INDUSTRY, TRADE AND TOURISM

The Acting Chairperson (Frank Pitura): Order, please. Will the Committee of Supply please come to order. This afternoon this section of the Committee of Supply, meeting in Room 255, will resume consideration of the Estimates of the Department of Industry, Trade and Tourism.

When the committee last sat, it had been considering item 10.3.(d)(3)(a), which is entitled Telecommunications Marketing. Shall the item pass?

Mr. Tim Sale (Crescentwood): Mr. Chairperson, I want to ask the minister's guidance or reaction. I have been waiting for some information from Revenue Canada in regard to the border issues of last year. It finally arrived over the weekend, and I would like to discuss this information. We could do it under Minister's Salary at the end, or we could agree to do it now. I do not really mind, it is not a contentious issue, but I want to just get up to date on the issue of pepper spray and other prohibited items. I have some information the minister may already have, but if he does not I would like to share it with him.

Hon. James Downey (Minister of Industry, Trade and Tourism): Mr. Chairman, before I answer that, I would like to introduce my deputy minister, Fred Sutherland, who was unable to be with us previously because of personal illness. He is back to normal again. I just wanted to introduce him as the deputy minister.

As it relates to the question which the member has presented, he may have some information that I do not have because he has just had recent correspondence. We have corresponded directly back and forth with the federal government of which I do not have any trouble in making the correspondence available of which it is not current, it is some time ago.

As I indicated to him previously, it is a matter of making sure that people are fully informed of what the regulations are, and we did not want to be treated any differently than what other jurisdictions were, because it was in fact having an impact on the department. So the member, I would appreciate any comments or anything that he has that might be helpful. If he has some recent information, I certainly would not deny him putting it on the record.

Mr. Sale: Mr. Chairperson, is there then agreement that we would--I suppose it is to revert back but I am not really asking for much of a reversion. I am simply asking to discuss the tourism issue at this time in the committee, and I just need some guidance as to whether that is appropriate or inappropriate, proper or whatever.

The Acting Chairperson (Mr. Pitura): Is there leave?

Mr. Downey: There is leave to discuss it, certainly.

The Acting Chairperson (Mr. Pitura): Leave has been granted.

Mr. Sale: Mr. Chairperson, I do not need to remind the minister of the unfortunate incidents that occurred at our border and at other border points across Canada in regard to, particularly, mace or pepper spray. The Canadian Customs indicated to me that there were some 170 incidents of pepper spray being seized at our borders in the calendar or fiscal or whatever year it is they use as their year. I want to be very clear that we are glad that material was seized, and we are certainly glad that the border officials are vigilant in terms of people bringing prohibitive weapons into the country.

Of course the most serious concern is weapons that could be used in a violent crime--as pepper spray can be used in crime--but guns, knives and those sorts of things are obviously unacceptable, and I am glad our border is monitored carefully and I hope that will continue.

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The issue that, of course, concerned us was whether the bringing in of a prohibited substance, in this case pepper spray, without declaring it or inadvertently forgetting to declare one or two small containers while declaring others should be seen as a major criminal offence with a five-year exclusion from the country consequence and serious fines and court proceedings and, in fact, a criminal record in Canada.

The issue here, of course, is that the possession of this substance in Canada is completely legal as long as it is labelled properly. The Catch 22 for American citizens is that in the United States no such labels are required, so, understandably, American manufacturers do not label their products for Canadian export. So it seemed to us always to be a case of serious overreaction to treat people who are bringing a substance into Canada in quantities that are clearly for personal use to be criminals simply for a labelling infraction, which is what this comes down to.

I want to ask the minister whether he has any current information about the approach that is being used with this substance now and whether this issue has been laid to rest.

Mr. Downey: Mr. Chairman, again, there are not any changes as it relates to labelling and packaging to my knowledge. The department has informed me that we are working with the feds, ourselves and the federal government, to inform by signage and/or by other information methods the travelling public who are coming to our country as to what the rules are as it relates to mace and pepper spray.

I think it is unfortunate because, quite frankly, the one situation that was raised, people had been coming to a northern fishing camp for some 22 years, really a part of the summer community, carrying a product which they carried, and no reason not to believe them, for the purposes of protection against dogs which, in fact, could cause them some harm when they are out doing their jogging or their walking and did not fully appreciate the infraction that they would face by having it with them and not declaring all of it, I guess, that they had in their possession. Then to have the five-year suspension from Canada and the criminal record the member refers to seemed, and I say seemed, the best information I have, a fairly substantial penalty for what would be seen at the outside as a perfectly innocent activity.

I am pleased the member has put on the record his position as it relates to those things that are prohibited from coming into a country. Customs officers probably have one of the toughest jobs going. Everybody is, in their own mind, doing what they think they should be doing, and, of course, when that does not meet the rules, then it causes a disruption, but I think it is a matter of trying to co-ordinate.

I did discuss this with the Canadian representative in Washington recently. He was not aware of it, Mr. Raymond Chretien. I raised it to his attention when he visited us about a month ago, I guess it was. He, quite frankly, had not been informed of the difficulties and was going to make himself a little more informed on the particular subject.

So I would say to the member that I think there have been enough people had it brought to their attention, that, hopefully, as it relates to tourism and making sure that it does not leave a bad taste in the mouth of those tourists who are legitimate and want to come in here and that we still have a system in place that protects us from those kinds of improper products that people may want to bring into our country.

Again, it is a difficult position the Customs people are in, but I think it is a matter of having on balance the kinds of regulations and the kind of system that can do both. It may be a tough call, but that is what we would hope could be accomplished.

Mr. Sale: I would like to ask the minister, Mr. Chairperson, whether he has had any contact with the Edgertons who were the couple involved in one of the two incidences that occurred in Manitoba in the last little while, let us say in the last six months.

Mr. Downey: Not that I am aware of. I do not believe that there has been contact to my office in that period of time.

Mr. Sale: Has the minister or his office or officials been in touch with Robert Dery the Consulate General for Canada in Minneapolis who is handling this case through his office?

Mr. Downey: I do not believe I have personally had contact, though someone in the office may have, and/or the department. I will take the question as notice to see if someone in the department has.

Mr. Sale: Mr. Chairperson, has the minister or his office had any contact with the office of Senator Charles Grassley, Waterloo, Iowa, the Iowa senator who has been advocating on behalf of the Edgertons and others?

Mr. Downey: I personally have not. Again, I will take the same question as notice to see if staff have been in contact with him.

Mr. Sale: Mr. Chairperson, I want to provide the minister with some correspondence that indicates both some of the process that has been going on and also some current information from Customs Revenue people.

I want to underline that I think that the minister's department's handling of this case has been considerably less than enthusiastic and helpful. I also want to provide the minister, without tabling, but I want to provide the minister with some confidential information that comes from Revenue Canada.

Revenue Canada has indeed changed its process for dealing with seized or concealed pepper spray at the border. I do not want to put on the record what the change has been because I believe this is something for Revenue Canada to enforce appropriately, but I think the minister on reviewing the material will see that persistent advocacy pays off and that there has been quite a substantial improvement in the intelligent approach to be taken to noncommercial quantities of pepper spray.

Mr. Chairperson, I would like to underline, without expecting any particular credit because it is part of my job, that I have spent a great deal of time on this issue over the last year, because I believe that it seriously damaged the credibility of Manitoba as a welcoming place for tourists. I would remind the minister that we were ridiculed in Reader's Digest, which is not perhaps one of the magazines I read most frequently, but it is one read by an awful lot of people, and we looked pretty foolish as a result of that article. It was clearly a matter of overkill and may well have arisen because of personality or inappropriate human relationships between the parties at the border, but to fine people, give them a criminal record and exclude them from the country for five years for possession of an almost empty can, which, in fact, was thrown back at them, saying you might as well keep it because it is virtually empty, and a tiny little one attached to a key chain in Mrs. Edgerton's purse, it was very clear to everyone concerned that this was overkill.

I think when we are trying to rebuild our tourism business and to make sure that we are appropriately enforcing our regulations while also welcoming people to our borders, we should be a lot more proactive than the department has been over the past year in this regard and should have been taking the lead to achieve what has been achieved by the hard work of Revenue Canada people and Senator Grassley and others who have had an involvement in this issue.

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I would tell the minister that I have had letters from as far away as Medicine Hat, Alberta, indicating real concern over this case, embarrassment; in one case, a letter by Mr. Leonard Fretts from Medicine Hat.

He was so upset by the treatment that he wrote, and I quote: The account of this incident reported in Reader's Digest December 1995 has bothered me to no end. My only thought was to appeal to our member of Parliament for this area--I do not have copies of this letter for the minister, but perhaps he might want to look at these and return them to me at some appropriate time--my only thought was to appeal to our member of Parliament for this area, and I told him that as a Canadian citizen and as a war veteran I hung my head in shame over the way these people were treated. Obviously, they had no criminal intent whatever. I sent them a cheque for $20 and told them to initiate a fund to reimburse these people at least in the amount of the fines and penalties that they were assessed. Further, I asked him to use his influence to have the five-year ban revoked.

I am 76 years of age and while I respect federal authorities, I am not intimidated by them at any level. With nothing to go by but the name of a fair-sized city, I was still able to contact the Edgertons. I have talked to them on the phone, written to them and received two letters.

He goes on to say the contents of some of the letters. He closes by saying: I am sending Mr. Solberg a copy of your letter--that is, my letter to the provincial minister, to you the minister now at these Estimates--and you have a copy of his letter to the federal minister. Perhaps you could get in touch and so forth, Mr. Leonard Fretts, and he gives his address.

The issue here, I think, Mr. Chairperson, is not simply one older couple who were refused entry at our border, but it is the impact of this issue that went on television in Iowa, television in Minneapolis, Minnesota, in the Reader's Digest, and basically found its way into corners that we could not even imagine. Without going over the top, I want to suggest that I think the minister and his department could have been considerably more forthright in dealing with the Edgertons in a constructive way and not simply rushing to the defence of the customs officials, and might have gone so far as to advocate on behalf of the changes in the rules which have been achieved, through some persistent advocacy and application of common sense, by Revenue Canada. So, with those comments, I am glad to share this information with the minister. If he already has it, I am certainly glad to know that as well.

(Mr. Ben Sveinson, Deputy Chairperson, in the Chair)

Mr. Downey: Mr. Chairman, I guess at the outset what I should say is that we did not, in any specific way, take the position of the federal Department of Immigration and/or Customs as it is put on the record by the member. We did advocate on behalf of the tour travelling public as it relates to coming into Manitoba. If the member wants to take the credit for accomplishing this, certainly, I do not have any problem if his actions and work had, in some way, helped this take place. I congratulate the member.

I do think, though, he is a little unfair in his criticism of the Department of Tourism, which, quite frankly, as well took the side of the tourists into making sure that there were not any negative outflows. The negative outflows had already taken place because of actions of Customs and Immigration department. It was up to the federal government. We communicated our concerns to them. He communicated his concerns to them. As I said, as recently as the visit with Mr. Raymond Chretien, who had not had it brought to his attention by the member, he was also going to look into it. I think a series of efforts by a lot of people put into this have probably brought the thing to the conclusion that it has. As I said earlier, we also have the department that--we did not have the ability to change it, but we did have the ability to help communicate to the travelling public what the rules in fact were as it related to importation of Mace or pepper spray or those types of what were considered to be prohibited weapons from coming into Manitoba.

Again, I think it was a combination of things, but I do not accept, on behalf of the department of Tourism, that they did not work aggressively to make sure that the tourism industry is healthy. I can assure you that every member in the Tourism Division of this department and this government are very much committed to tourism, work very hard on this issue, and I do not mind taking the criticism. If he wants to lay it at my desk, I can handle a little bit of that criticism from the member. If that is as bad as it gets, I can handle that, but I do say that I hope the actions that have been taken will now satisfy the problem.

We do not want to do anything that will negatively affect on the people of Manitoba, but, as I said earlier, the customs officers have a job to do, and I am sure that he would not want to see them in a compromised position because they rely on the job for their livelihood. I am sure that when it comes to dealing with importation of product which their officials and their supervisors have said shall not be brought in and it has come in, they have to act accordingly. Overkill, yes, not necessary, but that again is a judgment call by people.

So I again acknowledge that the member has put on the record what he has, but I will not accept on behalf of the department of Tourism that they have in any way not acted responsibly to try and have this action corrected. If he wants to take the credit, fine, lay the criticism at me, but the department, I can assure you, did their best to try and make sure that this issue was resolved as well.

Mr. Sale: Mr. Chairperson, I will take credit for advocating. I have no idea how the final decision was reached and whose advocacy had the right or good effect. I take no credit for the final decision, but only for pursuing what I thought was an injury to Manitoba.

Can the minister indicate whether his department is actively pursuing a full pardon for the Edgertons and the other couple who were criminally charged, at this point, so that they can re-enter Canada without a special permit and without further costs to them?

Mr. Downey: I cannot say, Mr. Chairman, what the current status is. I know that there have been discussions with Manitoba Justice. I do not know what the outcome or what the whole discussion has evolved around that. I will see as to where the status of that is at. If he is advocating a complete pardon, I will see what state it is at.

Mr. Sale: Mr. Chairperson, I am advocating a complete pardon because, as the minister will see from reading the Revenue Canada material that I supplied to him, a conviction would not have taken place under the revised interpretation bulletin. So I think that graciousness and any other kind of human considerations would suggest that is the right route to go.

I was in touch with Revenue Canada late last week, and they indicated that the Edgertons' letter and the letter from Senator Grassley, response, was being treated as an appeal to the current situation. I would ask the minister if he would be prepared to commit that he will, through his department or through appropriate officials, bring whatever kind of influence he can to bear on obtaining a pardon for the two couples involved.

There is another couple, Mr. Chairperson, I think that the minister's staff will be aware of, that were in the same situation. The only difference was that they did not leave Canada following their conviction. They continued on their trip, but, having now left Canada, they cannot come back for five years either. It is exactly the same situation.

I believe that we would win. We would get positive press. The minister could take all sorts of credit for it, and I would be happy for him to have that credit, but I would be more happy if we had the positive spin in the American media and perhaps in Reader's Digest and any other place where the negative spin has been, that we are a province that does truly welcome people and that we do try to right bureaucratic errors aggressively. We care about our reputation. I would ask the minister if he can make that undertaking.

Mr. Downey: Mr. Chairman, I have no trouble with that undertaking to look into making sure that the current rulings would in fact act as he has said, make sure that all that work is done if it has not been done. I believe that it was an overpenalization for those individuals, and, if that change could take place, hopefully, it would in fact get as much positive coverage as it received negative. I am not sure to what point that is at, but I will have an undertaking to get a complete update on it and take the necessary action to try and clear up the matter.

Mr. Sale: I thank the minister very much for that undertaking.

Mr. Deputy Chairperson: Item 10.3. Strategic Initiatives (d) Information and Telecommunications Initiative (3) Telecommunications Marketing (a) Salaries and Employee Benefits $287,500.

Mr. Sale: The minister undertook at our last meeting to provide a list of call centres in which the government had some involvement in terms of employment numbers. I wonder if he is able to table that information today?

Mr. Downey: No, I do not have that information fully prepared, but it is our intention, as soon as possible, to get all the questions that we have taken as notice prepared for him and provide them to him. I can talk about some, but I have not got all of them compiled at this particular time. He knows of some of them because they have been publicly announced. AT&T, GWE certainly are two of them that received support from the province.

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Mr. Sale: The minister was also asked if he would examine GWE in terms of its fundraising activities and whether or not those activities brought GWE into some potential conflict with Revenue Canada because of the cost of fundraising associated with their telemarketing on behalf of nonprofit organizations. Is the minister able to share any information in that regard at this time?

Mr. Downey: No, Mr. Chairman. All that work has been carried out. I believe--was it Friday that I took those questions as notice?

Mr. Sale: Can I ask about a couple of telemarketing companies and their current status? One of them is a company called Marusa. Are we involved supporting or in negotiations with the company M-a-r-u-s-a?

Mr. Downey: The answer is yes. We have a company of that nature operating in Manitoba.

Mr. Sale: The minister obviously has more information there than he just gave me. Can the minister enlighten me about the nature of the company and the nature of our relationship with the company?

Mr. Downey: I do not believe, my department have indicated to me, that we have any direct involvement through support of this company, so you would have to contact Marusa as to the work that they do.

Mr. Sale: Can the minister indicate who the principal of the company is?

Mr. Downey: I understand it is a family-owned company.

Mr. Sale: Can the minister indicate the name of the family?

Mr. Downey: No.

Mr. Sale: Well, let me share with the minister my problem. I know this company is a telemarketing company. I know some things about it, but I am unable to find it in the Manitoba corporate register. I am unable to find any record of incorporation. I cannot find it in the phone book, and I cannot find it in the Yellow Pages--

An Honourable Member: Put Jim Maloway on it.

Mr. Sale: Jim Maloway has done some very good work recently, and that may be the right answer. I would appreciate it very much if the minister could be a little more forthright in terms of--this is a public company, which clearly the minister has a briefing note on, how would one contact this company? Perhaps, let me put it that way. I would like to get some telemarketing done for the NDP, Mr. Chairperson. How could we get in touch with Marusa? [interjection] I do not see how he could turn it down.

Mr. Downey: Well, Mr. Chairman, he is aware of the company name, and he can phone Information. As I said, I do not have the name of the family. It just says that it is a family-owned company, my department have indicated to me. I also indicated that I do not have any direct support to that company. If he has a concern about their registration and their doing business in Manitoba, then he would be well advised to contact the Department of Consumer and Corporate Affairs to get the details he may need. I also have an indication that they are a member of the Canadian Direct Marketing Association, but it is not my place, I do not believe, to--we do not operate as police officers or an information bureau. It is incumbent upon the member to inform himself. I have given him as much information as I think is pertinent and what I have the responsibility of providing.

Mr. Sale: Mr. Chairperson, can the minister confirm that Marusa is substantially behind in its payments to the Manitoba Telephone company?

Mr. Downey: No, I cannot.

Mr. Sale: Mr. Chairperson, is the minister indicating that the company is not behind in its payments?

Mr. Downey: Mr. Chairman, I cannot make any comment as it relates to where they are at with the status of any bills that they may have owing or not owing.

Mr. Sale: Mr. Chairperson, can the minister indicate whether we have a relationship with a company called PR Response?

Mr. Downey: Mr. Chairman, I do not want to leave the impression that there has not been any discussions with Marusa as it relates to the government of Manitoba. They may have had discussions with the department as it relates to some form of program, but, to my knowledge, there has not been any conclusion of any support or any agreements reached between the two parties.

Mr. Sale: Mr. Chairperson, I thank the minister for that. Am I to take from his comment that there have been negotiations with this company but that they have not reached a conclusion that would be announceable?

Mr. Downey: No. He could take that there have been discussions, I believe, with the department but to what extent, I am not sure. There has not been a conclusion or the signing of any support or any program between the two parties. There may have been discussions as to what the province had available but no conclusion to those discussions.

Mr. Sale: Mr. Chairperson, the minister was wondering, the other company's name. It is PR Response.

Mr. Downey: Yes, Mr. Chairman, I understand they are a company operating in Manitoba.

Mr. Sale: Mr. Chairperson, does the government have any ongoing agreements or involvements with the various programs of loans or incentives or any other program training, et cetera, with PR Response either under discussion or in effect at this time?

Mr. Downey: Mr. Chairman, I am not aware of any; however, I will take the question as notice, but my department has indicated to me at this time--and they have not indicated that there is any connection.

I should say, however, though, to make it clear, that any of the call centres may have, and probably do have, arrangements with the Manitoba Telephone System which provide them with service, so I do not want the member to jump up and say that I did not disclose that there were some arrangements with a government agency or--

Mr. Sale: I would never do that.

Mr. Downey: The member says he would never do it. If I can get him to sign that in ink, then I would feel more comfortable. Well, maybe I would not.

But I want him to be clear on that, to my knowledge, there is not any support from the province, any program that I am aware of, and, if there is, I will notify the member.

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Mr. Sale: Mr. Chairperson, I take the minister's comments as lighthearted. I would always attempt to have substance behind any accusation I would make. I sometimes may be in error, but I would I hope I would not take that cheap a shot at any point.

Mr. Chairperson, he is indicating, the minister is indicating, as I understand, that the PR Response is a Manitoba company doing business in Manitoba. He is not aware at the present time of negotiations with that company, but is he saying that there are no negotiations between government and the company, excluding MTS, or is he saying he is simply not aware of any?

Mr. Downey: There have been discussions, but, to my knowledge, no conclusion to any agreement.

Mr. Sale: Mr. Chairperson, would the minister characterize the state of negotiations with PR Response as similar to his previous answers in regard to Marusa?

Mr. Downey: Mr. Chairman, it is pretty hard to be definite. Again, I am sure the department, as new call centre activities come to the province, carry out their responsibility without coming to the minister every time something like that is discussed, so I would classify them as having been discussed in both categories, but not to the stage where I have been presented an agreement which I would have to give any decision on.

Mr. Sale: Mr. Chairperson, is the minister aware of a company called Promark that is considering relocation to Winnipeg? P-r-o-m-a-r-k.

Mr. Downey: I am not; the department may have had discussions with them as they have had with many potential call centre clients.

Mr. Sale: Mr. Chairperson, are there any plans the minister is aware of that the government is making to relocate some of the rural call centres back to Winnipeg? I am thinking specifically of the call centre that was located initially in Russell.

Mr. Downey: Is there any intention of the province to relocate a call centre which we do not own or have any influence over back to the city of Winnipeg? It would not be, first of all, within our jurisdiction to do so, and the answer would be, as far as I am concerned and to the knowledge that I have, no.

Mr. Sale: The question was not whether the government was going to unilaterally do anything, it was whether there were any negotiations underway to move some of the rural call centre seats out of Russell and move those seats to Winnipeg.

Mr. Downey: Mr. Chairman, there may well have been some discussions with the department as it relates to service which may be provided by the company in Russell, but I do not have any specifics or any conclusion to any agreement. If it were to take place, it would be a business decision, but I do not believe there has been any conclusion to any activity in that regard.

Mr. Sale: Mr. Chairperson, does the government have any involvement with a company called Network Options, a Toronto company, or with Watson and Associates, a Toronto company, in regard to business undertakings in Manitoba?

Mr. Downey: Mr. Chairman, I cannot give any information on Network. I am not aware of any discussions. The department does not have any information that they can give me at this particular time. Watson, we did have some discussions with them, but nothing has proceeded from those discussions.

Mr. Sale: I am a little puzzled by that response, Mr. Chairperson. Clifford Watson and Associates are the owners of Network Inc., and I believe they are business partners with Manitoba Telephone System in one of its subsidiary four organizations, a company called MB Communications.

I am wondering if the minister can confirm that MB Communications is a new Manitoba company with which the government has had significant involvement?

Mr. Downey: The department has indicated to me that our department has not had any direct relationship, but I will double-check to make sure that is the case, and, if it is the case, I will report back to the member.

Mr. Sale: Mr. Chairperson, I am prepared to pass this section now.

Mr. Deputy Chairperson: 10.3. Strategic Initiatives (d) Information and Telecommunications Initiative (3) Telecommunications Marketing (a) Salaries and Employee Benefits $287,500--pass; (b) Other Expenditures $420,500--pass; (c) Less: Recoverable from Rural Economic Development Initiatives ($192,400)--pass.

10.3.(e) Environmental Industries Development Initiative (1) Salaries and Employee Benefits $365,200.

Mr. Sale: Mr. Chairperson, if I could refer the minister back to the organizational review document, which we talked about considerably in the opening section of our Estimates discussions, the consultant expressed some concern that the initiatives under this section of Estimates were very unevenly distributed, and the area of environmental industries was singled out as an area that was very small in Manitoba and that there were no particularly clear reasons why environmental industries were going to be a major winner for Manitoba in this area.

I wonder if the minister could respond to that concern as raised by the consultant.

Mr. Downey: Mr. Chairman, yes, I can and I will. I want to indicate that the concern that was raised will be addressed as it relates to the overall cluster industries. I do not consider, again, under the way the previous organization of the department was established, that it is particularly, or should be, a stand-alone industrial development sector, although we should identify environmental industries as a very important one, but it can be, in fact, part of a cluster of economic activity for which there are more supports coming to that particular development in our province through a broader range of supports through overall industrial development resources and policies.

So I acknowledge the comments that were made in the report, but I think what we are doing within the departmental reorganization will give probably even greater strength to those environmentally development-type industries or strategic initiatives. They will get a greater amount of support under what we are doing with the reorganization.

Mr. Sale: I appreciate that my question was general, and the answer was general. I wonder if the minister could be a little more specific about what he sees happening with the staff and the resources that are associated with the subappropriation, some half a million dollars? Are you moving these to another higher priority sector? What about the sectors that were referred to in the review by the consultant on page 12 which are understaffed and underresourced at the present time? What is the government doing more specifically in this area?

Mr. Downey: We do acknowledge and recognize the importance of the environmental industries sector within our department. It will be folded into the overall economic or industrial development sector. There will not be resources taken away from it. I believe we will see the need for additional resources. Again, indicating to the member that--let me give two examples in one particular area. We have seen two areas in our province that have come forward and are very aggressively trying to develop a recyclable use of straw. One is known as isobord, in which a lot of work has taken place. The other one is my colleague who is at the table in the constituency of Turtle Mountain in the Killarney area, which have worked very aggressively to develop a strawboard plant, Isobord being one, the other one at Killarney.

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They are both very ambitious projects. I would put them in the environmental industries category, quite frankly, of which we see tremendous opportunity, taking straw that has been traditionally burned, particularly in the Red River Valley, and turned into a usable product in the building industry. So just to single out and say that we are not putting the adequate resources, are not paying the necessary supports to that industry, I do not accept. We are spending a considerable amount of time, resources and energy and seeing how we can support those two major, major industries. So I do not think what is reflecting here and the comments he is making, and I think, in discussion with the consultants if they were to see the overall initiatives that are taking place, one could argue the case that we are in fact spending quite a bit of time and resources and effort to make those kinds of things happen.

We can also talk about the handling of waste waters. We have certainly some successful companies developing in that area of which, again, some of their product is used in Manitoba. One of them is Bioclear Technology which, quite frankly, are selling some product to the province in the Northern Affairs community. It is a technology which we are very pleased to see developed here in Manitoba and work very carefully with it.

Again, we have the sustainable development fund, which is also another area in which government's commitment to the environment and environmental industries, not as directly, but, I mean, there are a lot of different areas of resources and support for this whole area, and, in our new reorg, I think we will be able to not only maintain and enhance the environmental industry sector but in fact will see support for it grow.

Mr. Sale: This is a case where maybe we are learning how to spin straw into gold, and that is a good idea if we can do it. I hope that the strawboard plants, isobord, work and that it takes off. I would not characterize that as an environmental industry, but the minister can do so if he wishes. I do not see the isobord and strawboard plants as an environmental industry. I see them as a really interesting new developing sector but not much different than OSB plants that emerged in times past to make better use of what used to be garbage woods. That is fine. I am glad we are doing that, but that really does not speak to this issue. The concern that I guess I have here is that the things that the minister might have been doing in this area are not being done to any significant extent and I think we either have to hold up this as an area of high priority for the government, which I do not think it has been, or we have to get into it in a serious way.

Let me indicate what I mean by that. I asked last year in several Estimates, I cannot recall whether I asked in this one, but I certainly asked in Natural Resources and in Education questions about the Freshwater Institute and the research capacity related to fresh water and ground water in Manitoba. The experimental lakes station has been virtually gutted by the federal government cutbacks.

An Honourable Member: Shame.

Mr. Sale: It is a shame. This is world-class research which put the University of Manitoba and the Freshwater Institute on the global map and brought to us scientists from around the world. The minister knows, I am sure, and the member for Minnedosa (Mr. Gilleshammer) is indicating that he knows as well that this was an area in which Canada did the pioneering work on acid rain, lake acidification and eutrophication and that we brought as a consequence of that both a lot of research money through the University of Manitoba and we also brought scientists from around the world to Manitoba to study this.

The federal government has not seen fit to prioritize fresh water research and said all of the federal money is going to Fisheries and Oceans and saltwater fisheries and the whole notion of the enormous Canadian advantage in the area of our fresh water resources just seems to have totally escaped the federal Liberals at this point. I think they should hang their heads, given that they talk a lot about research and development, but when it comes time to actually do it in one area in which Canada clearly has the outstanding resource capability in the world in the natural resource area, they virtually shut down this world-class institute.

I know the provincial government cannot backfill in terms of areas of federal cutback, but the truly annoying thing in regard to the Freshwater Institute and the experimental lakes research plant is that these are very small amounts of money. In that particular area, a million dollars goes an enormous distance, because it is levered with other grant money and other contract money from universities around the world. I will just tell the minister, he probably knows that I enjoy long-distance canoeing as my major recreational summer pastime and--[interjection] I beg your pardon.

Mr. Downey: Did you bring your canoe with you today?

Mr. Sale: I may need it to get home, although paddling upstream on the Red this time of year, it would be a fair amount of exercise.

Mr. Downey: Go for it.

Mr. Sale: I have canoed through the experimental lakes area a number of times, probably 15 or so times in total in those days in there. It is a beautiful area too if the minister is interested in beautiful canoeing country. I have run into scientists from Germany, from Sweden, from the southern United States, other countries in western Europe, Japan, all working in this area in the summertime under contract bringing business to that camp but, essentially, they all come into Winnipeg and move through here and through the University of Manitoba where they do their detailed lab work to the actual field station where they get their samples, but they do not actually do much of the science at the field station. That is mostly done elsewhere.

I want to ask the minister if serious consideration has been given through his department to some way of capitalizing on our position at the edge of the Canadian Shield and on the other side in the prairie land mass with the great aquifers that we need and use and the very important issues of ground water quality which have significant implication for our hog industry. The minister is very proud of the expansion of the hog industry, but the minister also knows that Holland and Denmark are at the point that vast areas of their water table are polluted with nitrates and that they cannot use a lot of their ground water anymore because of the excessive runoff. So here is an area of true environmental investment in which we have great advantages. I do not see us capitalizing here; I see us, in fact, just accepting, perhaps with some protest, but basically accepting the significant shutdown of the Freshwater Institute and the ELA area.

I do not see the investment in the kind of technology that would allow us to manage hog production at a greatly increased level. I see us just basically abandoning a very important area here, and I would like to hear from the minister as to whether he sees any merit in any of these issues as a focus for his department to at least study what the potential might be in this area.

Mr. Downey: The first response would be that he has been laying a pretty heavy criticism on the federal government. I am aware of the fact that I think he knows Mr. Reg Alcock very well; in fact, they probably attend a lot of the same events and cross paths on many occasions. I would hope that he lays that directly on Mr. Alcock to bring it to his attention, of his concern, and is even more adamant in his criticism to him directly than it is to this committee because that is, quite frankly, who is part of making the decision, unless, for some reason, he thinks Mr. Alcock is ineffective as a member of Parliament. Now that could well be as well. Again, I would suggest that might be an approach that he may want to take to him; that is to be very straightforward and adamant about his feelings as to how the federal government is, in fact, treating this whole issue.

I am not so sure that it is the Industry department that should be doing this with funds that they have. I think the intent of the Environmental Industries section is to promote companies that want to develop activities in the whole environmental field, not to carry out the kinds of research that he is referring to. I am not saying the work should not be carried out; I think that there should be a clear recording--which I believe both Environment and Natural Resources are doing--as it relates to ground water. I think that we are pretty much on top of our capability and what is happening with our ground water supplies. If there are some specific areas that we are not, I would suggest that he suggest where that could happen.

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I am comfortable that Natural Resources, I believe, is pretty much on top of it, and I know that Environment is as well because through the different industrial activities that are taking place throughout the province, I am comfortable that both are carrying out their roles in a responsible way.

If we were to fund an industry or a company that was to come here to say, look, we are going to provide a service to the public or provide a service to an industry that wants to further do something that would impact or infringe upon or may, in fact, impinge upon or to, in some way, affect the water resources or the water tables of the province, then that is another question. That is an industry development presentation. I am not saying it should not be done and the monitoring should not be done. We should know where we are. I think that is important; it is the responsibility of government to provide that information. I believe we are doing that.

He makes specific reference to the hog industry. I can tell him that I am aware of some work that is being done by a private-sector company that is dealing with the hog waste. There is--in fact, I think there are several companies--but I know one in particular as it relates to the dealing with hog waste. I think it is important. I think we have to not only see the development and growth of an industry, but it has to be done in a responsible manner as it relates to the potential pollution of ground water and that whole system. That, I believe, is well in hand.

He makes specific reference to certain countries that have had difficulties. He has to remember that these countries that he is referring to are heavily, heavily densely populated with people and are very small in geographic size. We have, I believe, the capability to responsibly do what we say we are doing in the development of our hog industry, that we do not have to pollute any ground water, we do not have to pollute any surface water, that we have mechanisms and technology today that can deal with the problems that can flow from this as long as it is done and done responsibly. It cannot be done irresponsibly.

You cannot place demands on a private-sector company or on a farm community that cannot in fact put in what may be considered overly expensive and/or unnecessary treatment of certain things because we do have some experiences and we do have some background knowledge as to what in fact the impact of this type of industry has, not to the extent that we will have in some areas. We can learn by other countries' mistakes. If the member is referring to using some resources to make sure that we are not following in that situation, that could well be a potential area for someone to spend the money if somebody presented us with an environmental case to do it.

So I do not think the resources that we are identifying here and debating here, that that would be the proper use of them. I think that what I intend and would intend to do with this is to see an industry that comes forward, presents itself, has a good idea. Whether it is actually dealing with a product that comes strictly from something that might be an economic opportunity from a byproduct or an industrial activity, I think that is important.

I guess I could go on for quite a bit of time on this. I know that we have some success stories. The member says we should be either getting into it greater or we should be getting out of it. Our record is not good. I do not agree with him. I think it is good. We are being identified and recognized internationally with the work that has been going on here. Could we do more? Certainly, we could do more. Should we have more people interested in it? Yes, I believe so.

But there is one area that I think that we can hold our head high and we are recognized for, and that is in the whole area of our round table on the environment and the economy at which the Premier (Mr. Filmon) has chaired from Day One, he continues to chair, the business community, the environmental community, all those people who are interested in the preservation of our environment and at the same time seen the economic development.

We have had probably one of the most effective round tables in the country, and I think it is because of the attention the government has paid to this. Again, I will stand by our record. We, I think, are doing as well as they are anywhere, if not better, as it relates to the whole area, and it will not suffer in future as it relates to what we are doing with reorganization. I believe it probably will be strengthened.

I will conclude my comments on this particular time to say I disagree with the member. I disagree with the member in a big way when he says that the isobord and the strawboard plant could not be considered an environmental industry. I can tell you on two major fronts why I think it is an environmental industry.

Number 1, he has been in Winnipeg for many, many years, and he has seen what it has been like to be here in the fall of the year when a lot of the stubble is being burnt around. Why are the windrows being burnt? It is because there has not been an economic use for that straw. Yes, it is an economic return to the soils as it relates to their introduction of nitrogens, but the Red River heavy soils cannot incorporate and handle it to get a good crop in the next year, and farmers' practices have traditionally done this. They just have not had the ability to deal with the overabundance of straw that is produced. So the bailing to taking it off the fields and turning it into an economic product in a fibreboard is using a product that would otherwise be burnt. It was burning valuable product, No. 1.

Number 2, in the making of that board, what are we doing? We are replacing the need for more trees to be processed and put into a fibreboard. So I look at it on two fronts. One is, you are using a straw that has caused an environmental problem by burning, the smoke that has caused problems for the residents of Winnipeg, and, No. 2, when you are putting straw fibre into a board that goes into the building market, I am sure it replaces some of the demand that comes from the harvesting of trees. So I wanted to make that case because I feel that the member should look at it in a little bit broader context than he has. Thank you, Mr. Chairman.

Mr. Sale: Mr. Chairperson, I accept the case the minister has made to view this as a very environmentally friendly industry. I certainly agree that he makes a good case, that we should see it as an industry that would support the notions of using and recycling waste streams so that they become somebody else's product. That, I think, is not the same though as an environmental industry which normally means some new technology for the management of the environment and, in that sense, virtually any industry that is using raw materials and producing a service would be an environmental industry, but I think the minister's case that we should welcome this development from an environmental perspective is very sound, and I agree with it.

In his comments about the member of Parliament for Winnipeg South, he is a very large presence in the community, but I have to tell the minister that in my short time in office I have not been on a public platform with, nor have I ever encountered him in the community. I think that he exists in cyberspace to a very great extent. I am always being invited to look up his home page, but I have not actually seen the member in the flesh in the community, although I am sure he is there, but I have not run into him.

I can tell the minister though that in that member's campaign and in that member's public speeches at various points, he has said what a high priority the ELA and the Freshwater Institute has been for him, so the fact that the government has treated it the way it has is probably evidence of the member's weight in his party, and I think that the minister is probably accurate in his comments. But I think I have even less influence with Mr. Alcock than perhaps the minister does, given my record with his party. [interjection] No, I do not think I need to explain. I think my record and my choice speaks for itself.

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I do, though, want to comment to the minister that I had no intention of suggesting that the resources of this particular segment of your Estimates ought to be used to do primary research. That is obviously not the point of this department. I am not suggesting that, but I would ask him to recall that the HIDI initiative, the very successful HIDI initiative, and some of the other initiatives have sprung from and been grounded in some primary research capacity in the community. It was having a health sector that was doing fundamental research here that enabled the HIDI companies that have been so successful for this government and for our government when we were in office as HIDI developed to employ and support so much activity in this community.

So my point in raising concerns about the loss of the Freshwater Institute and related federal research is simply that it was on that kind of basis that some companies would begin to see possibilities, and his department might then be able to assist those companies to emerge. If we are going to lose the fundamental research capacity in the environmental sector because the federal government continues to cut back in that area, we are going to have a very great deal of difficulty developing any initiatives in this area because there is not going to be anything to develop them on. It is basic and applied research that lets us develop industrial initiatives, and the federal government is crippling the fresh water industry in Canada in this regard.

It has seriously cut back its agricultural research, and I am very concerned that I have not heard a lot of complaint from this government about the federal double standard of speaking strongly about the need for R & D and about the fundamental knowledge sector and at the same time slashing its expenditures in this area and trying to turn all of them into some kind of applied research that will have immediate payoffs.

I think both the minister and his deputy are people with a lot of experience in this field, and they know that you do not get long-term solid economic development that is not based on research, pure research, that was done at some point, often 10 or 15 years prior, and if you cut off that flow of knowledge development, it may not have an impact today or tomorrow on your industrial development, but it will have an impact down the road because your country will not be able to attract and retain the sorts of cutting-edge, leading-edge industries that we all want to have here. So I do not think the minister and I differ in this area. I just want to express the concern that I have not heard from this government much solid criticism of what the federal government is failing to do in investing in research, not just in this area, but in other areas that affect Manitoba's economy, not today and tomorrow, but 10 years from now.

Mr. Downey: Mr. Chairman, quite a few of the companies that are involved in this whole area of the department are really in applied research, in activities related to the applied research side of things.

Mr. Sale: Mr. Chairperson, without prolonging the discussion, I know that. I understand they are involved in applied research, but applied research always builds on pure research. It does not come from nowhere. You do not start out to machine a new engine block, you have got to start out first with the metallurgy that allows you to cast it in the first place, and the minister knows that, I am sure he is not disagreeing. But I would just ask that he and his colleagues be more critical of federal withdrawal from basic knowledge production sectors and recognize that our future health for the time when, of course, our party will be in government is dependent on the good research investment that is done while his party is in government.

Mr. Downey: I accept everything but the last statement, Mr. Chairman. I would hope that there is a long time for research to take place. I will work to that end.

Mr. Deputy Chairperson: Item 10.3.(e) Environmental Industries Development Initiative (1) Salaries and Employee Benefits $365,200--pass; (2) Other Expenditures $166,900--pass.

10.3.(f) Agri-Food Industries Development Initiative (1) Salaries and Employee Benefits $292,100.

Mr. Sale: Mr. Chairperson, I wonder if the minister could outline here, I believe we have transferred--well, maybe the minister should simply tell me, what is the status of the agrifood lab in Portage la Prairie at the present time?

Mr. Downey: It has now become an SOA, and it reports to the Minister of Rural Development (Mr. Derkach).

Mr. Sale: Could the minister then outline, Mr. Chairperson, the relationship between this initiative and the Department of Rural Development? It would just seem on the face of it that there seems to be some separation of responsibilities. Is the assumption that these resources might well move to Rural Development as well? What happens with this initiative?

Mr. Downey: Mr. Chairman, not that we consider it any less important to the overall activities of economic development but believe that the cross-functional activities of the food lab can play a greater role with Rural Development and closer to the Agriculture department. We certainly will still be strongly supportive of it and direct activities to it, but I think the direct relationship that it will have can better serve the people that would look to Rural Development for direct departmental support and the same with Agriculture.

I say this with the greatest of respect to all people who have been previously responsible for the food lab, I think it is one of Manitoba's better kept secrets, quite frankly, that we do have that capability. We have seen some excellent successes come from the food lab. I say I am not being critical in any negative way, I just think that it has done some tremendous work, but I see it can play a far greater role in the whole advancement of the food and activities that are available in Manitoba. So I would make those comments, Mr. Chairman, and pass this item.

Mr. Sale: Mr. Chairperson, could the minister indicate whether, and I just have not found it, I have looked for it but I cannot see where there were any resources divested from the department to go to Rural Development. Have I missed this in another subappropriation? How did this SOA get created without any apparent impact on the department?

Mr. Downey: There is no transfer of people. Basically, it stayed as a unit. What has happened is--EITC actually was the directorship of the Portage food lab--that the resources that were allocated for the activity, as it related to the operations of EITC and the food lab, have now been allocated through to the Department of Rural Development for the funding of the operation.

Mr. Sale: So, Mr. Chairperson, that is under subappropriation 10.4.(b) and (c), the EITC Fund and council. I am not sure where EITC itself is.

Mr. Downey: That is correct, Mr. Chairman.

I would like to just take a minute because I think it is important to put it on the record. We are really seeing, I hate to use the word “revolution,” but I will use it. There is really a quiet revolution taking place in Manitoba's food industry and what is happening. I think I made reference to it the other day with the loss of the federal transportation support program, that I was not happy that the support was lost in the manner in which it was. You know, it was an important support to rural agriculture. It has gone to the railroads over the past 10 years; I think 10 years at a subsidy rate of over $700 million a year, that is a substantial amount of money. Over $7 billion to $10 billion has been spent of what I would consider farmer's money has gone to the railroads to provide a transportation system. The unfortunate thing is that I do not think we have a better transportation system for it. I think, in fact, we have about the same as we had at that particular time.

We now have the loss of the Crow, the loss of the support to the grain industry. Farmers and industry have to equip themselves to deal with the new reality of marketing a bushel of wheat that now costs $1.35 or so to ship a bushel of wheat compared to probably less than 50 cents a bushel a year ago. That is a substantial increase. The member may wonder what is happening, why all this debate over movement of grain south of the border. Well, once you take away that subsidy and leave all the regulations in place, if you can find a market that is better for a farmer for less cost to get there, then they are going to cause a lot of the uproar that is taking place. That is, in fact, what is happening. A lot of people are now forced to use the Canadian system of transportation, I am talking about, and it is very costly. That is all going to have to be considered in the future as to what is happening.

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What we have really seen is a response from the Manitoba hog producers, the Manitoba potato industry, the Schneider announcement, the expansion we have talked about in the hog industry, the potato industry with McCain's $70 million, $75 million expansion, and with Nestle Carnation, which has just recently undergone a name change, which I referred to the other day. These are major, major shifts in what is happening in our agricultural community.

The job creation that will flow, for example, doubling the hog industry, will give us a potential 9,000 to 10,000 new jobs in rural Manitoba. For example, the potato industry, with the thousands of acres of increased production, will add tremendous numbers of jobs. Schneider's plant, we know how many new jobs that will create; McCain, at 150, in the plant, and that does not talk about what is needed on the farms. I have a couple of colleagues here who are very familiar with what it will take to make sure that the products are planted, properly managed through the growing season, and then harvested and then stored and then hauled, both for Nestle and McCain.

It is phenomenal and we can talk about special crops. We can talk about the continued sugar beet industry which, we would hope, continues to grow and expand and the canola plants and the oil seed crushing activities, both with Canamera that are in two locations in Manitoba. We took a look at the flour mill industry. Quite frankly, the member knows that we should be milling more flour here in Manitoba. Under the old system it was more efficient to build the big plants, the big flour mills right beside the populations and ship the raw product because it was cheaper to ship it.

Today there is probably enough milling capacity, but I believe it is in the wrong place. I think it will have to shift back to the source of supply, and we have to work very aggressively and very hard to do that, and it will happen. Again, and I will not take the member's time, because I know he has some other questions, but when you see this kind of enthusiasm and this kind of kind of planning taking place, it causes people like Simplot to announce what they have done, a $200-million expansion in one shot, $33 million in another shot.

That is big time--800 construction jobs at one time in Brandon this summer. There is enthusiasm out there and I just wish right now that the rain would kind of slow up and quit so the farmers could conclude their seeding and take advantage of the higher prices and the opportunities that are out there, but the point I am trying to make is, there are a lot of things happening, a lot of things, and it is reason for optimism.

I would hope the member would share that optimism. That is really the point that I am getting at.

Mr. Sale: Mr. Chairperson, I do share the minister's optimism. I also remember a conversation that I think we were both part of at an event last year in which someone who is very knowledgeable about the overall macroeconomics of agriculture pointed out exactly what the minister is saying now, that before we had the major market distortions of the Crow and the way it was used, we did have a big milling industry here. We had a large flour mill and I am very proud that part of my ancestry in Manitoba is with the Ogilvie family. I was preceded by one of my relatives who rode across with Van Horne in the first transcontinental train and sited mills in a variety of places across western Canada. I think we can get back to those kinds of days.

That makes the concern that I am wanting to raise here, Mr. Chairperson. We have an Agri-Food Industries Development Initiative with five SY, and the minister has just finished totalling up investments which by my very rough arithmetic are well in excess of $500 million and maybe closer to $800 million or $900 million, with very large numbers of jobs and long, long-term impacts, positive spin-offs and also a need for environmental management in all of them that will keep the whole base sustainable and protected so that this benefits our children and our children's children.

Yet, on the page previous, in the subappropriation 10.2(e) which we just finished approving, there are six SY in a tiny little sector by comparison with not nearly the leverage or impact that the agrifood industry sector has, so I just underline again the same concern the consultant had and have here, that here is a very big area that needs more research and development than the federal government now is apparently prepared to put into it, has huge impacts on infrastructure, roads, transport, technology, market development, huge impacts and, yet, we are sustaining it with fewer SY than the tiny little environmental sector, which really is not going anywhere. So I am wondering about the resource allocation within his department.

I see the deputy agreeing with my concern. Maybe the minister can elaborate a bit for me.

Mr. Downey: I would have to check that out, just how much he would agree with your concern, but I would--[interjection] He makes reference, he is agreeing with the solutions. What I want to say though is that what the consultant's report was was a snapshot in time, a particular time of our department. Also, I want to point out to him that it is a growth area. Environmental industries is a growth area. We are not denying that opportunity. In fact, I said it on the record a few minutes ago. I hope I do not have to go through it all again, that a lot of the major initiatives, quite frankly, are environmentally related. We do have an Economic Development Board, we do have a cluster, we do have a team of people that are called in that if there are opportunities, it is not just this little, what he refers to as a small amount of people and resources. We bring in a team of people to do the exact thing that we want to see happen, major developments take place, so it is not that we are denying any opportunity for industry to grow, environmental or otherwise, it is a matter of, as we said, a snapshot in a particular time and you see that change as the industries grow and we can promote them and develop them.

Mr. Sale: Mr. Chairperson, is there a linkage between this appropriation because of the--this is not meant to be a negative comment. It is a positive comment. The linkage between environmental sustainability, the concern that the round table--the minister spoke about, positively, about our round table--is there a linkage here between the Environmental Industries Initiative and the Agri-Food Industries Initiative in terms of mutual reinforcement or the looking for opportunities in the agrifood side? I reference this to Mr. Sieber who talks a very convincing case about the need to co-locate industries, each of whose waste stream becomes another company's input stream. There seems to me there to be some real opportunities that maybe we should explore further.

Mr. Downey: Mr. Chairman, the member is well aware of the fact that he worked in government and that there can be, certainly, stovepiping or islands or that type of thing. What we are doing, and successfully are doing so, breaking down some of those barriers and working within the different departments in a co-operative way through what I said were the deputy's teams, the way in which we establish our budgeting process, an ongoing process of working together to accomplish the goals of which the government wants and the people of Manitoba want. I do not think the people of Manitoba want different individuals having their own little turf wars. They want to get on with the overall objectives of getting on with development, and, yes, it is taking place and will continue to even get better.

Mr. Sale: Mr. Chairperson, the minister spoke about the round table on industry and environment. How does the round table impact on the agrifood developing area? What are the mechanisms for getting those messages about sustainability and investment out to the agrifood area?

Mr. Downey: Generally, it is the makeup of the Round Table on the Environment and Economy. The Minister of Agriculture, (Mr. Enns) the Minister of Rural Development (Mr. Derkach), the different ministries directly are involved at the round table level. Sustainable development unit works closely with the different departments on different projects, and has the opportunity through the ministerial connections through their departments to be part of it.

I think I should add as well that it is important to put on the record that we do have co-operation in the pharmaceutical industry and the agricultural industry. Good co-operation there. The Wyeth-Ayerst activities, the PMU activities, I think, are positive. It is an area which we see an industrial development growing and expanding. Yes, we have Environment involved because of the activities that the plant in Brandon carry out. I mean, it is not a matter of everybody working in isolation. It is a matter of a co-operative activity, and we have seen--and I do not know when we will get the opportunity to do so--but we have certainly seen an increase in the whole pharmaceutical industry in Manitoba. We are pretty proud of the work that HIDI has done and the success stories that come to the table, and it is not done in isolation. Anybody knows that you have to have co-operation from all sectors. The pharmaceutical industry could not grow and develop in that particular area unless they had the support of agriculture and the whole activities as it relates to the production of the product that they process. Again, that is, I think, another example of co-operative activities throughout the different departments.

Mr. Sale: Mr. Chairperson, the member for Emerson (Mr. Penner) wished to make a comment.

Mr. Jack Penner (Emerson): Mr. Chairman, just a very brief comment. I want to compliment the honourable member for Crescentwood and the minister for the discussion around this table. It has been most enlightening and interesting, and I think the discussion and the questioning have complemented some of the things that we have heard across this province over the last number of three months, specifically when we did the task force hearings on sustainable or economic development.

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I think it is important to note the very dramatic changes that have taken place, especially in much of rural Manitoba. I think it is also important to note the tremendous economic impact that will have to centres such as the city of Winnipeg and many of the other urban centres. What it points to, however, is that because of a very significant policy change at the most senior level of government in Ottawa that I think was not properly thought through, the impact of that policy change, namely, the elimination of the Crow benefit and the impact that will drive and have on other policy areas has not been truly appreciated nor understood. I think that many of the regulated industries that agriculture has been involved in, and you can talk about supply and management, you can talk about the Wheat Board, you can talk about the hog board and many of the others regulated within the parameters of equalization under a freight rate formula, were not in the ties within, were not properly understood.

I think the discussions emanating now within those levels of government or agencies that reflect the operations of some of the components on the agricultural sector side are only now realizing what that has meant or will mean in the future. It would appear to me that many of the things that we have heard across Manitoba over the last three, four months are going to be reflective of some of the things that we are going to hear in the future, some of the massive changes that will be driven by that one policy change. I would suspect that the competitive nature of the industry is going to be the driving force, not only in Manitoba, but in all of western Canada. I think the milling industry that the honourable member for Crescentwood (Mr. Sale) was referring to a little while ago was largely removed from the Prairies because of a freight rate equalization formula within a noncompetitive system. Thereby, I think, having removed that will cause a competitive re-evaluation of that industry and maybe many other industries.

(Mr. Peter Dyck, Acting Chairperson, in the Chair)

I wonder whether we have truly reflected what the needs are going to be within our departments in government in this province and maybe in all the other western provinces, and how we might want to reflect on changing direction with the knowledge that the ag-based or, what I like to call, the renewable resource industries, mainly our food production industry, how that will be reflected and how we deal with that. I think the honourable member for Crescentwood touched on it very briefly in his questioning as to the small component within the Department of Industry, Trade and Tourism, in that area, and the need to change that direction now based on the policy change in Ottawa, and how we have more impetus from this department as well as many other departments. You can name the Department of Agriculture, you can name the Department of Environment, the Department of Rural Development and others that should work very closely and tie together many of the initiatives.

We have heard from rural Manitobans saying that the co-operation within government should be much more significant than it has in the past. I think that will be reflected very quickly within the very near future. I think government departments within have noted this. I would like to ask the minister what action he has taken within his department and/or whether he has directed discussions with his people in relation to other departments and how they will tie in those discussions in the future.

Mr. Sale: I just would say, I agree with his comments and I appreciate his comments. That has been the substance of a great deal of our Estimates debate this year, how to reflect that new reality in the department and get away from what the minister aptly calls stovepipes. So I thank the member for his comments, and, if the minister wishes to reply, I would be glad to have him reply.

Mr. Downey: No, I will hold and maybe in my concluding comments, I will deal with it, what the member asked.

Mr. Sale: Mr. Chairperson, maybe I could just conclude with a question. Is it in this area of cross-communicating the round table issues, the sustainable development issues, that Brenda Leipsic works? Is that what her role is?

Mr. Downey: Mr. Chairman, no. The sustainable development unit does not answer to the Department of I, T and T. It answers to the Department of Environment.

Mr. Sale: Her role then is with the sustainable development branch?

Mr. Downey: That would be the sustainable development unit of government.

Mr. Sale: Mr. Chairperson, I was confused as to whether her role was through environmental sustainable issues in regard to environmental industries or agri-food industries or some other form, but the minister has answered my question, and I appreciate that. Pass.

The Acting Chairperson (Mr. Dyck): 10.3. Strategic Initiatives (f) Agri-Food Industries Development Initiative (1) Salaries and Employee Benefits $292,100--pass; (2) Other Expenditures $99,400--pass.

Resolution 10.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $13,480,800 for Industry, Trade and Tourism, Strategic Initiatives, for the fiscal year ending the 31st day of March, 1997.

10.4. Economic Development (a) Economic Development Board Secretariat (1) Salaries and Employee Benefits $531,500.

Mr. Sale: Mr. Chairperson, I apologize to Hansard for the confusion that they are probably going to hear on the tape when we were trying to sort out questions of adjournment.

I would request that the Chair ask for leave that the committee rise at this time and convene tomorrow morning--recess, not rise.

Mr. Downey: Mr. Chairman, I appreciate that. I do realize there was an agreement to go to six o'clock, but I think he has a reason why he wants to rise at 5:30. I certainly do not disagree with him, and we are back here at nine o'clock tomorrow morning, so even though we are not going along with what the House leaders agreed to, the committee is its own boss, and we will rise.

The Acting Chairperson (Mr. Dyck): So is that the will of the committee then, to recess until nine tomorrow morning? Agreed? [agreed]

The committee is in recess.