Manitoba Hansard — 25 May 2000 (Sitting 34A, 37th Legislature, 1st Session)

37-1-34a

Manitoba — Debates (Hansard)

First Session- Thirty-Seventh Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS Official Report (Hansard) Published under the authority of The Honourable George Hickes Speaker Vol. L No. 34A - 10 a.m., Thursday, May 25, 2000 ISSN 0542-5492

Member AGLUGUB, Cris ALLAN, Nancy ASHTON, Steve, Hon. ASPER, Linda BARRETI, Becky, Hon. CALDWELL, Drew, Hon. CERILLI, Marianne CHOMIAK, Dave, Hon. CUMMINGS, Glen DACQUA Y, Louise DERKACH, Leonard DEWAR, Gregory DOER, Gary, Hon. DRIEDGER, Myrna DYCK, Peter ENNS, Harry FAURSCHOU, David FILMON, Gary FRIESEN, Jean, Hon. GERRARD, Jon, Hon. GILLES HAMMER, Harold HEL WER, Edward HICKES, George JENNISSEN, Gerard KORZENIOWSKI, Bonnie LATHLIN, Oscar, Hon. LAURENDEAU, Marcel LEMIEUX, Ron, Hon. LOEWEN, John MACKINTOSH, Gord, Hon. MAGUIRE, Larry MALOWA Y, Jim MARTINDALE, Doug McGIFFORD, Diane, Hon. MIHYCHUK, MaryAnn, Hon.

MITCHELSON, Bonnie NEVAKSHONOFF, Tom PENNER, Jack PENNER, Jim PITURA, Frank PRAZNIK, Darren REID, Daryl REIMER, Jack ROBINSON, Eric, Hon. ROCAN, Denis RONDEAU, Jim SALE, Tim, Hon. SANTOS, Conrad SCHELLENBERG, Harry SCHULER, Ron SELINGER, Greg, Hon. SMITH, Joy SMITH, Scott STEFANSON, Eric STRUTHERS, Stan TWEED, Mervin WOWCHUK, Rosann, Hon. MANITOBA LEGISLATIVE ASSEMBLY Thirty-Seventh Legislature Constituency The Maples St. Vital Thompson Riel Inkster Brandon East Radisson Kildonan Ste.

Rose Seine River Russell Selkirk Concordia Charleswood Pembina Lakeside Portage Ia Prairie Tuxedo Wolsele)' River Heights Minnedosa Gimli Point Douglas Flin Flon St. James The Pas St. Norbert La Verendrye Fort Whyte St. Johns Arthur-Virden Elmwood Burrows Lord Roberts Minto River East Interlake Emerson Steinbach Morris Lac du Bonnet Transcona Southdale Rupertslana Carman AssinibOia Fort Rouge Wellington Rossmere Springfield St. Boniface Fort Garry Brandon West Kirkfield Park Dauphin-Rob lin Turtle Mountain Swan River Political Affiliation N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. P.C. P.C. P.C.

N.D.P. N.D.P. P.C. P.C. P.C. P.C. P.C. N.D.P. Lib. P.C. P.C. N.D.P. N.D.P. N.D.P. N.D.P. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P. N.D.P. N.D.P. N.D.P. P.C. N.D.P. P.C. P.C. P.C. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P. N.D.P. N.D.P. N.D.P. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P.

1451 LEGISL ATIVE ASSEMBLY OF MANITOBA Thursday, May 25. 2000 The House met at 10 a.m. PRAYERS Introduction of Guests Mr. Speaker: Prior to Orders of the Day, I would like to draw the attention of all honourable members to the gallery where we have with us this morning, fr om the Beaumont School, 29 Grade 5 students under the direction of Ms. Melissa Klima ck. This school is located in the constituency of the Honourable Member fo r Charleswood (Mrs. Driedger). On behalf of all honourable members. I welcome you here today . ORDERS OF THE DAY Hon. Gord Mackintosh (Government House Leader): Mr.

Speaker, before moving the Supply motion, there are two matters that will require leave. First is that the Estimates of Industry, Trade and Mines will resume on Monday and that by leave the Estimates for the Department of Agriculture will begin in the Chamber, if you could canvass the House to determine if there is leave fo r that substitution today. Mr. Speaker: Is there leave to switch Industry, Trade and Mines, which will resume Monday, to Agriculture fo r today? [Agreed] Mr. Mackintosh: The second matter requiring leave, Mr.

Speaker-and this really reflects a glitch, I think, in the rules that we can deal with at some point, but when the Committee of Supply finishes at noon today, if it will simply recess and reconvene without further notice after Routine Proceedings on Thursdays until further notice. So, if you could canvass the House to determine if there is leave fo r Commit tee of Supply to recess at noon and reconvene after Routine Proceedings on Thursdays. Mr.

Speaker: Is there leave to recess at 12 noon and reconvene at 1 :30 p.m. for the afternoon until fu rther notice? [interjection] I just want to clarif y that it will be after Routine Proceedings. Agreed? [Agreed] Mr. Mackintosh: Mr. Speaker, I move, seconded by the Minister of Finance (Mr. Selinger), 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 agreed to. "'(10:20) COMMITTEE OF SUPPLY (Concurrent Sections) FINANCE Mr. Chairperson (Harry Schellenberg): Good morning.

Would the Committee of Supply please come to order. The Committee will be resuming considera tion of the Estimates of the Department of Finance. When the Committee last sat. it had been considering item 4. Taxation (

a) Management and Research

(1) Salaries and Employee Benefits, on page 82, which reads $1,038,700. Shall the item pass? Mr. Harold Gilleshammer (Acting Leader of the Official Opposition): I would just like to put on the record that there has been some misunderstanding, I guess, between our House Leader and the Government House Leader about the order of Estimates and that we anticipated another department would be in here this morning and that we are hopefully going to be able to have our Fin ance critic here in due course. In the meantime, we will proceed with some questions.

At this time, I would like to just revert to page 63, if we can, in the Supplementary Inf ormation fo r Legislative Review. Mr. Chairperson: Is there leave to revert to 7.3.(f)? [Agreed]

14 52 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 Mr. Gilleshammer: Mr. Chairman, on the Enterprise System Management, which was previously titled Better Methods, I wonder if the Minister could tell us what substantial changes have taken place there other than a change in name. Hon. Greg Selinger (Minister of Finance): do not believe there have been any substantive changes. As you know, it was brought on stream April of '99. It is really trying to implement it and achieve its full functionality.

As you recall from the last meeting, we have recently ordered the upgrade on the software which we are endeavouring to have installed before Christmas, which, we hope, will then allow us to have even greater functionality with respect to that system. Mr. Gilleshammer: On page 63, it indicates there are four full-time equivalents who will be working in this area. I wonder if the Minister could indicate who those people are. Mr. Selinger: I am informed that those four FTEs are essentially data base specialists. Mr. Gilleshammer: The expenditure line there shows considerable expenditures.

Can you indicate any breakdown of those expenditures for the Commit tee? Mr. Selinger: I also believe this was indicated last time. The Comptroller is working on a breakdown of those expenditures. and he hopes to have them available soon. Mr. Gilleshammer: So am given to understand that a figure has been put in the Budget for expenditures for the Enterprise System, but the money has not yet been allocated? Mr. Selinger: The amount of money that was put in the Budget was to handle both operational requirements and consulting requirements.

The proportions of that money allocated to those various functions are being determined now with response back to the comptroller and then made available, if you wish, to yourselves and other members. But it was really an anempt to ensure that there were resources there to allow the system to function effectively. Mr. Gilleshammer: Given that response, then there are no capital requirements that will be drawn from this expenditure? Mr. Selinger: Yes, this is simply operational money. The capital is identified later on. Mr.

Gilleshammer: The consulting then, this will be tendered in some fashion to give, presumably, Manitoba companies an opportunity to bid on this? Mr. Selinger: The contract for the upgrade of the SAP system was tendered, and currently those bids are being reviewed. Mr. Gilleshammer: Does this replace any of the existing staff that have been employed by the Manitoba Government over the last number of years? Mr.

Selinger: All the staff for this project have been on secondment from other departments, and as the project settles down some will remain to work on the project and some will return to their original stations. Mr. Gilleshammer: So there has been no significant staff changes in this area then, that the people who have been seconded will remain or return to their previous jobs within government with the departments that they were previously employed by. Mr. Selinger: Yes. Mr. John Loewen (Fort Whyte): Mr.

Chairman, page 62 talks about configuring and testing Finance, Procurement, Human Resources and Payroll processes/modules. Could the Minister tell us which modules are, in fact, in use right now and an implementation

schedule for the rest of the modules? Mr. Selinger: I am informed that parts of all of those modules are, in fact, being used while others are not being tapped yet for their functionality. The specifics on that we would

May 25, 2000 LEGISLATIVE ASSE MBLY OF MANITOBA 14 53 have to take as notice and provide you with the detailed information. Mr. Loewen: Okay, well, I would appreciate seeing that information as soon as possible, and maybe if that could be in conjunction with the breakdown of the $8.5 million, that would certainly be appreciated. I guess with specific reference to the payroll processing module, is that module functional today? Mr. Selinger: Yes. That is one you would have some interest in, as I recall. Mr.

Loewen: Just on that note, I wonder if there has been an analysis done on the cost of producing the payroll, including the capital cost for this module by the province. Mr. Selinger: Somehow I thought you would go there. When you say analysis here, I am assuming you are looking at in-sourcing versus out-sourc ing analysis. Is that what you are alluding to? Mr. Loewen: I would hope that the Minister would be able to tell us what the ali-in costs are for this payroll module, including the purchase of the module, including the software upgrading costs that would have had to be undertaken.

It is my understanding that the Province of Manitoba was the first Canadian payroll application for SAP, and I guess I would be interested in what the total cost would be in that area. Mr. Selinger: In response to the question from the Member for Fort Whyte, the costs were done on a global basis. They were not broken out by module. Also, we are the first public sector organization in Canada to do the payroll, but the payroll has been implemented by other organizations within the country. Mr.

Loewen: Well, just for the record, and understanding my background in the payroll business, maybe the Minister could get clarification on that because certainly my understanding from previous history in the business is that this was the first application, the first Canadian application, period. So, presumably, in the request for proposal, there was information if there were other Canadian installations.

My understanding was that the previous system, the cost to the Government was approximately 15 cents to 17 cents per item, was a number that had been quoted previously in terms of the cost of issuing a payment for a payroll payment. I am just curious whether there had been a reduction in that cost, an increase in that cost, or whether, in fact, the Minister can tell us anything about a cost comparison between the old system and the new system. Mr. Selinger: To date, there has been no comparative cost analysis done between the old and new system. Mr.

Loewen: I would ask the Minister, in the interests of proper cost control, would he be able to get from his department a comparison of the all-in cost of the current system and compare that to the previous cost to see if there has been an increase in the cost? Perhaps at the same time he could ask his department to see if there are less expensive alternatives out there. Mr. Selinger: My officials are prepared to take a look and see what they can develop in terms of analysis there. It would take some time and energy to do that.

It is not something they can just pull up at their fingertips, so we will have to take that as notice. They inform me that part of the issue there would be an apples-to-apples comparison because of the different roles that the systems play. The legacy system was regardless of the cost, apparently becoming quite outdated, and the move to the new SAP system, or the Better Methods Initiative, was one that was done on a more global basis throughout the Government, as I understand it.

I understand that it was also driven, in part, by the Y2K requirements, that regardless of the cost-per -transacti on issue, they had to upgrade to meet Y2K requirements, and so the Better Methods Initiative was part of that larger thrust to make our systems compliant to meet that threat which was successfully dealt with by the Jack of negative reaction on January 1, 2000. It

1454 LEGI SLATIVE ASSEMBLY OF MANITOBA May 25, 2000 was part of that larger context that a lot of these new systems were brought into play. * (10 :30) Mr. Loewen: The Min ister mentioned that part of the $8.5 million that is being budgeted fo r this area fo r this work is going to be spent on consultants and systems firms who upgrade, understanding -and he has already indica ted that there are presently some responses to RFPs that are being analyzed. Can he indica te what outside firms are presently providing ongoing consulting and operational support to SAP? Mr.

Selinger: In the past, the three firms that have been consulting on the SAP system, as indica ted to me by my officials, are the SAP organization itself , Deloitte and Touche and Hewlett-Packard. Mr. Loewen: In terms of those consultants, does SAP have staff located in Win nipeg or in Manitoba? Mr. Selinger: Not to our knowledge. Mr. Loewen: So, the consulting staff from SAP are, I gather, fr om outside of the province flying in to provide their services to the Government, and there is no commitment to establish an office in Manitoba. Mr.

Selinger: We are not aware of any commitment to establish an of fice here, but they are providing consulting services, and they do have to fly in occasiona lly to do that . Mr. Loewen: Would part of the trai ning and upgrading fo r this system involve expenditures of staff from the Mini ster's department travelling to SAP training locations? Mr. Selinger: Yes, that has occurred. Mr.

Loewen: Could the Min ister advise us where that training location is, and has a budget been allocated fo r the amount of training and travel expenses that were required for people to go out of province to get the proper trai ning fo r SAP? Mr. Selinger: Trai ning is included, in part, in the number that you see bef ore you here, and they will, as I indi cated earlier, endeavour to break that down fo r you. The location fo r the training depends in part on the number of people that require the training.

Some leave the province to go to a training site, and that will be identified fo r you as part of this response. Sometimes the SAP people bring their trainers here to train staff , so we will have to take that as notice and give you more detai ls on the specifics of what is going on there. Mr. Loewen: On the same inf ormation, you may have to get back to me on this as well, but the Deloit te and Touche support that has been provided, I know that Deloitte and Touche certai nly has an audit department in Winnipeg.

Do the staf f from Deloit te and Touche who are provi ding consulting service from SAP reside in the Winnipeg office? Mr. Selinger: I am inf ormed that most of the IT consulting through Deloit te and Touche is also from outside of our jurisdiction. Mr. Loewen: Well, just fo r the record, fo r the Finance Minis ter's, I guess, future ref erence, having spent 25 years with Deloitte and Touche as our auditors, I am sure they would appreciate, and I am sure the original fo under of the firm, Mr. Touche, would appreciate his name being pronounced right. It is Deloitte and Touche , just fo r fu ture refer ence.

Has there been any consulting provided by the local Deloitte and Touche of fice with regard to the project? Mr. Selinger: I am inf ormed, in terms of the consulting provided through Deloitte and Touche, that one person has been involved out of the Winn ipeg of fice and the others have come from outside, primarily fr om the Calgary location. Mr. Loewen: I would ask: The one person that is involved fr om Winnip eg, are they also involved in the audit side of the business of Deloit te and Touche? Mr. Selinger: The local person from that firm was invol ved in the SAP implem entation, is not

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 1455 currently involved, and, no, they were not fr om the audit side of the firm. Mr. Loewen: Could the Minister explain Hewlett-Packard's role in the project? Are they doing more than providing hardware and hardware consultation? Mr. Selinger: I am inf ormed that that firm did do an assessment in the year gone past and that they looked at how to make the entire system more ef fici ent, including hardware, but also processes.

Their objective was to reduce the reliance on outside expertise to operate the system and look at ways that it could be more managed fr om within internal resources of the Government. * (1 0:40) Mr. Loewen: With regard to Hewlett-Packard and their role in particular in the hardware consulting side of it, can the Minis ter indi cate which of these systems will operate on mainf rame computers and which of these systems will operate on microcomputers? Mr. Selinger: The entire system is clie nt-server based. So they use servers, they do not use mainfra mes.

The printing portion is done through ISM, because apparently they have the printing capacity that allows high-speed, high volume printing. So that is out-sourced, in eff ect. Mr. Loewen: Well, maybe I could ask the Minis ter to explain that in a little more detai l. Client-server, I guess, within the industry has a number of diff erent varia tions. Is the Minis ter saying that all of the processing is done on microcomputers, or is the server a mainframe that has microcomputers connected to it? I guess what I am looking fo r is the actual processing itself .

Is that done on a mainf rame computer or is it all done on micros? Mr. Selinger: I think it is somewhat in between a mainframe computer and doing it right on the microcomputer itself . The server itself is kind of an intermediate mechanism. As you know, in the industry, we are going through dif fe rent evolutions here. Originally, it was all mainframe-driven, and then there was a big move to desktop that we discussed in the '90s, with respect to the City of Winnipeg. Now there seems to be an evolution away fr om having all the computing capacity right on the desktop back to a new generation of servers.

They are not mainframes, but they are servers, and dif fe rent desktop fac ili ties attached to those then use them for ef ficiency purposes. Mr. Loewen: Can the Minister tell us where the client servers are housed? Are they also housed at ISM, simila r to the printing? Mr. Selinger: Yes, the main servers are in public domain in the Norquay Building. I am being a little careful here. There is some backup capacity in confidential locations. Mr.

Loewen: I would ask the Mini ster, given that most of this work was pre viously done by Manitoba Data Services, which was sold to ISM and their of fice set up north of Portage A venue, it would seem that a lot of this work has come away fr om ISM and gone directly in-house to the Government's department. Can he give us an mdication on what the ramifications have been to ISM in terms of losing this work? Mr. Selinger: There has been a shift from using ISM fac ilities to in-house server capacity.

We were informed that it was not a signific ant proportion of the work that ISM was doing and had marginal impact on their operations but was able to be done more effici ently through our system. The only thing that seems to be continuing to be handled through the ISM is the printing component. I am informed that that has occurred over the last year, that transition, as the SAP system became functional . Mr.

Loewen: I would ask the Minister then, is this an inJication of sort of the direction that this department !s heading back into, taking control of its own data processing in-house as opposed to using, I guess, what in the industry would be ref erred to as out-sourcing, and will the eventual outcome of this move see that result in a reincarna tion or rebirth of MDS? Mr. Selinger: I am inf ormed that the location of the processing capacity is being driven mostly by technological considerations, and right now

1456 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 the office of Inf onnation Technology is assessing the appropriate mix of in- and out sourcing, but there is no specific vision of recreating an organization like MDS. It is really being driven by the ability to provide a cost eff ective service with the best technology in a way that delivers the best product. Mr. Gilleshammer: The Minister ref erenced work that was done fo r purposes of Y2K compliance. Can he indica te if there were any issues around that that were surprises fo r the Minister and the Government? Mr.

Selinger: The common reaction to the Y2K experience was that it was, as far as I can tell, an unqualified success. There did not seem to be any substantive issues that arose as a result of that. I am not aware of any negative impacts that we experienced in the immedia te switch-over ro the new year. They kept the system up fo r about. I believe, three weeks to a month after that to ensure that nothing happened, and I had no reports of negative incid ents that occurred as a result of that. It was consid ered a successf ul intervention to prevent any problems. Mr.

Gilleshammer: I am pleased to hear that, and I think it is a tribute to the staff and the individuals who were working many long hours and months on that and pleased that they were successful. Given the sensitivity of a lot of the government infonnat ion and the acti vities that are entered into by individuals out there, have there been any security breaches with any inf onnation since Y2K in recent months? Mr.

Selinger: The only ma jor event that we have had since Y2K is, you may have read it in the newspaper, this global virus, I think it was called the love letter, that showed up on the screens of many computers on people's desks. Our Inf onnation Protection Centre was right on top of that. As I understand it, we had very min imal exposure there. I think it was something less of 30 work stations.

In Manitoba the 12 out of 240 servers were inf ected and only 40 out of I 0 000 work stations, so we had a very small exposure compared to other jurisdictions, such as countries like Sweden, where virtually the country shut down, and Great Britain, where Parliament shut down fo r a period of time. We took our e-mail system off -line until we could virus-proof it, and I believe it was back up and running within the week. Is that correct? Within the week.

So we consider the Inf onnation Protection Centre to have been a very eff ective mechanism, organizational mechanism, to detect these sort of alien intrusions into our inf onnation management system. It proved its worth in this love bug virus experience. Mr. Gilleshammer: I wonder if the Minister can give us some more detail about the staffing levels and the acti vities of the Inf onnation Protection Centre. Mr. Selinger: With the patience of the Member, that will be covered when we come to that appropria tion. We are going to have a separate

section on that. Mr. Gilleshammer: The recent limited breaches of the system, then, I think, speaks well fo r the work that has been done by those individuals. What steps have been taken to try and elimin ate this in fu ture attempts by hackers or others to get inf onnation fr om you? Mr. Selinger: The Infonnat ion Protection Centre is consid ered to be on the leading edge of government responses to security measures with respect to inf onnation management in government.

We plan to continue that with the staff that are there, continually receiving training to upgrade their ability to detect these threats to our system. They are part of a national and international environment of technical specialists that specialize in inf onnation protection. So there is a network across Canada that meets and discusses these items. We are sort of continually upgrading our knowledge of what threats there are to the system and looking fo r ways to prevent them happening here.

When you consider that $10 billi on of damage was done worldwide, our relatively modest exposure, we had no inf onnat ion that was in any way accessed by that Love Bug virus. When we had 12 out of 240 servers and 40 out of 1 0 000 workstations that were inf ected but no inf onnation being in any way accessed by that

May 25, 2000 LEGISL ATIVE ASSEMBLY OF MANITOBA 1457 Love Bug, we fe lt we had a pretty strong response compared to other jurisdictions. * (1 0:50) Mr. Gilleshammer: With the breaches of the system, even though li mited, is there any disciplin ary action that has been taken other than further training in this area for those individuals? Mr. Selinger: We can take fu rther discussion on this under OIT when I will have other of ficials here. But, at first blush, there were no errors or negligence of any kind perf ormed by our staf f.

Simply the virus showed up on their screens. ln a small number of cases those documents or those Love Bug or e-mail messages were opened by some people and some of the files were contaminated. But in the overwhelming majority of cases, even that sort of curiosity action on the part of seeing a new e-mail was prevented by timely action on the part of the Inf ormation Protection Centre. We see no discipl inary measures that are required, but we do constantly want to remain vigilant with training and inf ormation to our employees to make sure that they detect these things bef ore they can do serious damage. Mr.

Gilleshammer: Does the Minis ter fo resee the Inf ormation Protection Centre in staf fing that area continuing into the fo reseeable fu ture? Mr. Selinger: We do plan to continue the Info rmation Protection Centre. Mr. Loewen: I would ask the Min ister, there are a number of ways and dif fe rent fo rms that contracts get drawn up with with firms like SAP regarding the availabil ity of their source code and who does the upgrading. Could he advise us the nature of the agreement with SAP? Has the software been licensed to the Province of Manitoba?

Will the Province of Manitoba handle the upgrading internally or are system upgrades done by SAP at an ongoing cost to the government? Mr. Selinger: In response to the question fr om the Member fo r Fort Whyte, I am inf ormed that we do get the licence and have access to all the upgrades. The incremental costs are required to have the expertise available to us to install and implement those upgrades in the most eff ective and effici ent manner possible. Mr. Loewen: Would the source code be in escrow for the Province's use, should anything untoward happen to SAP? Mr.

Selinger: I am going to have to take that question on the source code as notice and get back to you with the specific status of that. Mr. Loewen: Can the Minis ter tell us if it would be the intention of his department to gravitate to a point where they could upgrade the system with our own resources here in the Prov ince of Manitoba as opposed to relying on SAP, who, I guess, has no commitment to put staff or office facilities in Manitoba?

Will there be an opportunity to somehow move that part of the systems development to Manitoba to provide the types of jobs and employment that would be of great value to this province? Mr. Selinger: In general, I think the thrust of the Member's question is whether we can develop local experti se in this SAP area and upgrade area, and I am inf ormed that the expertise for these upgrades is in extremely short supply right now across the country. So it is hard to come by.

But I would agree with him that the more you can have people available on a local level who have this experti se, it not only allows us to make our systems more funct ional, but then it is something that we could potentially export as well to other jurisdictions. At the moment, what I am inf ormed of is that the older version of the software was not providing the functionality that was required and that SAP, in fa irly short order, was going to stop servicing it.

So I am sure you will understand the pressure we were under to upgrade to achieve new fun ctionality and to make sure we stayed current with that system, and we had to make a timely decision on that in order to have it ready fo r next spring. So we have moved on that, but as I understand it, part of what we are doing with this contract is we are getting training for our people locally, so that they are better able to manage the system and have greater expertise in making the system serve our purposes.

1458 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 So that transf erence of skills is something I think we would both agree is an important part of what we do. We do not want to be continually reliant on external expertise outside of our jurisdiction. Now, the time fr ame on that is something I do not have carved in stone, but we are trying to move in that direction with the way we let our contracts for furt her upgrades and training. Mr. Loewen: Thank you. I certai nly appreciate the Minis ter's response and his indication of the direction that they would like to take.

I guess my experience has been that it is not unusual when you enter into these types of arrangements fo r suppliers to indi cate somewhere down the road that they are not going to support t!le system anymore, and the next thing you know there is a substantial bill to upgrade. I do not expect this is the first time that SAP has done this in their marketing strategy, and I would certainly not expect that it would be the last time SAP does that in their marketing strategy.

What I would ask, I guess, is fo r the Minis ter to let us know if , in fa ct, there has been any looking fo rward beyond the $8.5 million that is in this year's budget to the fu ture in the next two or three years in terms of what other expenses might arise as a result of systems obsolescence or the annual changes that are required in payroll by legis lation, as well as any changes that the Government would require to these systems to meet its ongoing needs. Mr. Selinger: With respect to the question from the Member fo r Fort Whyte (Mr.

Loewen), we have a written guarantee that SAP will support the latest upgrade that we have agreed to go ahead with until September of 2003, which, apparently, is one of the longest commitments that a software provider has made to a client , and that includes any legisla tive requirements that impact on that software. So we believe we have negotiated a pretty good arrangement with them fo r their ongoing support. During that period, we will obviously carry on training our own people to be able to manage that better with our own expertise within the Government and in the community. Mr.

Loewen: Would that same contract involve a guarantee by the Province that they continue to use the staf f of SAP to handle any reconfigura tions or upgrades to the system until September 2003? Mr. Selinger: No, we do not have any reciprocal agreement to use their expertise. We can take it fr om the marketplace, as required. * (11 :00) Mr.

Loewen: The systems can get, I am sure, as the Mini ster is aware, inext ricably locked together to the point where if better alternatives come along fo r any of the particular modules such as procurement that will provide more fu nctionality at a lower price to the Government, is there the option at some point in the future to have a diff erent system fo r any given module, replace the SAP, total configura tion, or are the systems going to be so tied together that the Government is going to be relying on SAP fo r all the systems? Mr.

Selinger: I am sure the Member will appreciate that the fo rmer government was the one that made this decision. Apparently, when they opted fo r the SAP approach, they opted fo r an integrated system with the respective modules to work together to achieve greater effic iency. The other thing I have noticed since I have been looki ng at this area is that the technology or the advances made by various software companies, they tend to leap backwards and fo rwards at the time the decision is made. Presumably, the SAP was the one that seemed to off er the best value.

But, since that decision, it is theoretical ly possible that another system could have leapt in fr ont of it and on a today's evaluation look like it could do more, perhaps even at a better price. So you are fa ced with some difficult dilemmas here once you have made these enormous resource commitments, both on the capital and operating side. There is the possibi lity of going to another system that could interf ace with the SAP system, and then you would have to measure whether the cost of doing that was outweighed by the potential loss in ef ficiency by not having it as mtegrated as bef ore.

So these are part of the challenges of accepting a large-I do not know whether I would call it a top-down system, but a

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 1459 large integrated system that sort of operates as one piece and has a lot of -as you say, they all interconnect, and it is hard to sort of get out of the Web once you get into it. My understanding is that as the technology improves, companies are developing their products in a way that they can interact with existing sort of host systems. If they can interact with the same level or better efficiency, at the same level or better cost-ef f ectiveness, then we would consider them. We are not committed to SAP because it is SAP.

We are committed to trying to provide the best product. As a new government, this was the system that was put in fr ont of us, and we had some serious resource requirements that we had to commit to to make it achieve its fu nctionality. We decided we had to go ahead with that in order to provide the services of payroll and human resources that this government needs. But, as we go fo rward, it is a dynamic context. I have already had other representations of possible ways that we could do some of these things, perhaps better.

I do not claim to be an expert on the technical side of it, and my response is that if you can convince our technical people that what you are doing is better and more cost-ef f ective, we will consider it. But you have to meet those techn ical thresholds. It is not a political thing fo r me. It is strictly a question of how we can get the best product and the best service. Mr. Loewen: Well, once again, I appreciate the direction that the Minis ter has indicated that the Government would be willing to move at some point in the fu ture.

He is correct in saying that once you get going down the road in these systems, you can get to the point where you become totally reliant on one supplier. Of course, in their grand strategy, that is maybe where they want to lead you step by step. I guess our hope, as well, would be that at some point in the future there is a complete and thorough re took. I am sure at the time that the decision was made to move to SAP-and I am fam iliar with their product and with the services they provide and the inroads they have made in Canada in terms of I guess the public sector and the large business market.

They certai nly have a good reputation. But, as the Mini ster indicates, the nature of the business is that things change very, very quickly. I guess I would ask at this time if there has been any discussion with SAP or any other suppliers, and we certainly see it in a lot of these types of applications. It is being seen in human resources and payroll and other financial applications where the software is actually avai lable and through access to the World Wide Web.

Certainly, in terms of fu ture directions, I would think it would be advisable fo r the Min ister and his staf f to keep a close eye on where this whole issue of the management of systems and availability of systems with regard to the options that are provided through the Web. Has there been any discussion with SAP or any other suppliers regarding taking advantage of, I guess, the cost efficiencies of the Web to provide some of these services to the Government? Mr. Selinger: The question from the Member for F on Whyte, I son of understand it in two pans. The first

part is, as we move fo rward, do we fe el locked into the SAP system, or could we consider all other alternatives, including web enabled alternatives? Is that really the thrust of your question? In the short term, there has been enormous change within government just trying to implement this SAP system in the last year. My of ficials inf orm me that their first priority right now is to try and stabilize that system and derive more value fr om it.

As we move to the new, upgraded version, it is my understanding that some components of it are web enabled and that it is able to, with some additional add-ons, add more web enablement. So it has the potential to do more web-enabled applications. I am sure the Member knows that seems to be the direction that most of these systems are moving these days.

So I think the answer is that we will be looking at that, but it is pretty hard at this stage to son of consider a complete shift to another system before this one is even stabilized, but we would be looking at making sure that this system does the job in terms of web enablement and allowing that potential fo r the future, because

1460 LEGISLATIVE ASSE MBLY OF MANITOBA May 25, 2000 that seems to offer greater potential for real-time transactions and efficiencies that can arise from that. Mr. Loewen: I thank the Minister for his responses. I do not think I have any more questions on this area, but I do believe we passed a line the other day subject to the responses that were indicated at the time. I am assuming that it would be subject to receiving the information that the Minister has indicated today that he would provide the Committee. *( 11:10) Mr.

Selinger: I understood we passed this line, but we will endeavour to provide you all that information. Just for clarification to the official critic, who has joined us, I understand there was some miscommu nication about the scheduling of this event. I can tell him that I had some confusion around that point myself in terms of coming back last night, but we have been really dealing with the line that we passed last time in terms of the SAP system. So, as I understand it, we are really where we left of f at Taxation. if you want to pick up and move from there. Mr.

Chairperson: I will just interrupt for a second here. We will return to page 82. 7.4. Taxation (

a) Management and Research (

l) Salaries and Employee Benefits $1, 038,700. Mr. Eric Stefanson (Kirkfield Park): We just started on this area when we adjou rned the other day. I just want to bring to conclusion where the Government is at in terms of the relationship with the federal government and the new Canada Customs and Revenue collection Agency. The way I understood the Minister's comments is that we are in ongoing discussions with the federal government.

The stage we are at is really to do a review of, without putting words in the Minister's mouth, but I understand to do a review of how we are currently providing our services to effectively do an equivalent of a cost benefit analysis. Once all of that information is compiled it will help to form the basis of further discussion with the federal government as to whether or not it makes any sense to tax their services through that new agency subject to what kinds of fees the federal government might be wanting to charge. Mr. Selinger: I would characterize this slightly diff erently.

I think we have made a commitment in principle to participate in the new revenue collection agency and have signed an agreement to that effect. I see my ADM of fed-prov relations if he wants to join us for any further clarification. We are negotiating actively with this agency about the fees that will be charged for the services they render. That is certainly not unique to the Province of Manitoba.

All the provinces are negotiating with this new agency to clarify the fees, but we believe that a central revenue collection agency is in the best interests of the provinces and the federal government, that it can offer the efficiencies as opposed to having separate jurisdictions setting up their own systems. So obviously there are ongoing negotiations about the specific fees for specific services. We want them to be cost effective. We want them not to be something that generates a surplus for that agency but offers us service at cost. !\ir.

Stefanson: The Minister referred to, if I understood correctly, signing an agreement in principle with the federal government. Is that something that he is prepared to table, Mr. Chairman? Mr. Selinger: The nature of the agreement that has been signed is a service management framework agreement. Part of that agreement is to provide perf ormance standards for services that they already provide to Manitoba on an ongoing basis. We are not aware of any reason why that agreement could not be made available to you if you wished to have a look at it. Mr. Stefanson: I just want to be clear then.

The Government is saying, in principle they see some merit to potentially partnering with the federal government in some of these areas of collection and administration and so on, but there have been no commitments other than a willingness to participate in a process of review. Mr. Selinger: That, I believe, captures it. There is also, within this framework agreement, provision for participation of our officials on the

May 25, 2000 LEGISLATIVE ASSE MBLY OF MANITOBA 1461 management committee, so it is not sort of them providing a service to us at a completely arm's length way, but it is a na tional agency with participation of the provinces on the management committee so that we can ensure we get the performance standards we are looking for. Mr.

Loewen: I would ask the Minister, given the nature of the changing methods of electronic payments, and it was indicated in a previous statement that it was certainly under review how payments would be accepted, that we have assurance that in setting up this organization there is access for service providers to provide payments electronically on behalf of companies who are required to pay these taxes to the new organization. Mr.

Selinger: With respect to the question on electronic payments and the relationship to the national revenue collection agency, Tl payments have been possible for several years through federal facilities, and it appears that they are continuing to move further in that direction. I am looking at T2 payments as well. We have no reason to believe that they would not continue that progress.

On the other side of it, with respect to collections under Manitoba statutes, that is part of the BSI initiative that we are continuing with. and that is a priority to provide that capacity to Manitoba organizations, to have electronic payment capacity through our own system as we continue to develop it, so there are sort of two levels there, both of which are moving in the same general direction. Mr. Loewen: Maybe just for clarification on that, because again as we talked about in the

section dealing with the controller's office and the new finance systems, the options are changing very rapidly. Certainly historically the majority of those types of tax payments, the only vehicle that was available to, particularly on a taxation side, employers and to corporations was to pay through the bank with the advent of the World Wide Web. We are certainly seeing it on the individual biii payment side where there are a number of companies that have started up and are paying bills on behalf of their customers.

I would anticipate that this is going to move very quickly to the corporate sector where there will be a number of options outside of the traditional banking industry for corporations to make payments, both to each other and to the various levels of government in a very cost effective and efficient way. I guess my question would be in setting up, in negotiating how payments will be made for the various taxes that are identified in this section.

Can we have some assurance that there will not be barriers and roadblocks placed in the way of corporations who are either new or getting into a new business of facilitating the payment of taxes and other bills electronically? Mr. Selinger: In answer to the Member for Fort Whyte's (Mr. Loewen) question, clearly that is the direction that is being taken by all of the Government. However, in moving in that direction, we want to ensure that the proper controls and legislation are in place to validate these transactions and make sure that they are legally sound. * (11:20) Mr. Stefanson: Mr.

Chairman, I think we are prepared to move the Management and Research. Mr. Chairperson: Item 7.4. Taxation (

a) Management and Research

(1) Salaries and Employee Benefits $1,03 8,700-pass;

(2) Other Expenditures $168,0 00-pass. 7.4.(

b) Taxation Admini stration

(1) Salaries and Employee Benefits $2,858,300. Mr. Stefanson: Mr. Chairman, in looking at this

section in the Supplementary Estimates, I really want to ask some questions about the revenue increases, as one of the ob jectives, both here and through Management and Research, is to maximize revenue properly due to the Government. Looking at some of the areas of revenue collection responsibility in the area of retail sales tax, could the Minister provide what the projected percentage increase is in retail

1462 LEGISLATIVE ASSE MBLY OF MANITOBA May 25, 2000 sales tax for the year 2000-2001 over the current forecast for the year 1999-2000? Mr. Selinger: Yes, we would have to do a calculation on the percentages, but on the retail sales tax line, I take it you are looking at B9. Is that the page you are referring to? Mr. Stefanson: Yes. Mr. Selinger: I think, as is indicated there. the estimate for this year is about 4.5 percent. the increase in retail sales tax over the third quarter forecast is 4.5 percent. That is the projection. Mr.

Stefanson: I guess what I was looking for-I could certainly take the time to do the percentage calculation off the forecast numbers in the Budget on page B9. I was ju st curious if the Minister has more current information. as these are our own source revenues and we do not need to be waiting on numbers from the federal government, so what I am really looking for is what the end result was for '99-2000 in terms of revenue growth.

In fact, I should ask the Minister if he has a current number for '99-2000 of what our final retail sales tax revenue was. and it is from that number that I want to get a sense of what the percentage increase is and then what the basis of that percentage increase is. Mr. Selinger: Just on that specific information. I am getting signals from the secretary of the Treasury Board that they would like to process and verify those numbers before they firm them up in the report of the last quarter.

We have some information here but it has not been able to grind its way through the system entirely yet. and I am sure the member IS aware of the obsessive desire of our officials to make sure the numbers are as accurate as possible before they release them. Mr. Stefanson: Mr. Chairman, I would even be willing to accept numbers recognizing that they could change once that comprehensive review is done. What I am really trying to get a sense at is what the Government is projecting as revenue growth in retail sales tax, and I want to get a sense of what the basis of that is.

That is what I am looking for, is to see how reasonable the expected growth is relative to our projected economic growth, and I guess just other information that is available to all of us to see whether the Government is being aggressive or whether they are being conservative or whether they are being somewhere in between. That is what I am looking for. Maybe the Minister could just provide me, at this stage, a sense of what they have done in that area and once we get the final number we will be able to do the calculation and see what the growth is.

I am looking for a sense of whether the-and I will be asking that in each of these areas, or some of these other areas as to the approach taken by the Minister and the Government as to how aggressive they have been in terms of projected revenue growth. That is what I am trying to get a sense of. Mr. Selinger: The Estimates are prepared based on Conference Board of Canada projections, and that is the basis upon which all the statutes were looked at that are in front of you in the Budget there and which I am informed is the same as previous years. Mr. Stefanson: Mr.

Chairman, that would be one component of looking at revenue growth. It would certainly be consistent with previous years. but it was not the only component, and then I want clarity. Is the Minister saying that the revenue growth in these areas-we are talking now retail sales tax-the number he has used for revenue growth is the estimate of the economic growth for Manitoba as provided by the Conference Board of Canada? Is that the percentage growth m this area? Mr. Selinger: Yes.

I am informed that the information is based on the most recent forecast from the Conference Board of Canada in terms of retail sales and investment in Manitoba and what they would generate in terms of retail sales tax. Mr. Stefanson: Just to clarify then, Mr. Chairman, should I be able to take the actual retail sales tax generated in 1999-2000 and multiply it by the projected economic growth provided by the Conference Board of Canada and that will equal the retail sales tax revenue for 2000-2001?

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 1463 Mr. Selinger: It is not, my ADM of Federal Provincial Relations says. It is the components of the forecast that make up the base with respect to retail sales tax, not the entire GDP amount. So they have broken it out with respect to those areas that relate to retail sales tax. Mr. Stefanson: Mr. Chairman, to save me going to find those percentages, is the Minister then prepared to provide that breakdown and the components that have been used to calculate a projected increase?

Then I am assuming that we can take the actual for '99-2000 in retail sales tax and multiply it by that percentage, and it should equal the $950,700,000. Mr. Selinger: My officials inform me that they think they can pull that information together. So we will take that as notice and endeavour to try and provide that for you. * (11 :30) Mr. Stefanson: The mmmg tax revenue is showing at 2000-2001 of $68 million, up from the '99-2000 third quarter forecast of $10 million. Could the Minister provide us the background and details as to the basis of that revenue projection? Mr.

Selinger: The amount there is really an estimate provided to us by the industry without mentioning specific names, and their projection provided to us is based on their best forecasts for world metal prices . Mr. Stefanson: Recognizing the Budget was just a couple of weeks ago on May 10, we are now almost two months into the year. Is the Minister still confident in that projection based on the first two-month performance? Mr. Selinger: We are informed that the industry is still confident that that is the correct number. Mr.

Stefanson: The levy for health and education tax, the payroll tax, is showing about a $6-million increase from the third quarter forecast. Could the Minister provide the basis for that adjustment? Mr. Selinger: The additional revenue there is up approximately 2.7 percent, and it is attributed to wage growth. Mr. Stefanson: Mr.

Chairman, on page 71 of the Supplementary Estimates under Activity Identification, the fourth bullet down: "Processes tax refunds on a timely basis for Native Fuel and Tobacco Tax Rebate Programs." Could the Minister provide us with details as to how many agreements are in place on fuel and tobacco tax rebates? Mr. Selinger: I will just drag the puck for a second. He has the number, but I can tell you that there have been many processed during my short term in office. We have signed of f on several agreements. They are actively being renegotiated and put in place.

And the number is-we will get that for you, the specific number, if you want to move on to another question. Mr. Stefanson: I am wondering if the Minister is at liberty to say how many audits have been performed in this area during the last fiscal year or this year, year to date, and whether he is satisfied with the results of those audits. Mr. Selinger: In terms of the numbers of agreements, on the tax-exempt fuel agreements, 56 out of 61 have arrangements made with the Government. On the tobacco tax-exempt agreements, 51 of 61 reserves have agreements as of September 30, '99.

I believe that date is September 30, '99, in both cases. On the question of audits, there are ongoing audits as part of the regular process of administering the agreements. I am sure the Member knows that the information with respect to those .mdits remains confidential, but the normal administrative procedures and audits are ongoing. Mr. Stefanson: Mr. Chairman, in the area of tobacco-tax rebate, I know there have been ongoing discussions about looking at alternative ways to effect the rebate.

I am wondering if any discussions are currently taking place in that regard or whether all parties are satisfied that the current system is the appropriate system. Mr. Selinger: In general, the methodology in place for tobacco tax exemptions and rebates to bands is working well. There is an examination going on concurrently to look at other ways to improve that system and to make it more

1464 LEGISLATIVE ASSE MBLY OF MANITOBA May 25, 2000 effective, but for the most part the existing arrangements seem to be working quite well between our officials and First Nations communities that are participating. Mr. Stefanson: So just to clarify, other than continuing to look at the system that is in place, there are no plans in place or proposals to change the system as it exists today. Mr. Selinger: At the moment, the extstmg arrangements are the ones that are being planned to continue with.

There is some potential to look at more efficient ways of doing that, but discussions are not sufficiently advanced that I could say to you with certainty that there would be a change in methodology at this stage. Mr. Stefanson: I just want to go back to the issue of the audits. I am not expecting or looking for information on individual bands. I am looking for a sense from the Minister as to the overall results of the audits, whether or not he has been generally satisfied with compliance or whether there are outstanding issues in that whole area and so on.

I know there was a problem with at least one or two particular bands not all that long ago. I am just looking for a general sense from the Minister as to compliance and acceptance of the approach in both of these areas, both fuel tax and tobacco. Mr. Selinger: With respect to the two cases that the former minister might have recalled. those problems have been resolved. As you know. there are other issues that arise. They are being tackled as they come up, but there has been progress on the specifics that you might have recalled. Mr.

Stefanson: But just to bring this to a conclusion, I know from discussions, I guess, with the Assembly of Manitoba Chiefs and even individual bands, I am really just looking for a sense that on an overall basis these approaches are still acceptable and being complied with today. Mr. Selinger: Yes. Mr. Stefanson: Mr. Chairman, a question I know the Member for Elmwood (Mr.

Maloway) would be disappointed if I did not ask is one of the activities under here is "Collects and follows up outstanding tax arrears and delinquent tax returns." If the Minister has it right now or I am sure he can provide it very shortly, just what is our current status as it relates to the dollar amount of outstanding tax arrears for retail sales tax, what that is as a percentage of total retail sales tax, how we compare to other jurisdictions and how we compare to prior years . Mr.

Selinger: With respect to retail sales tax arrears, the amount outstanding is 1.88 percent, which is lower than last year's amount of 2.29 percent. Mr. Stefanson: Do we have a sense how we compared to some other jurisdictions in that regard? Mr. Selinger: There is no accurate information with respect to B.C. at this date. Saskatchewan has 0.64 percent outstanding, which was lower than their last year's amount by about a half. Ontario has 4.56 percent outstanding, which is about a quarter of a percent lower than last year, about 20 basis points lower than last year-19, to be precise.

So we seem to be in the middle of the pack compared to those other jurisdictions. * (! 1:40) Mr. Stefanson: Mr. Chairman, I gather some discussion took place on Better Methods and Better Systems. I just ask a general question on Better Systems as to how satisfied the Minister and the Department of Finance are with the current status of the Better Systems Initiative, and whether or not they continue to be supportive and see benefits both to government and to the public in terms of the introduction of the changes as they affect the taxation system. Mr.

Selinger: With the patience of the Member, we would like to defer that to the OIT discussion and bring it up there. But the only thing that I think I could say with respect to taxation is we see the idea of moving with respect to providing electronic mechanisms for taxation as an important continuing priority. We would like to continue to modernize that system and to consoli date the statutes along with that. Mr. Stefanson: I think we can move this

section then. Mr. Chairman.

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 1465 Mr. Chairperson: Line 7.4.(

b) Taxation Adminis tration (1 ) Salary and Employee Benefits$2,858,3 00-pass;

(2) Other Expenditures $4, 1 74,300-pass. Line 7.4.(

c) Audit

(1) Salary and Employee Benefits $5,208,900. Mr. Stefanson: Mr. Chairman, looking at this

section on page 75 of the Supplementary Expenditures, under Activi ty Identification, third bullet down, a reference to participating in the International Fuel Tax Agreement. Could the Minister just provide comments as to whether or not that is still working as well as it was in the past, whether it is still well received by the trucking and transportation industry? Mr. Selinger: Yes, generally there is satisfaction with the way these agreements are working and we feel that they are well received by the trucking industry.

Just parenthetically. as you know, we are moving to an international licensing regime for trucks. So that is the new area where there is work going on to find a way to make it effective for all the operators in Manitoba. Mr. Stefanson: Mr. Chairman, I am just wondering if the Minister could update us on the status of some of the reorganization that has taken place within this area of the Department. Mr. Selinger: During the course of the next year, the Audit Branch feels that it will have brought to fruition its reorganization plans.

As the Member might be aware, there have been several retirements in this area, and restaffing is occurring on an ongoing basis. On the research side, I think I mentioned before that there is a new manager there, Leslie Snell, who has taken over as manager there for the research section. and she is backfilling her positions within that operation as well. Mr. Stefanson: Mr. Chairman, I am ju st curious: What has been the impact within the Department of the additional positions that were provided last year? I believe there were certain revenue projections tied to the filling of those additional positions.

I am wondering whether or not the goals and objectives that were outlined at that time have been met by the Department. Mr. Selinger: I am happy to report that the revenue projections provided to Treasury Board, as part of the rationale for filling those positions, have been exceeded. Mr. Stefanson: As well, in terms of the whole Audit Branch reorganization, I am wondering if the Minister has a cost-benefit analysis of that reorganization, and if so, whether he could provide us with those details of that today or subsequently. Mr.

Selinger: There has been an analysis of the reorganization provided to Treasury Board, but there is a concern about releasing it publicly and that names and positions are identified and the roles they are playing. So at a minimum, we would have to take that as notice and see what could be made available to you. Mr. Stefanson: Mr. Chairman, I think it would be useful, even if it was an overview of the cost benefit without the details. I am curious whether or not the Department has done it on the basis of both the short term and the long term. Mr.

Selinger: We will take that question as notice, and my of ficials will try to provide an over-review for you of the results of that reorganization. Mr. Stefanson: Mr. Chairman, I know that the Department has, in the past, established audit coverage targets, and I am curious how the Department is comparing today to those targets that have been set in the past. Mr. Selinger: With the large number of retirements, some of those audit targets were not achieved, but as they restaff, they are confident that we will be able to meet those targets in the future. Mr. Stefanson: Mr.

Chairman, could the Minister provide for us what those audit coverage targets are either now or, again, subseq uently? Mr. Selinger: Those targets are provided in the annual report of the Department. * (11 :50)

1466 LEGISLATIVE ASSE MBLY OF MANITOBA May 25, 2000 Mr. Stefanson: Mr. Chairman, that will be helpful in terms of the historical. I guess what I would be looking for is whether or not the targets remain the same or whether they have been adjusted in any way going forward, and whether the Minister could provide that information. Mr. Selinger: We will take that question as notice. We will endeavour to provide sort of the chronology of targets, and with the reorg there will be an increase in those target levels. Mr. Stefanson: Mr. Chairman, I am prepared to move this

section on. Mr. Chairperson: Resolution 7.4. Taxation (

c) Audit (

I) Salaries and Employee Benefits $5,208,9 00-pass;

(2) Other Expenditures $999 .900-pass. 7.4.(

d) Tobacco Interdiction (

I) Salaries and Employee Benefits $578, 500. Mr. Stefanson: Mr. Chairman, this is an area, I think, that the Minister probably has some background on. that I think the Department of Finance can be very proud of I know. without going through all the history of this issue. when the federal government made the decision to lower tobacco taxes on the condition that provinces matched those reductions. we in Manitoba made the decision not to do that for a number of reasons, and the primary reason being the health of the citizens of Manitoba.

I know I was Minister at the time. and we had a number of delegations from the Heart and Stroke Ass ociation to the Lung Association to the Cancer Associa tion and so on, all making very strong cases as to the direct link between price of tobacco and consumption. particularly amongst young people. That was certainly the overriding motivation of the position we took not to reduce our tax rates in Manitoba. There is an offsetting revenue impact, as well, but the motivation was driven primarily by the health arguments that were made.

There were a lot of sceptics out there as to whether or no t Manitoba could draw the line in the sand at the Ontario border and actually stem any smuggling activities in Manitoba and in the rest of Canada. We have now been doing it for a number of years and, I think, done it very successfully. So I want to compliment the Department and everybody involved in this area for doing an outstanding job to date. I just have a few questions in this area. Could you provide for me what the cost of a carton of ciga rettes currently is in Manitoba compared to Ontario? Mr.

Selinger: It is about $47.20 a carton in Manitoba right now. That compares to the price in Ontario. which ranges between $29 and $34 a carton. Mr. Stefanson: Not being a smoker myself, I just want to clarify the $47.80 price in Manitoba per carton, is that after the recent tax increase introduced in this budget? Mr. Selinger: It was previously $46. It went up about $1. 20 a carton. Mr. Stefanson: Mr. Chairman, the federal government has been, I believe, just talking and oroposing adjusting the federal tax rates.

I am wondering if the Minister can provide us with information on any discussions or information the federal government has provided the Province of Manitoba relative to proposals they are considering in that area. If so, is it safe to assume that those increases would only take effect in provinces from Ontario east so that we would gra dually reduce this price differential that currently exists? Mr. Selinger: There is, the Member might know. a working committee of federal provincial officials in this regard. It is our position that any changes would harmonize or standardize the price across the country.

It is too early to tell with respect to those discussions at the officials' level about which direction is being pursued by the other jurisdic tions on this matter. Our position, coming to the table, is to standardize the price to avoid the kinds of enforcement costs that we are incurring here to maintain our regime. Mr. Stefanson: Mr. Chairman, I know in the early years, besides moral support, we were receiving some financial support from provinces west of us. That was gradually reduced and I

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 1467 believe basically eliminated over time. I am just curious whether today we are receiving any financial support from any other provinces or territories. Mr. Selinger: The short answer is, no, we get no other resources from other provinces, but we are informed that they are incurring their own enforcement costs now. Mr. Stefanson: I am also curious as to the level of co-operation with the federal government in this whole area. My recollection is that we were working quite well with the federal government.

I am just wanting to determine: Is that still the case today? Are they co-operative and supportive of our efforts to deal with interprovincial smuggling. Mr. Selinger: In general, the co-operation has been excellent with us and the federal government. They have two officials working with us on a daily basis. The Customs has been very co-operative. As well, we have had good working relationships with the Ontario authorities, the Ontario Provincial Police.

There is a lingering concern that we have expressed to the federal Minister of National Revenue about an attempt to maybe try and take those staff back that are working on a daily basis with us. They are claiming that some regulatory changes they will make would more than make up for the loss of staff. We remain skeptical about that, but we have made representations directly to the federal minister about the value of keeping those staff in daily contact with our people to make this thing work. Mr. Stefanson: I would share the same concern.

Once they harmonize the price nationally, then they might be able to not dedicate some resources. Could the Minister provide for us a

summary of the number of charges laid during 1999-2000 and year-to-date and 2000-2001 and the level of tobacco recoveries during those periods of time? Mr. Selinger: The only numbers I have available at the moment, Mr. Chairman, which I will give to the Member, since the commencement of the program we have to break it out on a more annual basis, if you wish, but since commencement, the taxation special investigations has seized 53 100 cartons of cigarettes and I 896 155 grams of fine cut tobacco.

They have brought 370 infractions related to tobacco smuggling to court, of which 236 have been successfully completed. Those have yielded $416, 850 in tax penalties and $68.000 in fines and costs. Mr. Stefanson: Mr. Chairman, are there currently any cases before the courts or outstanding as relates to charges in this area? Mr. Selinger: There are pending charges. If you would want specifics as to numbers and stuff, we would have to take it as notice. Mr. Stefanson: I would not mind a sense just of the number of cases that are still outstanding.

I am wondering, on an overall basis, I believe we have been quite successful going through the courts, 1 think particularly after some amendments were put in place one or two years ago relative to changing the procedures allowing individuals to bring their one carton. I cannot recall exactly how it all worked, but you could go and make a request to bring in some additional cartons and so on. My understanding is that we continue to be quite successful in court. I am just wondering if that is still the case. Mr.

Selinger: It looks that with 236 successful cases out of 370 that our batting average is pretty reasonable here. In terms of the outstanding cases pending, we will have to take that as notice and get back to you on that. Mr. Stefanson: The fact that I do not think we saw any technical amendments or any amendments in the taxation adjustment

section of the Budget would tell me that the Minister and the Government are comfortable that we continue to be on solid ground in terms of any challenges relative to our ability to address this issue the way we are. Mr. Selinger: Yes. I would agree with that assessment. We have no reason to think that technical changes are required with respect to tobacco interdiction enf orcement. Mr. Stefanson: Mr. Chairman, I am prepared to pass this area.

1468 LEGISLATIVE ASSE MBLY OF MANITOBA May 25, 2000 Mr. Chairperson: 7.4.(

d) Tobacco Interdiction (1 ) Salaries and Employees Benefits $578, 500- pass;

(2) Other Expenditures $253 ,400-pass. Resolution 7.4: RESOLVED that there be granted to Her Majesty a sum not exceeding $1 5,280,000 for Finance, Taxation, for the fiscal year ending the 3 1st day of March 2001. Shall the resolution pass? Mr. Stefanson: Mr. Chairman, I was ju st going to say my understanding is we are going until noon. This might be an appropriate time to adjourn until this afternoon. Mr. Chairperson: I will interrupt the morning sitting for lunch break. The time being 12 noon, l am interrupting proceedings.

The Committee of Supply will resume sitting this afternoon following the conclusion of Routine Proceedings. HIGHWAYS AND GOVERNMENT SERVICES * (1 0: 10) Madam Chairperson (Bonnie Korzeniowski): Will the Committee of Supply please come to order. This morning this

section of the Committee of Supply meeting in Room 255 will resume consi deration of the Estimates for the Department of Highways and Government Services. As had been previously agreed. questioning for this department will follow in a global manner with all line items to be passed once the questioning has been completed. The floor is now open for questions. Hon. Steve Ashton (Minister of Highways and Government Services): I was just going to respond actually to a question raised yesterday by the Opposition Hig hways critic.

What I will do is just read the comments and perhaps leave a written copy for the critic, if it could be passed on. I just want to summarize concerning the right of individu als to seek permission to access provincial trunk highways. An application is reviewed and either approved or rejected by the Highway Traffic Board.

Section 21 (3) of The Highways Protection Act allows the applicant to appeal the Board's refusal within 30 days of the date upon which the applicant received notice of the rejection by registered mail. The appeal is made to the Public Utilities Board, which we indicated yesterday. It holds a hearing de novo, and the Public Utilities Board is subject to

section 58 of The Public Utilities Board Act.

Section 58(1 ) of The Public Utilities Board Act outlines the grounds for appeal of Board orders and decisions to the Court of Appeal based on any question involving the jurisdiction of the Board, any point of law or any facts expressly found by the Board or relating to a matter before the Board.

Section 58(2) outlines the conditions governing leave to appeal, which includes amongst others, the requirement that leave be taken only within one month after the making of the order or decision. Once again, I have read that into the record, but I will leave a written copy, if we can pass it on, and I am more than prepared to provide more detailed information, if that is what the Opposition critic would like later on. If I might be of assistance, we have been going back and forth. My intent as minister was to accommodate whatever the Opposition's requests were in terms of ordering a question.

So there is no fixed agenda. Mr. Edward Helwer (Gimli): Perhaps the Member for Carman has a few questions on your announcement. I just want to say, as the critic for Government Services, this is new for me. I have not done this before, Mr. Minister, so if you will bear with us and the staff also. As a matter of fact. I have never been in the position the Minister is in either on that side of the table. This is new to me, but we will try to do our best and try to keep order. Mr. Denis Rocan (Carman): I appreciate, first of all, the Minister providing this information.

To the Minister and staff, I guess, for clarification, have we already dealt with, or yesterday would you have dealt with the Highway Traffic Board, where they approve or reject speed zone reductions on a particular highway passing through a town? Have you

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 14 69 already passed that

section or worked through that section? Mr. Ashton : There were questions on the workload at the Board and questions in regard to appeals, if that is what this response was made in regard to, but not specific questions on specific areas that the Traffic Board deals with. Mr. Rocan: Through the Minister again then. I guess the question that I would like to pose through the Minister is what sort of guidelines are-and if you have already answered this explain that to me, and then I will review Hansard, and I will quickly read it.

What sort of guidelines are put in place for the Board members when they are reviewing or deliberating over a particular request? In other words, if you were to receive a letter from a particular jurisdiction such as a rural detachment of the RCMP, the R.M. of Victoria case in point-we are talking about Holla nd here now who have made application because of several businesses on the north side of the highway, and they are asking for a speed reduction. I guess the question that they have asked me to put to the Minister was: Under what sort of guidelines would the Board base its decision? Mr.

Ashton: I cannot speak for the Board directly in the sense that being a quasi-judicial body it does conduct its own affairs, but I think the important thing is to run through the process. I think that probably is the best way of providing information that would be of some use in communicating back to constituents. As the Member probably knows, essentially what would happen is a hearing of the Board would be held. There would be input then from certainly the proponents, people who obviously would be making the argument.

There would be input from the Department at that point in terms of addressing the traffic and safety issues. So it is the hearing that would run through that process. I know certainly in my own experience as MLA, I have raised these concerns in the past, and I have encouraged people to go to the Board. Although it is interesting to debate back and forth in terms of speed restrictions et cetera, it is quite a complex area. I certainly know in some cases that I have been involved with where arguments were made that decisions were made not to necessarily reduce the speed limits.

There are all sorts of combinations of factors in terms of enforcement, in terms of the traffic flows, et cetera. So that is probably the best answer I can give in the sense that it is the Board that basically deals with that rather than the Minister directly. And I think that is appropriate, by the way. It should be based on that level of input. There are other jurisdictions where there are a lot of traffic-related items that are probably dealt with more on a political basis, stops signs, speed zones, et cetera, and particularly stop signs. I look at the City of Winnipeg, for example.

In some areas there are lots of stop signs, some there are none. I think it is probably part of the process over time of some various lobbying back and forth. I think the advantage of ha ving the Board deal with this is once again trying to get some consistency back and forth. I think that is important. We discussed this yesterday in terms of making sure that the Board operates in a way that is obviously taking into account various different factors but coming up with consistent decisions. Mr. Rocan: I want to thank the Minister for a very good answer. I expected nothing less from this minister.

His truthfulness carries him a long way because he is the sort of individual who always lays the facts on the line. I appreciate the way that you have just answered that because there are several individuals in the community who are of the belief that-an d I will just throw it, like the trucking association. They believe that the trucking association carries an awful lot of weight when it comes to a board decision on reducing a particular speed zone. I appreciate the Board doing due diligence on St.

Claude, Treheme, Glenboro, several areas where they have done their work, and they have done it in a timely-type fashion where they have agreed with the community. Now Holland is requesting the same sort of courtesy, and based on what the Minister has just actually put on the record, I would hope that the Board members take a serious look at the Town of Holland and No. 2 Highway just going past Treheme. Several individuals in this room might have family

14 70 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 members that live up and down that highway, and we would expect-I do not know if it is the new board or if the present board are still in place, I have no idea-but to the Board members who were there, I appreciate their due dilig ence in looking after my constituents up and down No. 2 Hig hway, but then also again the RCMP and the R.M. of Victoria have purposely set forth an agenda to try and slow down particula r vehicles going through the community of Holland. I would just hope that they look at it quite favourably. I just leave that on the: record. Mr.

Ashton: I appreciate the Member's concept in terms of his constituents . I want to stress, first of all, we have not changed the Board. As changes are made, my desir e as minis ter would be that the Board would operate on the basis of best judgment, not to be overly influ enced by other factors, and I will just leave it at that because I think the Member probably knows what I am referring to. * (1 0:20) I know what it is like. In my own community, my own constituency. I have been contacted by people in Wabowden . There are real concerns about speed in the proximity of the school.

I should indica te, too, that it is partly an issue for the Motor Transport Board in terms of the speed limits. It is often also an issue of enforcement. What I have done in my own case is I encourage them to look both at the speed limit per se but also enforcement of existing speed limits. It is one of these situations where people come off the highway and just do not see the reduction down to an urban speed limit, so they are going from I 00 down to 50.

There is something about having a few tick ets issued that spreads fairly quickly in terms of people understanding that the existing speed limit is fairly serious. I do appreciate that, and I will encourage the Member to also pursue the enforcement side. That is obviously not something that is within the purview of our department. In some cases better enforcement is also a key part of safety for people. I take it very seriously. I really believe that this is one of the reasons we have the Board.

The Board should use its best judgment and should base it on a number of factors but should not be subject to any outside influence. I do not bel ieve, by the way, personally that the trucking association or others do have that much influence. I bet they would probably argue the reverse. I think, in fairness, the key element has to be the Board itself . If you have a good board in pla ce and they operate properly, not everybody will be happy with every decision, but, over time I think you will get a recognition that it was based on best judgment.

That is what I am going to be looking for with any changes on the Board and any new board. Mr. Rocan: I thank the Minis ter again for his answer. The Min ister talks about the reduction of speeds. I always was of the opinion this is the reason that the Board would actual ly make their reduction in the speed zones. Treherne was a prime example. There had been several accid ents, and then finally it came to be where they actually did slow down the traffic. In my discussions with the local RCMP, there have been several accidents like, again, in the Holland area. Again, this is what we base our questions on today.

The Minis ter makes reference to he doubted whether or not the trucking industry would do that much lobbying, I guess, would be my words, in order to prevent the speed reductions. Myself, I know from days gone by, when I had my own trucking company, I hesi tated greatly adhering to some of the speed zones that were there. When you thought late one evening there might be nobody there and when you are in a great big hurry, you kind of mi ght have broken the law. An Honourable Member: Might. Mr. Rocan: Might have broken the law.

So I can understand where they would be coming from because a truck wants to get from point A to point B in an awful hurry because this is how they make the skimp few dolla rs that are available to them. Yet, you know, for a minu te to slow down, I mean, we save one lif e. l have been at a junction of highways where there has been loss of lif e. I just happened upon the ac;;id ents, but it is not a pretty sight. This is why again I support the Board wholehea rtedly and, indeed, the Min ister does too, because in his remarks-and I have known

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 14 71 this min ister for many, many years-he is that sort of a caring individual who would take this to heart. I also at this point in time want to put on the record that this minis ter has left his doors open to anybody from-! will just use my constituency for example. So I am sure that if ever the Board would rule opposite to what we would like, I understand there is an appeal process here.

Even the remark just from the Min ister, I am lead to believe that this minis ter is willing to see individuals whenever, from discussions I have had with him on a personal side of it. His door is always open. For that, I appreciate that. To all his staff who are here today, as much as I am supposed to be a partisan individual here today, I have great respect for the Member for Thompson. I think he will do his job and he will do it with great diligence. I do not suppose this is all what you want to hear, is it? Oh, Frank is here. Now we are in big trouble.

I am going to leave with those few remarks there, because I think my deputy critic is getting a little bit upset with them, so I leave that there. Oh, you are all here now. Are you all mad or what? Mr. Ashton : I really appreciate the comments from the Member. I have certainly worked very well with him over the years. I have a great deal of respect for him in his role in this House representing his constituents . I certainly want to indicate my wil lingness to meet with people in this province.

In fact, last night my deputy and I were in Pine Falls, met with municipalities in that area Actually, at the meeting was the MLA for Lac du Bonnet. It was an interesting sight I am sure for people who are used to seeing us spar in the House, sitting there and dealing with the common concerns in the Pine Falls area. We did have a little bit of an opportunity afterwards to discuss things just on a personal basis. I think that was probably a shock to people as well. But I think that is important in coming, as I do, from a community that is many miles away from the capital city.

I have always valued access for my communities. I have always appreciated mini sters in the past who made the effort to meet with my communities or in many cases actual ly travei to my communities. I certainly want to ind icate that as well. I try to be open to MLAs in particula r-! think that is imp ortant-and communities as well. In fact, I want to assure the member that if there are municipalities or others, obviously I met with many people who are not necessarily involved in municipal politics, but I do value the input of municipalities, parti cularly because they are the grassroots level.

I usually say my door is always open. Whether I am in it is another question, because I may be out in Pine Falls or travelling around the province. But I appreciate the comments from the Member. I certainly want to indi cate that I do take very seriously the concerns he has raised on behalf of his constituents. I would not expect anything less from him other than to be raising them at every opportunity, so I really appreciate his raising them here. Mr.

Helwer: Madam Chairperson, because I was at the Winnipeg Beach Council meeting last night also, I have a number of local issues that I would like to talk about first. One of them is the grant-in-aid streets program that works for towns, villa ges and municipalities whereby some of the communities get some assistance for their local streets. It is a good program. It works very well. I think most of our communities certainly appreciate the value of that program. I certainly hope that the new minister will continue with that program and maybe expand it if it is at all possible.

One of the questions from Winnipeg Beach last night, I guess they had applied for some assistance of Kernstead Road. I think they had done this a couple years ago and were approved for a portion of it but did not have enough funds to do the whole thing or to do a proper job on it. I wonder if the Department has any new information on that or whether that has been approved for this construction year? Mr. Ashton: We are going to be making an announcement of grant need within a matter of days actual ly.

I can probably be in a better position to provide the Member with information on that probably within the next couple of days. We have just gone through it. We have the letters going out, so if I could take it as notice, I

14 72 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 will show the Member; I will get back to him. I can indica te the program, we have maintained it in the Budget. I think it is a very useful program. I think it is a good example of partnership working with municipalities. So the program is in place, and I will take as notice the specific item and either get back to the Member if we are still in Estimates dir ectly or if not I will give him-and in fact I should indi cate that what we are doing with all the approvals is copying local MLAs.

So once the letters go out he will get direct advice on which communities in his area are involved. In fact, I am in the process of signing off those letters right now. * (1 0:30 ) Mr. Helwer: I thank the Minis t�r for that, because the program is certainly a good one. The municipalities all appreciate it. and anything we can help when regarding the infrastructure to-i li ke that. It is certainly a good program. I apprecia te the Minis ter's reply. I look forward to that in a couple of days or in a few days.

The other item I had from last night's meeting was the signing of some of the communities along Hig hways 8 and 9 because a lot of the traffic on both those highways IS related to tourists. Winnip eg Beach, as an example, has no sign whatsoever announcing, on Hig hway 8 or 9, where Winnip eg Beach is. At one time I think the former Min ister of Hi ghways last year, we had talked about it. He was going to get some signs made for that area. but at this time there are sti ll no signs letting people know on Hig hways 8 and 9 where Winnipeg Beach is and some of the services that are provided.

I know in some communities you have signs announcing towns plus a thing on the bottom announcing the different services that are avai lable in that community. I am just wondering if there was anything done on the Winnipeg Beach signing program. Mr. Ashton : I would like to actually discuss this further with the Member. I have had a number of other communities make some more sorts of requests. I do know there are a number of communities in the area, Winnip eg Beach, going down to Matlock, Whytewold and Ponemah, I believe.

My understanding is there are signs in place according to the policy, so I am not sure what I can indica te too is I am advised by the Department that, basic policy, there is cost sharing of this. We are more than willing to sit down with the municipalities involved and see if we cannot work something out. I do want to indi cate, by the way, that this has come up in other areas, as I mentioned. I do think it is an import ant question. Madam Chair, we have met with various different-communities have expressed very similar circumsta nces. I appreciate particularly when communities are very dependent on tourism.

It does pla y a fairly signific ant role in terms of making sure that they can have people aware of what is happening in the community. We just met with Rossburn and Waywayseecappo in Westman, simi lar concerns raised there. What I would suggest maybe is, if the Member mig ht want to correspond directly with us to make sort of a request on behalf of the municipalities, if he could communi cate back verbally now and I can communi cate in writing, we will be certainly will ing to sit down and talk to them. Mr. Helwer: Thank you. I appreciate the response.

Yes. it is impor tant to have the signing of these communities to recognize where they are loca ted in the community. I am sure both sides of Lake Winnipeg plus other areas of Manitoba have the same problems. So I am pleased that there is a program in place, and I will have to speak to the community at Winnip eg Beach whether they have made a request, l do not know whether they have, for cost -sharing. Because of the importance of tourism, though, along the west side of Lake Winni peg, a lot of the businesses are seasonal, and it is impor tant that we have proper signing there, so I appreci ate that.

My next concern was the federal government, in the budget, announced an infrastructure program. I just want to talk about the im portance of the infrastructure program for a mi nute. The one that we had a number of years

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 14 73 ago, back about five or more years ago I guess it was, whereby some of the construction and some of the infrastructure was cost-shared on a one third, one-third, one-third basis, a three-way basis, that worked very well. A lot of the communities certainly were able to improve a lot of their infrastructure, whether it be sewer and water, or streets or highways or, in some cases. building of municipal offices even. So it was an excellent program. I know that the federal government had announced some assistance for highway construction.

I wondered if it did include some streets and roads in the municipalities and whether the municipalities would be cost-shared with that on a continuing one-third. one-third basis, or whether there was a new program in place to deal with this. Mr. Ashton: I appreciate the questions. I just want to add, by the way, I think for the important point, while we are on the issue of Highway 9 and the tourist side, the fact that we do have the construction now finalizing the upgrading into Gimli. I was very pleased to be able to proceed with that.

I think it recognizes the high traffic volumes in the area and the fuct that that whole area, as the Member will know. has had signi ficant growth in the last number of years. So I did want to sort of note that it was an example of a project that we did proceed with, and I think it is very important in that community. I did have the opportunity at the AMM meeting to meet with municipa l officials from the area. It was certainly a priority, and we had proceeded on that. In terms of the infrastructure program, that seems to be a work in progress. There was a meeting apparently with the AMM just recently.

We received reports yesterday what might or might not be in the infrastructure program. The Minister of Intergovernmental Affairs (Ms. Friesen) is actually the Minister dealing with the municipal end. Our focus in this department is on the national highways side or national transportation program. Quite frankly, it is hard to determine on that side exactly what is happening either, but I do want to indicate that, in terms of the street side of it, I think that would probably come under the other side of the infrastructure program, if it is deemed as being something that is within the realms of that.

That is something I think the federal government is involved in right now in discussions with the AMM. We would certainly, as a province, want to be involved in discussions as well. The infrastructure program , apart from the highways side of it, was, I thought, fairly successful. It probably needs some different criteria. There was signif icant uptake, and obviously there are different needs in various communities, but I would encourage the Member, perhaps, to raise that during Inter governmental Affairs Estimates. By the time we hit the Estimates-! am not sure in the

schedule where they are-we may have a better idea of where we are at in terms of criteria. My sense is that the federal government has the concept in mind but does not have a clear idea yet on exact criteria, and I think those discussions are aimed at that. I think that is positive too. The AMM is in a very good position to represent the wishes of its member municipalities. Mr. Helwer: I want to thank the Minister for his reply there. Just getting back to the highway construction again on Hi ghway 9, I appreciate getting that last

section done there. I think the contractor has started already and it is underway there. Hopefully, they will get most of it done or most of the work done prior to the busy tourist season because it does have an effect between Winnipeg Beach and Gimli. So I know they are working on it. They started as soon as possible this spring and so I am glad to see that

section get done. That will, by the way, complete the

section between Gimli and Winnipeg Beach. I think it is done in about three or four different stages, because there is a bridge over one of the creeks, one thing and another, but I am glad to see that finally getting completed. That certainly will be a great benefit to the communities there along Sandy Hook and make that road a lot safer and also a lot better for the local residents with the extra few feet of pavement on the side for bicycles and walking, certainly a great benefit to that area. So I appreciate that finally getting

1474 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 comple ted, and I want to thank the Minis ter for that. I think the contractor is doing an excellent job there in getting that done. Regarding the infrastructure program, I guess that brings up the other program that was announced just recently by the federal government and that was the extra $35 million, or whatever it was, over seven years that will be coming to Manitoba to replace some of the roads or to increase the capacity of the weight on some of the highways where there were elev ators going to be closing.

In our area of the Interlake of course, I am glad to see the Member for Interlake (Mr. Nevakshonoff) here also, because there could be some rationalization in the elevators because of the rail line being taken out there. We do not know what is going to happen exactly yet but certainly if that doe� happen. if some elevators do close and there is more highway traffic on Hi ghway 7 and 8 especially. I would hope that Hig hway 7 from probably north of Winnip eg and probably 8 north of Gimli there where it has not been rebuilt.

I would hope maybe those highways would be inclu ded in your projects that you have for this kind of project. Because of the grain and the agriculture products that move out of that area. it is important to keep those roads at an RT AC weight factor, so that farmers and truckers alike can use those highways. So I wonder if the Minis ter does have a program in place yet for that, or where it is in the system. *( I 0: 40) Mr.

Ashton : On the program itself , I did outline to the Agricul ture critic and the Hi ghways critic on the first day of Estimates that it should be adminis tered through Agriculture, and we will be meeting. I know I have already talked to the Minis ter of Agriculture (Ms. Wowchuk) and made sure that we can have a co-ordi nated approach. On the specifics, I certainly acknowledge the situation. The Member mentioned Hig hway 7. I have had the opportunity to be up on Hig hway 7 quite recently.

I have talked to people in the area, and I know the Member for Interlake has raised this issue with me already and I do know particularly up in the Arborg area, it is a priority . We will take that under advisement. I think it is a legitima te concern and it has been expressed for a number of years now and while we have not finalized the capital budget, I certainly do acknowledge what the Member is raising is an issue. What I want to look at is over and above the additional programming money that is available, obviously look at situations like this in the actual capital budget as well.

It is, I think, a fairiy good argument that has been put forward, and I certainly will be taking that into account when we look at the construction budget. I appreciate the fact the Member is raising it. It is a priority I know in the Interlake. Mr. Helwer: I want to thank the Mi nister. Also, in both the in frastructure, whether it be the federal highways infrastructure program or whether the new program to deal with areas where the railways are moving out or the ele vators are closin g, some of these areas have an entrance to the community also.

Would some of that area be inc luded in your capital programs whereby, as in the case ofBalmoral off Highway 7. there are three miles that are not a full weight highway, I believe, or in Teulon, No. 17 even goes through a town to the elevators, and some of them, even Arborg, I belie ve-! forget what road that is? Are they also going to be included in this total infrastructure package, whereby you will be looking at where the need is on some of these roads? Mr. Ashton: There has really been no criteria set.

One of the points that was raised on the first day of Estimates, particularly by the Opposition Agric ulture criti c-and I thought was a very im portant point-is the need to plan ahead. The Member will know the normal cycle on highways is a two-year cycle. We are looking at a multiy ear agreement on the agriculture side; for example, the multiyear situation on the National Hi ghways Program, depending on the criteria that is involved. So I think there is an opportunity for us to sit down and do some planning around that.

With regard to specific projects, it is probably fairly early on to give any answers on that really. We have only had an indication about the money coming in for the last number of weeks. I just want to put on the record again that

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 14 75 I am quite pleased with it. Anytime we can get one cent of federal money in the province. we will take it, and I say "we" collectively. I am sure I speak for all MLAs. It is sti ll a long way to go. We are looking at probably getting three, four cents on the dolla r out of this program in terms of the money that comes out in gas taxes, three, four cents on the national highways side. If we could get a signi ficant reinvestment of the money that the federal government takes out of this province, we would be able to do the work that really needs to be done.

I think that is the key message here. The key to meeting the challenge, particularly in terms of the rural and northern economy, is going to be getting the federal government to put in its share. It was interesting, last night I talked to. of course, the Member for Lac du Bonnet (Mr. Praznik) at the meeting, and of course he is a former Hig hways minis ter. Madam Chair, his message was certainly my message. that members, government, you know, being part of government before, was quite vocal on this. We are too. In fact, we had an interesting di scussion on it.

I want to pursue this further and maybe see if we cannot develop a multiparty approach on this, because I do not think there would be any member of the Legisla ture in any party that would disagree with that. So that issue is ongoing, and I will try and keep the Member and members of the House informed as developments do take place on the agriculture side of it, and I certainly appreciate any input on areas the Member sees as being a priority in his region. I know a number of members have already raised simi lar issues of concern in their own regions of the province.

The only concern I have is that the money sounds not bad on a five-year basis, but, as the Member will know, $35 million over a five-year basis, you know, $6 milli on a year, it can make some difference. But compared to the need out there, it is a fairly small amount and that can often be two or three projects. When I say projects, it can be fairly-you can look at $2- million or $3-million projects to surf ace and upgrade 10 -15 kil ometres of highway . So we still have a long ways to go. I guess it may be a small step, but it is a step in the right direction. Mr. Helwer: Yes, I agree with the Min ister.

I realize that $35 million over five years sounds like a lot of money, but it really does not go very far when you get into construction. Hopefully, I would like if the province could match that. If you have $7 million or $14 millio n at least a year that you could spend on extra projects besides your normal Hig hways capital projects, that would certainly help. I realize that it is very expensive, especially when you want to build these roads to the standards that carry the RTAC weights and one thing and another. It does increase the costs, especially for bridges and things of that nature.

I just want to talk about Hig hway 9 for a few mi nutes, between Selkirk and Winnipeg. This is of real importance to me and also to the Member for Selki rk (Mr. Dewar) actual ly, because it is impor tant to commuters from Selkirk and people living in St. Andrews along Highway 9. This hi ghway has not been looked at or no construction done on this for many years. I know a number of years ago, some engineers were looking at a Selkirk corridor and also ways of trying to improve Hi ghway 9 to make it safer and improve the traffic flow on it. At the present time. it is a real problem.

Well, here is the Member for Selki rk (Mr. Dewar) now. I am sure he can verify everything I said. Mr. Ashton: A conspiracy here, I do not know. He just conveniently walks in. Mr. Helwer: But it is really a problem safety wise. There is a real safety concern there on Hi ghway 9. There was a person killed just south of Lockport there just this past winter. Because of the fact there is no divider between the four lanes, it creates a real dangerous situa tion. I realize that the speed lim its are such, 70 or 80 kil ometres, to try to keep the traffic moving at the same time to try to make it as safe as possible.

I am just wondering if the Department has any new information on it, or whether there has been anything done as far as the engineering or construction or planning on it. What can be done to try to improve Highway 9?

14 76 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 * (1 0: 50) Mr. Ashton : Before I respond to the question, to go back to the previous discussion, just to give the Member some idea in terms of how far money goes, I know he knows this, but I just want to put it on the record. The Hig hway 9 project from PR 519 to Willow Creek was $3 .4 mill ion, not a very long stretch of road. There is one other project in a simi lar range, but in our ini tial program schedule, it was pretty well the largest in the province. So one small but important project was $3.4 million. Roads cost a lot of money.

The Member knows that, but I just want to put that on the record and the fact that it certainly shows our commitment on that stretch of Hig hway 9. What I would like to do in terms of 9. just maybe give the Member some background. I do acknowledge too that the Member for Selkirk (Mr. Dewar) has raised this issue with me as well. I notice it was quite convenient that the Member for Selkirk seemed to just walk in when this issue was coming up. I am just wondering if there is some kind of a regional allia nce going here kind of that cuts across party lin es. Just again, if the Member will excuse me.

I will run through some of the detai ls on this and put it sort of on the record so people know some of the compli cations that have gone into this. I know the Member knows the background on this, but this is more for the people that do not. In the mid- 19 80s, there was a functional design study that recommended improvements to PTH 9. There was a recommendation in terms of protecting land for a possible four-lane, divi ded highway that would increase the capacity. If you go back to the 19 84 ID Engineering and DeJean western study, it looked at potential solutions in the Winn ipeg-Selkirk corridor.

It was asked to determine a couple of things: the best method for upgrading the four-lane. undivided portion of PTH 9 between 101 and 44; future north-south route; addition of PTH 9 and PR 230 would be needed west of the Red River, and if so, where it could be located; the need for and location of a future Red River crossing on 44 so that land could be protected; and the most suitable continuous routing of 410 between 8 and 238. There was a preferred plan that was selected after extensive public consultations, meetings held December 19 86-19 87.

The Min ister, in November, announced acceptance of the study recommendations, which talked about a curbed media n and other operational improvements to 9, a protection of right of way for a possible four lane, divided highway between Winnipeg and Selk irk, and a future Red River crossing near Lockport. That was subsequently abandoned. I will just run through some of the things that happened. There was a letter to area residents from the Minis ter and consid eration for advance property purchase. A study was comple ted in 19 90. The

summary report recommended, to improve safety, 9 should be upgraded to four lanes, and la nd would be set aside for a future highway between Winnipeg and Selkir k. Then there were a number of factors that prompted the Department to re-assess the study. Traffic volumes there were increasing faster than were predicted. Additional capacity was required to maintain and improve the current level of service in the study area, and there was need for immedi ate upgrading of No. 9.

To give some idea of the cost involved. one estimate of one of the possible options is up to $38 milli on, fairly signi ficant-th is is 19 90 dolla rs-and the first two lanes of the Win nip eg-Selkirk corridor, about $18 milli on. Alt ernatives were developed at that time. This is obviously when the previous government was in place. One was PTH 9 resurfacing. The second was a PTH 9 with a flush median. Third was PTH 9 resurfacing with a flush media n from 101 to Jackman Road. Fourth was PTH raised median. which was part ofthe 19 90 study.

It was determined that, regardless of the improvements, stage 1 would be required soon. That is the resurfacing. As a result, each of the alternatives inclu ded the requirement to proceed with Stage l. So 2, 3 and 4 were add-ons. The Department met with councils of the R.M. of St. Andrews, R.M. of West St. Paul and the Town of Selkirk. Prior to a 19 94 public open house, councils were in favour of the proposal to

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA I477 proceed with Alternative I, subject to results of the open house. I know the Member would have been aware of that at the time and the Member for Selkirk as well. Results indicate public support for Alternative I, with the associated safety and drainage improvements. In 1995, the minister at the time received a 1300-name petition to construct a median-separated four lane facility. One of the things that has happened is there is a lack of consensus in the area on what needs to be done, and I know both members from that region know that fairly well.

In the interim, the Department is performing remedial surface repairs on PTH 9 to keep it at acceptable condition. Since 1995, there has been expansion of about $950,000. There has been some purchase to protect a possible Winnipeg-Selkirk corridor that has resulted in about $872,000 worth of expenditures, and a couple of properties required for the river crossing. So there has been some attempt to preserve options. One of the difficulties, as I said, is not JU St the cost here but is also the differing views. There are quite significant differences.

I kno�. having travelled that highway on many occasions myself, it is one of the situations we are finding in a number of areas outside of the city, where you essentially have significant residential development along the highway, and it puts a lot of pressure on the highway itself, the access lanes. There are significant issues in regard to speed limits. It is interesting, back and forth. Some argue they want to keep highway-level speed limits; some view it as an extension of an urban area.

I wanted to give the Member, on the record, some indication of where it is at and the fact that the Department over the last number of years has been trying to deal with the resurfacing on 9, but I would certainly appreciate any feedback from the Member and the Member for Selkirk in terms of how we do deal with it. This is one of the issues I know I discussed with the Department already on a number of occasions. It is a very complicated issue. I do want to indicate that I think the alternative, for a fairly reasonable expenditure of money, has improved the surface fairly significantly.

So, in that sense, I think it was probably the right thing to do initially. That does have a safety impact, too. Obviously, the better the surface for the high-traffic volumes, the better the ability of motorists to drive safely. So that in a nutshell is where it is, and I appreciate any feedback from the Member on this issue and people in the area. Mr. Helwer: I thank the Member for his answer there. because it is a very important route, that No. 9, and I think the Department of Highways right now, I believe, has some control.

They are not allowing any more access of the new subdivisions onto Hig hway 9, which, I think, is a step in the right direction. There are a number of new subdivisions between Highway 9 and the river there, and I think their access is going to be on River Road in most cases. So I think that is cenainly a step in the right direction.

Probab ly, because it is almost impossible to buy property along there now to widen the property that the highway needs, there is probably enough room maybe for some drainage and to put a half a lane or so on each side so that you could have some kind of median, or a left turning lane in some places at least. on some of the main intersections. Probably you cannot make a left-turning lane on A very Drive, where there is a left turning lane, because there are just so many, but probably at the main intersections at least.

That seems to be where the accidents happen, when someone stops to turn and then someone comes from behind and hits him. I have seen that happen there a number of times this last six months or a year or so, and it has really created an unsafe situation because of the way it is set up. So I would hope that the engineering group, or Planning and Design people, would have another look at it and see whether we could come up with some system whereby to make it safer. We could put some lanes on each side and have some divider in the centre or a turning lane or something, and try to make that a lot safer.

The problem, I realize, when you look at the cost, $38 million, that is almost a third of your highways budget capital program spent. I realize you cannot do that in one year. It is just not possible. I think it has to be phased, and I would like to see the Department look at some way of trying to phase it in and improve it.

1478 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2000 As far as the purchasing of land, I am glad to see that they are looking at purchasing land for the Selkirk-Winnipeg corridor there because that would certainly take some pressure off Highway 9, although, because it is local traffic, it would not eliminate it completely, but certainly would help some, because of the new bridge on Highway 44, which goes across to meet 59 there. There is a lot of traffic on that road 230 and McPhillips road going into Winnipeg. Some corridor there, I know that is a long-term project; again, a very expensive project.

When you are looking at buying land. spending almost a million dollars just to purchase some land. I am sure that would increase it. I realize it is a very costly project. but I would like to see that maybe sped up. if possible, and try to get that. * (1 1 :00) Now, with the bridge on Highway 44 at Lockport, since that was rebuilt a number of years ago now. about five years ago, so that, I would think. would stay in that particular location.

I know they were looking at a new bridge at Lockport to move it a little further north, and then that would have changed the access roads, of course, onto Highway 9 and over to 8. So that changed that. But I was just wondering if the Department can give us some assurance as to what kind of a time frame we are looking at, trying to improve this Hig hway 9 situation. Mr. Ashton: Just to give the Member some idea of the difficulties, I am sure he is aware of this. and I know that is one of the complications for previous members.

First of all, there is difficulty in the drainage, just in terms of the line that is available. The second problem you run into is if you widen you have to take from off additional property. You have to acquire it. It is expensive. What happens is everybody, they want a widened highway, but if they live along the highway they do not want it to come out of their particular land. I think the Member will know that one of the reasons there was no consensus was in that range. So it is a huge cost and a huge complication.

I know as minister, with our limited budgets, and they are always limited relative to the need, the Department of Hi ghways tries wherever possible to do what is the consensus of the community, and there really is no consensus. It is the same thing with the raised median. Everybody likes it in principle until it affects their ability to tum off the highway. So you end up with virtually all the alternatives we look at are not only expensive but all on paper sound good until you actually go to the public, and then you have all sorts of people say, no, that is not the route to go.

One of the items, I think, that sort of has led to that is the PTH 9 upgrading is extremely expensive and extremely complicated

whereas the Winnipeg-Selkirk corridor would probably still be expensive-not as expensive-and potentially less complicated in terms of that. So probably I think the route that the previous government took and the previous department took. the upgrading of PTH 9 was probably about the most that could be done with any degree of consensus in the area I know that the councils supported that Phase I. I tend to think that further upgrad ing is so fraught with difficulties for people in that area that it does create a lot of difficulties.

Our intent again is to try and balance out the obviously high traffic levels. but I do respect the fact that there are a lot of people live along that road. I do want to indicate, by the way, too, that the Department has taken a position in terms of access from new developments, and what not, trymg to control and restrict that access, but it is not something that is totally within the ability of the Department to prevent. This came up at our discussions a couple of days ago.

A lot of times everybody wants access, but the more access you have the more difficulty it creates in terms of traffic flows and traffic safety. I think one of the lessons out of what has happened on Highway 9 is a lesson for the rest of the province too in the sense that we need to have some better long-term planning quite frankly. We are ending up in a lot of areas just outside of Winnipeg that are essentially becoming similar to urban in terms of concentrations of population. I mean, if you look at what is happening, the fastest growing municipalities are now outside of Winnipeg,

May 25, 2000 LEGISLATIVE ASSEMBLY OF MANITOBA 1479 East St. Paul, and in fact all around the area. You end up with a lot of times there is a significant impact on the highway system that really is not a key part of any planning process. So I just throw that out. I do want to indicate, and I mentioned this earlier on, that as minister I am a strong believer in planning, and I want to see us province-wide do a lot more planning so we bring together all the items, whether it is hog plants or whether it is residential developments and ever ything in between.

Every time you have a development, it puts pressure on the road system. Traffic goes up, and you end up with all these sorts of complications. When you look at the fact that it would cost. I mentioned up to $3 8 million, to upgrade with the raised median and that would not necessarily be supported by a lot of people on that road, you start seeing how fraught with difficulty it is. I actually want to say that I think what we did-when I say we collectively, I mean it was actually the previous government. I thought that was the logical place to start.

I know the Department is always open to reviewing and to looking at creative options, but I think this is one where they tried. They tried to come up with all sorts of different proposals, and they all seemed to run into the same sort of difficulty. Virtually any upgrading proposal on the existing route is both very expensive and creates significant difficulties for a significant number of people in that area. So I appreciate the

Document details

Collection	Manitoba — Debates (Hansard)
Citation	37-1-34a
Type	hansard
Volume / chapter	37th 1st hansardpdf 34a.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	fb5cc7c28fe3b90f49cc615beeb12e6e147cbc70

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