The Acting Chairperson (Mr. Peter Dyck): Order, please. Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Industry, Trade and Tourism.
Does the honourable Minister of Industry, Trade and Tourism have an opening statement?
Hon. James Downey (Minister of Industry, Trade and Tourism): Yes, I do. Thank you very much, Mr. Chairman.
First of all, let me indicate that my staff will be joining me in a few minutes. I guess I do my statement first and then they join. Okay. [interjection] Oh, after his statement, okay. They may not want to join after his statement. Thank you, Mr. Chairman, opposition critic.
First of all, let me say, I am pleased to introduce the 1997-98 Estimates of Manitoba Industry, Trade and Tourism. After I have done my opening statement, I will invite my staff to come to the table with me.
Since I, T and T's main objective is economic development, let us take a few moments to review the state of our province's economy. I should say as well at the outset, I think it is important to note that we have had a considerable number of businesses that have, as well as a lot of other individuals, had to deal with this devastating flood, and I want to at this time acknowledge on behalf of the department and the people involved in our activities that we certainly have a strong feeling of compassion for those people who have had those difficulties, and feel that we, hopefully, are able to do what we can to get the businesses back into operation fully again that have been impacted. We have staff that are in fact working with the EMO and the different organizations to try and do just that. So there have been some impacts. Again, it will be dealt with, I am sure, in the discussions. But we want to acknowledge the fact that we have had staff involved on an ongoing basis.
According to the key economic indicators across all industry, industrial, commercial and resource sectors, Manitoba's economy is stronger and growing faster than most other provinces in Canada and well on its way to becoming one of the most competitive in North America. A recent record in job creation, low unemployment, new investment and exports tells the story. In the first three months of 1997, some 18,000 jobs were created in the province compared to the same period last year, a seasonally adjusted rise of some 3.5 percent. That is the highest growth rate of any province, and almost four times Canada's growth rate, so far this year. All of these new jobs are in the private sector, and nearly two-thirds are full time. At the same time our seasonally adjusted unemployment rate in March '97 was 7 percent, second lowest in Canada. Equally encouraging is the fact that Manitoba's unemployment rate among the youth aged 15 to 24 was some 13.5 percent for the first quarter of this year. Again, the second lowest among the provinces and well below the national average of 18.2 percent.
Private sector investment is forecast to grow by 8.6 percent in 1997, above the Canadian rate of some 7.8 percent. If the 1997 forecast holds, Manitoba will have had six years of growth in private capital investment, which is unique among the provinces. Since 1991 that investment has grown in the province by 44.5 percent compared to the national average of some 17.1 percent. The outlook for capital investment in manufacturing is especially strong, as it is expected to rise by 23.5 percent over 1996. This is the third best of the provinces and five times the predicted national growth rate of just 4.7 percent. Since 1991, capital investment in manufacturing more than doubled as it rose by nearly 140 percent comparing that to the Canadian average of 9.4 percent over the same period.
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Manitoba's recent stellar success in exports, particularly to the United States, is, of course, driving many of these large increases in investment. Last year was the fifth straight year of double-digit growth in exports to the United States, and in that period our U.S. exports jumped by nearly 142 percent, the second strongest of the provinces. In 1996 the increase in U.S. exports was 12.6 percent, well above the national average of 6.9 percent, and manufacturing shipments accounted for about 40 percent of that growth.
Manitoba's overall exports in 1996 were just shy of the $6-billion mark, increasing by 9.7 percent over 1995. Our total manufacturing shipments are also on a growth trend, rising by 8 percent in 1996, outpacing the 2.9 percent national growth average for the second year in a row. Our much celebrated diversity shone through again as we saw a double-digit increase in shipments of food products, buses, aerospace components, fabricated mentals, wood products and electrical equipment.
Other sectors that contributed to the province's continued strong performance in exports were agriculture, which saw a 13.2 percent rise in farm cash receipts in 1996, the best of the provinces, despite the recent elimination of the transportation subsidies; and mining, which has been expanding, thanks to the better prices for nickel and copper and the opening of five new mines since late 1995.
Tourism continues to expand. The Canadian Tourism Research Institute forecasts expenditures will grow by some 5.5 percent in Manitoba in 1997, which should put them well over the $1 billion.
Domestically, Manitoba's economy is performing well also. In particular, I note retail sales rose 6.2 percent in 1996 over 1995, the third best among the provinces, and in the first two months of 1997, they have increased a further 10.3 percent, second best amongst the provinces.
Manitoba is losing fewer and fewer people to other provinces, a trend now into its seventh year. In 1989, we experienced a net outflow of over 10,000 people; while in 1996 we lost around 1,700. This reflects the fact that more Manitobans are staying at home, as they can find jobs without moving to other provinces.
A number of factors account for our province's excellent economic performance. One is our skilled, dedicated labour force with its strong work ethic. Companies that establish operations in Manitoba tell us the quality of our workforce is one of the reasons they are attracted to our province. People are being trained in Winnipeg with all the talents that businesses need, and our workforce is clearly stable and has a strong desire to succeed and help employers succeed.
Manitoba also boasts a wealth of entrepreneurial talent, a sophisticated infrastructure and a low-cost base for business operations, but I believe the Manitoba government, in balancing its budget, reducing the debt and maintaining a stable and competitive tax structure, has also played a large role. Since 1988, we have worked hard to make government more efficient and more responsive to the needs of Manitobans, and have frozen major tax rates in every single year since. That makes 10 consecutive budget years with no rate increases in the major taxes. The best record in Canada.
In addition, of course, we have passed what has been called the toughest balanced budget law in Canada. All of these measures have boosted the confidence of Manitoba businesses and consumers, and led to increased spending and increased economic growth. So, overall, I am extremely optimistic about the prospects for 1997.
A summary of forecasts by seven major economic forecasters, including the most recent forecasts by the five major Canadian banks, show that Manitoba's strong growth is expected to continue. Real GDP is forecast to grow by 2.7 percent in 1997. Employment will grow a further 1.8 percent, and Manitoba's unemployment rate is forecast for the year at just over 7 percent, the third best in the country. This growth is expected to continue into 1998, with a further 2.5 percent increase in real GDP and an unemployment rate falling to 6.5 percent, again, the third best in the country.
Let me now shift attention to specific activities and programs within the Department of Industry, Trade and Tourism. I will start by saying this fiscal year finds a reorganized Industry Development group within the department. This group continues our focus on emerging opportunities in strategic sectors, such as health care, aerospace, information and telecommunications technology, environmental industries and agri-food.
However, it also supports core manufacturing industries in our province, including apparel, furniture, electronics, plastics and metal, and machinery manufacturing. Industry Development staff will continue to provide counselling services and sector expertise to Manitoba business, promote and facilitate investment, infrastructure development, R & D and technology transfer, and skills development across the province.
Let me mention some activities in a few economic sectors. Manitoba's health care products and services industry continue to surge ahead, bolstered by a recently announced federal-provincial alliance. The western medical technology strategy was announced by the two levels of government together with the National Research Council in early April. It will direct about $110 million to enhance the capabilities and speed up the development of this vital sector. The first commitment of this strategy is to help fund two magnetic resonance imaging or MRI sites in Winnipeg.
As in other aspects of this new alliance, the emphasis is on interweaving objectives of technology research, commercialization, and targeting markets in western Canada and abroad. The fact this strategy is focused on Manitoba reflects the impressive growth of our health care sector. Since 1984, it has grown from just four companies with annual revenues of about $25 million to 109 companies generating revenues of $330 million in 1996.
Industry, Trade and Tourism also is committed to funding a health research infrastructure initiative geared to encourage research institutions to become more aggressive and entrepreneurial in attracting external investment. In the food and beverage processing, our largest manufacturing sector, the Department of Industry, Trade and Tourism is working closely with Manitoba Agriculture and Manitoba Rural Development, as well as the Manitoba Food Processors Association. A good portion of our government's activities in this area has centred on promoting the hog and pork industry abroad, especially in Asia Pacific, mainly by working with the industry to encourage more companies to export and expand value-added production in our province.
We can take some satisfaction in the fact the food and beverage industry grew by some 12 percent in 1996, the largest increase in 10 years, to a value of $2 billion. Of this, nearly $540 million was in exports, representing a 40 percent jump over 1995. In particular, world demand rose for Manitoba pork, frozen potato products, canola oil and meal, and fish. The significant recent investment that we have seen in this sector certainly reinforces its terrific prospects for continued growth. Four major projects alone involving world-class corporations accounted for more than $168-million worth of capital investment in the potato, pork and canola processing sectors.
Meanwhile aerospace seems poised for major sales growth of some 20 percent in 1997 and even stronger expansion in the years ahead. Significant industry players such as Boeing, Standard Aero, Air Canada's maintenance base are projecting good times ahead for themselves, which, in turn, means spin-offs for their local suppliers. The imminent change of ownership in Bristol Aerospace should also pave the way for renewed growth at this important member of the province's aerospace community.
Also, the Department of Industry, Trade and Tourism and the Canadian Space Agency, which promotes research and development and commercialization of space-related technology, have awarded contracts, totalling more than $200,000 to three Manitoba companies. The three companies are Kor Product Design, Lockheed Martin Electronic Systems, and Standard Aero. The technology includes an advanced hand controller, a diagnostic system for detecting potential malfunctions, and a special spacecraft computer system. The goal of all three contracts is to see innovative technologies applied to commercial-marketable products as soon as possible. I should note that the first two projects have conventional applications on earth as well as in space.
Now a word about the department's special operating agency, the Industrial Technology Centre. The ITC provides a wide range of technical services to clients that vary from start-up entrepreneurs and mid-size companies to large firms seeking specialized technical assistance. The centre's expert capabilities and forensic document services are unique in Canada, and it actually provides them to clients across the continent.
The ITC is proving to be yet another successful example of the SOA model for delivering public services. It has already reduced its reliance on government funds by enhancing its own source of revenue. In 1995, I, T and T formally re-established the Manitoba Trading and Investment Corporation, or Manitoba Trade for short. This semi-independent agency is the focal point of Manitoba's efforts in promoting more and more diversified exports to an ever-widening range of world markets and encouraging inward investment in our province.
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A central part of this work is to assist exporters and export-ready companies in cracking new markets by leading strategic trade missions, hosting delegations from key regions of the world and providing assistance in attending trade shows in various industrial sectors and geographic regions.
In 1996-'97, Manitoba Trade led and co-ordinated business participation in trade missions to South America, Mexico, South Africa, the Middle East, Taiwan and Japan. Most notably, perhaps, the agency has helped several Manitoba companies get a foothold in the Japanese packaged home and furniture markets.
Besides organizing Manitoba's exhibitors at several major trade shows in Japan-Manitoba Trade worked closely with officials from the Japan External Trade Organization, a relationship that is already paying off in terms of sales by businesses from this province. Manitoba Trade has also expanded the range of information and promotional tools for use by government officials travelling abroad. These include the development of a detailed Manitoba Advantage booklet, a complementary video, publications targeted at business immigrants, plus trade show booth displays with a consistent departmental look.
Small business has long been of vital importance, not only to the economy of this province but also to the strategy of this department. After all, over 90 percent of all companies in Manitoba have fewer than 50 employees. Over a third of Manitobans work for small businesses, and studies show smaller firms have created more jobs in the last decade than larger companies or the public sector.
Thus, the Department of Industry, Trade and Tourism's Small Business and Entrepreneurial Development division is a high priority as it expands its role in assisting small business start-ups and providing services to help existing firms grow. It also aims to make sure small business owners and managers have easy access to training, information resources and other services aimed at small businesses. The division is doing this in partnership with a wide variety of government and nongovernment agencies and associations to narrow the number of contacts entrepreneurs need to find the information they are seeking.
In 1996-97, the division co-ordinated $600,000 worth of loan guarantees under the Business Start program providing financial support to 69 new firms and creating some 200 jobs. Its staff are now working on a small business in Manitoba report which will provide information on the strengths, weaknesses, challenges and opportunities for small business in the province.
I should mention in this context that increasing access to risk capital for small and mid-size Manitoba companies is a major priority for the Department of Industry and, indeed, for our government. The shortage of such venture capital has been identified as a significant stumbling block to economic growth in our province, and we have been working hard in partnership with industry and financial communities to address it, but I should add through third-party agencies and not the provincial government directly.
We therefore strongly support such sources of investment capital as the Manitoba Capital Fund, the Crocus Investment Fund and the Vision Capital Fund, among others. These three provincially sponsored funds have helped raise the supply of venture capital available for investments to about $30 million for each of 1996 and '97, up from $4 million in 1993. This reflects how effective such partnership can be in the financial arena. However, we have a ways to go if we are to meet the goal of $60 million by the year 2000 set by the Department of Industry, Trade and Tourism, and we expect to reach that goal through new projects, including the Manitoba Business Expansion Fund to be announced next month and the union-sponsored venture capital funds announced in our government's recent budget and, hopefully, to be passed this year.
Let me now turn to the Manitoba Call Centre Team, a joint venture led by the Department of Industry, Trade and Tourism, which continues to market this province as a premier location for call centres despite some keen competition from other provinces. The team has done an admirable job in expanding this industry so that it now includes over 80 call centres and a workforce of more than 5,000 people. Earlier this month the Premier (Mr. Filmon) announced another large call centre. TeleSpectrum Worldwide now employs some 475 people in Winnipeg and is committed to employ some 700 people by the year 2000. In the meantime, the presence of other major call centres like CN North America, Faneuil ISG and AT&T Transtech is a great advantage in attracting operations to Manitoba from across the continent.
As I mentioned earlier, tourism is a major contributor to Manitoba's economy, and the last year has been no exception. In general, all arrivals from the U.S. and other countries were up from 1995-96, as were other indicators, such as accommodation occupancy rates, airport traffic and restaurant receipts. The Canadian dollar is expected to remain low throughout 1997, averaging about 73 cents U.S., which will draw both Americans north of the border and encourage Manitobans and other Canadians to vacation at home this year. To compete in competitive national and international markets, Manitoba's tourism products must be of the highest quality.
Recognizing this fact, the Department of Industry, Trade and Tourism has launched a program to provide cost-shared assistance for developing new tourism products. The objective is to ensure that Manitoba capitalizes on viable product development opportunities that will generate new tourism revenues, lever private sector investment and create long-term jobs. The program targets opportunities in ecotourism, outdoor adventure, aboriginal tourism, culture-heritage tourism and regional community tourism development. Product-development program is also focused on small business and communities; funding is available to support regional tourism forums and community and regional tourism planning and implementation. The small- and medium-sized businesses that characterize the tourism sector have limited resources to capitalize on emerging opportunities. So this new program will provide assistance where other sources of funding are not available. The program is already up and running, and staff tell me that numerous regional forums have already been held throughout Manitoba in March and April. I do know that there have been some delays because of the flood. The flooding has caused some delays on some of these, but that is to be expected.
This summer all tourism partners expect to capitalize on the Canada Summer Games in Brandon, which we are pleased are here, in addition to our regular complement of fairs and renowned celebrations like Folklorama. The Games should attract visitors from various locations to our province.
(Mr. Edward Helwer, Acting Chairperson, in the Chair)
Finally, I need to remind you that for 16 days in the summer of 1999 Manitoba and Winnipeg will host the largest sporting event ever held in Canada. Indeed, to indicate the magnitude of the Pan American Games, it is expected to be the third largest sporting event in North America after the Summer Olympics in Atlanta and Los Angeles. In terms of direct expenditures and direct spinoffs, the Games themselves are expected to pump some $225 million into our provincial economy. The 100,000-plus visitors are predicted to spend $28.5 million and spin off another $14 million here. Some 2,500 person years of employment are expected. Clearly, this is a huge opportunity for Manitoba's economic development among other benefits. This is why Industry, Trade and Tourism is working actively with the Pan American Game Society and its other partners to make the best of this opening to Latin America.
As the lead-up to the games begins in earnest, we will be encouraging all Manitobans and Manitoba export businesses in particular to take advantage of this increased exposure that our province will receive. From the obvious implications for tourism to the various industrial sectors that are seeking to expand their presence in Mexico, the Caribbean and South America, the games truly warrant our full attention today.
The Pan American Games seem an appropriate forward-looking topic on which to conclude my overview of the main Estimates and the activities of Industry, Trade and Tourism and my introduction to the department's Estimates for 1997-98. I would also like to include how pleased we are to have been awarded the 1999 World Junior Hockey playoffs that will be held in our province, which will again add to the overall economic development of our province, particularly the communities of Westman through Brandon, Portage la Prairie, Selkirk and Winnipeg.
I look forward with all my colleagues and staff to another challenging and successful year, working in partnership with other departments, with the business community and indeed with all Manitobans to continue building a strong, diverse and outward-looking economy as we prepare, not only for 1999, but also for a new century.
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I will conclude my remarks again, Mr. Chairman, by saying I look forward to a very positive and productive examination of the Department of Industry, Trade and Tourism and welcome the comments from the opposition critic.
The Acting Chairperson (Mr. Helwer): We thank the Minister of Industry, Trade and Tourism for those comments. Does the official opposition critic, the honourable member for Crescentwood (Mr. Sale), have any opening comments?
Mr. Tim Sale (Crescentwood): I do, Mr. Chairperson. First of all, I would like to thank the minister for his remarks. In many ways, in a broad sense, I think all of us concur in the sense that Manitoba's economy is flourishing in many aspects in terms of the economic aspects of that economy. I am particularly struck in the tours that I have done in the last six months or so about western and southern Manitoba's agricultural economy and the value-added components of that economy. I am also always struck by the industry, inventiveness and commitment to regional and rural economies throughout our province.
One particular example was a brief tour we had of the community of Rosenort, now surviving the flood, in which we toured a number of industries, but in particular toured their new arena. If the minister has not had a chance to be to their new arena--I am not sure whether he has or not--but if he has not, it is a very interesting place. I think it, in some ways, symbolizes the inventiveness of our community. That particular arena is heated by deep water wells with a heat exchanger.
The titanium heat exchanger, which is the heart of the whole system was designed and built by Fort Garry Industries and installed by local people for the most part volunteering their labour or providing their labour at a very favourable rate. The thing that is so unique about this arena and commends it to the minister, if he is thinking about industrial and other kinds of development in more remote communities, is that the energy consumption of this arena is roughly 10 percent of that of a conventional arena, because virtually no heat is exhausted through the compressor into the atmosphere. So there is no pollution at all, because it is a closed-loop system, very little energy consumption and not, perhaps, quite unique in rural arenas, but the seats are warm, because they use the heated side of the loop to heat the concrete under the seats, while they use the cold side of the loop to freeze the ice.
So it is a very unique, inventive arena built with an enormous amount of local labour, concern and technology which you do not expect to see in something like an arena, but there it is in the community of Rosenort.
I would like to make a few opening comments in the context of what I think are some of the difficulties that face what is admittedly, on a dollar basis and from a pure economic, macroeconomic picture, a very positive picture in most regards.
First of all, as the minister knows, Manitoba is, unfortunately at least it appears to be, increasingly regionalized in its economy. I think that if you look at the economy of the city of Winnipeg, apart from the economy of the province as a whole, you see a picture that is not nearly as positive as the minister paints in the province as a whole. Perhaps this is symbolized by the unfortunate circumstances facing Eaton's, but we can list a great number of very good jobs and good companies that have, for whatever reasons, decided that they either cannot survive here, or are moving, consolidating their operations elsewhere.
If you look at the unemployment rate in Winnipeg, it is significantly higher than the provincial unemployment rate. If you look at the tendency to out-migration from the urban area, it is a very serious problem from the point of view of the urban tax base. I think that those of us who are concerned about the development of our province--and I can probably include the minister and his staff in that--need to recognize that the southern and western parts of the province and the economy of those regions are extremely strong. The unemployment rates are often virtually zero for all intents and purposes in some of those communities--2 percent, 3 percent, essentially the frictional rate of unemployment and really negligible from any perspective.
You go to Winnipeg, you see a different picture. Unfortunately, if you go to the North, you see an even more depressing picture in terms of the overall situation. Now the minister talks about mines, and, of course, he is right about that, and there are bright spots. The Dauphin area, for example, the minister's own staff and the staff of the federal government in that region estimate that the true unemployment rate is around 20 percent in that region. The official rate is in the 12 percent, 13 percent region, but the true rate is around 20 percent.
Of course, we know the situation in the Far North in aboriginal communities. So increasingly, we have a provincial economy that is segmented into three zones that are doing very differently and have very different problems and very different opportunities.
So, in a broad sense, I would encourage the minister, if he has not already done so--and he may already have done so--but if he has not already done so, to begin to think about the province in a little more segmented sense, because the region he represents and the region that many of his caucus members represent is doing very well. That is not because they represent those areas any more than the reason that the North is not doing very well because members, like the current chairperson, are from an area that is farther north. It has got nothing to do with who represents it, but it has to do with some structural issues that are very, very difficult issues.
I wanted to highlight that, by looking at our unemployment numbers. The minister and the government have been as, I think, positive as we have been about the strong gains in the last half of 1996 and the first few months of 1997. I am sure that we all hope that those gains persist and strengthen. The difficulty is that in Manitoba something in the order of 50,000 of our labour force are not counted in the employment statistics, and that is because Statistics Canada does not count Status aboriginal people on reserve in their employment statistics. So Manitoba historically has, as has Saskatchewan and Alberta, always been second or third. No matter who has been in government, the unemployment ranking has been incredibly stable at second or third. Occasionally, we drop to fourth; occasionally, we bump up to second, but usually we are third.
Now there is a very real, serious structural reason for that, and that is because in the other provinces in Canada, particularly Ontario and Quebec, the larger provinces, and very much in the Maritimes, aboriginal people comprise a very, very small portion of the overall total population of the province. In Manitoba, Saskatchewan and Alberta, but particularly Manitoba and Saskatchewan, they comprise something in the order of 10 percent of the overall population. The Status aboriginal population is around 7 percent, and that population resident on reserve is not subject to statistical counting of a whole number of statistics. The minister probably knows that the poverty statistics for children do not include statistics of aboriginal children on reserve. Likewise, the unemployment statistics do not include any sampling of on-reserve aboriginal people.
So the real world in Manitoba is that, of our working age population, the true unemployment rate, simply taking into account aboriginal people, puts us over 11 percent unemployment. The true rate in Saskatchewan is similar, and I am not trying to make a political point here, because Saskatchewan is an NDP province at this point and historically has been that more often than anything else since the second war, but they have the same problem.
From a social, health, and education perspective, these provinces, among their citizens and in their population, a community that is, and I think everyone agrees, disproportionately disadvantaged represented in all of the negative numbers that we might want to count and at a proportion which is out of whack with their overall numbers.
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So the structural problem that we face is masked by what are, admittedly, positive unemployment numbers in a traditional sense, but I just put to the minister that this is really not a different picture than there has been in Manitoba for the last 20 years. It is essentially the same picture. We are second, or third, or fourth, but neither of the two big prairie provinces count their aboriginal folk when it comes time to be worried about unemployment. I hope to have a chance to talk perhaps through the minister or maybe even directly with his Bureau of Statistics Director, Mr. Falk, in which, hopefully, we can have a discussion about the reliability of the unemployment numbers themselves, which I know Mr. Falk has concerns about, and I am sure the minister has concerns about, because I know that his recent comments on Manitoba's employment patterns have been very carefully couched because of the unreliability from month to month of the numbers as they bump all over the place.
I just want to comment on a few other most recent statistics in our province that I think are important to note. Manitoba is very much a middle-of-the-road province. The minister makes it sound as though we were top of the heap in everything. The real world is that we are not.
The Manitoba Bureau of Statistics, March 11, 1997, most recent quarterly economic summary: In terms of population estimates, we rank from ninth to fifth, depending on the years in question in terms of overall growth or loss of population in regard to the rest of Canada. In terms of employed labour force--seventh, second, ninth, fourth, fifth, approximately in the middle; seasonally adjusted year over year. So, very much like the rest of Canada, not particularly above or below. The unemployment rate, as we have said, second or third, usually third; I think second, three times, four times in the last few years. We have been second from month to month, most of the time third, as it has been for more than a decade.
Average weekly wage earnings, we rank right, again, in the middle--nine, eight, eight, four, six, five, somewhere in the middle, probably about sixth if you average those. So, again, not at the top of the heap by any means. Consumer price index, here we are almost worst, seventh, eighth, seventh, tenth, tenth. So we have had a sharper increase in prices than most other provinces for reasons that I cannot explain. Capital investment, third, tenth, first, second, sixth. All over the map. Probably on average about in the middle, where you might expect. Gross domestic product, tenth, fifth, tenth, seventh, third. So, again, in the middle, perhaps a little below the middle. Factor costs, about the same. Farm cash receipts, fifth, third, first, ninth, eighth. All over the map, but basically not much out of what you might expect.
So when you look at things, including even manufacturing shipments, where our performance has improved since 1991, when we were last, to the most recent period, when we were third, you see a situation where we are not by any means leading the pack. We are about in the middle where you might expect the province. It is an equalization recipient province.
There are some areas where we are strong. Our trade performance on exports has been strong, and we would acknowledge that. However, this performance masks some very serious problems in the area of employment, and I want to again put on the record from the Manitoba Bureau of Statistics, February 13, 1997. There is a picture of employment from 1989 to 1996, and it is a very instructive picture. The only sector in which there has been growth in that period of time is the service sector. I will not take the time, Mr. Chairperson, to read all of the sectors in, but the minister could check page 13, table 13, of that report. You will find that agriculture, 40,000 down to 39,000. Primary industries 9,000 up to 10,000. Manufacturing 64,000 down to 59,000, and so the pattern goes. Little bits of change, but basically a stable picture.
However, when it comes to service here is all of the growth, 30,000 new jobs in service since 1989. Now, in that 30,000 jobs, of course, are the 5,000 telemarketing jobs that the minister speaks about as though they were high-quality jobs. I can tell the minister, and we will talk about this in that sector of the Estimates, that many, many people have talked to us about their frustration, their lack of satisfaction in those jobs. They are seen as essentially the sweat shops of the 1990s. They are not unlike the kind of garment-industry jobs in which there were production quotas, in which people were fired on the spot for performance that was seen to be subpar, in which the work was episodic, you are called in some days, you are not called in other days, in which there are no or very few benefits, only the statutory benefits. The so-called training on the job, we will talk about that in that sector. The training very often consists of a manual that you are supposed to read, and then you go on the phones. That is the training for these jobs.
So when you look at the pattern of employment, what you see is that virtually all of the growth, well in fact not virtually all, all of the growth in employment has been in the service sector. You can see that by virtue of the fact that the average industrial wage in Manitoba has fallen 8.6 percent over the time of this government being in office. The purchasing power of the wage packet that people take home has fallen 8.6 percent on average. That, of course, masks big differences. A few, a small proportion of the workforce has done extremely well, the upper 20 percent or so, but everybody else has not done very well, which is why families are reluctant to make the kinds of long-term investments, and why they are fearful, why when you go out and survey people and ask them what they are concerned about, they are concerned about jobs. They are concerned about job security, and they are concerned about the fact that they are worried in their families as to whether they should try and make an investment in a small starter home because they do not know if they are going to have the employment next year let alone next month. They do not know whether they are going to be employed so they can keep that mortgage.
If you look at the national statistics on work, what you find is that what gains we have seen are because more of us are working longer hours and part time, and yet fewer of us are members of the work force. All of these are Statistics Canada studies.
You see that some 35 percent of all part-time workers would like a full-time job but they cannot get one. I think we have to understand that the segmentation of our economy and the pattern of employment is an increasing problem that we need to address in a structural sense.
I think, also, it is important that the government--and I do not really expect the minister to acknowledge this but in his private heart of hearts he knows this is true. We have a tremendous segmentation also of departments responsible for economic development. We have I, T and T, we have Northern Affairs, we have Urban Affairs and we have Rural Development, and from feedback I have had from people in the field, Rural Development and I,T and T are often in competition with each other. They are not sharing information. They do not seem to work together terribly well. There seems to be a real competition between those departments and that, of course, is not going to help overall development in the province. So I hope we will have a chance to talk about that, as well.
Finally, the area of tourism the minister talked about, I think we already know that on a 10-year basis, 1987-1996, there is only one province that has done worse than Manitoba, according to Stats Canada Touriscope publication, and that is New Brunswick. We have had a loss of 14.6 percent on our tourism from that time, New Brunswick 16.4 percent. Canada has a gain of 15.7 percent and our neighbouring province, Saskatchewan, which probably faces about the same kind of marketing challenge as we do, has had a gain of about 7.7 percent over that period of time.
So I am glad the minister in his comments said that he is trying to develop a new strategy. That is probably what Barb Biggar was hired to do, to help create a new segmented strategy that focuses on ecotourism, aboriginal, outdoors, cultural, segmented tourism, and I hope that that strategy is successful, because it is very clear that whatever the strategy has been over the last 10 years, it has not worked. We have had a dismal record in comparison to the rest of Canada, and that is a very important industry to us, as the minister knows. It is going to be very hard this year, given the events of blizzards and floods, to deal with the tourism question of this year.
Finally, I see also in this department over the couple of years that I have been involved, quite a serious turnover of senior staff. We had last year, and discussed in Estimates, the report of Price Waterhouse, which the minister indicated was also a concern to him and that he was taking steps to address many of the issues, and I hope we will have a chance to find out a year later what has happened to reverse, or at least address, some of the signs of really deep distress in the department in terms of the feelings of staff expressed in that report last year, feelings that what they did, did not matter particularly, but that the department was politicized in many ways and that that was unhelpful, that people were not clear about their jobs and so forth. There were many negative things in that report, and hopefully in this year those have been addressed.
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So, Mr Chairperson, with those remarks, I think we should begin considering the Estimates in detail.
The Acting Chairperson (Mr. Helwer): I thank the critic from the official opposition for those remarks, and under Manitoba practice, debate of the Minister's Salary traditionally is the last item considered for the Estimates of the department. Accordingly, we shall defer consideration of this item and now proceed with the consideration of the next line; but, before we do that, we invite the minister's staff to join us at the table and we ask that the minister introduce his staff.
Mr. Downey: Let me introduce, Mr. Chairman, Mr. Murray Cormack, who is Acting Deputy Minister of Industry, Trade and Tourism and Mr. Jack Dalgliesh, who is the head of the finance section of the Department of Industry, Trade and Tourism.
The Acting Chairperson (Mr. Helwer): I thank the minister. We will now proceed to line 1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $489,400, on page 86 of the main Estimates book. Shall the item pass?
Mr. Sale: Mr. Chairperson, there has been a substantial turnover in senior staff in this department, as I have just referenced, and we have quite a different structure than was the case in previous years in the department. Could the minister indicate who have been the deputies and assistant deputies of I, T and T, acting and appointed, since 1988, when the department was formed, and how long each deputy was acting or appointed in the positions in which they found themselves?
Mr. Downey: Mr. Chairman, I do not know what the member is trying to get at, whether he is trying to prove that I am a tough person to work for or what it is that he is trying to accomplish, but I will provide that information for him. I have no difficulty with it. Since 1988.
From 1988, we had Hugh Eliasson, Michael Bessey, Paul Goyan, Fred Sutherland and Murray Cormack, and I can tell you the majority of those people are still within the Province of Manitoba, government, or have gone to further education and/or have gone to other activities of which have basically all been to--and one other individual to go to the private sector. So that is the lineup that he has asked for.
Mr. Sale: Mr. Chairperson, what were the dates at which Mr. Eliasson, Mr. Bessey, Mr. Goyan and Mr. Sutherland resigned from their positions, approximately?
Mr. Downey: This is a rough estimate. Mr. Eliasson did not resign from the position. He was moved over to the Deputy Minister of Government Services, and is still there, approximately 1991, I think it is, 1991. Mr. Bessey was there from 1992; he followed Mr. Eliasson, 1992 to 1994. Paul Goyan was there in 1994, and then we had--yes, I have to correct my statement. Mr. Kupfer acted for a short period of time, following Mr. Goyan, and then Fred Sutherland went from that period of time, from Mr. Kupfer, to just February of 1997. I apologize. I did not include Mr. Kupfer as acting for a short-term period. Mr. Kupfer is now an assistant deputy minister in Government Services, but also involved in some of the boards of which are still operating under I, T and T.
Mr. Sale: Can the minister tell the committee whether there is a search process underway or whether the intention is to fill this position from existing staff currently? What is the process for dealing with this acting status of Mr. Cormack?
Mr. Downey: Mr. Chairman, it would be my intention to fill the position on a permanent basis as soon as the final decision is made as to who it will be and it will be my intention to, as I said, do that sooner rather than later.
Mr. Sale: Mr. Chairperson, could the minister indicate what has been the process of seeking a permanent position and seeking a permanent incumbent for that position?
Mr. Downey: Yes, basically, Mr. Chairman, identifying the most capable person who could get the job done that the government feel has to be done.
Mr. Sale: Mr. Chairperson, was the position advertised?
Mr. Downey: I do not believe for this current deputy, no, or for the position that is open now, basically not.
Mr. Sale: Mr. Chairperson, in the British system, deputy ministers generally have a longer tenure than ministers do and many of them, at least traditionally, are there for quite a long time. We have had five different people in this department since 1994, including the current incumbent, Mr. Bessey, Mr. Goyan, Mr. Kupfer, Mr. Sutherland, Mr. Cormack. That is in significantly under three years, we have had five different people in this position.
Last year, the minister had a report from a respected consultant that he liked to quote in regard to some other studies that that consultant did, and that consultant told him in very clear terms that his department had serious problems in it. He concurred, in fact, in Estimates with the fact that there were issues that needed to be addressed. Whenever you have a medium-size organization, which I, T and T is, the senior leadership in it is pretty critical in terms of the overall functioning of the department.
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I find it, perhaps, a little strange that there was no attempt to do a professional recruiting job for this position, not doubting the qualification of many people within the civil service of Manitoba, including the current acting deputy minister. Why was this position not advertised so that you might cast a wider net, as it were?
Mr. Downey: I am not trying to lighten this discussion, but I guess what one could say is I am trying to change some of the British traditions to make sure the minister actually lasts longer than the deputies. [interjection] So far it is working. But the objective is to have the senior manager, senior deputy minister to carry out. I can tell you, with all sincerity, that the acting deputy minister who I have currently is doing an excellent job and will be considered for the job on a permanent basis.
(Mr. Peter Dyck, Acting Chairperson, in the Chair)
As far as looking at the outside or going further than what we have in the past, there have been circumstances of which each one have been considerably different that have caused the changes to take place. So I am satisfied with the process that we have gone through. I also can report to the member that I think if one were to look at the attitude and the feelings and the operations of the department today that we would find that the whole department, the operations and the attitudes, are totally different than they were at the time we had the study done, and the changes that have been made to date have been of a very positive nature. That is my response.
Mr. Sale: Mr. Chairperson, I hope that when the person is appointed finally, whoever it is, that this will be seen as a long-term appointment, because I believe this department needs the stability that a stable senior management team provides. The senior management team of this department has not been particularly stable over the last period of time. It has changed quite a lot. I think that some of the problems that it has experienced may be a reflection of whatever was causing that kind of rapidity of change.
Mr. Chairperson, the mission statement has also changed this year. The minister should take a look at last year's mission statement versus this year's mission statement. We have a change. It seems to me that it is an unfortunate change, because it puts the role of industrial trade and tourism development in a very ideological framework. I think that is unfortunate, because departments ought to survive the government of the day and have a long-term mission that is broad and inclusive of all kinds of roles and functions of citizens in the economy.
We have gone from "creating a dynamic economic environment which stimulates exceptional growth for the benefit of Manitobans," which is a laudable mission statement. It clearly allows for a wide variety of initiatives from the kind of health initiative which has R & D and the university sector, as well as public and private sector components to it. That is the way it ought to be, and that was started, as the minister knows, under previous governments and has continued to grow and flourish under this government. That is good.
We have gone from that kind of broad statement to facilitating private sector job creation, as though there were no other real jobs, no other valuable jobs, and the private sector is the only thing that we need to worry about in terms of our industrial trade and economic development. I wonder why the minister would move from a broad, inclusive kind of mission statement to one that is so ideologically focused only on the private sector, as though that was the only employment that mattered to Manitobans, as though you can have a strong private sector without having other things in the economy, such as a strong public sector health system, education system, environmental protection, urban--there is just no recognition here that the job that the minister sets out to do is much broader than just stimulating the private sector to create jobs. What is the rationale for this narrowing and ideological focus to the new mission statement?
Mr. Downey: Mr. Chairman, it is unfortunate the member can only be so focused and narrow in his reading of the mission statement and only reading part of it and putting an interpretation which he feels comfortable with, in opposing what this government is doing because of his narrow approach.
Let me read what the role and mission statement is in total, so that we have it in total context, Mr. Chairman: "The Minister of Industry, Trade and Tourism and the department, in pursuit of a vision of a prosperous and dynamic Manitoba economy generating progressive and sustainable employment growth for all Manitobans, have established as their mission: To facilitate private sector job creation by fostering and promoting an environment conducive to the development and growth of Manitoba business."
That in total is what we are talking about, Mr. Chairman. We have Operating Principles: "The role for Industry, Trade and Tourism, as outlined in the mission, is exercised in accordance with the following operating principles: taking the initiative to both create new and exploit existing opportunities; bringing partners together to work as a team"--which includes government; "developing human resources to enhance productivity and foster a motivational environment; and earning trust through integrity."
Again, Mr. Chairman, you have to read in total what we are accomplishing, not just a narrow focus that the member for Crescentwood is trying to place on it.
Mr. Sale: I can assure the minister I did read it entirely, and that was one of the things that struck me, that he has taken the same operating principles and the same strategic thrusts--I believe they are virtually word for word over the two years--and yet the mission of the department has narrowed substantially from the kind of broad and inclusive mission to a very focused, private-sector business orientation.
The implication here is that that is how you create jobs. Of course, if you look at the record of this government, that is the only place that there have been any jobs because the public-sector jobs have declined over the time they have had in office; and, indeed, even manufacturing jobs, one of their most frequently boasted-of areas, has lower employment today than it did in the mid-1980s. Admittedly, it produces much more product with the same number of employees because productivity has sharply increased, but employment has not.
I have a real concern that, unless we start thinking as a society about the creation of meaningful work in some context other than simply let the private sector do it all, then I think we are flying in the face of a great deal of statistical evidence that we are at a point in our history where we do not need everybody to work in the private sector producing goods and services because there is no demand for the amount of goods and services the private sector can now produce.
Look simply at the automobile sales in the time that you have been in office. You will see that we have sold 50 percent fewer automobiles because cars are lasting longer. They are a better product; they are being produced with fewer and fewer people; they are nicer vehicles to drive; they are more environmentally friendly. All that productivity has to go somewhere, or we are going to have the kind of social unrest that is increasingly evident in lots of parts of our world.
When you think of job creation as only private sector, I think that you leave out a lot of the really significant potential that governments ought to be concerned about in the context of industry, trade and tourism because there are many more than just private-sector job creation issues at work, and yet this government has consistently laid off staff and said the only place we are going to look for employment growth is in the private sector. Nations that have done are putting themselves at significant risk because there is not enough work to go around anymore if you just look at traditional private-sector approaches. It is a very old fashioned approach, and I do not think it is going to serve us very well in the future.
Mr. Downey: Let me be the first as a member of our government to acknowledge and compliment each and every one of those people who work for our government and particularly demonstrated in this last few weeks of the tragedies that we have had to deal with as it relates to the floodwaters of the Red River and the responses that we have had and the dedication and the commitment that we have had. I do not think anybody should understate just how important they are and how much work they have put forward on behalf of the people of Manitoba. I take my hat off to them and compliment them at every opportunity.
Let me as well say that, as it relates to the Department of Industry, Trade and Tourism, we believe very strongly that it is the private sector that generates the wealth that will pay for the employees that are hired by government as well as present the revenues to the province to give us the health care system that we need to pay for the health care system. So it is extremely important that the private sector be healthy; generate the wealth that does the paying for the work of the employees.
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I can go through many examples of where, under his philosophical approach, and I can bring several to the table, one particularly being a Manitoba oil and gas corporation which quite frankly cost the province of Manitoba a considerable amount of money because they were dabbling in trying to produce oil for the province of Manitoba which we can take our royalties off of it, which the private sector, quite frankly, can do very well, and $16 million wasted by the New Democratic Party, of which the member for Elmwood (Mr. Maloway) is sitting here with his smug grin on his face, quite frankly, proved it did not work.
There is in fact strong support for the employees, strong support for the employees of government. Quite frankly though, it all has to be in balance, and what we are talking about within the Department of Industry, Trade and Tourism is in no way a reflection on whether or not people are needed in government or whether they are not needed in government.
Mr. Chairman, I can tell you that in our department we have an excellent work staff. We have seen the people who are working there who are developing tremendous relationships, and I think they are seen as being a major part of the economic growth. The member's own comments at the outset, the member's comments at the outset acknowledged the growing economy of Manitoba. He did make reference to the regionalization that has taken place.
I can assure him that I think all parts of the province are advancing very rapidly. He has pointed out some anomalies, but I can tell you with the mining sector, particularly in the northern communities, when we talk of the forestry industry in the northern communities, we are seeing tremendous activities taking place. So I do not quite accept in total his comments, but the point he is trying to make now is that we do not really care about government jobs. Quite frankly, we do. We really appreciate the work that those people are doing and will continue to do. It is a matter of, are the services being provided, essential services that are being provided, and the answer I would give is yes.
Within our department, we are continually and will continue to encourage the private-sector investment, the private sector jobs which in fact generate considerable wealth to propel this province forward. Again, that is part of what our overall strategy is, is to make sure that we have a reasonable tax policy, the best environment for the creation of jobs through the private sector, so he may object to it. I am not going to let him put on the record or accept the fact that we do not care about government employees and those jobs, because we do. They continually demonstrate how important they are to our province.
Mr. Sale: Mr. Chairperson, I used to teach in the area of strategic planning and that whole general field. It is an interesting field to work in. One of the things we used to teach, and used to be thrown at us by the people that taught us, was that the role and mission statement drives the operating principles in this strategic thrust, et cetera.
Here is a situation where there has been, I would think, a significant change, not just a wording change, and yet the operating principles in this strategic thrust have not changed. So it simply seems strange to me that there would be that degree of change and yet the overall Operating Principles approach had not changed at all, so it is a little unclear whether the minister thinks that the mission statement has really changed or whether he thinks that this really is the same as creating a dynamic economic environment to facilitate private-sector job creation by fostering and promoting an environment conducive to the development and growth of Manitoba business, creating a dynamic economic environment which stimulates exceptional growth for the benefit of all Manitobans. It seems to me to be quite a change, and yet the principles and thrusts have not changed at all. Can the minister explain that?
Mr. Downey: If I could repeat what I just said, Mr. Chairman.
Mr. Sale: Oh, no, do not do that.
Mr. Downey: Then you will have to take it as answered.
Mr. Sale: What has happened to The Pari-Mutuel Act? Some other minister have it now?
Mr. Downey: The actual Pari-Mutuel Act now falls within the Ministry of Finance. However, the operations of the Horse Racing Commission fall within the jurisdiction of Industry, Trade and Tourism.
Mr. Sale: Moving on to the organizational chart, Mr. Chairperson, if we can, here there are some very large changes, some of them puzzling. I think the minister may have already answered where the assistant deputy minister has gone. I think he indicated that he is assistant deputy minister in Government Services at this point, Mr. Kupfer?
Mr. Downey: That is correct.
Mr. Sale: Mr. Swain, I think it is Bob Swain is listed as the secretary of the Economic Development Board. The phone book says Stu Duncan. Where has Mr. Duncan gone?
Mr. Downey: To the private sector.
Mr. Sale: So Mr. Swain is no longer where he was, he is now secretary of the Economic Development Board.
Mr. Downey: That is correct.
Mr. Sale: The Economic Development Board is shown as reporting to the I, T and T minister, but in fact my understanding is it reports to the Premier (Mr. Filmon). Is this a change?
Mr. Downey: No change.
Mr. Sale: Does the Economic Development Board in fact then report to the minister?
Mr. Downey: I guess on the chart it shows basically that is what it does, but I should make a clarification. The Premier actually chairs the Economic Development Board of which the secretary reports to for the purposes of basically reporting. It comes through the Department of Industry, Trade and Tourism. For example, the movement of work, the passage of work that would flow from Economic Development Board would come through the Ministry of I, T andT.
Mr. Sale: For clarification, is the minister saying that essentially administrative support for the board comes from the department but the decision making, the policy function of the board, is really a function under the direction of the Premier directly?
Mr. Downey: The administration falls within the Department of Industry, Trade and Tourism.
Mr. Sale: Could the minister detail the major changes in the personnel and mission of Manitoba Trade? Just for context, Mr. Chairperson, a couple of years ago the intention was cited of reactivating Manitoba Trade.
Last year the act was amended to give it a slightly different name and some different powers, or to augment its powers I guess because there were no powers taken away from it. Now we have a situation where the Estimates books from the two years do not agree in terms of numbers of staff in different places. It is not simply a change from one to the other, but the stated number for 1996-97 do not agree with the '96-97 book. So there is a series of differences in here that are simply puzzling. I am wondering if the minister could walk us through the changes in personnel and mission of Manitoba Trade under Mr. Rod Sprange.
Mr. Downey: Quite frankly the people who are now involved in Manitoba Trade came from the Industry Development section which in prior years would be reported under the Industry Development section. So now the Industry Development section has seen the Manitoba Trade personnel split off from that section.
Mr. Sale: Then where do we find the staff that were formerly the largest I think group of staff who are under the strategic initiatives of the department. They were under the various so-called managing partners who now have disappeared and are presumably under perhaps Mr. Cormack, I am not sure.
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Mr. Downey: Basically, as part of the reorganization, they would be found in the Industry Development section.
Mr. Sale: Has this been--well, I do not want to imply any kind of assessment of it. What has been the change in the various sectorial initiatives, or are they essentially intact but now under Mr. Cormack?
Mr. Downey: That assessment is basically correct.
Mr. Sale: We will probably get into this more when we could look at each area, but one of the things that Price Waterhouse raised was the appropriateness of some of these, and in particular they raised the question of the appropriateness of putting a lot of energy into the Environment Industries Development Initiative because of the size of the industry in Manitoba and the question of whether strategically this was a good use of resources.
There were also some questions raised by that report about the overall approach in terms of whether focusing on relatively narrow sectors was a good strategy or not. It sounds like you have decided to continue with the previous pattern without any change. Is that basically correct?
Mr. Downey: Basically, there is a change. The way it is now established, it gives the department and the Industrial Development section the opportunity to shift more resources to a particular area as it relates to a specific priority. It is not just, for example, the environmental industry section operating as the environmental industry section. If they, for example, were needed in another area, in a lot of cases to say this is an Industrial Development section or an Industrial Development activity, specific environmental industries, then there would be people that could be called upon to be part of that, but it all fits under the basic umbrella of Industrial Development.
I think it gives the department more flexibility. Mr. Cormack has been very aggressive in spending a considerable amount of time getting that system working, and we will work somewhat on a team approach. I think it gives us more flexibility than we had previously and, quite frankly, better communications within our department as it relates to industrial development taking place.
Again, the Financial Services people are able to sit as part of that committee. If, for example, we were developing an industrial activity that would include potential MIOP participation, it gives the ability for that part to be tied in. So I think it gives more flexibility. It is not so much as one would refer to as silo approach, if you have 13 managing partners or 14 managing partners. In fact, it takes away that, what I would call silo approach, within the department. There is a greater cross-transference of information as it relates to development, and I can report at the early stages of it that I think it is working better, and I am confident that it is going in the right direction.
Mr. Sale: Mr. Chairperson, is the new structure such that Mr. Cormack basically assigns the work of the some 22 or 23, I am not exactly sure how many, 24 staff who are development consultants, and makes up teams to work on specific projects as he thinks best, obviously with the advice of other people--I do not mean he is a dictator in that sense. But is that the style that we are in now, or is it some kind of matrix management style? What are we doing here?
Mr. Downey: Basically, there is a priorities committee established by the deputy which, in meeting with the senior personnel within that section of the department, will determine the overall approach to a strategic development or a project or a group of projects, and prioritization will be placed on it, and who the best resource people to be part of that will be put in place.
Again, from the outset, I think it feels as if there is a greater team approach to the overall industrial development and a greater knowledge of what, in fact, is taking a place within the department. I am satisfied at the outset that the system that is now established, and the process, not only will work within industrial development, but the member made some comments about not understanding clearly what would be happening between the different departments of Economic Development. It, I think, also gives us the ability to put on that industrial development team someone from another department if it related more to Rural Development, that kind of approach.
Mr. Sale: Well, then I go back to my previous question then and perhaps we are just clarifying here, but Mr. Cleve was responsible for Aerospace. I am not sure who S. Leahey is, whether it is a woman or a man, Mr. Lilley, Val Zinger--they all had specific areas of responsibility. I am hearing a mixed message here. Do they still have specific responsibilities for sectoral initiatives such as aerospace, technology, health, agri-food, environment? Or is it now more project or--tell me what it is.
Mr. Downey: Basically, they still have that same responsibility but rather than coming under a broader range of managers, they are more targeted to a less group of managers. Again, this is in dealing with individuals in a fair and equitable basis, because we had basically several number of managing partners which had certain expertise and responsibilities; for example, there is still work to be done that is co-ordinated under the deputy minister and what will be the assistant deputy minister's position in Economic Development.
There can be, for example, Aerospace where Dennis Cleve has been responsible for, a greater responsibility for example in working with Highways and Transportation in a broader way that is related to the work of Winnport. Again, somebody has to do that and, in most cases, we have to make sure there is a relatively experienced and senior person. That is the kind of work that that person would be delegated to do as it relates to the operations of the department.
Mr. Sale: So would it be fair to say that this is a transition process towards trying to address some of the issues raised from Price Waterhouse to maybe break up some of the silos, as the minister so aptly described them?
Mr. Downey: That is correct, Mr. Chairman. Again, we are dealing with capable individuals who have been in managing partner positions, and it is working and it brings a team approach to the business.
Mr. Sale: Could the minister indicate the rationale for linking Tourism with Small Business Development? Is this just because the person responsible happened to have that particular background? It is not an obvious linkage to me, and I would think given the importance of Tourism for Manitoba that adding Small Business in there is kind of like adding an appendix. What is the rationale for this?
Mr. Downey: I guess the answer would be yes to the first, that the individual did have responsibility for Small Business, but in finding the work that we are doing in Tourism, there are a lot of Small Business operations in Tourism. There is a better fit than one would automatically look it or see it as in the initial stages. Plus, I think it is important to note that the staff, the individuals who are working within that department have considerable experience, particularly the head of the Tourism department has had considerable Small Business and, quite frankly, the combination is working quite well.
Mr. Sale: In the departmental phone book, which is maybe a little out of date, is the area called the Business Services Branch what is the Small Business section in the Estimates?
Mr. Downey: Yes.
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Mr. Sale: There are obviously many, many, many more businesses that are small that are not tourism businesses. There may be many small tourism businesses, but there are far more that are not, and the minister made a very strong point that small business creates a great deal of jobs. It also, of course, gets rid of a lot of jobs, too, because there is more churning in small business than there is in large business, but it is a dynamic sector. There is not a lot of staff associated with this function, so they must work very hard, and we will note in these Estimates, as my colleague for Elmwood has noted in the previous ones, that in the co-op area you have really got only two staff now, with one support person, and yet that is a very big area of our provincial economy.
I do not find the minister's rationale for having Small Business here under Tourism terribly convincing. We have serious problems in tourism. I think this is acknowledged by the tendering of a new contract and the recognition that we have not done well by comparison with other provinces over the last little while. I think we need somebody responsible for Tourism that is responsible for tourism. That is a huge industry in Manitoba and a very important industry. I really question sticking Small Business under Tourism when tourism has as many priorities as it has. Can the minister comment on that?
Mr. Downey: Yes, I can Mr. Chairman, and I can deal with it at this particular time or later on when we get into Tourism as to some of the challenges that the tourism industry is faced with in Manitoba, and I will probably delay that until later, but I think the question that the member raises is one which I feel comfortable with. We are getting done what has to be done, and I do agree the individuals that work there work very hard. The individual who heads up Tourism and Small Business is not denied the support and services out of the Industrial Development section. If there is a need for people to be brought in as it relates to some of the businesses that may at some point be smaller or seem to be smaller business enterprise, if in fact it is of greater magnitude than what the capabilities are within that department, the access is available to the Industrial Development section, so they quite frankly work very closely together. So it may seem as reporting only to Tourism and Small Business. There is a considerable amount of work again crossing what would be seen as the line or the stovepipe from Industrial Development. So it is not that here is Small Business out here all on their own with Tourism. It is Small Business and Tourism as it relates to this, but when it comes to Economic Development and Industrial Development there is a team approach which is brought together and support services are brought forward in that regard. As well, we still have the Financial Services branch which are brought in to do the work that is identified by Small Business that has to be done if it is doing the guaranteed loan program, the small business loan program. That is where the support would come from for Small Business.
So I think, again, the member is probably overplaying the tying of the two together. Again, at this point, I am satisfied that it is working. I can assure the member, as well, that I want to make sure that the Tourism section does not go wanting, and we will again get into that in a little more depth at the appropriate time in these Estimates.
Mr. Sale: I guess we will get a chance to talk about that further. It just seems that Financial Services and Business Services might be very closely related, and it seems strange to have them under two separate assistant deputy ministers, but I will get a chance to talk about that further.
On page 5, Mr. Chairperson, there are some allocations of funds from headings, the Communications Technology and Industry Development Agreement. What program received those funds, what program in the Estimates? Where did they go?
Mr. Downey: I missed what the member asked in the question. The funds from what appropriation?
Mr. Sale: On page 5, the Reconciliation Statement, there are funds from a Canada-Manitoba Enabling Vote on Communications Technology that is federal-provincial. There are funds from Government Services, from Highways and Transportation, from Rural Development. Where did they go to, was the question.
Mr. Downey: I am told that the Communications and Technology amount is basically used to cover off expenditures in the other departments that needed the resources, and it is a matter of reporting it here. I have to get further information. Basically, Mr. Chairman, I am told it is a reconciliation of funds.
Mr. Sale: Mr. Chairperson, I may just not understand what is going on here, and Mr. Dalgleish can probably instruct me, but the department received these funds from other sources and these are the sources, if I am reading it correctly, the Canada-Manitoba Enabling Vote, Government Services, et cetera. It credited those funds to some functions within the department, presumably; that is what it did. It spent this money doing something or it has not spent it yet? It is going to spend it during this year. Is it going into a specific line in the Estimates? And what are those lines that those monies are going into?
Mr. Downey: For example, Government Services would have been the upkeep of our tourism information centre. Highways and Transportation is not a huge amount of money, but it could have been the same type of thing. I can get the exact details of that if the member wants, but basically the Government Services one is the best explanation of what that money was used for. It was for the work that was done on behalf of Tourism for the information centres.
Mr. Sale: Mr. Chairperson, it does not have to be now, but could he provide, the next time we meet perhaps, where the Communications Technology Development Agreement money went? What areas of Estimates it went into? Could he also indicate what functions were transferred to the Community Support Services for a cost of $75,000? What did we transfer out?
Mr. Downey: I will put the best effort forward to get that information.
Mr. Sale: On page 6 of the supplement there are a range of grants. The total is very similar and there are some significant changes, and I expect they are all covered elsewhere in the department. Am I correct that these could all come up under the appropriate page?
Mr. Downey: That is correct.
Mr. Sale: We can go over that and bring it back later. Okay, I think with those initial questions--just one question here.
I cannot remember. It seems to me, because of the change to an SOA, we no longer have discussion about the EITC. It no longer has a line, I believe, anymore. Am I correct, Mr. Chairperson?
Mr. Downey: No, that is not correct, Mr. Chairman. EITC still does report to the Department of Industry, Trade and Tourism.
Mr. Sale: Then let us pass the first area of Executive Support.
The Acting Chairperson (Mr. Dyck): Item 10.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $489,400--pass; (2) Other Expenditures $71,300--pass.
Item 10.1.(c) Financial and Administrative Services (1) Salaries and Employee Benefits $631,500.
Mr. Sale: Mr. Chairperson, in this area I do not have any questions. I just wanted to express my thanks to the minister and through him to Mr. Dalgliesh, his staffperson, for assistance and understanding the horseracing issue last year and, generally, in responding to questions that have been asked through the minister's office. I appreciate Mr. Dalgliesh's work in that regard.
The Acting Chairperson (Mr. Dyck): Item 10.1.(c)(1) Salaries and Employee Benefits $631,500--pass; (2) Other Expenditures $311,500--pass; (3) Computer Services $110,000--pass.
10.1.(d) Research and Economic Services (1) Salaries and Employee Benefits $523,600.
* (1750)
Mr. Sale: Mr. Chairperson, in this area of Research and Economic Services which comes under Assistant Deputy Minister Mr. Barber--is that correct? [interjection] This was an area in which the Price Waterhouse study had a lot of, I think, very helpful comments to make, and it was one in which they cited a number of other jurisdictions as best practice jurisdictions. They cited Alberta, Quebec, Oregon, and perhaps some others as well, as having some very sound practices of strategic information development.
I think the point that Price Waterhouse was making was that this is a very, very difficult area for government, because the needs are so broad and the area is changing so rapidly that it is a very challenging area to address. I think Mr. Barber is very well thought of and I am not, in any sense, commenting on any staff in the department. What changes have been undertaken as a result of the Price Waterhouse report in this area in which the minister could comment on?
Mr. Downey: I would agree, Mr. Chairman, I have a lot of respect for Mr. Barber and the work that he is doing within this area. He has basically had a lot of responsibilities that relates to the Internal Trade Agreement, and I can assure him that he has carried out his work very ambitiously.
The member can be made aware that we have actually increased this area in staff by three people to further support that area. I can say that staff will work to co-ordinate the communications within I, T and T and to also do a greater amount of work with the development of outside stakeholders in this whole area. So we took note of what was said in the report and have responded, to some degree, to try to improve it.
Mr. Sale: Could the minister indicate what staff are now there, what their backgrounds in broad terms are and, specifically, what staff? Who were the staff transferred in and what was the particular skill mix that they brought to strengthen this area?
Mr. Downey: Mr. Chairman, I will have to get that detail for the member.
Mr. Sale: Mr. Chairperson, in this whole area, it is a very difficult area because it is very competitive among jurisdictions and, yet, you would want in lots of ways to have co-operation between Canada and Manitoba, for example, in regard to many of the kinds of strategic information that is provided by this department to industry and to other sectors that might be wanting to perhaps invest in Manitoba or to expand their investment in Manitoba. How does the branch work with the federal staff, or does it work with federal staff? What are the mechanisms here for levering our relatively modest resources? And they are very modest.
Mr. Downey: Mr. Chairman, again, a good portion of the work that they have been doing has dealt with the Internal Trade Agreement, and that linkage on that side has come through the Internal Trade Secretariat, which is a representative organization of all the provinces, and the good fortune to have it in the province of Manitoba is ours I am sure. So there is a good, ongoing activity as it relates to that part of the work activity.
Again, I give a lot of credit to the individual who directs that portion of the department as it relates to the manner in which they work not only with Internal Trade but other federal departments. I am not clear on the direct linkages that he is looking for or indeed any way that any other department would work with a federal department or the government other than direct communications on issues of direct concern. I am not quite clear on what he is driving to get for an answer.
Mr. Sale: Mr. Chairperson, whether the minister finds this remarkable or not, I do not have an answer in mind. I am trying to discover how the department has changed to adapt to the circumstances that were pointed out in the Price Waterhouse report. Just, for example, in the whole area of science and technology there is a federal ministry of science and technology, and the current minister is Mr. Gerrard, Dr. Gerrard, who happens to be a cabinet minister from Manitoba. We have a federal imaging centre here on Ellice Avenue, a national Centre of Excellence in which we just attracted significant new investment which helped us get large additions to our MRI capacity in the health sector as well as significant research.
This whole field and the field of imaging is one I do not even begin to understand and would not pretend to understand, but colleagues and friends who are in that field tell me that it is an immensely rapidly developing field with applications ranging from human, you know, all the way through to our smart bridge that we are going to build at Headingley, the first smart bridge I believe in Canada, maybe perhaps in the world, I do not know, but certainly in Canada. The director of the materials testing lab at the University of Manitoba, Dr. Sami--I cannot remember his last name--but a fascinating man who has pioneered the notion of a bridge with live sensors in it that can virtually tell engineers what is going on under different load conditions and different temperature conditions. These are very exciting developments. How that information gets gathered in an efficient and accessible manner and then made available to potential investors in Manitoba is a very tough job, because that is just one field out of hundreds. It kind of amazes me that we are trying to do this with nine people, particularly given that the focus of Mr. Barber has been almost exclusively on trade and not on industrial intelligence or the things that are related under the Infrastructure section of this activity identification.
So I am not looking for a particular answer, Mr. Chairperson. I am trying to discover how we can respond to what I thought was a very good report from Price Waterhouse, that identified some real opportunities. I think it is probably very good that this branch has had three more staff. I am interested to find out who has been added, not by name so much as by skill base. I am also concerned that this may still not be sufficient resources to do the kind of job that the Price Waterhouse report anticipated when they said, look at what Oregon is doing, look at what Quebec is doing, look at what Alberta is doing. Can we do it with this staff?
I do not know whether that helps the minister to understand where I am coming from.
The Acting Chairperson (Mr. Dyck): The hour being 6 p.m., committee rise.