ISSN 0542-5492 Third Session - Thirty-Second Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS 33 Elizabeth 11 Published under the authority of The Honourable D. James Walding Speaker VOL. XXXII No. 44 - 10:00 a.m., FRIDAY, 15 JUNE, 1984. Printed by the Office or the Quee ns Printer. Province of Manitoba

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Second Legislature Members, Constituencies and Political Affiliation Name ADAM, Hon. A.R. (Pete) ANSTETT, Hon. Andy ASHTON, Steve BANMAN, Robert (Bob) BLAKE, David R. (Dave) BROWN, Arnold BUCKLASCHUK, Hon. John M. CARROLL, Q.C., Henry N. CORRIN, Q.C., Brian COWAN, Hon. Jay DESJARDINS, Hon. Laurent DODICK, Doreen DOERN, Ruaaell DOLIN, Hon. Mary Beth DOWNEY, Jamea E. DRIEDGER, Albert ENNS, Harry EVANS, Hon. Leonard S. EYLER, Phil FILMON, Gary FOX, Peter GOURLAY, D.M. (Doug) GRAHAM, Harry HAMMOND, Gerrie HARAPIAK, Harry M. HARPER, Elijah HEMPHILL, Hon.

Maureen HYDE, Lloyd JOHNSTON, J. Frank KOSTYRA, Hon. Eugene KOVNATS, Abe LECUYER, Hon. Gerard LYON, O.C., Hon. Sterling MACKLING, Q.C., Hon. AI MALINOWSKI, Donald M. MANNESS, Clayton McKENZIE, J. Wally MERCIER, Q.C., G.W.J. (Gerry) NORDMAN, Rurik (Ric) OLESON, Charlotte ORCHARD, Donald PAWLEY, Q.C., Hon. Howard R. PARASIUK, Hon. Wilaon PENNER, Q.C., Hon. Roland PHILLIPS, Myrna A. PLOHMAN, Hon. John RANSOM, A. Brian SANTOS, Conrad SCHROEDER,Hon. Vic SCOTT, Don SHERMAN, L.R. (Bud) SMITH, Hon. Muriel STEEN, Warren ST ORIE, Hon. Jerry T. URUSKI, Hon. Bill USKIW, Hon. Samuel WALDING, Hon. D. Jamea Constituency Ste.

Rose Springfield Thompson La Verendrye Minnedosa Rhineland Gimli Brandon West Ellice Churchill St. Boniface Riel Elm wood Kildonan Arthur Emerson Lakeside Brandon East River East Tuxedo Concordia Swan River Virden Kirkfield Park The Pas Rupertsland Logan Portage la Prairie Sturgeon Creek Seven Oaks Niakwa Radisson Charleswood St. James St. Johns Morris Roblin-Russell St. Norbert Assiniboia Gladstone Pemblna Selkirk Transcona Fort Rouge Wolseley Dauphin Turtle Mountain Burrows Rossmere lnkster Fort Garry Os borne River Heights Flin Flon lnterlake Lac du Bonnet St.

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LEGISLATIVE ASSEMBLY OF MANITOBA Friday, 15 June, 1984. Time - 10:00 a.m. OPENING PRAYER by Mr. Speaker. MR. SPEAKER, Hon. J. Walding: Presenting Petitions . . . Reading and Receiving Petitions . . . Presenting Reports by Standing and Special Comm ittees . MINISTERIAL STATEMENTS AND TABLING OF REPORTS MR. SPEAKER: The Honourable Government House Leader. HON. A. ANSTETT: Thank you, Mr. Speaker. I have a brief statement on behalf of the Minister of Natural Resources. Mr.

Speaker, we are pleased this morning to announce the release of a background report to commence the management planning program for Hecla and Grindstone Provincial Parks. The background report is the first step of a six-step process which will be followed in preparing a management plan for these parks. The report provides information about the planning process, the resources and current uses of these parks. lt also presents a variety of objectives and topic s for discussion on which we are seeking public review and input. Hecla is one of our outstanding Provincial Parks.

In the recent Park Systems Plan brochure, which is available on request, Hecla is recommended for reclassificat ion from a Provincial Natural Park to a Provincial Heritage Park to emphasize the need for protection and

interpretation of its natural and cultural resources. Grindstone Provincial Recreation Park has become an important cottaging area on Lake Winnipeg. lt is expected to continue to fulfill this role within Manitoba's park system. The management plan for Hecla follows similar init iatives for Whiteshel l, Gr ass River and Tu rtle Mountain Provincial Parks.

We are commit ted to the preparation of long-range plans to guide the protection, management and development of Manitoba's key park lands. • The Parks Branch of the Department of Natural Resources will be holding public information meetings and drop-in sessions to review and discuss the background report. Meetings are scheduled to be held in: Gimli, Riverton, Hecla Park and Winnipeg. All Manitobans with an interest in provincial parks are encou raged to participate in the planning process for Hecla and Grindstone. In this way we hope to develop a final plan that best meets the needs of all park users.

Thank you, Mr. Speaker. MR. SPEAKER: The Honourable Member for Emerson. · MR. A. DRIEDGER: Thank you, Mr. Speaker. We welcome the announcement. I think this announcement is a continuation of a policy that started already during the previous administration, so it Is not necessar ily a new initiative.

One would hope that in holding these information meetings that the results are going to be a little bit more positive in terms of taking the reaction of the people that they will be consulting with, not like they did in the case of the Whiteshell where they held meetings, listened to the people, and then contin ued on their route just as they please. So we hope there is going to be a bit more dialogue going on, and a bit more information taken and used of the people that are involved In these things. Thank you. MR. SPEAKER: I am pleased to table the Annual Report of the Ombudsman for 1983. Notices of Motion . . .

INTRODUCTION OF BILLS MR. SPEAKER: The Honourable Member for River East. MR. R EYLER Introduced Bill No. 26, The Chiropractic Act;

Loi sur la chir opractie. HON. V. SCHROEDER introduc ed Bill No. 27,

An Act to Amend The Fin ancial Admin istration Act. (R ecommended by Her Honour the Lieutenant­ Governor). HON. R. PENNER introduced Bill No. 28,

An Act to validate an Expropriation under The Expropriation Act; Loi validant une expropriation effectuee en vertu de la

Loi sur !'expropriation. INTRODUCTION OF GUESTS MR. SPEAKER: Prior to Oral Questions, may I direct the attention of members to the gallery where we have 85 students of Grades 3 and 4 standing from the Deloraine School. They are under the direction of Mrs. L. Lowdon and the school is in the constituency of the Honourable Member for Arthur. On behalf of all of the members, I welcome you here this morning. ORAL QUESTIONS Milk Prices MR. SPEAK ER: The Honourable Leader of the Opposition. MR. G. FILMON: Thank you, Mr. Speaker.

My question is for the Premier and it follows upon an announcement earlier this week of the decision of the Manitoba Milk Prices Review Commission having resulted in an immediate increase of 23 cents per two-litre carton of fluid milk at some retail outlets in Manitoba. 1997

FrideJ, 15 June, 1984 We 're told today, Mr. Speaker, that some chains of small grocery stores are going to have to lay off staff and indeed perhaps be in danger of closing as a result of this decision. My question to the Premier Is, will he order his Mi nister of Agriculture to speak to the members of the commisson and have them rescind this decison to set minimum and maximum retail prices on milk In Manitoba? MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Mr.

Speaker, first, I think the honourable member should be aware of the fact that the instances referred to on his part the other day are isolated events; that, in fact, much more common are reductions In smaller Winnipeg retail and convenience stores; also, of course, in rural and Northern Manitoba. So I think it is very very important, Mr. Speaker, when we rise in our place in this Chamber, that we attempt to be accurate and not attempt to mislead the public at large. Mr.

Speaker, it is also my information that currently uncontrolled provinces, those provinces that don't exercise control experience retail prices of $1.02 to $1.09 a litre, as rebates in those provinces do run rampant. Controlled provinces are indeed experiencing comparable product prices of around 84 cents per litre as in large Manitoba stores. Also, Mr.

Speaker, I think the honourable member should be aware that it was the Minister of Agriculture on his own initiative and, if I recal l, without any plaudits from the Leader of the Opposition or honourable members across the way, rolled back the gouging of consumers in the month of February in respect to milk prices. If indeed there needs to be rec ognition, it is of the fact that it was this Minister of Agriculture that stepped in to prev ent the gouging of consumers in the City of Winnipeg in the month of February of this year. MR. G. FILMON: Well, Mr.

Speaker, are we then to assume that he is even ing up now and getting back at them, because what is happening now is a 23 cent per two litre carton increase in major retail outlets, whic h is a 16.5 percent increase in milk prices immediately as a result of this decision. Mr.

Speaker, further , we are told today that an Executive Assistant in the Minister's office is quoted as saying, "We are unaware small grocers are affected." My ques tion to the Premier is, who did the comm ission consult, or the Min ister, and what investigations did they do in order to arrive at this policy that is detrimental to the interests of consumers? HON. H. PAWLEY: Mr.

Speaker, I again remind the Ho nour able Leader of the Opposition because apparently he was not listening closely a few moments ago, that uncontrolled provinces experience ret ail prices of $1.02 to $1.09 a litre, as rebates in those provinces run rampant. Second ly, controlled provinces such as the Province of Manitoba, products are approximately 84 cents per litre. Third ly, I rem ind the honourable members across the way that the situation pertai ning to the example given by the Leader of the Opposition the other day is isolated.

Much more common, in fact, will be reductions in Winnipeg, in rural Manitoba, in Northern Manitoba. Fourthly, Mr. Speaker, again I remind the Leader of the Opposition, In case he did not hear my remarks, it was the Minister of Agriculture that had the initiative and the courage to roll back the gouging of consumers in respect to milk prices in the month of February without, I must say, any cries from honourable members across the way, including the Leader of the Opposition, that he undertake that action. There was barely a whisper from honourable members. The Minister of Agriculture took that action, Mr.

Speaker, insofar as ensuring that there be a rollback in milk prices. So, Mr. Speaker, insofar as the milk situation in the Province of Manitoba and consumers, this government is quite conscious, quite aware of its res ponsibilities and will act accord ingly as will the Minis ter of Agriculture. MR. SPEAKER: The Honourabl e Leader of the Opposition. MR. G. FILMON: Mr.

Speaker, in view of the fact that the Minister in February was merely correcting for his own board's mistake when he took that action; and in view of the fact that the information that the Premier just gave about prices in other provinces did not pertain here in Manitoba because of the system that we had put in place to control it at the wholesale lev el; and, in view of the fact, that there are many losers and they include the consumers, they include the small retailers, and they include the local distributors who are losing money and going to have to lay off staff; will he ask the Minister to review and rescind this policy?

MR. SPEAKER: Order please. May I rem ind all members that Oral Questions should seek information and be argumentative or to supply Information. The Honourable First Minister. HON. H. PAWLEY: I assume that I have an opportunity to respond by a statement of my own to the statement that the Leader of the Opposition just presented to this House. MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: With that lead, Mr.

Speaker, I would just comment to the Leader of the Opposition that there was a serious mistake, and that serious mistake dates back to 1980 when the Tory administration of this province changed the legislation, despite strenuous opposition from the members of the, then, New Democratic Party opposition. We told the then Tory administration that there would be problems in respect to milk pricing in the Province of Manitoba.

The mistake was that the then government deli berately and calculatedly chose to ignore the warnings, the warnings of the then New Democrat ic Party opposition in 1980 that their legislation, which we opposed, and opposed strenuously at the time, and Hansard will inde ed bear out what I am saying, was proceeded with. So, if the Leader of the Opposition wants to talk about mistakes, Mr. Speaker, let him look into his own closet, let us examine the skeletons that exist within the closet of members across the way. A MEMBER: You blew it, just like on rent controls, Gary. 1998

Friday, 15 June, 1114 MR. SPEAKER: Order please. The Honourable Leader of the Opposition. MR. G. FILMON: Mr. Speaker, in view of the fact that no one is benefiting from this increase in price, this fixing of the minimum and maximum retail prices that his government has done, his government has put this policy in place, will he not intercede and ask -no, order -the Minister of Agriculture to change the policy and get milk prices down again? MR. SPEAKER: The Honourable Minister of Energy and Mines. HON. W. PARASIUK: Ye s, Mr. Speaker, I was wondering if you would peruse Hansard from today and take a look at the length of the questions and the

preamble of the questions of the Leader of the Opposition and, also, Mr. Speaker, just as a reference point, take a look at the pream ble of the questions of the Member for lnkster just to see whether , in fact, there was a similarity in the length of time taken to introduce their questions. MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: I, again, wish the Leader of the Opposition would attempt to be accurate and fair in his comments.

I think the Leader of the Opposition surely would want to be fair and would want to be accurate as a leader of alleged ly a responsible opposition in the Province of Manitoba. I would assume that to be the case because he made some comment, "nobody is benefit ing," Mr. Speaker. I'm not going to, again, repeat the remarks that I made in respect to the first two que stions from the Leader of the Opposition, but, Mr.

Speaker, I think it's important again to record, in case my comments are left unrecorded, that in the Province of Manitoba much more common will be reductions in smaller Winn ipeg retail and convenience stores, stabilization of milk prices in rural and Northern parts of this province. This is in contrast to a lack of regulation which exists under the kind of laissez-faire approach of Tory Governments in other provinces where rebates go uncontrolled with the gouging of the consumers in respect to milk prices in those jurisdictions. Oil and aluminum ventures MR. SPEAKER: The Honourable Mem ber for Turtle Mountain.

MR. B. RANSOM: Mr. Speaker, I have a question for the First Minister. Ye sterday the Minister of Northern Affairs tabled a beautiful, glossy Annual Report in the House announcing a $24.7 million loss by Manfor. Ye sterday in committee we discussed the $12.3 million loss by Flyer and earlier , a $1.8 million loss by McKenzie Seeds.

The public, in view of the history of losses such as Saunders Aircraft where $40 million was lost, the public are becoming concerned about the magnitude of these losses and my question to the First Minister is, what assurances can he offer the taxpayers of Manitoba that the government's ventures into oil exploration and their potential venture into an aluminum smelter will not result in losses proportionate to the size of the investment, given the record of the gove rnment's Involvement in supposedly wealth-producing ventures? HON. H.

PAWLEY: I'm delighted to have received the question from the Member for Turtle Mountain and it's a good question; and I commend the Member for Turtle Mountain in asking it, but I think it's a most constructive, reasonable question that maybe we've heard this week from members of the opposition benches. Mr. Speaker, the answer is pretty straightforward. We would not be having the problems in Manfor now if in fact we'd not been preceded by an administration that chose first, not to undertake modernization of the Manfor plant as this administration is doing in order to reduce losses, that's No. 1. No. 2, Mr.

Speaker, if we had not been preceded by an administration that allowed inventories to build up 17-1 at The Pas in November of 1981 because that administration didn't want to undertake the unpopular and tough steps that were necessary in order to reduce that inventory because there was an election on. Those are the facts, Mr. Speaker. ·So what is the assurance? The assurance is that the Manitoba Oil and Gas Corporation that's been established by this government, is not being preceded by a bungling, incomp etent government that we witnessed between the period 1977-1981. A MEMBER: Howard, Howard, Howard.

A MEMBER: You're so tough once you get mad, Howie. MR. SPEAKER: Order please, order please. The Honourable. Member for Turtle Mountain. MR. B. RANSOM: Mr. Speaker, was the $40 million loss suffered by Saunders Aircraft due to a bungling and incompetent government? HON. H. PAWLEY: Mr. Speak er, if I recall correctly - and I would like the Honourable Member for Turtle Mountain to check his own records in respect to this -the Manitoba Deve lopment Corporation established the board, established the policy pertaining to lending in respect to that.

I believe that board was es tablished during the term of office of Premier Duff Roblin, Mr. Speak er. lt is for that reason, in fact, that thi s administration is not proceed ing by way of Churchill Forest Industry kinds of transactions that were launched by previous administrations in this province; it is for that reason, Mr. Speaker, that we are not repeat ing any situation by which we simply pick up losers in any given situation. That may have been the case, Mr. Speaker, under a former Conservative administration with CFI. Mr.

Speaker , what we should be discussing this morning is, not the losers, is not the doom-saying by members of the opposition, but the fact that yesterday there was tabled in this Legislature an agreement that will result in the Province of Manitoba real izing $1.7 billion profit because of competent management of the resources of this province; that's what we should be discussing. 1999

Friday, 15 June, 1184 MR. SPEAKER: Order please. May I remind honourable members that Oral Questions should contain some element of urgency about them. The Member for Turtle Mountain. MR. B. RANSOM: Mr. Speaker , I would submit that when three Crown corporations In this province lost " close to $39 million last year there is a sense of urgen cy, especially when the govern ment is contemplating spending hundreds of millions of dollars to get into further so-called wealth-creat ing ventures. Mr. Speaker, my further question to the First Minister . HON. H. PAWLEY: Order, order. MR. SPEAKER: Order please.

Does the Honourable First Minister have a point of order. HON. H. PAWLEY: I would just like your ruling, Mr. Speaker, if that was indeed a statement. I would appreciate equa l oppor tuni ty to respond to the statement. MR. SPEAKER: We are in Oral Questions. Would the Honour able Member for Turtle Mountain pose his ques tion? MR. B. RANSOM: Ye s, Mr. Speaker. In view of the fact that during the years that the Lyon Government was responsible for the management of Manfor, two of those years the company actually showed a profit, compared to a $24.7 million loss this year .. SOME HONOURABLE MEMBERS: Oh, oh! J MR.

SPEAKER: Order please. Question. MR. B. RANSOM: Given the fact that the government promised that a $10 million investment would turn the corporation ar ound, when can the taxpa yers of Manitoba expect to see the $24.7 million loss incurred under this governmen.t elimina ted? When can they expect to see a profit? MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Mr.

Speaker, I am somewhat not surprised by the gall of honourable members across the way, because the honourable member rises in his seat without recog nizing the fact that there was nothing done, 1977-81, refu sing to reco gnize the fact, in respect to Manfor, it is this admin istration ... SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please . The Honourable First Minister. HON. H. PAWLEY: � . . that it was this admin istration, Mr.

Speak er, that successfu lly negotia ted the injection of large sums of monies into modernizing the Manfor plant with the proclaimed intent that the modernization of that plant would provide the opportunity for Manfor to be a stabilized operation in seven years time, Mr. Speaker. I would regret that such an agreement, such an injection of money did not take place in 1978, 1979, 1980, when it should have taken place, Mr. Speaker. The initiative was taken last year by this admin istration to put Manfor in a proper working, operat ing condition and we are on the way to doing that, Mr. Speaker.

No. 2, it was this administration that picked up a badly managed situation pert aining to We stern Flyer has ensured . . . A MEMBER: When is there going to be a profit? HON. R. PENNER: You made a $40 million profit for Kasser; that's what you people did. MR. SPEAKER: Order please. A MEMBER: He's living well on it in Oslo. SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please, order please. Order please. Are the members prepared to proceed with Oral Questions? The Honourable First Minister. HON. H. PAWLEY: Mr.

Speaker, it was this government that is undertaking steps in order to improve the management of Western Flyer; that is, exa mining the operations of Western Ayer because clearly Western Flyer's management and operations of that plant, despite some warnings a few years ago, was not proceeding as it should have been. Mr. Speaker, since this is the morning for statements, I would ask that the Minister of Northern Affairs further elaborate in respect to what is taking place pert aining to Manfor. MR. B. RANSOM: Mr. Speaker, I have a further question to the First Minister.

He says that the company of Manfor should be making a profit in seven years. Can he advise the taxpayers of Manitoba how many tens of millions of dollars he expects that that company will lose in the interv ening seven years? HON. H. PAWLEY: Mr.

Speaker, the projec tions, in fact, are that the investment will be paid off over a seven­ year period not because of initiatives that were taken as a result of omission, but because -and I pay tribute to the Federal Government because of the Injection of federal dollars and provincial dollars into modernizing a plant that, as I said before, ought to have been modernized years ago and was not modernized because of failure or neglect on the part of an administration which was the forerunner of an administration before in t�e 1960s, that handed the monies over to a chap by the name of Kasser, and Raiser , and signed agreements.

Then, Mr. Speaker, we saw huge pictures as we rec all, of Mr. Roblin welcoming this fine "plum" to the Province of Manitoba, the CFI, 1967-68. They allowed that plant to be run down . This administration is modernizing that plant, Mr. Speaker. The gall of honourable members across the way. MR. SPEAKER: The Honourable Member for la Ve rendr ye. 2000

Frlda� 11 June, ,_ MR. R. BANMAN: Thank you, Mr. Speaker. I have a question which flows from an answer the Premier just gave a few minutes ago. I wonder if the Premier could confirm that the Manitoba Dev elopment Corporation, when Saunders had. reached about the $20 million loan mark, refused to advance any more funds to Saunders Aircraft, and that indeed it was the then Cabinet, under

Part 3 of The MDC Act, that put a substantial amount of money, further funds into it, till it went into receiver ship. MR. SPEAKER: Order please. The Hon ourable Government House Leader on a point of order. HON. A. ANSTETT: Mr. Speaker, I rise on a point of order with regard to the historical information the member seeks, which is a matter of public record as provided in Citations 357 and 359 of Beauchesne. MR. SPEAKER: Order please. The Honourable Member for La Verendrye to the same point of order. MR. R. BANMAN: To the same point of order, Mr.

Speaker, the First Minister left the impression that it was the board that had made the decisions. Mr. Speaker, all I want him to do is clarify that statement and inform the people of Manitoba that indeed it was his government, and his Cabinet that he was a member of, that directly put in the money under

Part 2 of the act. MR. SPEAKER: Order please, order please. Order please. Historical matters are not proper subjects for Oral Question period. The Honourable Minister of Northern Affairs. Manfor Annual Report HON. J. STORIE: Thank you, Mr. Speaker. As the Minister responsible for Manfor, I would like to provide some information to the Member for Turtle Mountain. SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please, order please. We have passed that part of the Order Paper which deals with Ministerial State ments. We are in Oral Questions. The Honourable Minister of Northern Affairs on a point of order. HON.

J. STORIE: Mr. Speaker, I did not have an opportunity to answer specific questions that were asked by the Member for Turtle Mountain. If the member is really interested in the information, I am prepared to provide it. MR. SPEAKER: The Honourable First Minister on a point of order. HON. H. PAWLEY: Mr. Speaker, on a point of order, I think your injunction in respect to the Minister of Northern Affairs is a reasonable one. I would ask that you peruse Hansard to ensure that your injunction per taining to statements applies to the other side as well as this side this morning. Translation of Manitoba Statutes MR.

SPEAKER: The Honourable Member for Elmwood. MR. R. DOERN: Mr. Speaker, I would like to direct a question to the Attorney-General and ask him whether he can indic ate which of two conflicting public statements and positions is true regarding the translation of Manitoba statutes; a first statement that the task could be comple ted in 3 to 12 months; and a second that the 400 main statutes won't be ready until 1995, and that the complete task of translation won't be finished until the year 2,015. MR. SPEAKER: Order please. I don't think that is a proper question.

Would the Honourable Member for Elmwood ask a question to seek information? . The Honourable Member for Elmwood. MR. R. DOERN: Mr. Speaker, I would ask the Attorney­ �eneral whether he accepts the position of Mr. Greg Yost of the Translation Bureau, that it may take another 20 years to complete the task of translation? MR. SPEAKER: The Honourable Member for Elmwood should know that is an argumentative question. The Hofiourable Member for Elmwood. MR. R. DOERN: Mr.

Speaker, I will try once more and simply ask the Attorney-General if he can provide information to the House as to the length of time necessary to translate Manitoba's statutes and the complete task of translation. MR. SPEAKER: The Honourable Attorney-General . HON. R. PENNER: I will take as notice and be prepared to make a full statement to the House on the present estimate with respect to time and the assumptions upon which that is based . That will be forthcoming next week sometime. North of Portage Development MR. SPEAKER: The Honourable Member for St. Norbert . MR. G. MERCIER: Mr.

Speaker, I have a question for the Minister of Urban Affairs. Could the Minister of Urban Affairs Indicate whether she has sought or received a legal opinion or advice to the effect that the legal authority for the expropriation North of Portage Avenue is lacking, In that some remedial action will have to be taken by the province to confirm that expropriation? MR. SPEAKER: The Honourable Government House Leader on a point of order . HON. A. ANSTETT: Ye s, Mr. Speaker, I suggest the question Is out of order and that it anticipates a matter for which a time for debate has been appointed, 2001

FrldeJ 15 June, 1814 specifically Bill No. 28, moved for first reading this morning. MR. G. MERCIER: Well, Mr. Speaker, not knowing what is contained in Bill 28, I would ask the Attorney-General whether he can advise the House whether he has sought or received a legal opinion or advice to the effect that the legal authority for the expropriation North of Portage Avenue is lacking and that some .remedial action will have to be taken if the province wished to proceed further with that plan? MR. SPEAKER: The Honourable Attorney-General. HON. R.

PENNER: Yes, answering the question, in general, there's no doubt that the province has the legal authority to expropriate. MR. G. MERCIER: Mr. Speaker, could the Attorney­ General confirm that the basis upon which the province has proceeded with the expropriation north of Portage Avenue is n0t authorized under the act that they have proceeded under? HON. R. PENNER: No, Mr. Speaker. MR. G. MERCIER: Mr. Speaker, would the Attorney­ General care to offer an explanation of the contents of Bill No. 28 on the Order Paper? MR. SPEAKER: Order please.

That question is clearly out of order and the information will be given to the member at second reading of that particular bill. The Honourable Member for St. Norbert. MR. G. MERCIER: Mr. Speaker, a further question to the Attorney-General.

Could the Attorney-General advise whether he has now had an opportunity to confer with the Counsel for the Province of Mani toba and inform the House as to whether or not Counsel for the Province of Mani toba offered, as an alternat ive provincial position, to the Supreme Court in the case heard this week, that the Supreme Court be invited to impose the constitutional amend ment that the government had introduced into this House as an alternative way of resolving that matter? HON. R.

PENNER : Coun sel for the Province of Manitoba made no such offer to the Supreme Court and I will be meeting with Counsel for Province of Manitoba later today. Careeratart - continuation MR. SPEAKER: The Honourable Member for River East. MR. P. EYLER: Thank you, Mr. Speaker, I have a question for the Mini ster of Employment Services and Economic Security.

Given the fact that Careerstart is presently employing about 6,000 jobs, thanks to the Jobs Fund and, given the fact that about 40 percent of the unemployed are youth, I wonder if the Mini ster is considering setting up some sort of a program to continue wage subsidies for youth beyond the expiry of the Careerstart Program this summer. MR. SPEAKER: The Honourable Min ister of Employment Services. HON. L. EVANS: Thank you, Mr. Speaker.

Yes, I can advise the honourable member that our department is currently looking at various options that we may wish to pursue this fall in terms of providing some kind of wage subsidy to create jobs, particularly among young people who still unfortunately make up a great percentage of the unem ployed .

Although our unemployment level has become the best in Canada and we are very proud of the fact that we have the lowest level of unemployment, nevertheless we believe, given the fact that we do have a severe winter period at which time there is a certain amount of seasonal unemployment, that it is incumbent upon us to look toward preparing some kind of employment program for this fall and, indeed, that is now under consideration. MR. P. EYLER: A supplementary question, Mr. Speaker. Is the Minister prepared to consider giving this wage assistance to non-profit organizations as well as small businesses? HON. L.

EVANS: Mr. Speaker, we have in the past considered both the areas, both the commercial area and the non-commercial area, the business component of the private sector, and the non-profit area, and we believe that it would be worthwhile to consider funding jobs in both components inasmuch as both areas, both sectors, can offer some interesting employment challen ges for young people of Manitoba. MR. P. EYLER: A final supplementary, Mr. Speaker. Can the Minister give us some idea as to when he will have made a decision on this program, when the details would be annou nced to the public? HON. L.

EVANS: As I indicated, Mr. Speaker, the department is now working on various options and, hopefully, within the next couple of months we will have something more firm and by the end of August, perhaps early September, we will be in a position to advise the public as to what we may be able to offer in terms of providing employment opportunities for young people and not so young people. Coat of borrowing MR. SPEAKER: The Honourable Member for Turtle Mountain. MR. B. RANSOM: Thank you, Mr. Speaker, a question to the Mini ster of Finance.

Can the Minister of Finance advise the House what would be the approximate rate of borrowing today for the government to borrow, either U.S. or Canadian funds, over a 15-year period? MR. SPEAKER: The Honourable Minister of Finance. HON. V. SCHROEDER: For specifics on 15 years, I would have to take the question as notice. On five 2002

flrtdaJ, 15 June. 1114 yea rs, there isn't much of a market if the Member for Sturgeon Creek were to make himself a little more familiar with the market. A 15-year issue is a very unlikely issue in the North American markets at this stage. lt would be roughly in the area of 14 percent in all likeliho od. MR. B. RANSOM: Mr.

Speaker, given the Minister's statement that 15-year money is almost non-existent and, given the fact that the contract entered into with Northern States Power will be running for a 12-year period beg inning in 1993, was the Minister, as Minister of Finance and Minister of Crown Investments, involved in the negotiations over that power sale? HON. V. SCHROEDER: Ye s, Mr. Speaker, I've been involved throughout in the sense that I've been talking with the Minister of Energy and his Deputy Minister with respect to terms and conditions.

I can assure the people of Manitoba that the arrangement is a much better arrangement than we would have been in had we gone ahead with that arrangement with Saskatchewan and Alberta which would have given us nowhere near the kind of re turns this will provide to the people of Manitoba. This is a fairly good arrangement. I can tell the mem ber, as I indicated the other day in the Estimates for the Department of Finance, that our cost of money in other areas is considerably lower than the number I just mentioned. In addition to that, there are other forms of financing which can reduce the cost of money.

Just rece ntly the Province of British Columbia, for example, obtained funding at about 3.5 percent below regular market in a different form of funding in the Canadian market, and that would drop our costs down to closer to 10 percent. So, there are a variety of ways of reducing costs that we are looking at. We're looking at project financing, we're looking at a whole host of different arrangements. In addition to that, as I said, we will be getting far more for our power under this arrangement than we would have had we had that Tory deal. MR. B. RANSOM: Mr.

Speaker, a question to the Minister of Energy and Mines. I just advise the Minister of Energy and Mines that I was asking a question of the Minister of Finance as to interest rates available and the term of money available. The Minister indicated that 15-year money was really not readily available. My question then to the Minister of Energy and Mines is what assumptions, with respect to the availability of capital and the interest rates, are built into the agreement for the sale of power to Northern States? MR. SPEAKER: The Honourable Minister of Energy and Mines. HON. W. PARASIUK: Ye s, Mr.

Speaker, we have taken into account interest rate fluctuations and, to be on the safe side, the higher levels were taken. I don't have right now before me the specific interest rate calculations. I would think that would be discussed at the Committee meetings where we could go into the detail of the contracts. Certainly our interest rate charges to Manitoba Hydro are significantly less than those that Northern States Power has to pay. They are probably in the order of at least 4.5 percentage points less than the capital requirements of Northern States Power . That provides a pretty good cush ion, Mr. Speaker.

As the Min ister of Finance indicated, we are very pleased with this deal; we are going to sell power , and make a profit of $1.7 billion. That is in comparison to selling the entire output from a dam for 25 years at cost without a profit to Alberta and Saskatchew an, Mr. Speaker. What a difference -1. 7 billion versus zero. MR. SPEAKER: The Honourable Member for Turtle Mountain. SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please, order please. Order please. The Honourable Member for Turtle Mountain .. MR. B. RANSOM: Mr.

Speaker , it is evident from the information tabled yesterday by the Minister of Energy an.d Mines that there is a great deal of supporting information in terms of the assumptions that have been made about costs and interest rates. In view of the fact, Mr.

Speaker, that we expect that the committee will be meeting shortly to discuss this, would it be possible for the Minister of Energy and Mines to provide some of th�t background information to the House prior to the meeting of the committee, in order that we might have an opportunity to peruse it and have outside experts examine it as well, and that the people of Manitoba and, indeed, the government might be able to benefit from informed comment upon the information that they might make available to us? HON. W. PARASIUK: Mr. Speaker, I'll look into that.

The staff will be away at the beg inning of next week to conduct some very important other negotiations which, I think, would mean a lot to the future of Manitoba. We had offer ed, Mr. Speaker, to meet this afternoon and to meet tomorrow morning to provide that information or get information, but certainly I'll see if it is possible to put together that information.

I just give it that caveat that the staff will be away on very important negotiations in the early part of next week, but we certainly would unde rtake to try and provide background information because I think that we feel that everyone should come together on this very positive development for Manitoba. INTRODUCTION OF GUESTS MR. SPEAKER: May I direct the attention of honourable members to the gallery? We have 34 students of Grade 9 standing from the St. Claude School under the direction of Mr. D. Chapman. The school is in the constituency of the Honourable Member for Morris.

There are 34 students of Grade 5 standing from the Elmdale School under the direction of Mr. W. Kampen. The school is in the constituency of the Honourable Member for La Ve rendrye. On behalf of all of the members, I welcome you here this morning. 2003

ORDERS OF THE DAY MR. SPEAKER: The Honou rable Government House Leader. HON. A. ANSTETT: Thank you, Mr. Speaker. I beg to move, seconded by the Minister of Finance, that Mr. Speaker do now leave the Chair and the House resolve itself into a Committee to consider of the Supply to be granted to Her Majesty. MOTION presented and carried and the Hous e resolved itself into a Committee to consider of the Supply to be granted to Her Ma jesty with the Honourable Member for River East in the Chair for Crown Investments; and the Member for Burrows in the Chair for the Department of Energy and Mines. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - ENERGY AND MINES MR. CHAI RMAN, C. Santos: This

section of the Committee of Supply shall be dealing with the Estimates of the Department of Energy and Mines. We shall begin with an opening statement from the Honourable Minister responsible for the department. HON. W. PARASIUK: Thank you, Mr. Chairman. I've distributed notes for my opening statement, and I'll go through them quickly in the interests of time. I welcome the opportunity to present my department's spending Estimates for the 1984-85 fiscal year. I would like to present a brief overview of our acc omplishments over the past year, along with some insight into our plans for 19 84-85.

Our approach is one of balance. We believe in a balanced approach to development. That means that small projects, medium projects and large projects and developments are all equally important, because it is the balanc ed appro ach that is most important to Manitoba's well-being and, we believe, augurs best for the long-term future of the province. Turning to the Energy Division, we have a whole slate of conservation init iatives. We are very strongly committed to energy conservation. Most of Canada's energy resources are non-renewable, therefore the more we can save, the more secure will be our energy future.

Consumers also benefit from conservation by having to pay less for energy consumed. In a sense, we're looking to try and get the best bang for the energy buck. We have concentrated our efforts in the commercial and residential areas, because that's where we believe that we, as a province, have the greatest impact. The transportation sector Is still the largest consumer of energy in the province, but we believe that those major decisions regarding transportation energy are still made by the manufacturers, and we don't have as much influence.

Our strategy has been to start with the commercial and residential, get skills and experience there, with a long-term thought that maybe we might be doing more in the transportation sector in the future. We launched two new energy conservation programs in 1984, called Business CHEC and Community CHEC which were sponsored by the Manitoba Government Jobs Fund.

CHEC stands for Cut High Energy Costs, and these two programs will provide a matching grant up to $1 5,000 for materials and labour for qualifying small business and community institutions which can show that their conservation initiatives will reduce energy use by at least 20 percent. As you can see, there has been a commitment of $3.3 million to the program to the end of fiscal year 19 84-85. My department has also been active in promoting energy conservation for Manitoba homeowners.

For the past few years, under the Canada-Man itoba Conservation and Renewable Energy Demonstration Agreement (CR EDA), we have been researching and demonstrating new energy conservat ion technology. The Federal Government has decided to make some changes in the del ivery of the Conservation and Renewable Energy Demonstration Agreement and the National Energy Audit Program (NEAP) coincidental with their termination dates of March 31, 1984. We will continue to operate the CREDA Program until March 31, 1985. During this period, a number of existing programs will be completed and some new programs under taken.

The recently announc ed waste heat recovery project at the Manitoba Rolling Mills in Selkirk falls into this latter group. What we have been trying to do here is put together energy conservat ion projects that also have some impact on jobs. We've been trying to do this by getting people to think more about energy conservation and a good program has been the Energy Demonstration Program, introduc ed last year by the department. lt is demonstrating how 83 Manitoba homeowners will be able to reduce energy consumption by about 40 percent.

One of the lessons we learned from Energy Demo is that homeowners need accurate information, advice, and assistance as to what retrofit measures provide the greatest return for their Investment and we've concentrated a lot of our efforts in that area. We've also been conducting a town energy audit in two communities, Plnawa and Stonewall. We are also doing other initiatives In energy conservation geared to community groups such as the Age and Opportunity Centre, the Canadian Association for the Mentally Retarded, and Native People. That's been funded through the Jobs Fund.

We've been doing a number of other projects, Arena and Recreation Centre Retrofits, Small Scale Energy Demonostrations, Enerschool, and as I said before, the Town Enetgy Audit Match. All of these are done with a view to trying to get people to learn more about energy conservat ion, by being part of groups that have to face problems with energy conservation, they gained that knowledge and hopefully they'll apply it to their own individual or family situations.

In order to have some_ public input into the shaping of the Provincial Energy Policy in September, 1983, I announc ed the appointment of 10 members to the Manitoba Energy Council. The Energy Council was established under legislation passed by the previous administration with a mandate to assess energy policy and make recom mendations to the Minister on energy matters. The Chairman of the Council is Dr. earl Ridd of the University of Winnipeg. 2004

Frld8y, 15 June, 1tl4 The Council, which meets on a part-time basis, is review ing some of my department's activities In energy conservation and I look forward to input from this broadly based citizens' organization. We also have the Manitoba Energy Authority which in co-operation with officials in my department has been active in negotiating a number of energy related projects which upon fruition, will be beneficial to the economy of the province. We can talk about the Northern States Power sale.

We also have been involved in the negotiations for the Letter of Intent with the Western Area Power Admi nis trat ion of Golden, Color ado regarding a possible export contract of 1,200 megawatts of electricity for 35 years be ginning in 1993-94. Negotiations between the MEA and other U.S. power utilities are also under way. So we have a number of negotiations involving major exports of electricity from Manitoba which would create very significant numbers of person years of employment in the future, some 42,000, if all of these negotiations come to fruition.

They would also entail an Investment of some $6.5 billion. Right now, we're involved in delivering a $35.6 million cost-sharing agreement with the Federal Government and Manitoba Hydro to extend the main grid electricity to Churchill. This extension of hydro-electricity to Churchill will reduce the community's energy costs and, in conjunction with $57 million in transportation impr ovements, will help to make Manitoba's only seaport more viable. it's very important that Churchill be preserved .

I believe that had this overall transportation-hydro agreem ent not been signed that Churchill could quite easily have died. Once it had died one could not have revived it. We, as a gover nment, went out, and my department is part of that process, and reached agreement with the Federal Government to keep Churchill alive, to keep it going, to improve the energy there, to ensure the rail bed, to ensure the rolling stock, to improve the harbour. We still have a number of other problems to deal with; name ly, the ice breaking, we have the problems of insurance.

But for an industrialized west it is very important to have a seaport. We are 1,000 miles closer to Europe via Churchill than we are via Halifax. People have often in the past only looked at Churchill as an outlet for grain, but we are industrializing west, we will industrialize more in the future and 'having a seaport that can be more functional and more operational will, in fact, create even further industrial development in the west for all three provinces, Including Manitoba. I have been told that the season is some 90 days now,

whereas 100 years ago it was 150 days. So we certainly can improve tremendously. We hope that we might even be able to match some of the northern European ports that are at a more northerly latitude than Churchill and operate 12 months of the year, or at least get an operation there for 10 to 11 months.

If that happened, then I would think that, couple d with our cheap energy in Manitoba, which will be available in 10 and 15 years -and that's how long it will take to make Churchill a very viable seaport -we will be in the very enviable position where I believe very strongly that the 21st Century will certainly be Manitoba's. I think the Churchill seaport is a very important ingredient in that. We have also been involved in negotiations with aluminum companies to locate in Manitoba.

I announced a Letter of Understanding recently with the Aluminum Company of America to undertake a feasi bility study for the construction of a $700 million aluminum smelter in Manitoba, which would employ 600 people on a permanent basis and create 2,000 person years of emplo yment over the four year construction period. These Initiatives in the fields of electricity exports, hydro dev elopment and aluminum smelting indicate that we are actively committed to developing the province's energy resources in the best interests of Manitoba.

At the same time, I say that we are also interested on the energy conservation side and that's why I say we have had a balanced approach in energy development. Now turning to the Mineral Resources Division, we have had a tough two years. INe have gone through the sharpest downturn in its history, in the mineral industry, frankly, even sharper than the '30s; but now we are starting to see some modest growth in 1983. Manitoba's mineral output during 1983 increa sed by 20 percent over 1982 after two consecutive years of decline.

We are hopeful that a greater degree of stability will be experienced this year than in the previous two years. The bright seg ment �..-r the mineral resources sect or is the petroleum industry where the high levels of oil and gas exploration, discovery and development of the last two years are expected to continue during 1984.

Perhaps the most positive indications of recovery In the provtnce's metals mining indus try are In the resumption of some mine developments which were suspended during the peak of the recessi on. lnco, for example, has resumed work on the $90 million first phase of the new Thompson open pit mine which is scheduled to come on stream early in 1986. A second phase, estimated to cost $77 million (in 1981 dollars) is to commence in 1988 or 1989 and come on stream two years later.

The development of this open pit will further enhance the international competitiv eness of lnco's Thompson operat ions, already one of the world's lowest cost nickel producers. We 've also had resu mption by Hudson Bay, of Rod mine at Snow Lake, and we're expecting that production will build up to 500 tonnes by 1985. Gold properties in the province continue to attract a high level of exploration and development interest and we've had a very interest ing possible find near Flin Flon. Hopefully that will prove out, we'll have to wait and see what happens there.

Given the improvement in metal markets over the last two years, there's been some semblance of renewed stability to our mining communities. We are optimistic that this will be maintained and prog ressively strengthened, but Manitoba's copper-zinc industry, concentrated mainly in the Lynn Lake and Aln Flon regions, faces a serious threat from another quarter, name ly, exhaustion of ore reserves.

Members of this House are aware of the problems facing the community of Lynn Lake when the Fox Lake mine closes sometime in the fall of next year and the current difficulties of the Ruttan mine and Its dependent communi ty of Leaf Rapids. I think it was very commendable that the Municipal Council of the Town of Lynn Lake took the Initiative to promote a seminar on April 16 which was funded by the province, following 2005

Friday, 15 June, 1184 which they are undertaking positive steps to promote and develop new industries and are looking realistically at the hard future choices that people in their community have to lace with the closure of Fox Lake mine. The government will provide up to $50,000 from the Mining Community Reserve Fund to the Community of Lynn Lake to have an economic development and transition officer working with the community. We are remaining steadfast in our commitment to these communities.

Between 1975 and 1983, the Mineral Resources Division of my department and the Crown corporation Manitoba Mineral Resources have spent a large proportion of their annual budgets in programs in this area aimed at finding new ore reserves and generally stimulating exploration. Members are also aware that the gove rnment, through the NEED Program, is participating with the Federal Government and Sherritt in a $2.7 million exploration effort at the Agassiz gold mine located three miles east of Lynn Lake.

As for the Ruttan mine, a loan of $10 million by the government to assist Sherritt in financing a $27 million development program has been a determining factor in the recent decision by the company to continue operations while, at the same time, proceed ing with mi ne development, thus eliminating the need for any layoff of employees. When this mine development program is completed in the fall of 1985, this unde rground development will extend the life of the mine to 1992, increasing both ore reserves and grade and permitting expanded production and empl oyment.

This is im portant, not only for the Community of Leaf Rapids, but also it's important because Ruttan mine provides a substantial quantity of copper and zinc concentrate for Hudson's Bay's processing facilities at Flin Flon. While the Lynn Lake-Leaf Rapids mining complex presents immediate problems which must be addressed with dispatch, it's important also to look at the long­ term future at Flin Flon and we have been concentrating some of our efforts to do that. I was also pleased to announce the undertaking of • the Letter of Intent with Canamax Resources to undertake a fea sibility study.

That certainly augurs well for Manitoba, and I will be having discussions later on in the summer with officials from IMC. Petroleum is very buoyant , and I have made statements in the. House in that respect before so I won't repeat them now. We are proceeding to work out the final details of the SS-kilometre pipeline from Waskada to Cromer. There has, I think, been final discussions taking place with local officials there as to routing, and I would hope that some time in the near future there might be some further announcements with respect to developments on that.

Omega Hydrocarbons has rec ently completed its $2.5 million natural gas liquids recovery plant in the Waskada Oil field. This is the first of its kind in Manitoba. lt, I think, shows a balance again to the development of the oil industry and, hopefu lly, will add to further stability in the province in this respect. In conclusion, Mr. Chairman, we have every indication of a more stable and gradually recov ering mining industry during this year, and a continuing high level in the petroleum industry. I think we have had a very active year over the last year.

A lot of it was troubleshooting, frankly, at the beg inning of the year but, at the same time, we are working on longer-term developments while having to deal with crises as they arose. I am pleased that towards the end of the fiscal year, a lot of the things that we had been working on did fall into place, and I'm hoping that next year will even be a more eventful year and an even more positive one for us all.

I would like to finally just pay a strong tribute to all of my staff in all of the sect ions who have had to work very hard in dealing with the crisis of a two-year, very deep recess ion while, at the same time, keeping their eyes set forward on positive developments and working incredibly hard to bring them about. MR. CHAIRMAN: Thank you, Mr. Minister . Consistent with customary practice, the Chairperson now calls upon the leading opposition critic to give his reply to the Minister's statement if he so desires. The Member for Lakeside. MR. H. ENNS: Mr.

Chairman, I thank the Minister for the opening statement, and also for the provision of · notes ther eof so that we can, during the consideration of his Estimates, refer back to them as well as to the annual report of his department. In commencing to deal with the Estimates I note, for instance, in the first res olution before us, little or no change with respect to the Administration, salaries and costs associated with the department, as such.

In reflect ing back on the statement just read , much of the depar tment's activity, particularly its actual program del ivery, whether it's CHEC or other energy-related programs, are funded out of other sources , principally the Jobs Fund and/or other agreements entered into with the Federal Government with respect to some of the mining initiatives that have been undertaken by the department.

In dealing with this first res olution, my only question really would be, there was another initiative taken at the time, or during the course of the year, that removed the safety inspection element of the Department of Mines, or what used to be the Department of Mines and Natural Resources, out of this depar tment.

This has been, I suppose it would be fair to say, a recommendation of some standing coming particularly from the miners' point of view -the Depart ment of Labour, I understand has taken on this responsibility -can the Minister - I don't see it particularly reflected in the Estimates - I would ask the Minister simply to comment that that perhaps, is the only substantive change in terms of personnel admin istrative responsibilities of this department. MR.

CHAIRMAN: Before we proceed any farther, at this point in time, the Chairperson cordially invites the members of the departmental staff to finally take their respective places. We shall defer consideration of Item No. 1.(

a) relating to the Minister's Salary, to become the last item for consideration by this Committee of Supply. We shall, therefore, Immedia tely begin with the next item which is Item 1.(bX1) rela ting to Executive Support: Salaries; and 1.(bX2) Other Expenditur es -the Member for Lakeside. MR. H. ENNS: Mr. Chairman, I note again as I said at the outset, that there appears to be little or no change 2006

Friday, 15 June, 18M with respect to the Administration Executive Support staff with respect to money set aside. We can proceed. HON. W. PARASIUK: Well, I'll answer the question he raised before his introductory statement. I think that was a fair comment on the part of the Member for Lakeside regarding the transfer of mines inspectors and now is transferred to the Department of Environment. Now all of the Workplace Safety and Health inspectors are all in one place. We have retained mines inspectors for purposes of looking at the things related specifically to mining.

There's a question of mine production, there's a question of high grading, low grading. There's a question of mine plans so that we have some idea of what might take place over a 2, 3, 5, 10-year period with respect to development and we've been pushing that part fairly strenuously because it's important, I think, for government to have a full disclosure on a confidential basis from the mining companies as to what their plans are because it's the province that provides so much of the infrastructur e in relation to a mining company's activities.

We have been asking the mining companies to provide us with that type of information. Our inspectors have been working very closely with the mining companies to ensure that that information is kept up­ to-date, and that reflects a bit of a thrust within the remaining component of mines inspections. In terms of the num ber of people tha t were trans ferred, that might have been di scussed in Environmental Safety but, if we have that information I would provide it. There were 13 staff transferred to Workplace Safety and Health, 12 staff and one vacancy. MR. H. ENNS: Well, Mr.

Chairman, I appreciate that we could probably be dealing with this under the resolution more closely related to mining. I also take it, this was discussed at the Environment, Workplace Health and Safety Estimates. I think the Minister is aware that the move - I'm trying to search for the right word - perhaps caused some concern within the mining commu nity as such.

Any change always brings with it some concern. lt certainly was drawn to the attention of myself and that of my Leader during a not too recent visit to some of the mining communities in the North. 1 think, by and large, they were certainly not opposed to the move. • There was also some concern with respect to the staffing of the personnel. For instance, in this transfer, was there a change In the Chief Inspector? That may not be the right terminolo gy. HON. W. PARASIUK: No, I know what your raising.

In fact, the Director of Mines Inspections stayed with the Department of Mines, and there was some concern about providing good leadership on to the group that was going to be in Environment and Safety, and we have provided that person on a lend basis to the Department of Environment and Safety to make sure that there is a smooth transition. I know there have been concerns in the past. I think we have taken into account those concerns, and made the decision to make the transfer.

Even though I am the Minister of Mines, I believe that the transfer was a good thing. lt was not a matter of trying to give up something. lt was a matter of trying to do something that was good from an overall governmental perspective and I think that in the past the Member for Lakeside probably has expressed the same sentiments, that it might be a good idea to put them all in one place, knowing full well that with any change that one makes, you have a number of pluses and some minuses and hopefully, the pluses will outweigh the minu ses.

We think they will In this instance, but we certainly will keep close touch on the matter. I would expect that the industry association will keep close touch on it, and I would expect that the companies will, and I would expect the workers will as well. MR. H. ENNS: Just to be absolutely clear then, Mr. Chairman, the current or existing director of this division has been seconded to the Department of Environment? HON. W. PARASIUK: No. He is not full-time seconded. We have lent him and he does work between the two departments. MR. CHAIRMAN: The Leader of the Opposition. MR. G. FILMON: Thank you, Mr. Chairman.

I am just seeking information from the Minister as to a time and a preference as to when I should ask various questions that primarily have to do with the Manitoba Energy Authority's recent act ivities with respect to Hydro power sales and major energy intensive industries locating here, are the basic questions, I suppose, that would be background to the discussion that we might enter into in the Committee on Manitoba Hydro. Perhaps In some cases, the Minister has Information that he can give immediately. In other cases, he may wish to bring it back for discussion at · the Hydro Committee.

So I just seek his guidance as to when he would prefer me to place those questions on the reco rd, or enter into any of the discussions that may ensue. HON. W PARASIUK: Yes, there is an item called 2.(g), Manitoba Energy Authority, where I think that could best be gotten Into. Secondly , Manitoba Energy Authority Is also a Crown corpor ation under legislation and it was established in 1980, so we can go into that on 2.(g), and also Manitoba Energy Authority officials and Hydro officials will be at the Pub lic Utilities Commi ttee of the Legislature.

I know that a question was raised today during question period about providing some background information regarding assumptions of some of the contracts. I went and talked to the questioner after question period, Indic ating that I would have tried to have a private briefing, or failing that because he wanted some written information, that I would try and put together some written Information. I did so on the caveat that staff have lined up those very im portant meetings, and I will try and accommodate that to the best of my ability.

If it means an extra day of hearings next week, I think we can be in touch with each other on Monday to try and sort that out. MR. CHAIRMAN: 1.(b)( 1)- pass; 1.(b)(2)-pa ss. 2007

Frld•l 15 June, 1884 1. (cX 1) Commu nications: Salaries, 1. (cX2) Other Expenditures - the Member for lakeside. MR. H. ENNS: On Commu nications, this I take it, is a staff person or two? HON. W. PARASIUK: Yes. Those that are there are three staff people. This is an Information Centre that we have. Now this was an lnfor!Tlation Centre that existed before. lt's one that exists today. Right now, it's in Eaton Place. lt used to be on Colony Square. MR. G. FILMON: Mr. Chairman, so there are three staff people covered under the Salary Item, (cX 1)? HON. W PARASIUK: Yes. MR. G. FILMON: Mr.

Chairman, what is covered under Other Expenditures? HON. W. PARASIUK: We can get the details to hand to you. These basically are the energy publications that are at the Energy Information Centre that exists. There is a whole set of public ations that are put out there dealing with energy conser vation, and mi nerals publications as well. MR. G. FILMON: Would that be primarily the cost of printing and publishing information that's disseminated to the public? HON. W. PARASIUK: Yes. MR. G.

FILMON: Does that figure include contract salaries of people who are doin g writing and development of public relations material on behalf of the government or this department? HON. W. PARASIUK: No. MR. G. FILMON: Mr. Chairman, my understanding is that there are more than just the three SMYs that were referred to in (c)(1), that Is, people who are doing the development of information and public relations and news releases and so on, working for the department. Where do they appear in the Estimates? HON. W. PARASIUK: There are more staff involved, and they would be in 2.(c).

The agreements that we have signed with the Federal Government require an information component to them as part of the condition of signing the agreement, and we have five staff working there. MR. G. FILMON: Those five staff are primarily information officers, commun ication specialists, public relations people? HON. W PARASIUk: Yes, they are and that again is part of our requirement under the agreement. Whenever an energy demonstration project is undertaken a certain percentage of the cost of that has to be allocated to dissemination and it's up to as high as 20 percent.

That is the condition right across Canada for the Federal-Provincial Energy Agreement. Again, some of this information has to be shared right across the countr y, because one of the reasons of getting approval federa lly-provincially for a demonstration project - for example, the one at the Manitoba Rolling Mills - is that it might have a utility in other parts of the countr y. So, that's wtiy there is a high information component to it and this is a cost­ shared program. MR. G. FILMON: The Other Expenditures is primarily cost of printing and publishing information that has been disseminated from the department?

HON. W PARASIUK: Yes. MR. CHAIRMAN: 1.(c)(1)-p ass; 1.(c)(2)- pass. 1. (d)

(1) Financial and Admi nistrative Services, Salaries; 1.(d)

(2) Other Expenditures - the Member for lakeside. MR. H. ENNS: I take it from the figures presented, there's no change here. HON. W PARASIUK: No change. MR. CHAIRMAN: 1.(d)(1)-p ass; 1.(d)(2)- pass. 2.(a)( 1) Energy, Energy Economics, Salaries; 2.(a)

(2) Other Expenditures - the Member for Lakeside. MR. H. ENNS: Could the Minister just give us a brief description of what all is entailed in this particular resolution? HON. W PARASIUK: The energy economics is involved in all of the analyses relating to many of the projects that have been announced. it's the straight number crunching involved to make sure that members are right. There's a numb er of other ones as well that have been looked at; things relating to waste disposal, possible rail electrification is an energy economics component.

I can give you the strategic goals is to provide an analytical function having responsibilities to informing and advising the department on energy issues having imp lications for the province. We develop positions on those issues; we sometimes have to go before the National Energy Board with respect to gas price hearings; we've done that. We have to look at particular projects, we are involved in doing that, we provide that. We are looking at the economics of some longer term, more futuristic developments that might augur well for Manitoba in something like hydrogen research.

We do have our economic analysis group that provides that number crunching for all of these activities that the department carries out. MR. H. ENNS: Your Annual Report indicates that this group was also involved during the diffi culti es experienced in mining communities that faced closures • during the year and developed government actions in job creat ion programs in consideration of various policy options for dealing with these situations. Staff of this

section were fully engaged in these activities and closely monitoring developments. Were they ac tually delivering -I don't imagine - were they developing job alternatives 2008

FrldaJ, 15 June, 1984 In some of these Instances or maybe just making the analysis? HON. W PARASIUK: I don't have my Annual Report with me to look. That would be under 3.(a). We do have two mine economists in the mineral resources

section because the economics is a bit different between the two areas. They would have been involved in working with the communities and with the companies and providing some advice to the Federal Government because some of these were shared-cost programs, but they were not involved in the actual deli very, but they do economic and policy analysis related to the mining industry.

The intent there was to try and keep workers, who we believe had developed pretty high productivity levels, gainfully employed within those communities during the depression so that when there was an upswing in the economy , and an upswing in that mining company's activities, they would not have lost that very productive workforce. I think the programs themselves were quite success ful. MR. CHAIRMAN: The Member for lnkster. MR. D. SCOTT: Thank you, Mr. Chairman. The whole area of energy economics is something that I'm very much interested In. I was wondering if the Minister can give us any kind of brief

summary, or if he could take the undertaking to get back to us on the cost benefit one is faced with, or one realizes, I should say, when one undertakes conserva tion projects. In other words, insulating the home or insulating businesses, trying to bring in micro processors as far as in indus trial applications to reduce the amount of energy consumption. Particularly, there's been advances, I understand, in electric motors and they're sort of management of electric motors; just how that sort of compares with the cost of having to develop new resources to produce the power or the heat for those. HON.

W PARASIUK: The payback period for these investments often is quite short. We 're getting paybacks of three to five years to undertake a number of the energy conservation projects. In fact, most of them have to have a savings of 20 percent per year, so you're looking at a pa yback within five years. We work with the various companies or people to get them to understand what that payback is. That means that if you took all of the small, what people might think individually as small energy. conserva tion projects, their return is very high. That's why the communication of this is so important.

If we could get society as a whole to do a lot more of this, then the aggregate of these small projects which have a high payback, tremendous re turn on investment, tremendous multiplier effect in terms of employment, would be the equ ivalent of some of these larger projects that ever yone's attention is focused on. So it's important to have a good communication element there and, also, to make sure that we've checked the facts carefully so that we can communicate hard facts to other people.

That is done on a case-by-case basis, but generally the ones that have been procee ded with have paybacks of three to five years. MR. D. SCOTT: That's something I've suspected for a long time, and I'm very heartened that the Minister has taken prompting, not just from myself, I know that he believes very strongly In the alternative energy and the use of conservation as a supply of energy by replacing wasted energy with the more effi cient use of that en ergy.

I had an elderly constituent, who spent quite a bit of time in the North and was an electrician involved with some of the early installations in the mining communities in the North, tell me of a dam that I believe is on the God's Lake River. it's an old dam that was built for a gold-mining community on God's Lake years ago -back during the Depres sion, I think -closed up fairly shortly thereafter and my understanding is, it's only about 12 miles from Gods Lake Narrows.

Instead of stringing and running power lines miles and mile s through the bush towards these communities, I was wondering if it is possible to restore -or first, who owns this plant? Is it the province? I have a feeling it is still owned by some private individuals.

Are there any negotiations going on to try and acquire this to be able to produce power? · When one considers the cost of generating power through diesel generators that most of these stations uSe and the implications of that with the oil pollution around the sites where the diesel genera ting stations are, the cost of moving the oil in on the winter roads in the wintertime, the cost of trying to get rid of all the old containers afterward s, at least I would like to know if this group in particular has done any study whatsoever on this potential alternative for supplying power, both to the communities of Gods Lake Narrows, possibly even some of Island Lake, although I am not sure of the proximity to Island Lake - I think it's much closer to God's Lake - and possibly God's Lake River as well, which could be potentially strung underw ater connecting the various communities.

Has there been anything done in that area, or would they be interested even In looking at that as a possible alternative, Mr. Chairman? HON. W. PARASIUK: We have been looking at small­ scale Hydro developments, ones that would be in closer proximity to remote Northern communities, because that has been looked at from a departmental perspective and also from a Hydro perspective. One of the reasons why we are looking at it from a departmental perspective Is that a number of these communities are Reserves. To the extent that we can get the Federal Government Involved, we want to.

We have been looking, and there is a study that is being undertaken by federal Energy, Mines and Resources regarding small scale Hydro development, primarily in the northe astern part of Manitoba. We have not received a copy of that study. I think it is just nearing completion, and we certainly are interested in looking at it and determining whether, in fact, a small-scale Hydro project would be viable in one community or possible a few of them. I do know the facility that the member talks about. I think it is at Kanuchuan Rapids . MR. D. SCOTT: That's right. HON. W.

PARASIUK: . . . and we certainly have looked at it. In my understa nding, it is privately owned at present, but I don't think it is being used at all. 2009

Friday, 15 June, 1884 So it would be a matter of looking at the reliability of that type of facili ty, taking into account the construction costs of the transmission lines to the nearest community, looking at reliabil ity. That is one of the things that, I understand, is being done in the study. Hopeful ly, we will get some answers to that to make a decision as to whether we should do something more in the next six months or so. MR. D. SCOTT: Thanks very much, Mr. Chairman.

I am glad the Mini ster is looking at thes e various alternatives, because it shows that all of our energies are not just being put into massive power dev elopments and stringing power lines across. it's a very balanced approach. lt's an approach that benefits the consumer in the long run, because the consumers themselves will benefit through lower energy costs in the home. I would hope that in the future, we start to look more at the energy sector in transportation. lt is a sector that I studied quite extensively a couple of years ago. I know we are using much less energy than we did a couple of years ago.

You just have to look at the consumption of fuel in Manitoba; it's down substantially. I think there is still a lot of additional room to save there. One thing, when we are talking about non­ renewable resources which are mostly imported into Manitoba, they are also a substantial drain on our economy by sending money out of Manitoba to the other provinces to pay for those natural resources, be it natural gas, coal or oil. In the transportation sector , virtually ever ything is imported. Even the oil we produce in Man itoba goes to Saskatchewan first, I understand, for proces sing.

So the savings are quite substantial. The less fuel that we consume as a society to maintain our quality and standard of living, I think the better our quality of life will be and the standard of living, and the better it augurs for us in the future. A mean machine is much better to be able to take advantage of recoveries, and not to suffer so much during the rec essions. MR. CHAIRMAN: Thank you. 2.(a)( 1)-pass; 2.(a)(2)­ pass. 2.(b)

(1) Provincial Energy Programs: Salaries, 2.(b)

(2) Other Expenditur es -the Member for Lakeside. MR. H. ENNS: Mr. Chairman, I ask the Minister's indulgence whether or not he would consider allowing us to move to Item (

g) of the same res olution to facilitate some questions that I would like to put on the record. Due to the two committees running, my leader can't be in two places at one time. HON. W PARASIUK: Ye s, that's valid. In fact, I think that is very fair. If you want to go beyond 12:30, fine on that. I am quite open on that as well to facilitate the questions. MR. H. ENNS: Okay, I would like to just understand. We would want to come back to the Canada-Manitoba Energy Agreement as well, under which I think we can discuss the CHEC programs and the various other programs. HON. W. PARASIUK: You want to go to 2.(

g) right now? MR. H. ENNS: But I would appreciate to deal, as the Minister indicated earlier, that under Item (

g) we could perhaps discuss some of the issues that Mr. Filmon would like to raise at this time. HON. W PARASIUK: Certainly. MR. CHAIRMAN: I just called (b). Do you want to pass it, or hold it In abeyance? HON. W. PARASIUK: We could hold it. MR. H. ENNS: Hold it. MR. CHAIRMAN: Okay. Holding (

b) in abeyance, I am now calling 2.(g,) which relates to Manitoba Energy Authority -the Leader of the Opposition. MR. G. FILMON: Mr. Chairman, I wonder if I could just ask the Minister to indicate who are the members of the Manitoba Energy Authority . HON. W PARASIUK: The members of the MEA are Mr. Eliesen, who is the Chairman; Mr. Cherniack, who is the Vice-Chairman; Mr. Arnason; Mr. Puttee, who Is an Assistant Deputy Minister in the Energy Division; and Ms. Patty Park, who is my special assistant. MR. G. FILMON: Mr.

Chairman, is it my understanding that this is the negotiating team on behalf of the Province of Manitoba for the various agreements that have been entered Into, or are being currently discussed with respect to Letters of Intent and so on? HON. W. PARASIUK: This is the team, but it is assisted by and augmented by staff from the department or from Hydro, or by consultants that are hired to provide assistance. MR. G. FILMON: Specifically , Mr.

Chairman, with respect to the Northern States Power Agreement, I wonder if the Minister could indicate what staff or consultants have been hired to assist him in negotiations on that? HON. W. PARASIUK: There were staff from Manitoba Hydro who were involved in that, staff who had been involved in some energy discussions beforeh and, and they were the Hydro people who have been involved. We had the staff from the Department of Ener gy. In terms of consultants, we have consultants involved . There were, I think, the consultants who had experience with U.S. eo-pricing patterns.

We had consultants who had knowledge of the economics of U.S. electrical utilities. They were specialists in that particular area. We didn't have specialists in that area, so we hired consultants from the United States to provide us information there. • MR. G. FILMON: I wonder if the Minister could be a little more specific as to which staffpersons primarily were involved, and which consultants were involved? HON. W. PARASIUK: John Arnason, Art Dary and Paul Thompson from Hydro. 2010

MR. G. FILMON: Art Dary and Paul Thompson? HON. W. PARASIUK: Mark Eliesen, Alan Puttee and Charles Kang from the department, plus a perso n who had been employed by the department before, Richard Eckert. We use a consulting company from the United States called Black and Ve itch. MR. G. FILMON: Any other consultants? HON. W. PARASIUK: We have other work that was done, general background work and that relates to the $250 ,000.00.

There was work done of a general background nature in a number of areas -American utilities, utility pricing practices, what's happening in the rest of Canada, what might be happening in the way of any type of lntertie patterns, lntertie work, keeping abreast of what's happening in Wisconsin. In Minnesota we have a number of small utilities because often it's not a matter of just dealing with one utility; you might have to deal with seven or eight. Sorry, I've just been told we have Price Wate rhouse, who has done specific work with respect to this particular contract.

But that background work is done with respect to utilities and with respect to energy­ intensiv e industries as well, including aluminum, and sometimes that background in formation is then particularly useful with respect to a particular project. This is something that the department picks up. In a sense, this is the type of R & D required for market development and there are costs of a more major nature that are in the capital side of MEA, because those are costs that can be capitalized against a particular project. MR. G.

FILMON: I wonder if the Minister could indicate what the current estimated cost of construction of Limestone is, and on what time frame of construction that would be based. HON. W. PARASIUK: The $3 billion estimate is a Manitoba Hydro estimate, with respect to a plant built for Manitoba Hydro needs, which would be a 1992 start-up date, be ginning in 1986 -construction. There is the impact of this sale, with respect to the whole question of reliability on the overall system that accelerates the start-up date for Limestone and that's being looked at in a very detailed manner by Hydro.

We expect to get a recommendation from them in the summer and we would then be making a decision on Limestone public. That would mean that if the construction date was moved ahead that would have a reduction in the cost of Limestone and .we would, of course, get that information following Hydro studies that are being conducted right now, and that's in as­ spent dollars. MR. G. FILMON: Does it include all the interim financing and capitalization of studies and all that? HON. W. PARASIUK: Ye s, it does. MR. G. FILMON: The second thing is, from rec ollection, Limestone is over 1,000 megawatts.

What's the size of Limestone? HON. W. PARASIUK: 1,275. MR. G. FILMON: I wonder if the Minister could indicate the size and the general cost projections of Conawapa? HON. W. PARASIUK: The megawatts of Conawapa are in the 1,300-1,400 range and I think the specifics of that would best be derived from Hydro at the meeting because the megawattage changes a bit, depending upon the exact location of the dam downstream and what the impacts of the forebays are. The estimated cost is $3.5 billion, if it was brought in service in 1994. MR. G. FILMON: Assuming about a six-year construction time? HON. W.

PARASIUK: About a six-year construction. lt might be a bit longer. lt would be a bit longer because there would have to be some preliminary work done. MR. G. FILMON: What other capital costs might be requi red in order to be able to satisfy the Northern States Power Agreement? I believe that the transmission lines are in place, but are any ·other adjustments to the system req uir ed or to the transmission facilities? HON. W. PARASIUK: No, there aren't any. MR. G.

FILMON: With respect to the Manitoba Energy Authority, they are responsible, as I understand it, for all of the negotia tions, whether they be with energy­ inten sive Industries or with the various utilities in the United States, all of the potential, major resource development projects that are under consideration today in Manitoba are coming under the Manitoba Energy Authority? HON. W.

PARASIUK: Ye s, the government of the day, I think in 1980, passed the legislation giving the Manitoba Energy Authority that mandate, That act came into effect July 2, 1980 and the first board of directors was appointed on March 18, 1981, and was chaired by Paul Jarvis, the then Deputy Minister of Energy and Mines. MR. G. FILMON: Is there any difference in the perso nnel or consultants who would have been utilized, for instance, for the Northern area or Western Area Power Authority negotiations, the WAPA group? HON. W.

PARASIUK: lt is basically the same team of departmental and hydro people with some probable changes in the consultants used, because of the different geographical area of the Western Area Power Administration. So we would be gett ing consultants specifically geared to that particular area. MR. G. FILMON: You have consultants who are specifically geared to that area, or is it still in the stage of seeking out consultants who might be able to have the expertise you're looking for? HON. W. PARASIUK: We don't have consultants right now. MR. G. FILMON: That comes later. 2011

FrtdQ. 15 June, 1884 HON. W PARASIUK: I don't know about this. I don't know if I will be around 12 years from now actually In any capacity. No, we don't have consultants on contract right now with respect to WA PA. MR. CHAIRMAN: Life is like a wheel. The Leader of the Opposition. MR. G. FILMON: Before the Chairman gets into his philosophy, we'll ask the question as to who are the specific staff and consultants who are doing the negotiations and inves tiga tions on the Alcoa arrangement. HON. W. PARASIUK: The Project Co-ordinator for Manitoba is Mr.

Eliesen, and the Project Co-ordinator for Alcoa is Dale Cockerill. Working with Mr. Elie sen are Alan Puttee, Charles Kong, Murray Fraser, Executive Vice-President of Hydro and the staff that he might bring with him, Woods Gordon Consulting Company, and outside legal counsel within the City of Winnipeg. MR. G. FILMON: Is there any reason why the outside legal counsel can't be named? HON. W. PARASIUK: No, not at all, Buchwald Asper . The firm of Buchwald Asper is providing legal counsel. MR. G. FILMON: Which of the legal counsels? HON. W. PARASIUK: Richard Shead and Yale Lerner. MR. G.

FILMON: Who would be the specific staff that Mr. Fraser would bring with him from Hydro on this? HON. W. PARASIUK: I can't give you the exact names. lt is people who deal in the area of energy economics within Hydro and financing. They have a staff, I think, in the order of about 10 there, and I'm not sure which ones he'd ... MR. G. FILMON: That's fine. I wonder if the Minister could just bring those names to committee then next year . HON. W. PARASIUK: Certainl y. MR. CHAIRMAN: 2.(g) -the Member for Lakeside. MR. H. ENNS: Mr. Chairman, just getting back to the NSP Agreement. lt includes in

Article 6 a provision for adverse water provisions. Reading from the contract: "Dur ing the contract period, in the event of adverse water conditions in our water, said NSP shall deliver to Manitoba upon request the maximum of 1.5 million megawatts of energy in any 12-month period to allow Manitoba to fulfil! its obligations under this agree ment." 1 asked the Minister a question on this a few days ago in the House. This clause should not and cannot be inter preted as a diversity agreement. Is that correct , Mr. Minister? HON. W. PARASIUK: That is not a diversity clause. MR. H.

ENNS: So it's just a safety clause . HON. W PARASIUK: lt's a safety clause. MR. H. ENNS: . . . that recognizes the vagaries of hydro generation of power. My question to the Minister is anticipatory. In the WAPA contract which we have yet to conclude or may conclude, is a similar clause being talked about, or are we looking at diversity agreements in tho se negotiations? HON. W. PARASIUK: We would be looking for the same type of safety clause.

We are not looking at diversity in that there are other avenues available to us to conclude diversity arrangements in different markets. lt's a matter of trying to pick the best market for firm sales and the best market for diversity exchanges. MR. CHAIRMAN: The Leader of the Opposition. MR. G. FILMON: Will the government be required by the National Energy Board or Manitoba Hydro, specifically , to indicate availability of di versity arrangements in order to gain approval for this sale? HON. W. PARASIUK: No. lt has to indicate that there is sufficient capacity and sufficient surplus. MR. CHAIRMAN: 2.(g)-pass.

The Member for Lakeside. MR. H. ENNS: Mr. Chairman, the question of diversity has always been attracted to Manitoba in the sense that it maximizes the efficiency of our generation plants. lt also enables our system to cope more easily and, quite frankly, with less capital outlay the very diverse energy demands In our climate and in our part of the country.

Is the Minister telling me that he has foreg one any advantages to be gained for writing In or negotiating diversity clauses in the NSP contract, and I take his answers to also include the WAPA proposed agreeme nt, because he believes that that diversity arrangement is still available to him under other arrangements such as the proposed MANDAN Program? HON. W. PARASIUK: Those options have not been closed.

We are pursuing the MANDAN option with respect to diversity , but a diversity arrangement could be possible that one could pursue a diversity arrangement with NSP as a backup to the MANDAN discussions and how things are proceeding there. I did meet with NSP rece ntly and we certainly talked abot,: the contingency of diversity discussions. We wan ted to make sure we had a good firm sale.

We do have presently a process under way for a fairly significant diversity exchange with MANDAN that is being slowed up in the courts in the United States over which we have no control, but we certai nly would pursue that and we certainly have the opportunity of pursuing a diversity exchange with NSP. We certai nly would look at that contingenc y, as well, with respect to longer­ term discussions with WAPA; but there are trade-offs that one makes between firm and diversity and, frankly, 2012

we would like to make sure that we get the best dollar return for Manitoba. So it's part of negotiating strategy that one uses. MR. H. ENNS: I suppose, Mr. Chairman, what I'm just trying to get at with the Minister is that the question of negotiating the best possible diversity arrangements would, of course, impact very substantially on the need and the decision for capital construction in Manitoba. I don't have it with me, but I have noted that the present Chairman of the Energy Authority, Mr.

Eliesen, had some very specific comments to make on this subject matter when dealing with a report provided to another administration, I believe Mr. Kierans, back in '73 that dealt rather specifically with this issue, in view of the very massive capital requirements involved in the construction of our major dams. I just want to put this firmly on the record, Mr. Chairman, through you to the Minister, that this I take it was not a consideration in the negotiations that have proceeded thus far with NSP and are not a consideration with the negotiations that are ongoing with the WAPA group? HON. W.

PARASIUK: Well, one has to take this all in context, Mr. Chairman. There is a MANDAN diversity that exists as part of the overall export-import strategy that is proceeding, we hope. There are some caveats because it was taking place in the United States. Mr. Eliesen, as undoubtedly the member might remembe r, was commenting on adequate pricing and adequate retu rn. I believe that he was commanded for those comments and his percept ions by a number of people at the time, possibly of all stripes.

Certainl y, he would have wanted to take those things into account and these particular sales that are being negotiated right now. I will check, because I don't have it right in front of me, to determine whether, in fact, there was any diversity exchange being planned in the proposed We stern Grid sale. but I'll check that as well. There are instances where it might be better to go with the firm sale, use another vehicle for diversit y, but I'll certainly check those. MR. H. ENNS: Just a little further information if the Min ister will, Mr. Cha irman, on the question of tranmission line capacity.

I know our Leader asked a general question on that just a little while ago. Where do we stand at the moment? The Minister indicated that current transmission lines are capable of handling Limestone should it come on stream without any extension to those facilities, does that then fill up the current capacity looking ahead to Conawapa, where do we stand with transmission line capacity coming from the North? HON. W. PARASIUK: I can give you just a general answer on that.

I think those are the type of detailed technical questions I think would be best dealt with directly by the Manitoba Hydro people at the committee. We do have sufficient capacity to provide for the NSP sale, existing capacity, and that's the capacity for Manitoba to Minneapolis. We have - (Interjection) - Pardon? Ye s, it's a 500 KV line, and again it would be better, I think, to have the officials in to the specifics of the technicalities. If Conawapa is brought on stream, then another major transmission line is required. MR. CHAIRMAN: 2.(g) -the Member for Lakeside. MR. H. ENNS: Mr.

Chairman, the Minister in his various statements and reports has used specific dollars in description of the sale. it's my unders tanding, of course, and I think most Manitobans' understand ing, that we have, of course, been doing business with NSP for a goodly number of years selling interruptible power. The figures that the Minister indicates when referring to the current NSP contract, I assume they are exclusive. We will now be selling firm power under this arrangement displacing the poorer-priced but, nonethless, fairly significant amounts of power that have flowed south.

Can the Minister give me some indication? What I'm after is I'm trying to recall, and I appreciate again the Minister may well choose, and it's appropriate that we should be directing these questions to Manitoba Hydro officials when they appear before us, but I would like ballpark figures if I can as to what were we selling per annum in the last several years of interruptible power that is being displaced by this firm contract? HON. W. PARASIUK: I can give you the details in terms of aggregate sale can be provided to the committee. We had a contract for diversity with NSP that ends in 1992.

That was for a smaller amount in the summertime, 200 megawatts for a summer period, and that was firm, 1 think, for a very short period of time in the summer, and 300 diversity. They can call on us, we can call on them. The specifics about what the aggregate sales were can be provided at the Hydro meetings. By having a firm sale that doesn't preclude having interruptible sales if it's to our benefit to either other Minnesota utilities or NSP itself or to other parties that have interties or some type of hookups with us.

The line has a capacity of more than double the 500 megawatts so one has the fle xibility in there. MR. H. GRAHAM: Mr. Chairman, just to recoup. The Minister indicated that the line has that capacity to add the 500, in addition to the diversity. HON. W. PARASIUK: The Diversity Agreement ends in 1992. There's a firm power sale that comes on stream in 1993. That line has the capacity to carry the firm power sale from Manitoba to Minneapolis, but it also has within it, capacity for other types of sales. MR. H. GRAHAM: The Minister also indicated that that line was from the Manitoba border to Mlnneapolis.

Is that right? HON. W. PARASIUK: Ye s. lt starts actually at Dorsey. lt goes to the Manitoba border -that's the Manitoba sect ion -and from the Manitoba border to Minneapolis is Northern States Power secti on. MR. H. GRAHAM: Mr. Chairman, does the existing line from the Nelson to Dorsey have the capacity to carry another 500? HON. W. PARASIUK: Ye s, it does. lt has the capacity to carry the entire output of Limestone. MR. CHAIRMAN: 2.(g) -the Member for Lakeside. 2013

Fridar. 15 June, 1884 MR. H. ENNS: Just before we leave, I appreciate the Mini ster's response that the line has the capacity and there is nothing inherent in the agreement that we're considering that precludes ongoing sales of other types of power, providing the mutual benefit to buyer and seller. Would it be a reasonable comment to say that it likely precludes those sales of power, with a firm contract in place? HON. W PARASIUK: No, not at all. Five hundred megawatts is just a small portion of a utility that probably has in the order of 8,000 megawatts.

The Min nesota economy has been doing quite well and I would expect that they will have certain types of requirements on them. From 1993 on, we certainly have the opportunity of selling through other forms of sales, either spot sales or interruptable sales or looking at diversity and we certainly talked about that as an option for future discussions.

Those options are all open and before us, but we also have a numb er of other discussions taking place with other utilities and it's a matter of trying to, in a sense, maximize the returns on the basis of all the discussions and that's the process that we're following right now. MR. H. ENNS: I won't attempt to fully appreciate the details of the various formulas arrived at that were included in the material tabled by the Min ister the other day in the House.

But the one specific item that is perhaps a little easier to deal with at this stage is the fact that, in terms of costing and pricing, the figure of 80 percent is used relative to American alternative sources of power, thermal coal-fired agreements. I take it that was a major part of the negotiations that took place, as to whether it should be 70 or 80 or 90 or 50? HON. W. PARASIUK: Yes, the percentage is something that people look at, tying a contract, if you're the producer of hydro-electricity, to someone else's costs that have been escalating and are going to escalate tremendously.

Every piece of material ind icates that the Americans just don't have too many options for the production of electricity. There's nuclear power, which is causing them tremendous headaches. The States of Minn esota and Wisconsin aren't allowing nuclear to be built, so that even if one wanted to do so, there's a whole very long planning process involved with nuclear. The Supreme Court has ruled that the states have the power to prevent a nuclear plant from being started unless people can prove satisfactorally that they can dispose of the wastes.

That was challenged all the way up to the Supreme Court and the states were given that power. Thermal plants are costing a lot because of the pollution control equipment and there is the whole problem of, again, demands on coal. Indeed, the acid rain question was one that was debated at the Governors' Conference that the Premier and I attended.

There was a debate between two of the governors regarding acid rain, with the Governor for Wisconsin saying, "I wish we could all buy Manitoba power, but we can't, i.e., it's limited." So I think we're in a very good bargaining position to get a very good price for Manitoba, while at the same time, ensuring that we are meeting our own needs and our future needs in the most economical way. One then looks at what these percentages are and one works them up and that's part of the negotiating process.

I'll check through the records to see whether, in fact, there were attempts to try and do this with respect to the Grid negotiations, but I kno w that the cost differentials for Alberta and Saskatchewan coal are so low in comparison to Manitoba's pricing that it might not have been a practical way to proceed; but there the cost differentials are pretty significant between ourselves and utilities to the south of us and it is a more practical way of looking at this. MR. H. ENNS: Mr.

Chairman, I appreciate that of course many of these questions relate to the same Minister at Public Utilities Committee meeting at Hydro when Hydro appears before us, but it was of interest for us to ask some of these questions at this time and also to have the benefit of the time between now and the Public Utilities Committee meets to research some of the answers that are being provided. In the system today - and this perhaps Is one of those questions that Is more properly related to Hydro - what Is your current average surplus available to us, in megawatts? HON.

W PARASIUK: The surplus - and again, I'm going to use ball parks because I think the specifics would be best left to the Manitoba Hydro discussion at the Public Utilities Committee. We aren't spilling water. We are selling all that is produced on interruptible basis and it's in the order, I think, of 1,10 0-1,200 megawatts. MR. H. ENNS: 1, 100 to 1, 200 megawatts could be described as a surplus today? HON. W PARASIUK: Yes, depending upon water flows, taking in the whole question of reliability.

That's why you start getting into a fairly technical discussion when one starts looking at questions of reliability for a hydro system. I think it would be best to have that type of discussion take place at the committee. MR. H. ENNS: Just appreciating what the Minister has said in terms of fluctuations with respect to plans, the Mini ster earlier ind icated to the committee that, say, the capacity of Limestone is in the order of 1,15 0, 1,200, what does the Energy Authority, who is doing the negotiating, count on firm coming out of a plant of that size?

Is it 700, is it 800 megawatts, if the Minister understands my question? HON. W PARASIUK: Yes. MR. H. ENNS: We rate these plants at 1,000 megawatts or 1,2 00 megawatts, but if we are making firm contractual agreements, surely we have to more realistically take in account adverse water conditions. So a plant like Limestone's actual or firm production may be scaled down to 700 or 800 megawatts? That's my question. HON. W. PARASIUK: I think this is again a question that would at best be asked in Public Utilities Committee.

But I think Manitoba Hydro's experience has been in the order of about 60 to 65 percent capacity. 2014

FridaJ, 15 June, 1884 MR. CHAIRMAN: The Member for Virden. MR. H. GRAHAM: Mr. Chairman, I believe that the thinking of Manitoba Hydro has probably become a little more conservative with regard to capacity of their plants because of maybe some unprecedented low water levels in the last two or three years. Is that correct? HON. W. PARASIUK: I think again that we could deal with that when the Manitoba Hydro comes before the Public Utilities Committee.

I know that they have taken into account the last two years of experience, the last year of experience, certainly the last three years of experience, and again, they've got averages going back for quite some long time in terms of water flows. MR. CHAIRMAN: Would the members want to pass 2.(

g) before we break up? The time being 12: 30, committee rise. SUPPLY - CROWN INVESTMENTS MR. CHAIRMAN, R Eyler: Committee come to order. We are considering the Estimates of the Department of Crown Investments. Does the Minister have an opening statement? The Honourable Min ister. HON. V.

SCHROEDER: Crown Investments is one of the newer departments in the structure of the government. lt was created to enhance the government's administration of the commercial Crown corporations, and to provide a focal point for the analysis of issues and opportunities pertaining to the Crown corporation sector. lt should be noted that when we refer to the Crown corporate sector we are speaking of 19 Crown corporations with assets in excess of $4 billion, annual revenue in excess of $1.5 billion, and that sector employs over 12,000 people.

Our government recognizes the enormous responsibility which the citizens of Manitoba have entrusted to us, and we have acted to ensure that we are doing everything possible to safeguard and enhance tho se inv estments. The establishment of this department is but one step we have taken to strengthen financial and operational accountability of our corporations to government. Manitoba has been a front runner in this area of public administration of taxpayers' investments.

As you are aware, the Federal Government has only within the past two months introduced legislation to create a departmental structure to assist in the overview and administration of its Crown corporations. Once again the west is leading the way. In the past year my department has undertaken a numb er of major init iativ es. These include the establishment of a conflict of interest policy and guidelines for directors- the corporations were directed to implement these policies last fall; and to establish guide lines which respect these same principles for the officers and employees of the Crown corporations.

The preparation of guidelines of business conduct which, among other things, say that Crown corporations must operate in obedience to the Jaws of Manitoba, of Canada and the laws of the jurisdiction in which they are operating, even if that jurisdiction is a foreign country. The completion of the review of alternatives to optimize the long-term viability of the Manfor complex is the third area, third initiative. This successfully completed work resulted in a $40 million investment at The Pas - (I nterjection) - lt may well be a boring speech, Mr. Chairman, but it i5 a very important speech.

This is the one speech a year I get to make opening the Estimates of the Department of Crown Investments, the only time I get to explain in public what we are doing in this department which is a department not very many people are even aware exists, but it is fundamental to the operations of those 19 Crown corporations. That review of the alternatives at Manfor resulted in, as people in the Legislature know, a $40 million investment at The Pas. We believe that is a very important investment for that particular area of the province.

We expect to do qu ite well with that investment to modernize that operation and to turn it around. ·No. 4 are the continuing efforts to encourage an in vestor to come forward to unde rtake a major development in potash; No. 5, the creation of the Manitoba Oil and Gas Corporation and the staffing of its senior management, an important achievement; No. 6, the improvement in budgeting procedures and an intensive review of Crown corporations' plans. As you know, the department has a very small staff complement, and the work that I have mentioned represents, I believe, a major accomplishment for that staff.

In the 1984-85 fiscal year our Estimates call for the expenditure of $650,000 with a permanent staffing complement of seven staff years, in addition to the Deputy Minister's position. This compares to last year's approved expenditu res of $632,500, a proposed increase of 1. 03 percent - (Interjection) - I'm not sure about that. I don't believe there were any new staff years approved, but I'll get onto that.

I think it bears repeating this year that the focus for Crown corporation activities is the Economic and Resource Investment Committee of Cabinet and it is this body which determines what are the appropriate and applicable policies and strategies for the government to institute with respect to the Crown sector. As in the past, individu al Ministers have been assigned responsibility for individual Crown corporations and they ensure that the corporations operate efficiently and effectively.

In addition, the Minister responsible Is accountable to the public through the Legislature for the operations of their assigned corporation. These Mini sters also represent the corporations at the Public Utilities Comm ittee or the Commit tee of Economic Development. In the next year, my department has several major activities and I will touch on these briefly:

(1) Assisting the government to clarify its expectations with respect to the missions, functions and performances of these publicly owned enterprises. These matters should be periodically reviewed to ensure that they are consistent with the time and environment 2015

Friday, 15 June, 11M in which we live. Departmental and corporate officials are working together and assisting the government to update and de-mystify the missions which may have been left over from previous administrations. We are endeavouring to identify expectations that are desirable, realistic and achievable.

(2) We believe that the public has a right to keep informed about important developments in the Crown corporations. Once again, staff and corporate officials are working on ways to improve commun ications to the public.

(3) Streamlining and improving the information flow which is essential to timely decision-making. As we all appreciate opportunity knocks once and softly, and when opportunities arise tim e is needed to deal effectively with them. Consequen tly, we recognize information that flows to decision makers at all levels must be timely and complete in order to avoid time consuming re dund antcy of effort. Here again, imp rovements in information flows are being worked out in a joint effort by departmental corporate officials.

(4) Our department is also involved in assisting corporation officials to rectify problems which have been brought about by economic conditions and adverse circumstances. Our work at Manfor and Flyer are examples of that, and even McKenzie. While some of the Crown corporations are very large and employ sophisticated planning tech niques, others are less able to attract and retain the expertise necessary to gain the benefits which may be derived from good, long-range planning.

Officials of Crown investments are working with corporate staff to propagate these techniques and to encour age a sharing of ideas and methods throughout these Crown owned enterprises. As we all know, some of those enterprises are very small indeed and need outside assistance. Protection of the taxpayers assets in the corporate sector requires good administration at all levels.

The government has been assisting in this task by competent managers, public -spirited directors, chai rpersons and department staff and I would like, at this time, to express my government's thanks to these people for the job they have done and are continuing to do. In the year ahead the department will assist in ascer taining the strategies which will permit Flyer Industries to make a positive economic contribution to the province. We'll work in co-operation with management to assure that A.E. McKenzie Co.

Ltd. returns to profitability and will assist in the appointment of further worker representatives to the Board of Directors of several more corporations. Crown Investments will continue to develop guidelines and processes which will permit a close monitoring of all corporate development act ivities of the corporations and will continue to facilitate the organization and implementation of strategic planning within the Crown sectors. MR. CHAIRMAN: The Member for Turtle Mountain. MR. B. RANSOM: Mr. Chairman, I don't really have a statement, as such, to make in response to the Minister's opening statement.

I think if he would like to bring his staff in, we'll just simply get into asking some more specific questions. MR. CHAIRMAN: The Minister may bring his staff in. HON. V. SCHROEDER: They were on their way a few minutes ago. If the member has questions, maybe I could start off. MR. B. RANSOM: First of all, could the Minister provide us with the names of these 19 Crown corporations? 1 believe he said 19 that are sort of shepherded by Crown Investments.

And can he tell me whether there is a Crown corporation, any Crown corporation, that functions in the marketplace that is making a profit at the moment, within these 19? HON. V. SCHROEDER: Just on that last question, the first company that comes to mind obviously is the Manitoba Public Insurance Corporation which is in competition with other corporations in the general insurance business and it certai nly makes a tidy profit. As we go through them, maybe we can . . . There's A. E.

McKenzie Ltd. which we hope to be turning around this year; Channel Area Loggers Ltd.; the Community Economic Development Fund; Ayer Industries Ltd.; Leaf Rapids Town Properties Ltd.- I'm not sure whether or not that company is earning a profit; the Liquor Control Commis sion which isn't functioning in a competitive sector but certai nly is very profitable; Man itoba Agricultural Cred it Corpora tion; Man itoba Crop Ins urance Corporation; Manitob a Data Services; Manitoba Development Corporation; Manitoba Forestry Resou rces Ltd.; Manitoba Hydro-Electric Board ; Manitoba Mineral Resources Ltd.; Manitoba Oil and Gas Corpora tion; Mani toba Public In surance Corporation; Manitoba Telephone System; Manitoba Tr ading Corpora tion; Mo ose Lake Loggers Ltd .; Tantalum Mining Corporation; Trout Lake Mine; Venture Manitoba Tours Ltd.

I believe those are the corporations and agencies of government that are dealt with by this department. MR. B. RANSOM: Does the Department of Crown Investments give what might be called "directives" to Crown corporations with respect to the sort of capital investments that they might be making, where the investment might be based on some goal that the government has, in terms of job creat ion, as opposed to how the corporation might see the money best flowing in terms of the financial security of the corpora tion?

Does the corporation give di rectives to Crown corporations with respect to personnel management, for instance? Are Crown corporations told that it's not acceptable to lay people off? Are Crown corpora tions told that they must keep their settlements within a certain range? I'm interested in how this Crown In vestments Department infri nges on what would normally have been considered the responsibilities of individual Crown corporations. HON. V. SCHROEDER: Mr.

Chairman, each Crown corporation, prior to while it is planning its year, does • submit to the department its proposed Capital Expenditures for the upcoming year. Those Capital Expenditures are reviewed by the Economic Resources Investment Comm ittee of Cabinet with input, of course, from staff from Crown Investments and the Capital Budgets are approved in that fashion. 2016

Friday, 15 June, 1884 Corporations are being asked to provide us with some estimates ranging ahead for five years or so, to give us an idea as to what is coming down the line in order that we can better plan the capital requir ements for the government as a whole.

We feel that there has to be some co-ordination of that when the amounts of money are pretty significant in terms of the capital investment and if, for example, all of the Crowns decided in a particular year , independent of each other, to do a significant amount of capital investment, that would have an imp act possibly on our ability to get the money. lt would also have an impact on the economy!

We believe that we should at least be taking a look at those things and saying, in order to even things out, we might ask people to slow down on some investment or speed up on others so that we would get a little bit of a more even approach to that sort of thing. We are, as well, asking the Crown corporations to discuss with us, at least to some extent, the issues of salaries.

This year, we have asked Crown corporations, in general, and we're always open to further discussions, to deal with specific aberrations or specific cases, not to increase their operat ing expenditures by more than 3 percent from the previous year.

Now that is not a request to keep wages at 3 percent, although obviously it's going to have an impact on the ability of the corporation to provide wage increases, it may allow them to have larger increases if they have other areas where they could cut costs, it may mean that they have less ability, they may not have enough money to provide the 3 percent with respect to the wages.

We have also asked the Crowns to bargain, if possible, and we recogniz e that sometimes it's not possible, but if possible on the basis that people get somewhat similar dollar increases throughout the corporation, which means smaller percentage increases higher up and greater percentage increases lower down. We are not saying that is something that has to be done all the time, we recognize that, If you do that over a period of time, you could run into some difficul ty.

On the other hand, we do believe that is the appropriate policy at a time when we are asking people in the public sector to accept wage increases that are less than the rate of inflation. In that kind of a case, we believe that we should be taking special notice of those who are at the lower end of the scale. MR. B. RANSOM: With respect to wages and the department's involvement in looking at the Manfor operation, what conclusion was arrived at in terms of the wage structure there?

I ask that relative, first of all, the fact that the corporation is losing almost $25 million this year, and that it has been my understanding that the wage structure at Manfor is really not related to the company's ability to generate revenue here, but is related to the wage scale that exists where there are forests that are infinitely more productive than the forest that this operation is based upon. HON. V. SCHROEDER: Mr. Chairman, I think that's a very good example of an area where in the past the contr acts have been geared to the west coast settlements.

I think that's pretty difficult to justify if we don't have the same conditions as the west coast does. I don't believe we do have the same conditions, although I understand that a lot of the companies on the west coast were losing a considerable amount of money over this particular period. I am told that the union is now looking at, rather than west coast, the eastern wages. I don't know how that impacts. Certainly as I understand it, there were some settlements at no increase on the west coast or at least there was talk of that a few months ago.

I think it's pretty difficult to justify wage increases to people earning that kind of money when we are losing the kind of money we are right now, and when we're looking at further public investments in that corporation. I think that employees of public Crown corporations, public corporations tha t are involved in general industrial pursuits in competition with others must recognize that we have to, in the long