COMMITTEE OF SUPPLY

(Concurrent Sections)

INDUSTRY, TRADE and TOURISM

Mr. Deputy Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. This afternoon this section of Committee of Supply meeting in Room 254 will resume consideration of the Estimates of the Department of Industry, Trade and Tourism.

When the committee last sat, it had been considering item 2.(a)(1) on page 98 of the Estimates book and on page 25 of the yellow supplement book.

Item 2.(a)(1) Salaries and Employee Benefits $1,490,200.

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Mr. Tim Sale (Crescentwood): I would like to start, Mr. Chairperson, by talking about the MUSH sector briefly, a sector we talked about on Friday, and it refers to the question of the agreement on internal trade.

The minister and his staff reassured us that their view was that, should the MUSH sector be brought into the provisions of the AIT, that this would not automatically open up national treatment, it would not trigger national treatment under the NAFTA agreement.

I consulted a couple of trade experts over the weekend, and I will say for the record that they said the same thing, that they agreed with the minister and his staff, but they then went on to qualify what they said very carefully. [interjection] No, in fact, neither of them were lawyers. The minister said, were they lawyers? No. The qualification that was shared with me went this way, that you could still use the defense of regional procurement under the NAFTA agreement to keep tendering and procurement in the MUSH sector out of the hands of companies from across North America, but in order to do that you would have to have a very clear and clearly articulated policy that was public and that could be defended in trade tribunals in terms of its purpose as a regional development priority.

So, if, for example, the minister wanted to defend our small health industry sector and treat that as an incubation sector that was being strengthened in order to become globally competitive, as was the Western Flyer bus company in the example I gave last week, the minister would have to have a very clear written policy that could be defended against a challenge from another company, either Canadian or American, that would challenge the need for such a regional development policy or its appropriateness.

Does the minister have any comments in response to the input that I gained from a couple of tradespeople?

Hon. James Downey (Minister of Industry, Trade and Tourism): It is appreciated, Mr. Chairman, although we do have a considerable amount of time from the time in which these Estimates are being debated because the MUSH sector does not come into effect until July 1 of next year, 1996. This does not come into effect as when the provinces' agreement comes into effect, so we do have some time to further clarify, and if a written policy is needed to protect them, and if, in fact, the government were to do that, there would be ample time in which to do that.

Mr. Sale: I thank the minister for that answer. I think the particular question that we have is, is it the minister and the government's intention to articulate a regional development procurement strategy for any or all of the four subsectors that are under the MUSH heading?

Mr. Downey: At this time, Mr. Chairman, it was our intention as we entered the free trade agreement, the internal trade agreement, with the other provinces as it related to procurement and provincial governments, was to have it apply to the MUSH sector basically the same as it applies to the provincial governments.

I know there is a need to further discuss with some of the municipalities their concerns as to a cap of the amount of money for contracts which have to be put out to public tender, the efficiency with which they can actually do the contracting.

I know there has been a concern brought forward on the operational side of it. There has not been a concern brought forward as to any intrusion of U.S. companies bidding where, in fact, it would impede regional economic development.

Again, it is an area where regional economic development can be used for many purposes. One that I would hope would not be used is to circumvent the trade agreement which was entered into with the principles of having the movement of goods, services, people and bidding capabilities for small companies to bid in adjoining jurisdictions.

One of the concerns that also came forward, and it was a question, but I think it helped satisfy some of the minds that were out there as it related to what extent--would the free trade, in fact, as it relates to MUSH, if a municipality opened up, would the agreement allow them to have some form of mix of private and public investment in some of the capital projects that are being carried on their communities, and it is my understanding that the agreement will allow that.

Under a system where municipalities continually only allowed bidding to take place within their own jurisdiction, whether it be engineering or construction firms, then how would it ever open up so they could see other alternative ways of doing it, and making sure maximum efficiencies and opportunities were being applied to their jurisdictions.

I think the internal trade agreement, quite frankly, will help.

As I said, the objective certainly is to save the taxpayers money, lower costs and I think create greater opportunities for some of the smaller Canadian companies.

Again, specifically as it relates to regional development, I think there is enough consideration, or there has been enough consideration so that it in fact, is workable, to some degree.

But again, it is a fine balancing act as to whether or not it is used truly for regional economic development or is it used to circumvent an agreement, which is to allow open and free bidding nationally on major projects.

Mr. Sale: Mr. Chairperson, I thank the minister for that thoughtful response. In the main, I do not think I could take exception to it.

Our concern is that large companies, and they do not necessarily have to be American, but they often are, have the pockets to engage in predatory pricing in order to win contracts. Should they then become, in effect, a natural monopoly, which is the sort of thing that happens with laundries, for example--once you build the capital facility and put together the infrastructure to collect and distribute hospital laundry--it is very hard for another company to come in and bid against that existing supplier.

So what I would like to ask the minister is, is the minister able to tell us what mechanisms are in the department to monitor whether predatory pricing is likely to become or is becoming a problem in any of the sectors where there is not much in the way of a real market for the services?

Mr. Downey: Under the internal trade agreement, if that is what you are still referring to, and there is, I understand indication that it is, I would expect that the secretariat as it relates to the operations of the Internal Trade Agreement well could be, if not charged, could be asked if that could be carried out, in a monitoring system within the structure that is established for the provinces and the federal government.

They will be stationed here in Winnipeg, as I indicated the other day, and we are pleased that the internal secretariat will be here in Manitoba. Again, that could be a responsibility that they are charged with. Again, that direction would come from a ministerial direction and one which I would take under consideration.

Mr. Sale: I wanted to put those concerns on the record because it does appear, at least in the health sector, which is the once I am most familiar with, that there is a substantial drift towards the use of non-Canadian companies to provide some of the bigger services. They may indeed provide quite efficiently but once they become the monopoly provider then it would be very hard to restrain them in terms of price gouging.

I would like to ask some questions about AECL. I gave some notice to the minister of this on Friday. I know some of the issues of AECL may well go to a different department, but I would like to just put on the record that in 1992, August 31, 1992, the Manitoba Bureau of Statistics under its director, Will Falk, undertook an economic impact assessment of the AECL laboratories, and in this, Mr. Falk noted, among other things, is that AECL has a $54-million wage and salaries budget, that this has a multiplier effect in Manitoba bringing it up to $74 million in wages and salaries, that for every dollar spent by AECL, the direct return to the Manitoba economy is 95.3 cents, that the employment directly at AECL is 1,021 with a further 731 full-time jobs dependent on AECL operations, again a significant multiplier effect.

I am sure the minister probably is looking at the same document that I am now, but the tax impacts on the province are substantial and positive, and the contribution overall to our gross domestic product is substantial and positive.

I want to ask first, is the minister and the department in an active relationship with AECL in regard to its future development direction?

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Mr. Downey: The answer is yes.

Mr. Sale: Could the minister describe the nature of that relationship and where he sees it going?

Mr. Downey: I was afraid that question was going to come. I did not expect him to accept the yes.

Mr. Chairman, let me at the outset for the record state that this government feels very strongly that AECL and all the people who work there in research and part of that community are extremely important to our province and to our overall provincial economy, and they do make a major contribution to our province. The member is aware, as we are aware, that with less taxpayers' money available to support them, they have had to make some, and are, in fact, making some decisions which will cause change.

We have played a role as it relates to Whiteshell Park in a couple of ways. One is that we have funded a technology park feasibility study or have been part of a study. We have contributed $25,000 to that, and we have had staff, some of the staff sitting here, who have been either part of discussions or been in departments in ongoing dialogue as it relates to the future of the park, and also we have put forward some technology assessment and a targeted market study of some $37,400 as part of the work that they are doing in that regard.

So it is really a matter of trying to find future opportunities for AECL as it relates to many areas of activity. Again, what the main objective is, is to try and find private-sector work, to try and find international work that can be carried out at AECL, and quite frankly, I do not know where else we could find the assembly of some 800-plus highly trained, professional, scientific-type people. I think that is just tremendous. So I think we need to further work aggressively with them to find options and opportunities for them because we do not want to lose that base of technology and that cluster of people who, I think, have done some tremendous work.

Again, some of the sales of power units that have recently taken place--I believe they have signed one. The last one that was signed was with South Korea when the Honourable Jake Epp was the minister, and it had some supporting activities for AECL in Manitoba. I also believe it had more of a greater support for Chalk River in Ontario.

One of the other things that we have to appreciate is that I think Ontario Hydro put forward a considerable amount of support for the work that is being done by AECL, and all I can say is that we--and I cannot tell you about Manitoba Hydro. The minister during his Estimates may be able to talk to you more about Manitoba Hydro's involvement with AECL, but we have had an active part, and I say as a government, we are strongly supportive of making sure that the operation stays viable here in Manitoba.

Mr. Sale: I am glad that in a general way, the minister is positive about this. I think AECL languished under more or less all provincial governments until the federal government began to threaten it with its life and the province began to wake up to the potential of that centre out there as a very concentrated research and development resource, and I do not think most Manitobans, and I certainly would include myself among them, had any understanding of the scope and scale of work that was being done there, and that most of it, in fact, had little to do with atomic energy, per se, and a great deal of it had to do with applications of atomic physics but not the generation of power, although the Slowpoke reactor was developed there.

Does the minister have an understanding of the cuts that have been coming to AECL from the federal level, and has there been any discussion with AECL about how they might survive these cuts?

Mr. Downey: I could ask the department maybe for specific information on time frames, but I know they are working towards trying to get themselves more self-sufficient and more dependent upon outside sources other than the federal government. I know they are moving and working as aggressively as possible. I do not honestly know if there has been a time limit or a further indication as it relates to what federal funding will do to them.

I think the one thing that they have been informed about, and one that I have a feeling about, is that there is not going to be any additional federal funding that will go to them, that they have to, in fact, get out and aggressively market themselves as a research base and service.

I guess that is the--the member has not commented on it. One of the things that I see and that is the most recent development that I can report on a positive note was the sale of the Slowpoke reactor to South Korea which added some stability, I think, to some of the jobs that were there, and maybe added a few.

Other initiatives that are being carried out, other than reduction of support by the federal government, I cannot report on. I will make a commitment to the member, if there is any intelligence internally within the Department of I,T and T as what the future plans of the federal government has as it relates to the Whiteshell AECL operation, then I will report that to the member.

Mr. Sale: I thank the minister for that. Just for the record, I do not believe that it is a Slowpoke reactor that was sold to Korea. I think it was the standard heavy water design that was sold. I think they have had difficulty placing Slowpokes anywhere. It was on the market and now I think it is off the market again.

Mr. Downey: It was the Candu reactor which they sold.

Mr. Sale: I want to then move into the area which I know largely impacts on the Minister of Environment, but from an industry, trade and development of jobs perspective it certainly is also of interest to this department. I suspect there must be some interdepartmental group that either has been or will soon be struck to deal with this.

AECL filed, I believe it was in the early part of the winter but it might have been late last fall, documentation for an environmental impact study coming from more than 10 years of exhaustive study of the question of the safe storage of nuclear wastes. I am aware of this work because I canoe through the experimental lakes area frequently with my wife. Those lakes are dotted with monitoring devices to monitor the release of gases and the rate at which those gases are released through the Canadian Shield country. The environmental impact documentation is about three feet high, and I think only insomniacs would try to read through it.

Nevertheless, the hearings will be held this fall. I would like to have a sense from the minister as to the government's general direction in responding, in participating in or appearing at these hearings, and, secondly, how broad public policy might be framed in terms of the siting in Manitoba of a large, hopefully safe, storage of nuclear waste, if indeed that is not an oxymoron.

Mr. Downey: The specifics as it relates to the environmental hearings and any activity that would be carried out there, I think would be more appropriately asked to the Department of Environment because they are the agency and the department which will be the ones that are more directly involved.

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Mr. Sale: I understand from an environmental perspective that is true, but I think there is the potential for in excess of 1000 full-time high-skilled construction jobs over quite a long period of time. It is not like a hydro dam that would be built over a short number of years, but an extensive amount of excavation over a long period of time, then the question of encasing, entombing, backfilling, monitoring and guarding. This is not a short-term project. My understanding is that their time line goes to 2030. I do not imagine my time line goes to 2030, but that is the kind of thing we are looking at. So could the minister comment on the whole question of government response to the storage, safe or otherwise? What is the government's position going to be on this?

Mr. Downey: I guess I could answer the question with a question. Is the member advocating that we go out and aggressively promote and try to make sure that we have that capability here in the province of Manitoba? Is that the intent of which I am to take the question?

Mr. Sale: No. I will be very frank with the member. My own view is that nuclear waste and nuclear power, while they have been, in Canada's case, more or less safe, there are abundant indications from around the world, from Windscale in England, from Chernobyl, from Three Mile Island, from the Fermi plant, and, in fact, if the minister has ever toured Chalk River, he will know there is an entombed plant there, too, which most Canadians do not know about. It is a small reactor from the early 1950s, but there was a major spill and they did what Chernobyl did; they tombed it up with concrete.

I do not view nuclear power in the same benign way that the promotion suggests in Ontario, but I am conscious that we have benefited from their nuclear power and that their economy has contributed to our economy, and we have got a problem in this country with the safe storage of high-level wastes. I do not have an answer to that but--I am speaking personally, not for my party--I am not de facto opposed to it. I would rather, in fact, have it stored safely in a secure setting than stored where it is now. We have got the bloody stuff; we have got to do something with it. I think that is quite a separate issue from the question whether we promote further use of nuclear power.

I think it is going to be a very tough public debate. I am wondering how the minister and his government are planning to handle that debate and whether they have any overall strategy to deal with it, because it is a lot of jobs, it is a lot of money, it is a lot of time and there is risk involved. We have not generally had a good record in dealing with that kind of complex issue at a government level. It has generally deteriorated into a lot of name calling and factionalism. We are going to have to face this sometime.

Mr. Downey: I did not intend to get into a philosophical debate on the storage of nuclear waste, but I guess I could enter into a little bit of a dialogue on it.

I first of all believe that we in Manitoba, with our hydroelectric power, as low cost as it is and as available as it is, we, as far as using it for the production of electricity, I do not believe will be faced with the problem of production of it, of nuclear waste through that system for many, many years, if ever. My preference is to continue to develop the Manitoba hydroelectric system with the use of water power and that is the first position. As far as the safe storage of it is concerned, again, I would look to people who are professionals in the field as it relates to that, I would look to people like the professionals at AECL and would not try to second-guess them, because I certainly have a limited knowledge. I do not know of any direct--and again the member is being, I think, very open and fair, saying that it does create and could create tremendous numbers of jobs and economic activity.

Again, one has to bring into balance at what cost, and I think at this particular point the people of Manitoba would be somewhat apprehensive as it relates to entering into a proposal that would in fact have it stored in Manitoba. We are not the producers of any large quantities of it, if any, that I am aware of, and so to invite it into your backyard, it would take some long-term public debate and a clear understanding of whether or not we could see an advantage as it relates to the jobs.

My suspicion at this point would be they would not be comfortable in having it brought in. However, there would be a process, and I say there are people at AECL, there are professionals in this field, and there is a process through the environmental department and environmental hearing stages that could be carried out. At this particular point I can see nothing more at this particular debate or time to say that, if brought forward by AECL and all the security was put in place to further open the public dialogue and debate on it, that is what would happen.

As far as being out actively promoting it, we are not, and, again, appreciating the position that the member comes forward, when I am sitting here as a cabinet minister I cannot say that I am sitting here as a private individual speaking for this private individual. I am here as a cabinet minister, and I have to speak for the department.

Having said that, at this particular point, I think further clarification as to the handling of any move in that direction would certainly come under the purview of the Department of Environment, and you could further dialogue during those Estimates as it relates to their position.

Mr. Sale: As the minister knows, I may well be in trouble with my own party for stating a personal view on the issue, be that as it may.

Mr. Downey: If you are asking for defence, I cannot promise it.

Mr. Sale: No, I will defend myself, I think.

What I--and I will not push this past this statement--what I am suggesting to the minister is that this is not an environmental impact process or hearing like many others. This is one that has very large risks and benefits associated with it on both sides, and I would hope that the government would think about some perhaps more constructive ways of handling the process than simply doing the linear by-the-book environmental impact process.

I would think, for example, that all of us on both sides of the House might be well served by having extensive, adequate briefings on the issues at stake, that we would all benefit from some leadership from the government to try and avoid the issue becoming hysterically polarized before it starts. So I am raising a concern that I think this is not like a lot of the ones we do. This is not small potatoes, and it touches people at a nerve end. People are afraid of the potential. I do not have an answer for it, but I think from a public policy point of view the management of it calls out for something more than just the ordinary process.

Mr. Downey: Mr. Chairman, the first thing the member would have to consider is repealing his former Premier's legislation making Manitoba a nuclear-free province then. That would be the first thing he would have to go against, would be his former Premier's legislation.

Mr. Sale: I think when that legislation was passed AECL was even more involved in nuclear power than it is now. So, we did not have much problem with that, and that, as the member knows, was not the point of the legislation.

We can move on to a couple of other questions in this area. On page 24 of the additional information book the proposal to develop--if I can find the quote here--it is in the third line of Trade and Global Markets. An additional $500,000 budgetary authority is allowing Manitoba Trade to establish a single, highly visible export identity for Manitoba.

I think we talked earlier about that being the rationale for the Manitoba Trading Corporation being activated to a higher extent and being funded to a significantly higher extent than it has in previous years. Could the minister indicate what the current plans are for doing this? In structural and departmental terms, what are you going to do to achieve this goal?

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Mr. Downey: First of all, one should determine the need for doing it, and I think as we see a more global market opening up to Manitoba has been demonstrated the need for an additional support mechanism that would help carry out trade activities as it relates to particularly some of the smaller companies that do not have the resources and/or the current technical capabilities of reaching into some of the market opportunities that are out there. Whether they are under NAFTA or whether they are into the Asian markets or wherever, the government felt there was need for the implementation of a trading corporation that would be of some assistance.

So that is the thought behind it in that regard, as well as the adding to it of some additional people whom we believe would have, under a restructured way, knowledge that would further enhance and support individuals in that whole arena. So that is the thinking behind it. It is basically part of a commitment to Manitobans as it relates to trade out of Manitoba.

I think there are not many days go by that we either are not contacted by or in discussion with either people from outside of Canada looking to strike up some form of trade relationship or smaller companies, particularly within Canada and within Manitoba, looking for some form of structured support to give them as it relates to market activities outside of the province. Again, as we have said many times, Manitoba depends very heavily on trade. Eighty percent of our trade, I believe, our product is basically traded outside of the province in other provinces and the trade percentage that goes into other jurisdictions. I do not have the numbers on it, but it is, it is our survival, if we do not have effective trading activity. So that is the thinking behind it and that is what we are proceeding to do.

Mr. Sale: Could the minister indicate, my understanding is that MTC is a corporation, established as a Crown corporation. Is that correct?

Mr. Downey: That is correct.

Mr. Sale: Who are the other board members of MTC at the present time other than, I think it is your--is it the assistant deputy or the deputy? It is Mr. Kupfer, assistant deputy.

Mr. Downey: Currently, the membership is made up of Stephen Kupfer, Rod Sprange and Mike Bessey and with Mike Bessey leaving the employ of government, there will be another individual put in place of Mr. Bessey.

Mr. Sale: I hope Mr. Bessey finds Harvard a good place to be.

So it is a corporation then, and it does have a board of three people. Could the minister explain what the functional relationship will be between Mr. Kupfer and his corporation, in effect, as the officer of a Crown corporation, and the various managing partners that are in the various divisions currently in the department?

It looks to me like we are putting MTC in that line now and that the intention is to manage the trade operations through this corporation's activities rather like a Crown corp within the department. Can you comment on that?

Mr. Downey: We are still, Mr. Chairman--as the member knows, the amendments to the act are before the legislature. I believe it will be used as a supportive tool for any managing partner that sees need to use the instrument to enhance activities as it relates to trade. That is basically it. It is another tool within the department to enhance the objectives of trade activities which, of course, at the end of the day return economic benefits to the province and job opportunities for those people who are in the export business.

Mr. Sale: Could the minister just explain the footnote on page 25 of the supplementary information? The appropriation of $812,000 represents a $500,000 increase for a new trade and investment promotion initiative less a $200,000 nonrecurring amount for MTC.

Mr. Downey: The nonrecurring amount was basically in there for the Arctic Bridge work that was done.

Mr. Sale: I am sorry to admit my ignorance, but I do not know what the Arctic Bridge is.

Mr. Downey: The Arctic Bridge was an agreement that was struck, and work was done to enhance trade activity between the Port of Churchill and Murmansk. There was a study carried out and some work done, and, basically, it was to enhance trade between those two jurisdictions. These were the resources that were made available for that purpose.

Mr. Sale: Just so that I can understand this MTC role more clearly--and I am not being critical of it. I am just wanting to understand it. What it sounds like the minister is saying is that there will be a corporate identity called Manitoba Trading Corporation, which any of the partners, the directors of the various groups, could use in terms of flowing agreements, reaching agreements with potential clients, new companies. It would be the vehicle that from a corporate and legal point of view, a new industry might interface with in working with the department.

Am I understanding that correctly?

Mr. Downey: That is a fairly accurate assessment.

Mr. Sale: As I have said, I do not have any problem with this. It does seem to me that you are moving, perhaps in a deliberate and appropriate way, to a special operating authority or a special operating entity.

That is not necessarily a bad thing, but are you going to make plans and lay them out, or is it just going to kind of become an SOE de facto?

Mr. Downey: In the initial stages of it, it was seen to be able to satisfy a need as it related to trade, enhancing trade and trade opportunities for Manitoba companies.

It will be, I would say at this stage, relatively flexible in how it participates to meet that objective, because there are any number of situations which we are faced with as it relates to companies trying to embark upon international or trade outside of this province. We needed this capability to work and work with them and support them.

The member indicates that it could flow to an automatic special operating agency, if that is what he is referring to. If that were seen to be advantageous as the entity unfolds, then, as he has indicated, he does not have any problem with it, and I would not see where I would have any problem with it if it moved in that direction. The point is, we do not have an effective mechanism today. We are trying to put one in place.

Mr. Sale: I think that is good. I did not say that I had no problems. I said that I did not have any problems in principle with it, and I do not.

My concern would be that this is a vital area of government and SOEs tend to move beyond the scrutiny of Estimates, and to a certain extent they become line entries instead of detailed entries, and I would not want this area to move beyond the kind of scrutiny that I think it should get. I do not have an in-principle problem with SOEs. I think it is a question of how they are used.

The regional representatives of Manitoba list Hong Kong, U.K., Japan and other locations. Could we have a list of the regional representatives with their locations, salaries and expenses for those?

Mr. Downey: Yes.

Mr. Sale: Could the minister just expand a bit in terms of their sense of the current cost benefit of these regional reps? Some have been open, some have been closed from time to time as the perception of the utility has gone. I think one was closed in The Netherlands, if I am not mistaken.

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Mr. Downey: Basically, I can give him the names. We have Richard Walker in Hong Kong who is under contract to carry out services for the province but is not prohibited from carrying out some additional work on his own activity. There is no office provided in that situation.

We have Mr. Watson Laing who is in the U.K.--[interjection] Yes, actually living in Windsor Castle, a touch of royalty there. Goes right to the top. [interjection] No, he did not live in the part that burned. That is under contract.

And we have a lesser contract but a very important one with a person by the name of Anne McDonald in Tokyo carrying out some activities as it relates to the province. She is an expatriate Manitoban and a very highly qualified person as are the other individuals representing and working on behalf of the Province of Manitoba. We, unlike other provinces, have not gone out to the expense that some other provinces have in foreign service. Rightly or wrongly, we have not. Other governments previous to us have not. We believe there is an important role to play.

However, we also know that the federal government have representation in those areas and we depend heavily on the federal government representatives, and, in a lot of cases, have worked very closely with the department to make sure that we have adequate and proper representation in those foreign markets.

I am not able to, at this particular time, disclose in detail some of the benefits that we are seeing, but I know we have seen some very positive activities flow from those contracts, and one that, without disclosing something that is not able to be disclosed, there will be one announcement that will be coming shortly that will have fairly significant impact on future trade activities for Manitoba. I will be announcing that when it is appropriate. There are other processes that have to be gone through.

(Mr. Frank Pitura, Acting Chairperson, in the Chair)

I think we are getting value for our money. It is an important role for people to be in, and I could elaborate, as I say, on some of the individuals but I do not think that is necessary. We are, I think, carrying out the most efficient of any province in the country as it relates to having representation in other jurisdictions.

Mr. Sale: I wonder if the minster has a sense of the trade with each of these regions that is influenced by these three people iIn terms of some kind of time series. How are we doing over time with these regions? I picked some dates, but I do not have any particular reason for them, 1991 to '94 or '95, or some convenient period of time.

Do we have a sense of trade with the regions and whether we are getting better or are we getting worse?

Mr. Downey: I am prepared to provide the trade numbers over certain periods of time. We have that with those jurisdictions.

One area that probably I could just further elaborate on, that we are seeing some growth in, of course, is the tourism industry. One of the objectives of employing an individual in Tokyo, there are major moves between the Government of Canada to encourage a greater amount of Japanese-Canadian trade activity, tourism activity. This individual is very active as it relates to the proper connections in Tokyo. We look for some greater results there as it ties in with the Japanese tourism industry.

Again, the U.K. is the same thing. We have a major aerospace sector, which has very close linkages with the U.K. Bristol, of course, being owned by a U.K. company and a lot of work activity, we want to make sure we have proper and appropriate contacts with those jurisdictions. So those are basically some additional comments.

Mr. Sale: I have one more question in this area, Mr. Chairperson, and we can pass this subappropriation.

I apologize for my voice today. I woke up in the middle of the night with very little of it. It sounds strange to me; I do not know how it sounds to you.

Dow Corning had a pilot project in Selkirk which, I believe, has been terminated. There is another company looking at Selkirk whose name, I think, is Saskatchewan Heavy Industries. I am not absolutely sure that that is the legal name of the company in Manitoba. Could the minister provide us with some information about both of those initiatives, why they are either going forward or did not go forward and whether substantial provincial funds were committed, in any case?

Mr. Downey: Mr. Chairman, I will comment on the Saskatchewan Heavy Industry proposal that was being proposed for Selkirk. There was a proposal that came forward by a group of individuals that had requested provincial government support. We stated, I think it was, 16 points which we would expect them to accomplish. One of them was to raise some $28 million of an equity investor or investment capital and 15 other conditions which had to be met. To this date, I am not aware of the fact that they have come back and have met those conditions, and so we are still in that pattern, unless the department has something further to add.

I understand there have been some changes, Mr. Chairman. They have changed their legal name to Tayco--

Mr. Sale: Could you spell that?

Mr. Downey: T-A-Y-C-O. Maybe I am wrong on the numbers of conditions. I know it was originally 16 conditions. It may even be more than that, but apparently they have met the condition of which No. 1 is. They had to raise some $200,000 to do a feasibility study to go out and raise equity capital, raise the 20-some millions of dollars that needed to be raised to carry on with the project. That they have accomplished to this date, that they have raised the $200,000, and they are out now in fact soliciting the additional capital needed for the project.

Mr. Sale: Could the minister just indicate whether he has any sense, or his officials have any sense, of the time line on this proposal that has been made? Presumably, it is manufacturing mining industry machinery, and our mining industry is undergoing somewhat of a boom. What is the timing on this?

Mr. Downey: Again, Mr. Chairman, it is not for me to put time frames on when it is out in somebody else's area of doing the work that has to be done. There is a possibility within months that there could be some showing of some positive results, but again it is not for me to say. I am not the one that is carrying out the work activity. We would hope that it gets carried out positively, but again there are certain conditions and one of them is to raise a substantial amount of capital.

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Mr. Sale: Could the minister comment on the Dow Corning proposal?--and this may again be that I have just not found the references. Did it fail because of a technology question, a marketing question? What was the reason for their winding up?

Mr. Downey: I think I would not say that it failed. I would say we have seen a substantial investment by Dow Corning. We have seen a considerable amount of money both put forward by the provincial government and by WDO to support a new technology as it related to the processing of silicon metals and the development of that product. So I do not consider it a failure.

There have been quite a few jobs in the interim period during the testing process that were created. It is my understanding that it did not meet some of the technical and economic benchmarks that were put forward that would warrant commercialization of the technology at this particular time. So rather than advance and go to a greater plant, which would have been the desirable decision for us, that was not able to be done, and it was the people who were carrying out the project activities, that being Dow Corning, that made that decision.

They--as Dow Corning have a considerable amount of resources in it, as do we, as do the federal WDO office have considerable resources in it--are looking for an alternative use for the enclosed arc furnace process that is in East Selkirk. Again, we believe that there could be some additional or some new opportunities found for that furnace, and, hopefully, that happens sooner rather than later. But, at this point, we do not consider it a major loss because it has created a considerable amount of employment, and there is major capital invested in that facility that is potentially usable.

Mr. Sale: I did not mean to use the term pejoratively--failure in the sense that it failed to go ahead, not in the sense that anybody is to blame for it. I know very little about this area, but what I have read suggested that it was sort of leading-edge technology and pushing the technology to new applications.

Is there any residual benefit to the province, having been a major partner in the proving of this technology, or does Dow Corning own it entirely and has, in effect--well, one might say, they have used public sector research grants to forward their own technical capacity, but we have no further stake in that.

Mr. Downey: The benefits to Manitoba, as I have indicated, is we have a considerable investment from Dow Corning in a plant in Manitoba that has created considerable numbers of jobs. The ongoing use of the plant, we would hope we could find some company that would be, in fact, encouraged to use it. I believe that Dow have something in the neighbourhood of $30 million invested in the plant. Manitoba's contribution, I believe, is $6.6 million, and Western Diversification is in basically for the same amount. The point I want to make is that there is a considerable amount of capital investment. It has created some employment. We would hope that on a sale of this particular plant to any other individuals--we know that we would participate in a percentage of the sale proceeds.

Mr. Sale: I think the minister partly answered my next question, and that was the question of equity in the plant. Do we have equity in the plant roughly in proportion to our investment? Is that the deal?

Mr. Downey: I do not believe it is considered as equity. We would get a percentage of any revenues that were generated from the plant in operation of it in a commercialized way, or if it were to be sold, we would recapture some of our money, if not all of it, through the proceeds of the plant to the number of, 20 percent of the sale proceeds would come to the province.

Mr. Sale: Again, this is because I am new in the portfolio, so I do not know, Dow Corning still owns the plant then and is looking for an opportunity to use it but not within their own company. They are looking for someone to come in and either lease it or buy it.

Mr. Downey: That is correct.

Mr. Sale: I think we can pass this particular section, 10.2, 2.(a)(1).

The Acting Chairperson (Mr. Pitura): 2.(a) Industry Development (1) Salaries and Employee Benefits $1,490,200--pass; (2) Other Expenditures $1,473,800--pass.

2.(a)(3) Grants $152,800.

Mr. Sale: Whoa, whoa. I am having difficulty finding the numbers you are quoting, Mr. Chairperson. The first one was $1,490,200. The next ones?

The Acting Chairperson (Mr. Pitura): $1,473,800.

An Honourable Member: Where am I finding that? I am sorry, Mr. Chairperson. I just did not want to pass too little money for the department to operate on.

The Acting Chairperson (Mr. Pitura): 2.(a)(3) Grants $152,800--pass.

2.(b) Financial Services (1) Salaries and Employee Benefits.

Mr. Sale: I just have a few questions in here. One is on the Manitoba Industrial Recruitment Initiative, MIRI. I tried to make sense of the difference between MIRIs and MIOPs. For the life of me I cannot make a distinction between the two and perhaps it is obvious and I am missing it. Could the minister comment?

Mr. Downey: Basically, the difference is the MIRI program is one which allows the government, through negotiation, to provide a loan which would be written off totally, the loan and interest. MIOP is basically a repayable loan with the ability to forgive some of the interest in return for job creation. The reason for the difference is that, initially, with some of the new activities that are taking place with new technologies, under MIRI there would not be necessarily any plant or product to take security on, so it gave the ability for the write-off of loan and, basically, the province would not be in as secure a position as they would be through a MIOP program.

Mr. Sale: Thank you for the explanation. Just an observation, and nothing more than that. From the point of view of transparency to users, it is not always helpful to have that kind of fine detail broken down. It would be better for the department to know what it is rather than the public to have to try to make the distinction. I am sure that is what happens. I find all of those things confusing. Inside people understand them and it is not confusing to them, but to the public, they have a hard time making the distinction, just an observation.

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Can I ask about the preferred provider program? There are a number of sectors, I particularly know of the health sector, where companies can become preferred providers by doing some things. Sometimes it is by donating some equipment. Sometimes it is by agreeing to put materials up for test. Does this program have anything to do at all with this department?

Mr. Downey: Not that I am aware of.

Mr. Sale: Again, I guess I would ask, why not, because it sounds very similar to some of the things that you would be doing. I think it is a Health department program. It just seems strange to have little pieces of programs that have to do with procurement and supporting companies to supply Manitoba in different departments, especially in a sector as huge as Health. I will just make that observation, I guess.

A question about Carté International--last year Mr. Storie asked a number of questions about Carté. I believe the Hansard discussion showed that Mr. Storie's view was that most of the jobs that were to be created were in fact transferred from Winnipeg so that there was not much net new job creation but in fact simply a relocation. That was at least the gist of the questioning in Hansard.

Could the minister comment on the status of Carté and the targets?

Mr. Downey: Yes, the proper pronunciation is Cartay.

Mr. Sale: Carté. C-A-R-T-É?

Mr. Downey: Yes, it is a transformer business where they build hydroelectric transformers. In some cases, not in all cases, there is not necessarily a stipulation of a major job increase, although I believe there was in the initial stages. It maybe has adjusted downward. But in some cases it is also looked upon as the maintenance of jobs are also important, and I guess it was the company's decision that a move to a different location and the decisions that were made gave it the kind of stability it needed to maintain the jobs, and that is really probably the basis for which it was made.  I really cannot indicate any further than that.

Mr. Sale: Well, I apologize to the company for not knowing it was Carté. We will put an accent on it, and we will make it Carté.

I think Mr. Storie's concern, and it would be mine, too, was that the loan was premised on public perception that this was a job increase rather than a job protection situation, that the government used the loan that it made to the company in promoting its job creation activities and did not make it clear that that was not the case with Carté, but that in fact you may well have been doing a useful thing, but you were not creating new jobs. You were relocating a plant.

Mr. Downey: No comment.

Mr. Sale: Could the minister give us a status report of the loans that are currently out under these various programs that would be to places like Medix, MacLeod Stedman, Carté and any others that are current in terms of the loans that were given, terms and the jobs that were to be either saved or created?

Mr. Downey: Was that not in that list of material that I gave the member?

Mr. Sale: This is MIOP. Oh, I am sorry, MIRI is down at the bottom. Thank you. I withdraw. Thank you. I did not see MIRI.

Okay, on page 14 of the annual report of the department of 1993-94, I presume it is, there is a reference to a directory of some 1,800 firms representing Manitoba's industrial capacity. Could the minister describe how that directory is maintained, how it is made available, et cetera?

Mr. Downey: Yes, the question I believe was, how is the database maintained or how is it developed and maintained. Is that--do I understand the question correctly?

Mr. Sale: Yes, Mr. Minister.

Mr. Downey: Basically it is within the Research department of our department. There is a process that the individuals who work for the department carry out in making sure that they through direct contact and/or other informational systems that are available, they make sure it is fed into the Research department. I am not sure whether there is additional information that I can provide as to how it is done specifically, but if there is I will provide that to the member.

Mr. Sale: My concern is that this is obviously a very useful tool. Has consideration been given to making it available on interactive video, on diskette, on the Internet, on any of the business bulletin boards? Can you key-word search it? What is the capacity of this tool to be user-friendly in effect?

Mr. Downey: It is available on diskette at this particular time. Again, I think the department are pretty aware of the valuableness of it and will make it available in as broad a way as possible so that it can be used as a resource base for business.

Mr. Sale: Mr. Chairperson, can it be key-word searched? Is the diskette free? Can we have a little more information about the nature of this, and if it is in that kind of frame may we have a copy of the diskette?

Mr. Downey: Yes, there is a charge of $25 for each diskette. So we will see that you get the proper application form for it.

No, the member makes a good point. I am assured by the department that it is available through a broad range of mechanisms, and if it is not to the satisfaction of the member I am sure that he can let me know. I will give him a more specific answer as to all the systems and the process that is available.

Mr. Sale: I recall when I was watching--I very rarely watch TV--but I was watching TV one night, when the Canadian consul general in Seattle happened to hit the news. Maybe the staff might recall that particular story. He had put up a bulletin board page on the Internet with information about the characteristics of companies and individuals that Canada was looking for within the area that was his particular concern, which I think was B.C. It might have been B.C. and Alberta. He was getting very fascinating responses because precisely the kind of people that he was looking for are the kind of people who will look on bulletin boards on Internet because they are proactive people and they understand how this technology works. So I am not being critical. I am simply asking whether the department has thought of ways of aggressively marketing this, not waiting for requests but pushing out there and making sure that it is as user-friendly as possible.

I ask then a further question on this. Has the minister considered placing this resource in Manitoba's public libraries or other commercial libraries such as Chambers of Commerce or other locations? Has that been considered?

Mr. Downey: Again, I would have to check with the department as to whatall areas have now, and what technology is used to make sure it is properly distributed and what are some of the potential ways to make it further available to the public.

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Mr. Sale: Mr. Chairperson, a procedural point, would the committee consider a five-minute break?

An Honourable Member: Sure, no problem.

An Honourable Member: Take an hour if you like.

Mr. Sale: No, I am learning too much; I cannot afford to take an hour.

The Acting Chairperson (Mr. Pitura): Order. Is it the will of the committee to take a five-minute recess?

An Honourable Member: And leave the clock running.

The Acting Chairperson (Mr. Pitura): And leave the clock running. [agreed]

The committee recessed at 4:02 p.m.

________

After Recess

The committee resumed at 4:07 p.m.

The Acting Chairperson (Mr. Pitura): I call this Committee of Supply back to order. We are on item 2.(b)(1).

Mr. Sale: Going to this list that the minister supplied of MIOP and MIRI statistics, the last column is headed Jobs Created and To Be Created, but there is no distinction between targets and actual. Does the minister have the data that separates target from actual here?

Mr. Downey: Yes, there is an audit done each year. I have not got it right here, specifically, although it might be on the bottom.

In most cases, I say this in most, not absolutely all of them, but in most cases, particularly under the MIOP program they have, for all programs, basically exceeded the target which they have to create and in some cases substantially passed the targets.

I will try to identify for the member which ones may not have reached the target, but they are very few. I will attempt to try and get that information.

Mr. Sale: I thank the minister for that. In the case of Boeing Canada, my understanding is that, unless there is another loan that I am not aware of, this was not new jobs but this was a saving, a retaining or a protecting strategy. Is that incorrect?

Mr. Downey: I am told by the department that it was for the creation of new jobs, and they actually created substantially more than what the target was.

Mr. Sale: Then I think, Mr. Chairperson, I must be recalling a different program from Boeing that was made at a different time that was intended to protect some jobs which subsequently were lost when the industry turned downwards.

The heading Unannounced MIOPs at the bottom of this list, could the minister tell us what an unannounced MIOP is?

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Mr. Downey: Basically, it is an unannounced MIOP. I am not trying to be smart. That is exactly what it is. It is a MIOP program that has been approved by government but has not been officially announced publicly.

It is in concert with the company as to when, in fact, that announcement is made. These will be made as it relates to the ones that are approved and will proceed as soon as possible. I certainly do not want to hold up good news, Mr. Chairman. I will be advancing them as quickly as I can.

Mr. Sale: I guess the government House leader is going to convey this information to the minister. I was just going to say at ten o'clock, we will finish--maybe. Well, this will depend on, of course, the member for St. Boniface's (Mr. Gaudry) long list of questions.

Under the Vision Capital Fund, could the minister describe the current operational status and level of the fund within the overall Venture Capital program?

Mr. Downey: I would just ask him to be more specific in asking what, particularly, the level of the funds--would he repeat the question so we can get the information?

Mr. Sale: I am asking first, Mr. Chairperson, for an overview of the current status of the Vision Capital Fund, the number of loans, a broad overview. I am not looking for particular information. I am wanting to have an overall sense of where the fund is at present.

Mr. Downey: Basically, at this particular time, the Vision Capital has made a total of 15 investments at a cost of just under $11 million.

Mr. Sale: Is the list of projects available, Mr. Chairperson, or is that confidential information?

Mr. Downey: I will check, Mr. Chairman. The only reason is that we are dealing with private companies, and I am not sure whether I have the capability of doing that. I have no reason to not, but if there is a confidentiality clause which we have to live up to, then I have to respect that. That would be the only reason, to protect the company or the interests of the company as it relates to providing that information.

(Mr. Deputy Chairperson in the Chair)

Mr. Sale: I thank the minister for the information. If you have to leave some information out for that reason that would be understandable, obviously, but it would be helpful to have a sense of the investments. Could the minister also indicate whether there have been loans that have been written off in that list of 15 investments of $11 million in any kind of venture, fund or generally companies which do not pan out? You aim to have 25 percent of them pan out really well. Could the minister indicate?

Mr. Downey: There have been a minimal number that have had to be written off, but I would have to get the exact amount.

Mr. Sale: During the election campaign, the Canadian Liver Foundation telemarketing program failed. Could the minister indicate why this project failed and whether there are any learnings from that in terms of other similar projects?

Mr. Downey: The province had not flowed any money into that program, so we are not as a province at any loss as it relates to the actual cash that we may have invested. I would only be speculating. I guess it is a matter of some of the initial plans that they had thought would work out but did not. The intention was, I believe--and it is unfortunate because there were a considerable number of people who would have been employed, had been on the social assistance program. So I think the intent was certainly there, but for some reasons--whether it was management usually has some responsibility. Again I do not have the specifics, and again we did not lose any cash output from the province.

Mr. Sale: Perhaps the minister could clarify then, the list shows an amount in each case. I had assumed until his answer that that meant that that amount had been used. Is there some difference between the indicated amount and what was actually advanced?

Mr. Downey: Yes, that is the agreed on amount if conditions are met. Conditions were not met with that particular project so there were no funds advanced.

Mr. Sale: I am then, I guess, under the first one, Linnet. There is a blank in terms of total capital and jobs to be created in an amount of $200,000. What is the status of that particular program?

Mr. Downey: Basically, that was a cost-shared study that was part of setting up the whole Linnet program which currently does have substantial employees today employed.

Mr. Sale: An area in which Manitobans and Canadians have been concerned is the whole business of Immigrant Investor Funds, and we had some serious problems in the province with one of those funds. An investigation, which was commented on extensively in last year's Estimates process--I understand that the Business Immigration Program is under review. I think it was December 1992, the province placed a moratorium on accepting new offerings; '93, withdrew from the program altogether; '94, the federal government placed a moratorium on the program.

What then is the status of this program, and is it still figuring here in our Estimates?

Mr. Downey: As the member may or may not be aware, it is a federal government program, and the federal government currently have it under review, of which, I believe, we have an individual who is currently either part of that review or involved in it to some degree, so that is basically where it is at.

Mr. Sale: Is the program being operated while it is being reviewed, or is it totally in limbo?

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Mr. Downey: Prior to the freezing or the stopping of the program, there have been programs in place that we have to be part of administering or monitoring to make sure they are carrying out the objectives, but there have been no new approvals since the freezing of the program.

Mr. Sale: I am confused about dates. On the bottom of page 27, the period for the program operating is indicated 1987-1994, $58.8 million, yet, on the next page we see that the province had put the program on hold in '92 and withdrew in '93. Statistics indicate it was still operating, and the last sentence on page 27 indicates during '95-96 fiscal we estimate an increase of 20 percent, or 110 entrepreneur cases, coming to Manitoba, so I am confused.

Mr. Downey: Basically, I am told by the department we are talking about two different programs: One, is the Immigrant Investor Program, which has been put on hold; the other one is the Entrepreneurial Program which is continuing on. So we are talking about two different programs. Entrepreneurial is different than the Investor Program.

Mr. Sale: I guess the problem is that they are both under the same heading in the material here, and that was the source of my confusion. So if we could back up a moment. Then the entrepreneurial immigrant program is still in operation, but the investor program is the program that is on hold?

Mr. Downey: Yes, to both questions.

Mr. Deputy Chairperson: Item 2.(b)(1)--or do you have more questions on it?

Mr. Sale: I do. Under the Business Development Fund on the top of page 27, I am not suggesting that you have to give away large amounts of money in order to have an effective program, but this is a very small program, $1.339 million, and that averages out on a just straight average to $22,000 per firm. Some of it is grant and some of it is loan, I think. It is a very small amount of money. What is it that this program does? It sounds really impressive when you read it, but at 22,000 bucks a pop it cannot be doing a whole lot in that area. Could the minister expand a bit on that?

Mr. Downey: Basically, it is to carry out feasibility studies, work that involves Manufacturing Adaptation Programs. I know it does not seem like a lot of money, but it seems to be able to satisfy the need that is out there with the amounts that are being requested.

Point of Order

Mr. Downey: Mr. Chair, on a point of order, I wonder if the committee would be so generous as to allow me in about five minutes to take a five-minute break, as I have a group of students who are in from rural Manitoba that I would like to just speak to for a minute. I would appreciate it if we could in about five minutes take a five-minute break.

Mr. Deputy Chairperson: Is it the will of the committee that in five minutes we will take a five-minute break and we will leave the clock running? [agreed]

* * *

Mr. Sale: The last sentence says, in this Business Development Fund, that some of it is grant, some of it is loan or at least it could be. Are there in fact loans under this program at the present time?

Mr. Downey: Yes, the Manufacturing Adaptation Program is a loan program, so there are both.

Mr. Sale: The Pine Falls Paper Company, Mr. Chairperson, I think we are all glad that that mill was saved by the workers and the company that they formed, and with the co-operation of governments, there is nothing but good news in that. I am not critical of that. In the long run, Abitibi, like all forestry companies, is going to have to come to terms with the way in which they harvest their timber. We know they are still cutting in provincial parks and that we are the only province that allows that to happen, in Nopiming specifically.

I had a particular involvement with Pine Falls when it was run by Abitibi. We, when I was working with the United Church, put together a small camping centre on the Maskwa River. If anybody has driven up there they will know there is a little retreat centre that is now being used as a native alcohol treatment centre as well as a youth hostel. At that time Abitibi promised us, and I guess we should have got it in writing, but they promised us they would not be cutting up to that road allowance and that it would stay as mature timber and they would give us that. Within four years they had strip-harvested all the way up to the road that is access to the camp.

What is this department's role in terms of securing longer-term forestry practices? In some senses it comes under your mandate, in some senses it comes under Environment, I suppose some of it comes under some other mandates of parks or whatever. Is there a lead in this area, and is there some kind of policy work being done to try and move this company into a sustainable long-term pattern instead of what I think is a shorter, relatively short-term sustainable pattern?

Mr. Downey: First, I appreciate the member's comments as it relates to the Pine Falls Paper Company, as they have now taken it over completely from Abitibi, so it is now the Pine Falls Paper Company that do the forest harvesting.

It is also, I am pleased to note, that in the Berens River area there was previously a company known as Channel Area Loggers that provided very needed work opportunities for the aboriginal people of that community, and the government were involved working with them in Channel Area Loggers. They now have taken it over as a community-owned corporation, which we are pleased, and again the harvesting for them is extremely important as it creates jobs, employment and wealth and keeps them from being on social assistance or unemployment. As well, there are major programs carried out in the replanting of seedlings. There were some contracts let with some of the community people out there.

The lead department that the member is referring to as it relates to harvesting quotas and forest management falls within the Department of Natural Resources. Again I think it is important to have a balanced policy. We have, I believe, a balanced policy where we believe in the long-term sustainability of our forests. We have worked, I believe, very hard to make sure that any agreements or any involvement that is carried out in the forestry activities, for example, in the west side of the province with Repap, they have to make sure there is a living, breathing tree for every one they harvest, and that is in fact working out very successfully.

I think that most of us here clearly understand that if you do not harvest the forest with the thought that that has to replenish itself to be there for an additional harvest, you are in trouble. So we are sensitive to that in a very major way, but again we also appreciate that you need employment opportunities for individuals, and again, it is a balance. The Department of National Resources is the lead department as it relates to the allocation of timber and the licensing of harvesting of our forests.

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I would only add that it is times like this, when we see the devastating forest fires that are raging through our northern provinces, as to the impact that forest fires have whether it is a park or whether it is not a park, it just is a matter of being a terrible, terrible situation which threatens people and animals and all of those things that depend on the forests for their livelihood. However, there are certain limitations which we have in controlling them, and we are doing our best.

It is a matter of carrying out the sustainable development policies, and that is what we do. Again, all I can say at this time for the record is we are extremely pleased and proud of the employees, the management and the individuals that put themselves forward to take over the Abitibi plant with the Pine Falls Paper Company operation. I think it proved to be the right decision for them. It proved to be the right decision for us as a province to financially support them.

Mr. Deputy Chairperson: I believe the will of the committee is to break for approximately five minutes and leave the clock running. Agreed.

The committee recessed at 4:35 p.m.

________

After Recess

The committee resumed at 4:40 p.m.

* (1640)

Mr. Deputy Chairperson: Order, please. We are on 2.(b)(3)(e).

Mr. Sale: The minister indicated in his opening remarks that he thought that perhaps the total loan amount to Pine Falls would not be required. Could you indicate what the total loan is expected to be and what the conditions of that loan are in terms of forgiveness and repayment?

Mr. Downey: Basically, it is all repayable although on the two projects, the effluent treatment and the recycling part of the operation, it is deferred until the latter part of the loan. It would be paid after the initial loan agreement was paid off, and there is no forgiveness of interest.

Mr. Sale: What is expected to be the scale of the loan, now that it is clearer? What is required, Mr. Chairperson?

Mr. Downey: It really would be speculative except we have an indication that they probably would not draw the full $30 million. I think it would be unfair to speculate at this particular point.

Mr. Sale: Mr. Chairperson, on the list of MIOP and MIRI statistics of course Pine Falls does not show up because it is a special case. So the agreed upon ceiling was $30 million. What has been advanced to date?

Mr. Downey: I understand there has been nothing advanced to date.

Mr. Sale: The provision for this year is only $2.5 million.

Mr. Downey: The provision which has been allocated in our Estimates is for the interest. At this particular point, as I have indicated, there has not been any money drawn, so at this point we cannot honestly say how much will be drawn, but this is an interest amount which has been allocated for with an interest that we have to pay on the money that we would have advanced to them.

Mr. Sale: Again, I am a little bit puzzled. It seemed in all of the lead up to the Pine Falls takeover that the public sector loan ceiling of $30 million was absolutely vital to the takeover of the plant, and yet the plant is in the new company's hands. It is operating, I believe, at full capacity, and no monies have been advanced. So could the minister explain why the change in circumstances?

Mr. Downey: The market has turned around substantially for the value of pulp that is being produced, and I think at the time it was being negotiated, the loan was something in the neighbourhood of $450 a ton or a tonne--I am not sure how they measure it. It was a ton or a tonne.

Mr. Sale: It is heavy in either case.

Mr. Downey: One is 2,200 and some pounds, the other is 2,000 pounds. I am not sure which it was. Anyway I think it is a ton, and I believe it is probably close to double that at this particular time. So I think it is a matter of their cash flows have been able to satisfy what their demands have been to date, although they still have the capability of doing that, and quite frankly it was essential, as the conditions were at that particular time, to make this project fly.

Mr. Sale: Mr. Chairperson, I believe in some of the material I have read about Pine Falls is the intention to put in place a deinking capacity. Is that capacity under construction, being planned or completed?

Mr. Downey: I am told that the engineering work has been done and they plan to proceed later this summer.

Mr. Sale: My understanding had been that the $30 million was related more to the deinking plant than it was to the actual takeover of the old operation.

Mr. Downey: Yes, the basic lending, the loan proposal was for the upgrades that had to take place. One was the deinking, and the other was the effluent treatment part of the operation.

Mr. Sale: So, Mr. Chairperson, then it is not so much the question of the price of pulp that helps with the cash flow. It is the fact that the requirement for the $30 million is tied to work which is not yet substantially complete. That is the reason it has not flowed then.

Mr. Downey: To some degree, but I imagine the cash capability of the company is substantially greater than it was when the purchase was taken. They probably have a cash reserve which can carry out some of the work, and I suppose they would invest in that work rather than borrowing the money. It is the decision that they have taken.

Mr. Sale: Could the minister indicate the state of the effluent upgrade?

Mr. Downey: I am told that it is in progress at this particular time, the upgrading of the effluent treatment.

Mr. Sale: I thank the minister. I am glad the company has not required the money. Maybe they will not and everybody will save money. That is a good thing.

Could the minister comment on whether there are any loans or anticipated potential loans for reactivating mining in the Bissett area?

Mr. Downey: That, we hope, is a good news story. We know there has been some considerable amount of work carried on. There have not been any loans under the Department of Industry, Trade and Tourism, although I know, and I have been told this by the owners, that under the programs in Energy and Mines, that if it had not been for the mining incentive programs, they probably would not have done the work that they have done which could well lead to a decision of reactivating the mine some time in the not too distant future.

Again, the questions would be more appropriately asked in the Department of Energy and Mines, but I do not believe there are any direct loans out of Industry, Trade and Tourism.

Mr. Sale: I wanted to ask that question because it ties into the earlier statement, the earlier aspect of our discussion around the one-window approach, the special operating agency or role of MTC, however you want to characterize that. It seems that the government, and I do not exempt our previous governments from this comment, but it seems that the government has a great number of programs in a great number of areas for industry.

Industry is not a single dimensional thing, but I am wondering about the degree to which you can co-ordinate Manitoba's industrial marketing and opportunity-seeking when the focus of doing that is spread among three or four or five different departments. That must be difficult unless some miracle has happened since I worked in government. It was always hard enough to work within your own department, but when you had to try and work across and between and among departments, it was even more complex.

Mr. Downey: The member is leaving himself very open as to if he wants to compare the time when he was in government and now, but I will not rise to the challenge and try and help him out.

Mr. Sale: I thought we had an agreement that we were not taking shots.

Mr. Downey: We have. I will not do anything to--

Mr. Sale: So you will restrain yourself even one more time.

Mr. Downey: It is a legitimate question that the member raises. That is, are we carrying out the most efficient and most effective way in which we can deal with industry, whether we are talking industry of the manufacturing, the mining, a broad cross section of areas. We have been working to co-ordinate that. Some of the work is being done through our department, Economic Development Board.

I would take it that the member is suggesting that maybe we should even look further as to a co-ordinated approach. I have no trouble with that. Again, I think the Premier made it clear during the election campaign that one of the policies that we will be trying to deliver on and working towards is making our government more user friendly and, by making it more user friendly, might mean, hopefully, less either contact points or red tape. I think he can appreciate, having worked within the system, there can be some tremendous frustrations. That is what I am hearing from him as he is talking. I am not disagreeing with him, but I think we have not done badly. I say this genuinely. I think there has been an appreciation for the difficulties that have been out there and I say that in respect to the staff that have been working on our programs. They do appreciate that there are different disciplines within government that should be brought in, and we have attempted to do that to make sure that there is not frustration between departments and frustration by people trying to use the departments.

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Speaking of the Department of Energy and Mines, here comes the minister and he will be certainly ready to deal with all the tough questions I cannot answer for you, Mr. Sale.

Mr. Sale: I thank the minister for that answer. Perhaps he should tell the honourable Minister of Energy and Mines (Mr. Praznik) that his department has just been moved into Industry, Trade and Tourism and that we will be able to shorten the Estimates significantly as a result.

It is a serious point, because when the Department of Industry, Trade and Tourism says in material it has sent high, wide and handsome that we are providing a one window, one-stop shopping, clear identity, et cetera, but, footnote, we are one of five departments that has a range of programs. You have got to talk to Rural Development about Grow Bonds and you have got to talk to somebody else about something else, but if you happen to fit into this list, then you talk to us and we have a one window. I think it would be helpful if the one window really were one window and not one among many.

Mr. Downey: I appreciate the member's comments.

Mr. Sale: In terms of critical skills shortage, I am not sure where that reference is--maybe I am on the wrong page here. The reference to critical skills shortage, I cannot see it in the short term, it must be up further. We can pass this item.

Mr. Deputy Chairperson: Item 2. Business Services (b) Financial Services (1) Salaries and Employee Benefits $749,900--pass; (2) Other Expenditures $258,100--pass; 2.(b)(3)(a) Manitoba Industrial Opportunities $3,874,500--pass; 2.(b)(3)(b) Venture Capital $68,700--pass.

2.(b)(3)(c) Surface Transportation Technology $2,600,000.

Mr. Sale: Mr. Chairperson, that is a very substantial increase. It is not a large amount of money in total, but it is a substantial increase. What is happening with MCI on this project? That is the MCI intercity bus, I think, is it not?

Mr. Downey: Basically, the money has not been drawn on the earlier part of the program, so it is a matter of the resources being moved to the latter stages of it and being available for work that may be carried out under the agreement.

Mr. Sale: Mr. Chairperson, could the minister indicate the status of that project? My recollection is that the bus itself or at least a prototype has already had substantial in-service testing, and I have been in the bus myself. I am wondering what is going on here.

Mr. Downey: I am not so sure he has been in this bus.

Mr. Sale: Okay.

Mr. Downey: We do not have a lot of information on it. Apparently it is very popular--or not very popular, but kept under wraps, I should say, at this particular point. As my deputy said, it is maybe the Stealth bus--

Mr. Sale: I thought that was a transit bus on the weekend.

Mr. Downey: I am not sure what bus you were on, whether it was a Motor Coach Industries bus that you were on?

Mr. Sale: Yes.

Mr. Downey: You may have been on it but not the one that we were told is being developed.

Mr. Sale: I am referring to a bus that had a handicap lift built in, handicap seating built in and was a full highway bus which I was in about a year ago, I guess, when it was on tour. But this sounds like a different product.

Mr. Downey: I believe it is a different product.

Mr. Sale: Okay. Thank you very much. I will look forward to seeing that one, too. Pass.

Mr. Deputy Chairperson: Under 2.(b) there will be a number of sections, (a), (b), (c), et cetera.

2.(b)(3)(c) Surface Transportation Technology $2,600,000--pass; 2.(b(3)(d) Vision Capital 2,800,000--pass; 2.(b)(3)(e) Pine Falls Paper Company $2,574,100--pass; 2.(b)(3)(f) Manitoba Business Development Fund $1,339,500--pass; 2.(b)(3)(g) Energy Intensive Industries--pass; 2.(b)(3)(h) Manitoba Industrial Recruitment $2,507,000--pass.

Mr. Sale: Can I just ask what the footnotes mean in terms of increase in carrying costs? Is carrying costs interest that is being paid?

Mr. Downey: The answer is yes.

Mr. Deputy Chairperson: 2. Business Services (c) Small Business and Entrepreneurial Development (1) Salaries and Employee Benefits $1,037,600.

Mr. Sale: This is the section in which there is a mention of critical skills shortage, and I would like to explore it a bit in this area to find out what other initiatives are planned. I recall the initiative around long-distance trucking, and I have had several meetings with owners and companies in that area and know that the province is aiming to train 500 or to identify 500 potential drivers and train them. Spokespeople in the industry indicate that they could use at least that number, so that is certainly positive. It is not a job that everybody wants or can handle, but it is a good job for those who are so inclined.

Can you give some indications of other areas where there are critical skill shortages, and what specific plans are being done to address those?

Mr. Downey: One that was debated extensively the other day, and that was in the garment industry in which there is some work being carried out now, I think, between the Department of Education's Training section and the garment industry as to program development for upgrading of skills and equipping people to deal in that industry.

The trucking industry that the member has referred to, I think it is 200 we were talking about, not 500--a correction. I do believe there is a--the 500 could be a number which the industry could use without any difficulty, but I know that we have currently--

Mr. Sale: It was the industry that said to me it was 500.

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Mr. Downey: Okay, but I think the number we used, to correct the record, was 200 which are being worked with. I know that there are some areas that--talking particularly as it relates to the light- manufacturing sector, and I know, in some direct discussions we have had with the furniture industry in the woodworking sector, there have been some requests to--I have had some meetings, particularly with some of the manufacturers, to make available more apprentice-type-work activities within that industry. I know in the light-industry there have been some discussions as it relates to light-manufacturing, some possible demands in that particular area.

Those are some of the general areas which we have talked about, and I am encouraged by it. I know, in talking to some of the manufacturers of windows, particularly with the growth and the export demand, there has been one company particularly that is committed to expanding some 240 positions in the Steinbach area. I am not sure how they are fulfilling their needs, but also in discussions with individuals a few days ago, expansion in that area particularly as it relates to the Japanese market, opportunities are opening up at a relatively rapid pace.

Again, it takes people to be trained in these areas to satisfy their needs. Our job, I believe, as a department is to try and identify those areas, to work with the Department of Education and Training, to work with the trade schools to make sure that we are clearly communicating the opportunities that are out there.

One of the difficult situations, and I think this is a matter of promotion and making sure adequate information is going into our high schools at senior levels, that there are some pretty good paying jobs that are out there, that everybody should not expect to--as it is said sometimes, it is absolutely essential to get a university education, that the community colleges, as was identified by the Roblin Commission, needed more resources and expansion. That is what we have tried to target some of the resources of government into.

I am of the belief that our structure of new governance of our community colleges will reflect to the community colleges through the private sector, people who are on the boards, the needs that are in society to train these people. Again, I think there are some excellent job opportunities that are out there in these trades. It is not for everyone, I must admit, but I am sure there are some opportunities there when young people are getting close to graduation from high school or maybe have been out for a year. Clearly, it is a matter of identifying these opportunities for them.

Are we effective enough in that area? We can always probably do better. I think we are doing a reasonably good job. The department, I know from reports I have had, are getting reasonable compliments from the garment industry as it relates to work that is being done there. Again, I can only reflect what I am hearing and what I am communicating with. I try, as a minister, to keep as much contact as I can with the different industry sectors to make sure that we are sensitive to their needs.

Mr. Sale: Could the minister indicate for the committee the degree to which the 200 trainees or slots for driver training have been filled? How has the public responded? How is that initiative going?

Mr. Downey: To get the specifics for that we would have to get him to ask the question of Education and Training. They would have the specifics of that question.

Mr. Sale: I thought the minister announced this one.

Mr. Downey: If not Education, Highways and Transportation were also involved in the announcement of it.

Mr. Sale: At the bottom of page 30, there are comments about the administration of The Co-operative Promotion Board and The Co-operative Loans and Loans Guarantee Board.

Could the minister share with the committee the most recent activity under that board, the degree to which new co-operatives are coming into being?

Mr. Downey: The most recent one that I can tell him is I signed a letter yesterday complimenting the formation of a co-op in the Elie area for the collection of straw for the potential isoboard plant for the making of fibre board out of straw. That is the most recent co-op that I am aware of that has been developed.

I do not know in volumes. It is maybe written down here how many numbers of new co-ops we have had over the last year. Again, that information is available, and I am certainly pleased to provide it to the member as to new co-ops. I think it is an instrument that is being looked at a little more.

Oh, I can give him the numbers right now. This is consulting services for co-operatives. Services have been provided to 80 groups desiring to start a co-operative enterprise. Of these, 15 have incorporated and approximately 20 more are in various stages of development. It is planned that consulting will be provided to 75 to 85 groups in the '95-96 year. So that is, I would say, a substantive amount of groups looking at and organizing themselves into co-operative organizations.

Mr. Sale: I appreciate that information. Is there a pattern to where these co-ops or the area in which these co-ops are located, or is it all over the map?

Mr. Downey: I think pretty generally all over the province. I am aware of some individuals that, and from my recollection of letters of notification of acceptance that have been sent out, they are pretty much all over the province.

Mr. Sale: If I could just say that I hope that the government will continue to work in this area to promote co-operatives. I am aware that we used to have a department, and we have a division or a branch, and now we are down to substantially fewer numbers within an area. So the promotion of co-operatives does not seem to have had the same priority that other kinds of activities might have.

Mr. Downey: Well, I do not accept that from the member. I think that there has been a pretty aggressive move to support the co-ops. I have to remind the member that many members sitting around our caucus and cabinet table have been members of the rural communities that have either been involved in grain co-ops, Manitoba Pool Elevators, United Grain Growers. Certainly, I know of livestock co-operatives that are out there, and some of the new programs that have been established under the Department of Agriculture. They call them feeder co-ops, and they have been very successful. I can also tell him that there are many members, I am sure, of the credit union movement which is a very substantive co-operative exercise.

So I do not think the NDP should think that they can take total credit for being supportive of co-operatives. We have seen the development, as I have indicated, of substantial co-operative organizations under this government, and we will continue to promote them where they best fit the needs.

I say this again, in the agriculture community particularly, as I have indicated, the straw co-op that has been most recently organized. We are also seeing potential livestock feeder co-ops being expanded. So, again, it is a vehicle and a tool which I think plays a very meaningful role and will continue to do so in the development of our province.

Mr. Sale: I thank the minister for his comments. I just note for the record that we have the programs in the high school that promote the development of entrepreneurial skills. Junior Achievement I think is one such program. I am not aware of our curricula in the schools anymore spending any time at all on the virtues and roles of co-ops. I think that it is an area that has not been appropriately prioritized.

We build no more co-operative housing projects; that program died with the federal government cuts. And I would agree with him, the NDP certainly has no monopoly on co-ops. They began in the dark distant past in Greece and other societies and have been part of all societies that I know of for a long time. The modern co-op movement dates from some of the work that was done in the Maritimes which was not a hotbed of NDP governments or its predecessors, although the priest that formed the co-ops along the St. Lawrence and Labrador shores I think was a socialist Christian--or a Christian socialist.

I am simply saying I think this is a very appropriate form of organization of entrepreneurial activity. They can be very efficient and effective, and I am sorry that the activity has been downgraded to being a subunit in a branch. I remember well when the Lyon government took power and the staff who were working on the development of the co-op curriculum were fired summarily, and the curriculum was ultimately sold to the Co-op College of Canada. I mourn the loss of that resource. That was not a shot at Johnathon, Mr. Chairman.

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Mr. Downey: I just want to make it clear that this government has not downplayed in any way the importance of the co-operative movement in this province. I want that record to show that, state that it has not.

Mr. Sale: Thank you. Pass.

Mr. Deputy Chairperson: 2. Business Services (c) Small Business and Entrepreneurial Development (1) Salaries and Employee Benefits $1,037,600--pass; (2) Other Expenditures $1,040,300--pass; (3) Grants $30,000--pass.

Resolution 10.2: RESOLVED that there be granted to Her Majesty a sum not exceeding $21,996,500 for Industry, Trade and Tourism Business Services for the fiscal year ending the 31st day of March, 1996--pass. [interjection]

Resolution 10.2 was the correct resolution and the correct figure and it was passed.

We are on to 10.3, 3. Strategic Initiatives (a) Tourism Initiatives (1) Tourism Services and Special Projects (a) Salaries and Employee Benefits $631,300.

Mr. Sale: There is a great deal in this particular area. I would like to just start by asking, again, we have (a) to (f) in terms of initiatives, and yet in Manitoba one of the biggest employment areas where there is a desperate need for a strategy, and I do not think we have one, and that is the whole area of transportation.

Now is this because it comes under several other departments? If that is the case, then I think we should talk about how to make it function better.

Mr. Downey: Yes, we are trying to address that concern that the member brings to the table, and we will be, are, in discussions with the Department of Highways and Transportation to make sure there is a very strong and positive linkage between the two departments, and that transportation is given a greater profile.

It is not that it is not an important industry within Manitoba. It is, certainly. Up to this point, the predominant role has been within the Department of Highways and Transportation. However, on the developmental side, one could consider, of course, the aerospace industry as being a very major part of transportation.

As we have indicated, we have major transportation industries being developed under the initiatives of Manitoba Industrial Opportunities, whether it is the development of carrying capacity for bulk commodities, whether it is the development of the truck cab component parts with Franklin Enterprises that are a major part of it.

We, of course, have two bus companies of which direct discussions, support and dialogue have taken place with our department, so we may have to and may want to consider adding another word as it relates to the aerospace and transportation industry sector. That is a possibility, one which I would not be in disagreement with.

Mr. Sale: Mr. Chairperson, I thank the minister for those comments. I think that a very strong case can be made for Highways being the hard infrastructure, but the strategy of transportation being a matter that should fall in the purview of this department because increasingly--I am sure I do not need to say it, you know it--we are talking about integrated, multimodal kinds of transport, so having one in one area and one in another just again confuses the entrepreneurial public who want to find the right place in government to get the support they need to do the job properly.

Since the minister has kindly opened this up a bit, could we spend a few moments on the question of the rail issue?. With the privatization of CN, and we have talked a little bit about this, the northern hemisphere strategy north of the airport and the bayline questions, those are all intensely related to the rail and multimodal. Can the minister indicate where the point of co-ordination is, and what the stage of the development of the strategy in that area is in regard to rail and the multimodal greater modal terminal at the bayline?

Mr. Downey: Just let me give a little bit of an overview, as I see it, as it relates to the northern hemisphere distribution alliance, which we have been basically the lead department as it relates to that.

It is a major, major initiative which takes more than just one department to be part of it because the developmental stage takes partners, like the trucking industry that has been part of it, like the airline industries will be part of it, and like the rail industries. There are also regulatory aspects that have to be brought to the table. There have to be decisions made as it relates to approvals of where different infrastructures are built. One could say that Urban Affairs has a fairly major important role to play as well because of the relationship with the city.

It is not a matter of any one particular area that has sole responsibility. I think it is a matter of developing a team approach, which we have done and will continue to do. In my estimation, we have gone through a pretty preliminary stage of a vision--the private sector, Mr. Hubert Kleyson who really was the individual that brought this forward to government several months ago as a vision, working with the manager of the international airport, working with Mr. Gord Johnson who is the technical person, the executive general manager of the program, to really get a grasp and to really get that vision put more into a workable form.

There are still many disciplines that have to be part of it. I see it as a lot of the initial work, getting the vision down to some hard realities. I think that is getting closer. The contacts that have to be made with the necessary airlines, whether it is in Europe to hook up with transporting product from Europe to Canada or to the United States or to Asia, the costings and the efficiencies which we can demonstrate have to be put together. That is as well being done.

The other part of the puzzle has to be the piece in Asia, which we need to have either a major airline connection at that end or airports that are in that similar vision of themselves as being regional distributors. Again, it is a major initiative and a major strategy, and there is a strategy. The member referred to not having a transportation strategy. There is a major strategy that is being applied here. There have been major resources that have been committed both by the provincial government and the Western Diversification. So there is a strategy.

We certainly have identified some products that could in fact be moved into those markets as a backhaul from here on major air carriers, which is key. It is a matter of putting loads of product together to bring into this country or drop off or redistribute and also to be able to gather loads, which the trucking industry could complement and/or the rail industry.

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So that, I think, is getting well down the road and starting to take shape, and I certainly compliment the people that are working on it. As far as the rail component, again, there are major decisions that would have to be made as it relates to intermodal traffic. We know where the CN activities are located as it relates to the airport. Again, Urban Affairs, the City of Winnipeg have to be major players in the development of this whole program. How do you shift, if you were to shift, from that area for assembly to another area which may be north of the airport and of the city?

Major decisions by a lot of players, but I think what is in place is the vehicle in which to do that, and, again, I think it will create a tremendous amount of employment. Let us face it, Manitoba and Winnipeg have a history of being the hub of transportation and distribution, and I see us as continuing to expand into the 21st Century our capability of being that hub for redistribution and connections of major markets, both through Europe and Asia, and that Winnipeg and Manitoba will play a role.

I also see it playing a role with the north-south traffic and the movement of traffic of which we are currently seeing with the increase of trade under the North American Free Trade Agreement under activities that will in fact come by truck and by rail. After all, we are 800 miles from Chicago and 1,500 miles from Toronto. The numbers of people to be provided with services, I think we are in a very competitive position.

Of course, then, that takes us to what activities are taking place up the bayline. Again, we can offer, I think if the political will were there, a pretty impressive connection through to the northern Port of Churchill. Again, if the will to do it is there, and that is--go back to the comments we talked about earlier here with some of the discussions and the vision that was carried out in our Arctic Bridge--that there is an opportunity to see movement assemble, a product assembled here moved in every direction, either by rail, by air or by road, which eventually, if given the right policies and the right supports in place, political if not anything more, to see the Port of Churchill become a lot more aggressively used for products other than grain. I know some of the discussions that are coming out of the northern United States could well see a greater relationship of use of the northern rail line, possibly with sourcing of product in the northern United States.

Again, all of these things are all very preliminary, but they all tie together, and it goes back in my mind to where we are naturally placed as a province and a city to be the hub, the distribution and the activity of a tremendous amount of transportation activity, the same on telemarketing and communications. I, for the life of me, you know, somebody has to make the case to me that, again, going way down into eastern Canada is a far better place to set up than right in the centre of Canada when your distribution of messages and activities could well be distributed right from the centre of the country, but some people are making that decision based on the information on what they have.

Again, we have been very successful in our telemarketing in our whole call centre activity because I think people want to be in the centre of our country. It gives us a two-hour advantage both ways to do business in the East and in the West. It lengthens our period of time.

So I apologize if I have gone a little bit longer and broader than what the member has asked for, but I honestly see the whole development coming down the pike very well. More co-ordination. One can always have more co-ordination. Is lack of co-ordination a detriment? No, it is not. I think there has been to this point good co-operation from within government. I see good co-operation from within the private sector. I again say to the member, I think there has been some extremely important work done at this stage by the private sector.

Talking recently with some of the financial organizations that are part of it or lending money or at least prepared to lend money to some of the organizations that are part of this, they are pretty intrigued and enthusiastic as well. So I think it will just further develop as the next few weeks and months go on. We will be playing and have offered to play a more aggressive role as it relates to connections into Asia. We have had some recent contacts that would give me the idea that there are certain countries or airports or people setting up the same basic principle in their jurisdictions that they will be the distribution centre for the big part of Asia, and we, of course, would like to tie into that.

Mr. Sale: The minister's digressions are interesting, because it is good to see the vision that he has. I take it that we really could add a (g) here. It sounds like you are de facto the lead department on transportation strategy at this point. That is not a negative. I think that is a positive. That is what I would hope to see.

I would just say, as I think we have said in the House and you will probably hear it again--you will likely get quite tired of hearing it--that we hope to see the same kind of initiative and attempt to provide leadership in something as vital as the bayline and transportation strategy as we have seen in regard to the hockey team, that pumping $200 million into a hockey team is not a--[interjection] Well, no, I was just setting him up. The question of strategy and energy and priorities for the bayline; the fact the Transcona Shops has lost and will lose more jobs. The locomotive shop has virtually no activity going on in it at this time.

CN is open to privatization; 15 percent is the maximum for any one company to own of it under the privatization legislation. However, it would be a very easy matter to find four or five American buyers of 15 percent, in which case Winnipeg is not in the middle of anything. It is at the far end of an American perspective, especially if the lines east of Thunder Bay or east of Winnipeg become all, or virtually all, CP. Then our strategic location is not nearly as obvious as it is when we are placed in the middle of an east-west network.

I know the minister spoke of north-south and being pleased that that is developing. We are not opposed to the development of more trade, but I think we have to have a very careful look at the strategy that we are going to use in regard to our role in rail transportation. The fundamentals of that industry have shifted. You know as well as I that both CP and CN conceive of themselves now as North American railroads not as Canadian railroads. Their logos and their corporate headquarters--CN I believe is in Chicago now. Corporate headquarters are in Chicago for their North American operations.

So the shot regarding the Jets may not find the right mark, but it is a question of priorities and strategies. We are very concerned about transportation.

I appreciate any comments the minister may have on that.

Mr. Downey: Again, I have to correct the misinformation that the member puts on the record. This government is not putting $200 million into a Jets hockey team. This government has proposed to be part of an entertainment complex that is far more than a hockey arena. There will be, as I said the other day, some professional hockey played in the facility that is being built, but it will carry out a tremendous number of activities other than professional hockey.

We are not, I say not, putting $200 million in a hockey team, as much as they may want to try to continue to say that. I would hope that when the complex is being built that the member is as adamant about opposing the jobs that people that he sees need a job when they are there working and building and feeding their families, the money that is there, that he is aggressive in criticising those people that are working to help accomplish that as he is trying to be negative about the whole move that the government is making to make something very positive happen, an attraction for more than just professional hockey teams. So keep the record straight. It is not $200 million.

I think the other comment that has to be made is, and I say that when he talks about fundamentals, we will continue to be in the centre of a lot of activity. We will not see us being at the end of anything.

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Two rail lines currently have been moving product through this country for many years with great and tremendously important linkages to the United States. We are continuing to see manufacturing product developed in this country. We will continue to see overland traffic product needed. The other thing that should be brought to the attention is I do not think that the public of Canada are of the mind to continue to pour mass amounts of money into subsidizing businesses that are not going to make some money and pay returns. That is not on. I mean, look what happened in Ontario last week. The public of Ontario made a decision that they were not going to continue to go into debt in a massive way to support a philosophy that quite frankly is along the same lines as the member from Crescentwood.

The public of Canada are saying we have to get our act together as a nation; there is not room any longer to pump major subsidies into companies that cannot make it. We can get into the whole debate whether it is right or wrong to privatize. I quite frankly am of the philosophy that believes that private operating organizations are far more efficient than government operations and government subsidized organizations.

The marketplace is eventually the mechanism that will determine the survival of almost every activity that is carried on as it relates to business. We have seen it in too many cases, whether it is the forestry product operation that we sold after getting into office--the member I am sure would not agree with what we have done, but we did privatize that. We privatized an oil company which we did not need; it cost us $16 million of valuable taxpayers' money for an experiment.

Again, I do not want to get into this philosophical debate, but I can say that transportation and the trucking industry and the rail industry and the air industry will continue to grow and expand.

This is another area that I was--why am I making this statement? The federal government and the removal of the subsidy to the movement of grain out of western Canada was done--the former Minister of Agriculture I believe, Mr. Charley Mayer, offered something like $5 billion to replace the Crow rate, to pay out to the producers of western Canada so that there no longer had to be any subsidies paid. He was quite frankly unfortunately removed from office. They did not accept, they would not even entertain the $5 billion that was offered for the transition for the federal government to get out of payments.

This current government comes along, offers $1.6 billion, offers it to the landowners, and so what debate has been going on is between the landowners, whether they should get the money or whether the people operating the land, rather than saying to the federal government $1.6 billion is an insult quite frankly, and let us join together, landowners and operators, and go to the federal government and say at least give us the amount of money the federal government offered us under the Conservatives and Charley Mayer. But, no, they have thrown crumbs on the table, and they have got us fighting over crumbs rather than saying the real loaf of bread is the one we should jointly go together and get.

I am surprised that Mr. Goodale was able to fly into Regina and was not met by a group of Saskatchewan Wheat Pool farmers and all the farmers of western Canada quite frankly to give him a real roasting.

To my knowledge they have said that this is all there is. So the point I am making is that there is a mood in the country of Canada that these large subsidies, paid to anybody, are not on any longer.

Mr. Doug Martindale (Burrows): Hockey players included?

Mr. Downey: The member for Burrows (Mr. Martindale) said hockey players included. I will remind him again, it is not the government that are paying for any subsidies to hockey players. We are in the position of building an entertainment complex which will carry out many activities which I would hope he and his family would see fit to go and be part of, whether it is a major convention which would bring spiritual people together, whether it is a convention to bring people who are non-spiritual people together; I am not sure what it would be.

Trade activities, we are in a world of trade, and we have to be able to demonstrate our qualities and our capabilities. That is the kind of thing, and I used the example of the Morris Stampede grounds recently as to what they were able to accomplish with a complex in their community.

I think the NDP and their members would, certainly they have a right and a responsibility to criticize, but I would hope, I would hope that they would put true facts on the record, not trying to lead the public to believe that there is $200 million going into a hockey team because that is not in fact what is being proposed, and I would hope they would be honest enough to state what is in fact happening rather than what they want the public to believe is happening.

Mr. Sale: Thank you for the answer and the lecture. For the record, the subsidy that is being proposed is $111 million for an entertainment complex which is essentially a hockey arena. It is not the big complex that was proposed by another operation. Thirty million dollars in infrastructure for that arena from the City of Winnipeg; something in the order of $50 million in tax, either breaks through charitable status or tax forgiveness by virtue of the investments being treated as a business expense, plus, apparently, the potential total loss of the shares as held by both the current owners, the excess shares over what they would be paid for, and the 36 percent shares held in the public sector.

The fact of the arena is absolutely inseparable, as the minister knows, from the demands of the hockey team for such an arena. The fact that the arena will have other purposes is indisputable. The experience in other cities is, without major anchored tenants, such buildings are completely prohibitively expensive and cannot be made viable. It is like love and marriage, you cannot have one without the other. The Jets want the arena, the arena needs the Jets.

Insofar as the public sector is primarily buying and building, it is true that we are not building the hockey team but it is equally true that we would not be doing that were it not for the needs of the hockey team. That is neither here nor there. We both put our own views on the record in this regard.

An Honourable Member: Preaching the last sermon, preaching last.

Mr. Sale: Inevitably, we get to preach last, the way the rules go.

Commenting on the top of page 34 in regard to call centres, does the department have any statistics indicating the relative turnover and wage rates of staff in the call centres?

Mr. Downey: I will get that specific detail if they have it. I will just give you some personal experience because I think it is important to put it on the record. Experience that I have had, and that has been two different occasions in visiting the AT&T call centre activity that has been recently developed here in Winnipeg, in one of a very positive nature. I guess, to say at the outset, the individuals who were brought into the call centre activity have seen, particularly with the developing industry, an opportunity to go and advance from basically the actual operations, operator-type systems, into management and to advance their careers very rapidly. That is what my first report is, and, again a general comment, at satisfactory wage scale levels. Again I will give a little more detail.

We do not have the turnover rates, but I can give you some of them. The average salaries for some of the teleservicing agent wages are from $5.50 to $12 an hour; customer service representatives from $8 to $16 an hour; trainers from $30,000 to $40,000 per annum; managers from $35,000 to $50,000 per annum; and senior management from $50,000 to $100,000 per annum. They are wage rates that I think are certainly acceptable because the experiences of hiring people in those sectors has been very positive. Because it is a growing industry, new opportunities are developing. People move into the system, and as they move into it, advance very quickly into management roles.

I use the example of AT&T Transtech, which made an announcement a few months ago of their expansion to expand several hundreds of jobs and move into the Trizec building, renting one or two floors to further advance their business. People in there, and the ones that I have seen and have been exposed to and talked to, are extremely pleased with what has taken place. That is one example. I think that it generally applies across the board as to an industry that is growing and developing. There are opportunities, you move in, you get a clear understanding, management opportunities open up, and they open up for internal people. With that, of course, goes a pay increase.

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Mr. Sale: I would not dispute that there are some good jobs in this area. I do take issue with the continued promotion of these as high-tech jobs. There is nothing high tech about operating an automated calling system and using a script. The minister's party and our party did that with mixed success for four to five weeks recently and we know that that is not exactly a high-tech operation. The equipment that is used is very high tech. The development of software for predictive marketing is very high tech, but the bulk of the jobs are not at all high tech.

I think it would be a service to the industry and to the people working in it if the government would try and discover the turnover rates in this industry, because my anecdotal experience is very different from the minister's. My anecdotal experience goes more towards the younger people I have known who have worked in this kind of industry. It is not an industry that people stay with very long, in my experience. If they move up to management, they may stay, but everybody cannot move into management. I am interested in the comments as to whether the turnover rate is, as I think the minister is implying, fairly low. I think we should have some data on that.

Mr. Downey: I will attempt to get as much information as it relates to turnover as possible.

Mr. Sale: Could the minister indicate what the term "publication (influencer) packages" means, in the second phrase in the Objectives of the department?

Mr. Downey: Does he want my definition or the department's?

Mr. Sale: The department's. It is jargon I have never met before so I thought I would find out what it meant.

Mr. Downey: It is basically promotional material.

Mr. Sale: I think it is always helpful to write things in English as opposed to jargon. So thank you. That makes sense as to what that would be.

In terms of the toll-free telephone telemarketing centre, is this operated by government staff, or is it contracted out? How do these centres operate with tourist promotion?

Mr. Downey: Currently government, looking at contracting it out.

Mr. Sale: It is currently operated in-house, and you are looking at contracting out.

Mr. Downey: That is correct.

Mr. Sale: Can you tell us a little more about the type of contracting out? Who, for example, would provide such a service?

Mr. Downey: The best in the field.

Mr. Sale: I have no doubt about that, but it does not answer the question.

Mr. Downey: We will identify those people who are providing that type of service, and as I indicated, we will find the best in the field and for the best price that they can do it for us. That is really what we are looking at. We are just at the very preliminary stages. We have just announced it right at this particular time so we now have to go to work and do it.

Mr. Sale: Did I miss the announcement, Mr. Chairperson?

Mr. Downey: No, I just told you.

Mr. Sale: You just made it now. I see.

I want to just spend a little bit of time on the question of the tourism business here. I ask the minister to respond and maybe talk with his staff about this, but I have a perception about Manitoba's promotions which is different, quantitatively and qualitatively different from the promotions of some other states and territories in particular.

We seem to have a great range of things that we promote, but they are not woven together. When I read the material for Manitoba, I get the sense of a potpourri from which I could choose things in which I was interested. I do not get that destination sense that is part of the whole theory of getting people to choose a destination. I will give you an example.

We have, and this is an example that is near and dear to my heart, because I grew up in a railroad town that was a lake port and had a good airport. So I have this tremendous love for things mechanical. I think the finest creature that ever was made on God's Earth is a steam locomotive. I am that old fashioned.

We have the oldest operating steam locomotive in North America in the Prairie Dog. It is an American 040, I think, or whatever wheel designation is, 240. We have the Lower Fort. There is a branch line between here and the Lower Fort. We have the river with the river boats. We have the locks and we have The Forks. We have a historic station. Where does the train run out of? It runs out of St. James. If you think in terms of an integrated package, we have a four- or five-day experience to offer people that we could put together from the elements that we have here.

I know I am speaking as a bit of a train nut, but trains are an incredibly attractive promotion for hundreds and hundreds of thousands of people in North America who still have some heritage, or if they do not have the heritage in their own family of the railroad, they remember it, and there is some sort of fond reminiscences of that.

When you put a package together, you put together some Folklorama, a round trip to the Lower Fort, one way by boat, one way by train, you put guides on the train that can talk about the history, you put people in costume, and it becomes a destination, a memory for a family in which they get a real sense of the place they went to. If you have visited Louisbourg for example you know what I mean. Louisbourg in the summer is a destination place where you are exposed to the history, to the culture, to the architecture, et cetera.

My sense in Manitoba is that we do not do that, at least we do not do it well. The minister I am sure can think of other examples of where packaging and promoting--the VIA Rail experience to Churchill. I know that it is promoted, but I would not say that it is promoted well or promoted with any integral vision of what could be done with Fort Prince of Wales and all the things that happen along the bayline from the mining and aboriginal communities through to the various destinations.

I am not being particularly critical of this government. I know that we were government for periods of time, but I am interested in whether there is any sense that we need to rethink how we package the promotion of this province so that it has much more of an integrated destination motif to it, rather than the potpourri of events that are contained in the Free Press publication that got the department into such trouble recently. This is just a grab bag of stuff. Could he comment, or is that unhelpful?

Mr. Downey: No, that is a fair comment, but let me just at the outset say that we have seen a pretty significant turnaround in our Tourism statistics. Of course, he has to appreciate our first market draw is from the United States or northern United States which is showing very strong numbers with an increase of overnight visits by 10 percent, more than twice the national increase. This represents 25,000 more tourists from the United States alone generating an estimated $7 million in incremental revenues. The international visitations were also up and accommodation occupancy was up 5 percent in Winnipeg and 13 percent in rural Manitoba compared to 1993. So what we have seen, whether it is market promotions or whether it is the dollar difference or whether it is any number of things, it is working.

I will comment in a little bit of a different way as it relates to my response to, are we theming it, are we targeting enough. When you are in a province as diverse as Manitoba, you have to try to reflect that diversity when you go to the marketplace, No. 1. You have many constituents who have to be satisfied that you are out there marketing. If I went to Clear Lake and I said, boy, we are doing a tremendous job. We have a whole lot of visitors going in to ride the train between The Forks and Lower Fort Garry. They would say what about Riding Mountain National Park, hey, what about us. I could go into northern Manitoba and they would say, yes, great, you have a great train run, but we have such a regional diversity which we have to try to address.

There are as many experts in tourism as there are tourists. Our main theme though is a friendly clean place to visit, a safe, friendly, clean place to visit. Explore Manitoba, water, air and that whole friendly atmosphere which they have to see. Within that advertisement are special activities of which we are trying to draw people. Again, I do not believe that it is government that should be putting that package of material together. We should be helping, but it is the industry that has to develop the packages, whether it is fishing trips into the North where we have many successful ones. They go into the United States and promote it. If it is a matter of train trips on the Prairie Dog Central, it is up to again the people who are running the system to aggressively promote it.

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Our job is to try to do an overall theme and I think the department have done it reasonably well. Again, it is explore Manitoba. Manitoba is a huge place with many, many attractions within it. So to specifically say there is one thing, there is one region, we have tried to theme it all. Again our main market area is the United States, and we have to keep driving towards that and the overland traffic that comes is the greatest number.

I will comment. He makes reference to the Free Press article in defence of the department--and I say this in defence of the department--there was a proposal given to the department as to being part of a promotional package. The department agreed to the cover of the material. From that point on, it was the Free Press who took on the responsibility of putting the package together.

We did not approve putting in two pages of advertisement for Grand Forks. I was shocked and astounded that a newspaper that depends on Manitoba business and Manitoba circulation that they would see fit, quite frankly, to do that to the area and the community which they depend on their livelihood. So they have taken the full responsibility for that and they should. I was astounded by it, and I have to say to the point where I am not sure what further decisions will be taken as it relates to that.

The member does not need to feel that we are not upset about it. The department is certainly disturbed. We, myself as a minister, are extremely upset. The point I can make as it relates is there was editing of maps as particular parts of regions in Manitoba, editing which took towns and communities totally off the map, and I have to say it was not in the best interests of the promotion.

I will be hard-pressed to be talked into giving a nickel to them in another year's promotion. I will be hard-pressed to pay the bill which they are asking us to pay on this particular promotion, I can tell you that, and we have given them notice that we certainly are not going to be easy to come forward and pay that bill. It is an embarrassment. I think it should be--it is an embarrassment to the Free Press as much as anyone that they would carry out such an activity.

So I have clearly stated on the record as to how I feel. Granted, I will give them credit. They have put letters of correction in the paper so I am not being one-sided on this. They have put letters of correction.

I am really excited about tourism in Manitoba. To me it is the one industry that will continue to grow and expand. I have been so bold as to say I look forward to the doubling of the tourism industry by the year 2,000. Little did the department know when I put that challenge forward that in the year 1999--I did not know it either--but in the year 1999 we are going to have the Pan-Am Games come to Manitoba which in one fell swoop will give us a tremendous, tremendous boost in our overall tourism revenues, in our numbers of people working in tourism. It is just great.

When we look at the World Youth Baseball that was held in Brandon last year, again it kind of just shows the people in the world that we can entertain at a world-class standard. Another clear demonstration is the World Curling that was held in Brandon this year. Of course, it would be the opportune time to congratulate the two Manitoba participants who did exceptionally well. There were comments about we are disappointed that Connie did not win the gold prize. I am exactly the opposite. I am extremely happy she won the silver and I congratulate her for that. Yes, it would have been nice to win the gold but it certainly was very nice to win the silver medal, and she should be congratulated on a tremendous showing that they made.

The same with the Burtnyk rink, who by the way Mr. Burtnyk was actually born in Reston, Manitoba, which happens to be in my constituency, so that really makes the people of southwestern Manitoba pumped up.

So you have given me the opportunity to really wander here a little bit, but I say genuinely our first market is to attract people to a clean, safe environment for family vacations and holidays. It is to provide them with a broad variety of product that appeals to them. Apparently it is working. I will always take advice and criticism as to how we can improve that.

One of the things that I think we have to do--and that is why we set up our forum last year to bring industry people together, a tourism forum--is we have to develop some confidences within our tourism industry that we truly are world class, that we should invest in tourism a lot more than we have. To me that is a confidence that we have to develop, that there is a market out there to go after. We have been a lot more narrowly focused. We now see the Japanese coming in pretty major numbers to see the northern lights, to see all the polar bear activity. That is spreading. There are numbers--I have talked to the U.S. We have done the U.S. thing. Europe is another major market for us in the whole ecotourism activity. That to me has got a tremendous opportunity. The Japanese that we are targeting to have two million more Japanese come to Canada by the year 2000. There are something like 500,000 today. There are shoulder tours that they call, that people would come to Banff or to the Rocky Mountains and would then find another opportunity to come back to Canada.

Single women, business women in Japan are looking for safe places to come to holiday in. We believe we have got a lot of places that can appeal to them. So it is a matter of a broad range of product being focused enough that appeals to people, that will satisfy their appetite, and it is absolutely critical, absolutely critical, when we go to the marketplace with product that we have people who are equipped and trained to give them a world-class vacation when they get here.

The worst thing we can do is to attract people to come and have them disappointed with the holiday that they have because that kind of news spreads far worse than anything else. So our strategy is, we are going to keep growing and expanding with our Explore Manitoba into the U.S. market. We are going to further excel and try and get more European activity, and, of course, with the Japanese market that is one, and the Asia markets, that is one which we believe is totally untapped, and we will be going after it for Manitobans.

Again, it is a matter and it is critical I believe that the industry--it is a Catch-22 situation--you have to have the product, you have to have the marketing that goes with it, and you have got to move together. If you have the marketing proposal, for example--and I know I am taking a little more time than I should; the member wants to comment--we have an aboriginal tourism potential here. Europe really wants to come and see an aboriginal tourism activity. The aboriginal community at this time would also tell you they are not ready for it. They are in very, very embryonic stages of developing that product. As that develops and we bring people from Europe, I think the market potential is unlimited for economic development for our aboriginal communities. Again, I think it would not be doing the tourist a favour or the aboriginal community a favour, if we advanced and promoted it, until we have the product that would satisfy the customer. That again is why we have to work and develop this industry together and collectively.

Mr. Chairman, I will let the member make a comment before the committee rises. I apologize for taking all the time, but I just felt that speech coming on and I just had to get it off.

Mr. Deputy Chairperson: The honourable member for Crescentwood, if he wants to make a comment now or he can wait till we come back.

Mr. Sale: When you have got to do it, Mr. Minister, you have got to do it. No, let us call it six o'clock.

Mr. Deputy Chairperson: The hour being 6 p.m., I am interrupting the proceedings of the committee. This section of the Committee of Supply shall resume sitting at 8 p.m.