debt - there are only three provinces that have a foreign trade deficit in Canada , Nova Scotia , Ontario and Manitoba - now , how does the Minister try to alibi that we're in a healthy position when we see these sort of trade deficits?

We have no figures for interprovincial and I'm sure , if those figures were out, it would be twice as bad as what we see now with the foreign tra de deficit. HON. V. SCHROEDER: Mr. Chairman, when I was talking with the Member for Sturgeon Creek, we were discussing some engineering contracts that were let. One example was the grain project in Egypt for $30 million . You can look all you want on your statistics , but that $30 million export of services does not show up on your numbers .

Hundreds of jobs devoted to financial insurance arrangements , for instance , at Great West Life for the United States does not show up on those trade statistics. Those trade statistics , it is tru e, have shown a defici t for the last 20 years, but those trade statistics are not totally reliable . We're not suggesting that there isn't some cause to attempt to better those numbers, but let's not pretend that those numbers are sort of the final numbers, that says it all. They do not say it all.

There's a whole host of things that were involved with exporting that we do not have credit for on those numbers, and in the converse , there may well be things that we import that do not show up in those number s. I make the point as well that just because you have a trade deficit does not mean that you're headed totally for disaster, as witness , say, the U.S. economy. How many years in a row have they had fairly large trade deficits? They've had them for quite a few years. You know , after all, that Reagan's supply-side economy is working wonderfully . MR. E.

CONNERY: If the Minister is feeling complacent about his position , then I feel very sick . I think what we have to look at is manufac turing, which is the one item that we see that we've lost, I don 't know , the figures are anywhere from 11,000 to 13,000, and we can see why, becaus e we're importing the end-user goods , the ones that take the most manufacturing. We' re doing reasonably well in the fab ricated materials and in the crude materials; we've got a reasonable surplu s, but they'r e small numbers .

So really, we are hewers of wood and carriers of water , and I think as long as this Minister goes with the, we'r e going to put everyth ing in Manitoba with the bubble of Limestone and eventually that will crash. 2160

Tuesday, 19 May, 1987 You see that the Conference Board and the Royal Bank of Canada now are starting to qualify their statements , yes, this province has done reasonably well, but on borrowed money in a vacuum totally within Manitoba , and if we don't have some outside money to bolster our economy, we are going to be going downhill. I think this Minister had better start to maybe listen to some of his people because I'm sure the staff that he has are reasonably competent staff .

I think the Minister should start to maybe listen to some of those staff and maybe move over and let somebody come in who would also give them some proper direction. HON. V. SCHROEDER: Mr. Chairman, the member refers to some losses of jobs. He doesn't look at the economy overall. He refuses to look at the economy overall, and we've dealt with investment numbers just previous to this, from 1983-86, where we showed an investment growth far above, something like three times above. the national average. I don 't recall the numbers, but I can pull them out again .

So there is investment in this province; there are more jobs in this province, and I have no problem with the notion of us attempting to do more in the area of manufacturing jobs . But let's not pretend that there's something disastrously wrong or that investment was geared by Limestone , because that is not correct. Those numbers were between 1983 and 1986 and, basically, mostly before Limestone. MR. CHAIRMAN: The Member for Morris . MR. C. MANNESS: Mr.

Chairman, to finish the discussion on this area, the Member for Kildonan has shot acro ss the floor, or across the table here just a few minutes ago that 50,000 jobs have been created in the last five or six years . Of course, the vast majority of those, and indeed I'd say all of them, are within the service industry; and the latest figures that come to mind to me is about how that broadly defined sector is now responsible for 70 percent of our Gross Provincial Product.

I'm fully aware that if those service industries are sold outside of the province or, indeed , outside of the nation, they're as sound , the income that they bring in, the revenue to the province, they 're as sound as a bushel of wheat. I have no difficulty accepting that . But I ask the Minister, where is this service industry heading? He may want to suggest that it's not terribly well defined by Statistics Canada at this time, but failing that explanation, the service industry by definition is there to serve.

It has no role, indeed if there isn't something of a primary nature or something of a manufa cturi ng nature for which to serve , in the sense that it's dependent on exports - and a large measure of it is - and I would say that that's under some type of threat , given discuss ions of a free or enhanced trade nature . Indeed, I dare say also, dependent to some degree on the value of the Canadian dollar vis-a-vis the American dollar . Where is this massive sector , the service sector, representing such a large share of the provincial economy, where is it headed?

Because quite frankly, as is obvious, the future of the economy, indeed of this province, is totally dependent or significantly dependent upon the service industry . I ask the Minister then, where is the service industry headed? HON. V. SCHROEDER: It seems to be growing, and not all of them are low-paying jobs . Something that probably will show up as a service industry is the Canadian Centre for Excellence, of Unysis Corporation, they bring in 50 people into their software operation for Canada for hospital systems and hospital information and so on.

That will basically be well-paid jobs , skilled jobs , considered service. It doesn't show up in manufacturing; software doesn 't show up in any of our trade statistics . Comcheq, a Winnipeg company, as an example , is out all over the place in North America. They don 't show up anywere ; they have good jobs. One can go through those kinds of things that are happening here , as they are happening across North America .

We are getting further and further away from the smokestacks , and the few areas where the manufacturing jobs have been strong have been in Central Canada because of automobiles, to a larg e extent. Why are we weak in manufacturing? To a large extent, because we've had thousands of people out of the agricultural implement manufacturing sector . That's where we've suffered our drop. That will go up when prices go up on grain and it'll drop again when prices drop on grain. MR. CHAIRMAN: Do you have any agreement to go beyond the hour of ten o'clock, Mr. Minister? Is that the understanding?

What's the will of the commit tee? HON. V. SCHROEDER: Were we going to finish tonight? MR. F. JOHNSTON: Yes. HON. V. SCHROEDER: Okay. MR. CHAIRMAN: The Member for Morris. MR. C. MANNESS: The Minister 's attitude changed quite remarkably . HON. V. SCHROEDER: Just my smile . MR. C. MANNESS: Mr.

Chairman, I fully recognize that when the measure of the service industry is so all encompassing, that there 's a measure of well-paying jobs, of very professional jobs that are being glossed over by the total label, but I have to ask the Minister - and he gives me two or three examples and I know he can give me another two or three, I have no difficulty with that - but if the Minister wants to go through the Gazette, like I do on a monthly basis , or indeed on a weekly basis, and wants to look at the incorporations of new businesses in this province he will recognize these two facts.

Firstly, nine out of 10 - and I'm generalizing - nine out of 10 are in the service industry. Secondly , out of those nine I would say eight-and-a-half are associated with either retail sales - they're into car washing , to use an example , they're very specifically service oriented in the general understanding of the term. Yes, and then there's a half out of that nine that indeed is as the examples the Minister gives me, very high-tech 2161

Tuesday, 19 May, 1987 positions that are exporting a service, indeed , worldwide . Again my question stands , Mr. Chairman , because so many of the jobs and indeed the businesses that are being created today are there to serve, as we know it, the general definition of service industry . Not all people providing haircuts and certainly not all people there to provide a better barbeque sales retail service. But the point being, that's where most of them are . And I know what the Minister is saying, and it's important that we try to husband the whole area of services in the area of high tech.

But the point being, it's slow and I don't think it's giving the contribution to the economy in a measured form that's significant enough that it can hold the economy, indeed , when manufacturing and indeed when primary industry is falling. So I want to know the soundness of the service industry. What is this government doing to convince Stats Canada , or indeed any numbered collection agency to better define that area so we can track it better as to what is happening within it? HON. V.

SCHROEDER: We are working, I suppose, in some ways the questions we might both address them to the Bureau of Statistics , be it provincial or federal , but both at the provincial and federal levels. There is work being done to better analyze what the sector is all about and to track it better. I think there's a recognition on the part of both levels of government, that the tracking hasn't been all that good up until now. I really wouldn 't be able to say anymore on that right now. MR. C. MANNESS: Mr.

Chairman, I won't belabour this, other than to say that quite obviously a lot of spending decisions, a lot of borrowing decisions are being made by Cabinet and indeed by the Minister of Finance . And this Minister , of course , having had that former role knows that I've been calling for some time , for a long multiyear Budget; and quite frankly when I sense that 70 percent of the economy is dependent upon the service industry, as it appears to be at this point in time , that we have to have a better understanding of what makes it up and indeed where it is going . Mr.

Chairman , I direct my next question to trade and the discussions associated with free or enhanced trade . Mr. Chairman , we, in Opposition, over the last two years have been presented with - to the best of my knowledge - two documents that they have attempted to lay before us, the government's view and stand on the whole area of trade negotiations. I, to the best of my recollection, cannot remember a document having been provided to us over the last 14 months. What is going on? And I do know that Mr.

Adams is representing the government and indeed the people of this province in a federal-provincial sense but yet, Mr. Chairman , we are in the dark, quite frankly , and therefore the people of Manitoba are in the dark . I sense that this government is still vacillating and sort of lukewarm, luke cold to the whole idea, and yet there are many of us who are just sitting back and really, from time to time , reading an

article in the newspaper , or the Enquirer, as the Minister of Trade and Technology would use the term and really have nothing more to go on. What is the latest as far as Manitoba's whole trade future and its stakes within this discussion? HON. V. SCHROEDER: Mr. Chairman , we're in the awkward position wher e we're not in the room at the negotiating . Mr. Adams , every time Reisman and Murphy have discussions, he's in on a conference telephone arrangement the day after, and then several days after that there's a meeting in Ottawa where there 's a debriefing of officials, but it's on a confidential basi s.

It's reported back in Manitoba to me and to the Premier and basically that's it, we're not allowed to get out there and say, this is what happened although there are all kinds of leaks . But we have tried to be especially clean on leaks given the different polit ica l perspectives . I am told that we have issued three discussion papers, although I'm sure that the third one won't be any more illuminating for the member than the first two. But in many ways we're in no different a position than the members of the Opposition are, although we're given tantalizing details of discussions.

There is no draft agreement in any one of the areas, whether it's dispute , resolution, whether it's agriculture, whether it's tariffs , or anything . They just haven 't put something to bed and said , fine, now, we're moving on to the next one, in total. They were hoping for a draft agreement by the end of June , which would have those areas which are in disagreement bracketed . From all indications I have now, that's been shoved back a little further into the middle of the summer .

But we really . . . any information we have from Reisman we're not entitled to give out, so that's just the structure of the negotiations. Everybody in the country is having the same problem. I was at a meeting of the U.S.-Canada Legislative Project back in February and there were legislators from about 20 states there. They thought we were very fortunate at the amount of information we were getting , which is very little compared to what they 're getting . They 're getting absolutely nothing , and one of their federal negotiators was there .

I suppose it's a difficult process to be trying to do your bargaining when occasionally some issue gets off on the table and if the provinces make something public , it gets ragged around and all of a sudden takes on a proportion on the overall, that makes it difficult for the negotiators to come up with a package , initially , that makes sense overall as opposed to looking at just one particular segment. MR. C. MANNESS: Mr. Chairman , I accept that. I don 't want this to sound like an allega tion , but it will.

I ask the Minis ter if he is as totally diligent in his maintaining confidentiality, as is the agreement between the Federal and the Provincial Governments , in respect to all groups in Manitoba. Indeed , are we all treated fairly, whether it's the Opposition party; whether it's friends within his party; indeed whether it's the labour movement; indee d whether it's the Chamber of Commerce or business groups? Are we all being treated fairly and equally in this respect? HON. V. SCHROEDER : Yes. 2162

Tuesday, 19 May, 1987 MR. C. MANNESS: Mr. Chairman, that's fine, I just wanted the Minister to put that on the record , and , of course, I accept his word because the rules say I have to. Mr. Chairman , I would ask one other question . Has the government's stance with respect to free trade , has it changed at all in the past year?

Is the government , on a philosophical basis, changed its view at all, over tha t stated a year ago; given some of the insights and some of the deepe r understandings that it would have obviously, or does it still believe that the Americans are waging some idle threats , or indeed, Canadians who say the Americans and the U.S. Congress may be trying to use the heavy stick of countervail , and indeed import duty to keep out our goods . Does the government take more seriously those types of comments, and therefore has their stance changed at all? HON. V.

SCHROEDER: No, I don't think our stance overall , in principle , has changed . It's a stance that really doesn't have any ideology on it. We're saying we'd like to see the agreement, because certainly we could prepa re one that's in the best interests of Manitoba, and somebody else could prepare one that could harm us, and one would want to wait and see the agreemen t. I think we all have our own ideas about how the negotiation has gone; whether it was good, bad, or indifferent in certain areas; whether mistakes were made, and so on, but I don't think it would serve any useful purpose . MR. C.

MANNESS: One final question, Mr. Chairman, is dealing with interprovincial trade. Quite frankly, I'm a little alarmed too at Saskatchewan's strong coveting of our diversified industrial base , to the extent whereby some of our firms have been precluded and prevented from bidding effectively on projects within that province ; and yet, on the other hand , when you see something as dive rsified and it seems to be a strength in a neig hbouring province, I guess it's human nature , of cou rse, to want to have some portion of that.

Can the government trade anything off to the Province of Sasatchewan, either in a formal or an informal sense, such that we can continue to have free access into that market, or is the Provincial Government just going to sit back and hope as one of the side benefits, close to the side benefits of a comprehensive free trade package would be the breaking down of interprovincial boundaries? Is there something else the government can do before that? HON. V. SCHROEDER: Mr. Chairman, we're in the cou rse of renegotiating the negative trade barriers within the country .

We have agreed about a year ago tha t there would be a standstill, and , quite frankly, when we agreed to the standstill, we weren't aware of the changes in Saskatchewan, and I believe that a lot of those changes came afterwards , I'm not sure that they 're living up - it's not a legal kind of document, but it's sort of a commitment between provinces. One thing we have been looking at is saying to Saskatchewan that we're prepared to be a mirror image to you.

If your contractors want to bid on burying Manitoba telephone cable, as an example, then you're going to have to let our contractors bid on burying Saskatchewan telephone cable . If you put in something about your people, we'll do the sam e here, but that's a difficult kind of thing to follow up on in industries where they don't have anything. They 're trying to build up and take things out of the province and one would hope that it can be done on a rational basis.

I'm going to a Trade Ministers' meeting late r on this week, assuming this is over with, and there will be further discussions along those kinds of things again. MR. C. MANNESS: Mr. Chairman , this will be my final question .

When we have the comparative advantage we do, based on a long history of diversified production, quite frankly then , we do have a head start , but when it comes to some of the resource areas - and I'm not suggesting this - but has the government felt that it might be wise to maintain , let's say our steel products entering the Province of Saskatchewan in a manufactured form , in return for our staying, let's say, for no better example - and again I don't suggest this - staying out of the potash industry; or indeed, we stay out of potash if Saskatchewan stays out of a nitrogen plant because, quite obviously , when these developments come on, there are some major inelliciences associated with them, because on the scale they have to be built in today 's economies, they should really service more than just one province?

Is the government to that point where they would be prepared to turn away from some highly thought-of developments, provincially, to keep what we have , historically built up, in another province? HON. V. SCHROEDER: Certainly it hasn't been discussed in government. Personally I would be initially strongly opposed to the notion of giving up something where we intend to compete fairly with a neighbouring province because they're competing unfairly with us on other product.

If we were to take two new projects and divide them up between Saskatchewan and Manitoba, I could see us doing that , but I couldn't see us putting something on the table because they're kicking us below the belt . I don't think that's the way I would want to negotiate. MR. CHAIRMAN: 2.(c)(1)- pass ; 2.(c)(2)- pass. 2.(d)(1) - the Member for Sturgeon Creek. MR. F. JOHNSTON: Mr.

Chairman, in the objectives: " ... opportunities through export, and substitution of imports in health care products and services ," and then it says, "improve the quality and productivity, and reduce the cost of administration and delivery of health care services ." Then, of course, the Activities Identification get close to being the same as "investment sourcing in Eastern Canada , United States and selected other areas. I believe that I'm following it.

This is a sourcing that is done with companies that could invest and make health products in the Province of Manitoba from the point of view of replacing imports. HON. V. SCHROEDER: Yes, Mr. Chairman, of replacing imports , getting into exports and reducing the cost of administration and delivery of health care services , all of them. That's happening . 2163

Tuesday, 19 May, 1987 The announcement on Friday, I mentioned previously , Chemfet, and I have their card I'd like to just pass on to the member. There's a little chip on that card which has a sensor on it which, for example with a heart operation, can be somehow attached and then the heart and the system can be monitored from the outside to determine exactly what's going on, without wires, without any muss of fuss .

They've got similar kinds of sensors for blood testing at a cost of some $10 which can provide a number of blood tests very, very quickly during operations where you don 't have to run back and forth and find out what's going on in the system. Those people expect to have some 300 people working in manufacturing and research and development in Manitoba within several years .

The Unysis Agreement on health information systems in hospitals is another example where we're hoping not only to reduce administration costs in hospitals here , but to be the Canadian centre for the software which would be developed for hospitals and health care systems across the country. MR. F. JOHNSTON: The card you presented to us is one company that has come here . It's fairly obvious what the department is working on, the development of new jobs in health and research now. Down further in the expected results , you have '86- 87 and that fiscal year of the government is over.

What was the $10 million in new investments? How many companies? MR. DEPUTY CHAIRMAN, M. Dolin: The Honourable Minister . HON. V. SCHROEDER: Mr. Chairman, for '86-87 we didn't reach the $10 million target. I'm asking staff to find out how many companies, but there were 140 jobs as opposed to the 100 that we had hoped for. MR. F. JOHNSTON: Did you say you did reach the $10 million in investments? HON. V. SCHROEDER: No. We did not meet that because, actually many of the jobs were created in existing Manitoba firms requiring less capital investment at this stage. MR. F.

JOHNSTON: Well, the new investment then is not new companies , it's existing companies, or a lot of it is existing companies . HON. V. SCHROEDER: Yes, some of it is existing companies with, however, expansions . MR. F. JOHNSTON: Well, I wonder if the Minister could let us have the creation of 140 jobs, the investment and the companies who've made the expansion or the investment. HON. V. SCHROEDER: Mr. Chairman, we'll just send them on to the member along with the other material. MR. F. JOHNSTON: That's fine.

Now, the existing companies that put in new investment , have those products started to sell across the country or are they being used in Manitoba? HON. V. SCHROEDER: There are instances of both . Some are selling across the country and some are selling in Manitoba at the moment, and some are selling in the States as well. MR. F. JOHNSTON: In the area that is down here for rehabilitation home care segment, what type of equipment are we looking at for that? HON. V.

SCHROEDER: That would be in the area of patient bathtub lifts, institutional and home care seating, bathtub grip, security alert systems, emergency alarm systems , prosthetic devices , walking aids and health foods. MR. DEPUTY CHAIRMAN: The Member for Portage. MR. E. CONNERY: ABI Biotechnology , sounded great last year, what took place? HON. V. SCHROEDER: Mr. Chairman , we sti ll have great hopes for ABI. As I indicated last year, there was an arrangement that they had with a city in China for sale of - I'm sorry that's the R.H. Institute. ABI has opened their lab. There are 20 people working there.

They've got a number of products that they are developing . They've got 20 people working there . MR. E. CONNERY: I'm happy it's successful. There were a few others , very quickly, there was Seimens that you were working with, Burtech in Montreal , some of these ones that you had last year. Did they come to fruition? HON. V. SCHROEDER: Mr. Chairman, some have and some haven't. I think the two you refer to, I haven 't - there's an agreement to procure $4 million in components by Siemens from Manitoba firms.

That's as an offset for some Health Sciences Centre equipment, along with the C.T. scanners , there's a clustering purchase of three scanners which save $250,000 plus offset agreement to procure $3 million in components from Manitoba firms - that was CGE as the supplier. The two above totalled offsets of $7 million in sales for Manitoba firms , equal to about 20 jobs for five years and access to new, long-term markets . MR. E. CONNERY: What success have you had with investment sourcing? You had a lot of ideas last year, including Israel and the Eastern United States, Minneapolis, Toronto, Los Angeles.

What came out of those adventures? HON. V. SCHROEDER: These are new projects or expansions - Autobok of West Germany , this is in the last year; 3M of the U.S., Chemfet of the U.S., two Israeli companies . The two Israeli companies, for instance , there's a joint venture in technology transfer to Manitoba . MR. E. CONNERY: What kind of an investment and numbers of jobs would these be in total, roughly? HON. V. SCHROEDER: The total jobs for the year were about 140, and the investment was somewhere under 2164

Tuesday, 19 May, 1987 $10 million . There were new projects implemented . New products includ ed the following: artificial ligaments, surgical masks, electronic monitoring disposables, blood derivatives , limb bands, heart valves, optical products, dental office products, biotechnology products, gynecological products, estrogen, pharmaceutical dispensing products and medical alert systems. MR. DEPUTY CHAIRMAN: The Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman , this will be in the form of a request to the Minister. Maybe he could ask Mr. Blicq to investigate it, contact me to get some information.

There 's a group of handicapped and mentally handicapped people at the Deer Lodge School in St. James . They have been managed by a group of school teachers and principals and people in the area. They have from time to time, put together different products. even had some welding for them and then they would do the assembling. They presently have the moulds and everything for toilet seats for handicapped people that have to be raised, called water closets . They have the capacity to assemble them and they have had lots of consultation with hospitals and medical people in this province and elsewhere .

It looks like they'll be self-sufficient within another six months . Between now and the end of June, or maybe the end of August they need $10,000, and were being supported by Community Services, and they've been told they're going to be cut off. I wonder if there's anything in the medical situation - if these people are going to be making medical products, if your department , through Mr. Blicq, could look at these people, and maybe give them some advice on how they can carry on and keep these people occupied as they have for quite some time. HON. V. SCHROEDER: I'll certainly pass that along to Mr.

Blicq to see whether there 's something that can be done. MR. DEPUTY CHAIRMAN: 2.(dX1))-pass; 2.(dX2) pass. Resolution 104: Resolved that there be granted to Her Majesty a sum not exceeding $2,897,600, Industry and Trade Division, for the fiscal year ending the 31st day of March, 1988-pass. 3.(aX1) - the Member for Sturgeon Creek. MR. F. JOHNSTON: The Strategic Support Program and Technical Commercial Support Commercialization Program, I left out the word Research Support Program .

How many companies are you estimating will be involved in this program this year and how many companies were involved last year, or how many grants were forgiven? HON. V. SCHROEDER: You're referring to Strategic Research Grants. MR. F. JOHNSTON: Yes. HON. V. SCHROEDER: There will be no new companies in it this year. There are sufficient funds available to 2165 continue on with the projects that were started last year. MR. F. JOHNSTON: You mean the programs that started April 1, 1986; there will not be any more for '87-88? HON. V. SCHROEDER: That's right, Mr. Chairman. MR. F.

JOHNSTON: Then the list that we have in the report to the end of '86 - some others have been added through '86-87 . I wonder if we could have the numbers of those , or how many new ones have been added to tha t list in Research Support. HON. V. SCHROEDER: Mr. Chairman , there are 14 new ones from last year. MR. F. JOHNSTON: What is the amount that the 14 new ones will come to? HON. V. SCHROEDER: Mr. Chairman, with a number of them there will actually be commitments for two more years. For this year, there's $250,000 budgeted. MR. F. JOHNSTON: This year. HON. V. SCHROEDER: Yes, '87-88 .

I should say many of the grants , just so it's clear, many of the grants are a three-year commitment. So when I refer to two more years, it's two years after 1987-88. MR. F. JOHNSTON: But there are 14 others involved, and to be added to this list. You've got University of Manitoba - these might have been three year, totalling 854,000.00. I'm reading from your report at the end of'85-86, page 42. Now you show the University of Manitoba, Research Council - I hope I'm referring to the same thing, the Strategic Research Support . HON. V. SCHROEDER: Yes, that's the one . MR. F.

JOHNSTON: Industrial Technology and then 1.D. Systems Ltd., Cancad, and then those may be three year agreements or two years. HON. V. SCHROEDER: That's correct . MR. F. JOHNSTON: You mention 14 new ones have been added, from where we're at. HON. V. SCHROEDER: Yes. MR. F. JOHNSTON: And the total commitment over whatever period these are in this book is $854 ,000.00 . What is the commitment to the new 14? HON. V. SCHROEDER: What you have here is just the grants that were actually paid out in'85-86 for these, so there would be continued support.- (lnterjection) Not necessarily.

A lot of them were one year, and there were two year and some three year. MR. F. JOHNSTON: What would the total be then that you paid out , if you have the figure, of the '86-87?

Tuesday, 19 May, 1987 HON. V. SCHROEDER: I don 't have the exact figure . I can get that , but it was in the range of $1 million. MR. F. JOHNSTON: $1 million? HON. V. SCHROEDER: Yes. MR. F. JOHNSTON: Then there's $200,000 per cheque for the coming year? HON. V. SCHROEDER: Yes, $250,000.00 . MR. F. JOHNSTON: The Technology Commercialization Program , this program is designed to assist companie s to go into new technologies in Manitoba , that's putting it very broadly.

The Robonics International, there 's Rescom Ventures Inc., but is this to go into new technology for the purchase of equipment or so that they can sell their technologies elsewhere? What is the intent? HON. V. SCHROEDER: The intent is to purchase or transfer technology, either from Manitoba technology or outside technology, to companies here in Manitoba.

An example would be, say, K & S Tool & Die, where we provided assistance for them to get technology from the University of Manitoba, technology which allows them to produce magnets that are used on things like the Triumph Lab in Vancouver , B.C., and they 're now selling the magnets in other parts of the world . It can be the purchase or acquisition , transfer of technology in different areas as well , obviously. MR. F. JOHNSTON: Well then, the K & S Tool & Die would pay the money used to pay them to the university? HON. V. SCHROEDER: Yes, Mr. Chairman, most of that money went to the University of Manitoba .

They were developing the technology there , and it was at a considerable cost . We're trying to do as much as possible of that sort of thing, so that the research goi ng on at the universities or other labs in the province can be transferred to industry to commercialize and make use of. MR. F. JOHNSTON: Who evaluates the applications for these technology grants? HON. V.

SCHROEDER: There 's an assessment committee made up of representatives from the Manitoba Research Council, the Technology Division of the IT and T Department , lnfoTech , the Industr y Divis ion of IT and T, and a grou p from Small Business Development. MR. CHAIRMAN: The Member for Portage la Prairie . MR. E. CONNE RY: The Indu str ial Applicat ion of Microelectronics Centr e, that's at the university, isn't it? HON. V. SCHROED ER: Yes. MR. E. CONNERY: Because they had grants both years.

Now you said they were grants over a three-year period , but they got a grant last year in the Strategic Resear ch of $37,500.00 . What would be the rationale , if they were for two- or three-year grants? HON. V. SCHROEDER: Mr. Chairman , it was a research project that extended over a course of several years . MR. E. CONNERY: Yes, and they also got, in '86, under the Technology Discovery. Why would they be under multiprograms, not all under one? Were there different programs? HON. V.

SCHROEDER: Yes, there was a cost-shared study with the Federal Government on the viability of the centre, and that's where the money came from or was used for. MR. CHAIRMAN: 3.(a)(1)-pass; 3.(a)(2)-pass . 3.(b)(1) - the Member for Portag e la Pra irie. MR. E. CONNERY: This is where we deal with lnfoTech. What is the Jobs Fund money in this sector? HON. V. SCHROEDER : There 's a total of $1.96 milli on. MR. E. CONNERY: Was that all for lnfoTech becaus e, last year, lnfoTech was somewhere over $2 million . Would that be all for lnfoTech this year? HON. V. SCHROEDER: Yes, Mr.

Chairman, it's redu ced from $2.22 5 million last year. MR. E. CONNERY: Last year, if I recall , there was $4.5 million in this sector . Is there no other Jobs Fund money th is year, other than lnfoTech? HON. V. SCHROEDER : Yes, the $4.5 million included all the technology init iatives together . MR. E. CONNERY: All of three . HON. V. SCHROEDER: That included the Techno logy Commercialization Program ; Strategic Res ea rch Program , which we've already indicated is down from $1 million to $250,000 ; and lnfoTech . MR. E. CONNERY: I took the opportunity, Mr. Chairman, to visi t lnfoTech this spring.

It's an impressive-looking building . To what extent is it being used, and also what is the cost reco very of lnfoTech? HON. V. SCHROEDER: Well certainly, we feel it's being used . We've been very pleas ed with some of the responses from businesspeopl e, from schoo ls and so on. The user visits - I'm not sure that they say all that much, but in '86-87 we had about 2,500 people visit the Resource Centre . We had 25 gro ups with meeting rooms and so on. In any event , there is a fairly substantial use. There was anot her question you had on cost? Cost recovery? That's just coming into effect now.

I should say, we're not exp ect ing a large proportion of the costs to be recov ered certai nly in the next year or two. It takes awhile to build that up. I should say, we don't 2166

Tuesday, 19 May, 1987 expect it to grow to much larger than about 15 percent or so. MR. E. CONNERY: What percentage or amount of it is used by business? I think there are school people go in there, schools go in. Do school students go in there? How much of it is used by business, and how much of it is used by government programs? HON. V. SCHROEDER: We expect that it will be roughly one-third for business , and the other two -thirds for schools , mostly schools almost entirely, the other two thirds. MR. E.

CONNERY: Is it for the schools to come and to determine what computers and so forth they want to buy for putting into the schools , or is it school classes coming to learn how to use computers? HON. V. SCHROEDER: It's the former, definitely. Yes. MR. E. CONNERY: I forget the lady's name who showed me around. The headman wasn't there. She's got a name that's famous. It was some actress , I believe. HON. V. SCHROEDER: It must have been Kathryne Hepburn . MR. E. CONNERY: That 's right , it was Kathryne Hepburn, and she is a very gracious lady. She gave me a very good tour, and an excellent salesperson.

You should be pleased that you have somebody like that because she did an excellent sales job, but I still have some concerns over the amount of money we're spending on it versus what the revenue is. Don 't tell her I said that. I might want to go back. But I am concerned. It's a lovely facility, I must say, but the cost is fairly significant when you're looking at close to $2 million to run it and, with not the strong possibility of much in the way of a cost recovery , we do have to really analyze what we're getting out of it in terms of the community and so forth.

I would hope that these sort of analyses would be made of the facility. I'm not saying we should close it. I think we would want to study it and maybe try to promote it to make it more effective. HON. V. SCHROEDER: Just on that point , I understand it has resulted in increased export sales of more than $1 million. There's considerable consulting to business, so there are some clear benefits we can identify. I believe there are a lot of benefits that can't be identified .

When a business goes there, picks the right hardware or software to improve their business, that certainly, over a per iod of time, improves things for them as well. MR. CHAIRMAN: 3.(bX2) - the Member for Sturgeon Creek. MR. F. JOHNSTON: ... Mr. Chairman, repr esents the province at the Manitoba Canada ERDA Communications and Cultural Enterprises Technology Applications. What does the department do with the Cultural Enterprises Technology Applica t ion sub agreement? That sub-agreement is in the communications field. We have had a report from one group on that Cultural Enterprises Technology.

What is this department's involvement with that Cultural Enterprises? HON. V. SCHROEDER: Strictly with the technology applications portion. We have nothing to do with the Cultural Enterprises aspect of it. MR. F. JOHNSTON: That's all, thank you. MR. CHAIRMAN: 3.(bX2)-pass. 3.(c) - the Member for Portage la Prairie . MR. E. CONNERY: On the Manitoba Research Council and the Technology Centre and the Food Centre, I notice the funding is down slightly from last year. I remember the Minister being quite concerned with other levels of government and their funding to research , and I see that we are down slightly.

Taking into account inflation , there is less money going into the Manitoba Research Council. Can the Minister give me a comparison of last year versus this year and the projection for the - well, this is the projection for this year - the comparison for the Food Products Development Centre and for the Technology Centre, the funding? I'm having trouble finding it. HON. V. SCHROEDER: Mr. Chairman, total core grant for '87-88 is $2.918 million as compared to $2.957 million the previous year. The Canadian Food Products Dev

Document details

Collection	Manitoba — Debates (Hansard)
Citation	33-2-50b
Type	hansard
Volume / chapter	33rd 2nd hansardpdf 50b.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	dabfd34720efcfca5daf5d9b9bccbd8cba96a5b5

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