Hon. Leonard Derkach (Minister of Rural Development): I would like to move, seconded by my colleague, the Minister of Highways and Transportation (Mr. Praznik), that Bill 47, The Municipal Assessment Amendment Act (2) (Loi no 2 modifiant la Loi sur l'évaluation municipale), be now read a second time and be referred to a committee of this House.

Mr. Derkach: I am pleased this afternoon to rise to introduce Bill 47, The Municipal Assessment Amendment Act (2), for second reading. The purpose of this bill is to provide an exemption for utility distribution systems from being taxed through municipal by-law.

Historically, the authority to tax was never intended to apply to electric or telecommunication distribution systems. Despite the fact that both Manitoba Hydro and Manitoba Telecom Services currently pay business taxes to municipalities on their offices, their storage facilities, and realty taxes on all lands and buildings, two Manitoba municipalities have passed by-laws directing that an assessment be made of all electric and telecommunications personal property within their municipalities.

Issues concerning how utilities are currently taxed are very complex. Because of the significant changes within the various utility industries, especially telecommunications, there are important public and private issues at stake, and we have to ensure fairness for both consumers and the industry.

The application of the current assessment and taxation provisions would produce inequities, especially within the telecommunications industry. For example, service providers using wireless technologies and competing directly with MTS would escape personal property taxation, thereby giving them a competitive advantage. Removing the discretionary authority of municipalities to impose taxation on utility distribution systems allows for comprehensive investigation of relevant taxation policy and other important questions surrounding the issue.

In the interim, this new legislation is designed to safeguard the integrity of our utility distribution system and assure Manitobans, regardless of where they live, that they can continue to rely on the best and most economical utility services possible.

Madam Speaker, the Department of Rural Development is intending to release the details of a review of this issue as soon as it possibly can. I look forward to the support of all members of this House in passing this bill. Thank you.

Mr. Steve Ashton (Thompson): I want to indicate that the introduction of this bill is creating a rather sticky situation for me here, sorry, Madam Speaker, but a sticky situation indeed for this government, because it is very much the result of a situation that rises out of the privatization of MTS in 1996. The fact is that this government ignored this and many other issues that were raised at committee. We raised this issue specifically in the committee. I point to the fact that many people traditionally had seen the tax exemption arising out of telephone poles or hydro poles as being very much a part of the trade-off. Indeed, rather than having that assessment, obviously you had two public utilities dealing with the whole issue. We know that the minister had attempted to bring this in in a committee, and we felt, my opinion was fairly clear as House leader at the time that it would have been out of scope. I am glad that the minister has recognized that as being the case, because obviously we are only in a minority in that situation. But the bottom line is we feel this should have been dealt with in 1996.

The situation the minister has dealt with could have been dealt with at that point in time. We are prepared, as we have shown, to give leave. This bill will be referred to a committee by agreement on Monday afternoon because, while there may be some discussion and debate about some of the principles involved, that sort of discussion should not happen on a random basis. Clearly, here, you have a couple of municipalities who have done what is appropriate, I mean, for their own municipalities, but it is a broader policy issue. It does raise the possible situation of significant rate increases for both Manitoba Hydro and for MTS.

I just cannot resist in saying that I think everyone will understand that we have seen enough in terms of rate increases because of the privatization. We have seen further applications now related to MTS as a private company attempting to have the ratepayers cover not only its rate of return but its taxation. We are concerned that the government set this situation up. Indeed, if there was municipal assessment, the people that would pay, once again, would be the ratepayers of Manitoba and not the private company, which, by the way, is 80 percent owned outside of Manitoba–80 percent owned outside of Manitoba.

There has been indication in the past that some of these types of costs will be passed on by the CRTC. I have spoken out, by the way, on the issue of the corporate taxation that MTS is subject to, one of the issues we raised, once again, consistently in 1995. The bottom line is, we said it would happen and it happened. I cannot resist the opportunity on second reading to point to the government and show that this is one more example, when it came to the privatization of MTS, of the degree to which they put blinkers on, they would not even consider the legitimate points that we raised as an opposition party in the committee.

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You know, what really frustrated me, and I go back to 1996, what frustrated me is, even if one accepts the difference on the principle of the bill, I mean, obviously we were fundamentally opposed to what the government did, the government obviously was committed to the privatization of MTS, what really frustrates me is on this issue and many other issues, the government, in its ideological haste to privatize MTS, proceeded in an incompetent manner.

They did not even listen to us and presenters at the committee when the concerns were raised. There were legitimate concerns. I mean, the issue was raised by presenters. I remember a presentation from the member for The Maples' (Mr. Kowalski) father, I believe it was, and there were others. People actually raised the issue of telephone poles and whether they were going to be subject to taxation.

I want to say to the government this is one more example of the degree to which this government was fundamentally incompetent, even with the principle of privatization, which we disagreed with. This government ended up with the incompetent result that we now have a privatization that was supposed to build up a Manitoba private company that has now, due to the incompetence of this government, ended up with 80 percent of the shares owned out of this province.

I would love to use other more stronger words, but, you know, they helped finance the purchase by Manitobans. Then they allowed Manitobans to immediately flip the shares, setting up this immediate takeover. It is sad; it is just so sad to see now, as I do, the MTS employees on the lockout fighting for their job security, fighting to prevent the same kind of thing we have seen in Ontario with Bell Canada where jobs have been contracted out to Phoenix, Arizona. Phoenix, Arizona. You know, Madam Speaker, once again this is the kind of thing we said would happen under privatization.

So I want to put on the record that even now that it is less than three years since the privatization debate in Manitoba, this is one more example of how incompetent the government was. Even notwithstanding our fundamental disagreement with what they did, here is a classic case where they have to come in to this Legislature in the dying days of their mandate, and we are obviously nearing the end of the session. I mean, it is always hard to predict. We may be here for a while yet.

An Honourable Member: At the threshold of our new mandate.

Mr. Ashton: I know the member for Lakeside (Mr. Enns) is the eternal optimist. I just say to the member for Lakeside, he needs to be an optimist right now, believe you me. I appreciate his comments because the fact is they are asking us to give leave, and we are having to give leave to deal with a situation that could have been dealt with two and a half years ago if they had listened to us in committee. Two and a half years ago we predicted this. I say to this government: incompetence is an understatement when it comes to their mishandling of MTS, their mishandling.

They are not even competent privatizers, Madam Speaker; it may be an oxymoron. But here we have a situation of 80 percent ownership; we have had rate increases; we have got job security at risk for Manitobans; and the people who benefited the most, I might add, have been the chair of the board, board members, the million-dollar stock option group, the brokers. I might add the Conservative Party because it is interesting that, if one runs through their contribution list, I calculated at least $28,000 that comes directly from people who were direct beneficiaries of the sale by being the brokers, let alone the ultimate insult that MTS itself donated, included the mobility section, $8,000 to the Conservative Party. I mean, talk about kickbacks. And do you know what is ironic? This government has no problem with that. They will take that money, their just reward.

Do you know what amazes me? They are concerned about rates on this issue, but no concern about the fact that the ratepayers of Manitoba are paying $8,000 out of their money to subsidize this political party as a reward for them doing something that has only benefited a very wealthy few in this province and has hurt average Manitobans with rate increases, with losses of jobs. Through the incompetence of the government, we almost saw a situation where there was another dramatic rate increase because this government was too tuned into its ideology and tuned out to the facts.

I just want to finish off on this because there are members of the House that will indeed remember other debates. [interjection]

I realize the member for Assiniboia (Mrs. McIntosh) as being somewhat frustrated recently, but I believe sort of singing to herself while a member is speaking–I have been heckled before, but I must say that if the member for Assiniboia might show some courtesy on this, I do think she might want to listen. I realize–[interjection]

Madam Speaker: Order, please.

Mr. Ashton: Madam Speaker, I was hoping the member for Assiniboia might show some courtesy to this House by not singing from her seat. I know she is toning down her comments for the last several days. She has been yelling "shut up" to various members across this way, and I think it shows the fact that members on this side–on the one hand, they are asking for leave to deal with this bill, but then they have a member who–

An Honourable Member: A cabinet minister.

Mr. Ashton: A cabinet minister who, quite frankly, is an embarrassment to this Chamber when she sits there and deals with this. I am quite prepared to give leave to this government to deal with its degree of incompetence. But I do wish members opposite would at least recognize and listen to why we are so concerned about their inability to deal with the situation before. I appreciate the fact that the Minister for Rural Development (Mr. Derkach) knows this. It was dumped on his desk, and I do not envy him. This minister did not create the problem other than being a part of the collective group, the Conservatives. I just say that I hope the Minister of Rural Development will go back to his colleagues and perhaps look at some of the other areas that still remain unresolved in terms of that. There are so many aspects of the incompetence of that privatization. I mean, for example, this government still has not dealt with the fact that there is only one body that is prohibited from buying shares in MTS, our colleagues in Saskatchewan. SaskTel is the only phone company in Canada that cannot purchase shares in MTS. They allow Bell Canada to do it but not SaskTel, because they prohibited any Crown entity from purchasing shares. If they are on a roll now, in terms of dealing with this stuff, I would suggest they look at that.

Bottom line, Madam Speaker–

An Honourable Member: She is singing, Madam Speaker.

Madam Speaker: I apologize, but I cannot hear.

An Honourable Member: The member for Thompson has raised this issue at least twice, Madam Speaker.

Madam Speaker: And I called the House to order previously on more than one occasion. But I apologize; I cannot hear the honourable member for Assiniboia's singing from this vantage point. I would hope that members of the House would recognize that when you sit here, you cannot pick, thank goodness, up all of the comments that are being made off the record, but I would ask that all honourable members please come to order.

The honourable member for Thompson has the floor to debate Bill 47.

Mr. Ashton: Thank you, Madam Speaker, and I do think it is important that the government members recognize and listen to the fact that there are other issues that need to be dealt with.

I want to complete my remarks on this by just appealing to the government, now that we are two and a half years into the privatization, to recognize this is one area that needed to be dealt with. There are many other areas. They can have their principle, right or wrong as it is, but I would urge them to consider, even now at this late point in time, some of the situations that are in place that are going to lead to a very difficult situation.

By December of next year, we will lose virtually all control in this province over our phone system, and I did not agree with the privatization. I would have been a lot happier, I think most Manitobans would have been, if there had been a real attempt to have a Manitoba company, a Manitoba-owned company, controlled by Manitobans. Perhaps if there had been some joint venturing with other jurisdictions like Saskatchewan, some building up of that, because I think it does make a difference. I think it makes a real difference where decisions are made.

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You know, members opposite may not realize this, but at the recent board meeting of MTS, the public meeting, the annual meeting, the majority of the nominees for the board of directors made by the company itself, not the government members, the majority of them are living in Toronto, Ontario. The majority of them are working on Bay Street. We now have a company, MTS. We have come full circle. I just want to remind people we started off with Bell Canada. I think we are going to end up with Bell Canada or perhaps even worse, an American-owned company, and I just want to say the government still has time to fix that.

They do not have to take it back under public ownership; I realize they are not going to do that. If they are going to be fixing this problem, if they need leave at any point in time to fix some of the other significant problems that we raised, that I raised in the committee, that the member for Crescentwood raised–in fact, the member for Crescentwood sent an excellent letter to the Free Press. Even the Free Press was asking what the government was doing. In fact, I think, it took a Free Press editorial, two and a half years after the member for Crescentwood asked the question for them to wake up and say, oh, we got a problem here.

I just want to put on the record that despite everything, despite the temptation one might have in a political context to see this government pay the political price for its own incompetence, by giving leave and passing this through to committee, we have decided to do the responsible thing to allow this bill to go through to completion, subject to whatever review might take place of this issue in the broader context. But we are acting responsibly rather than embarrass this government, and embarrassed they should be. We are doing the responsible thing and protecting the ratepayers of Manitoba.

We will send this to committee, but I think the government owes a real apology to the people of Manitoba for putting them at risk for the last two and a half years because of their incompetence. Thank you, Madam Speaker.

Mr. Kevin Lamoureux (Inkster): Madam Speaker, I too want to put a few words on the record before seeing this Bill 47 pass into the committee stage. It is, indeed, as the member for Thompson (Mr. Ashton) indicates, a bill that does merit the support of all people inside the Chamber. I appreciate the explanation that was given by the minister in regard to its needs.

The issue first came to my attention, I was over at my colleague for the Maples' (Mr. Kowalski) father's home. He had taken me into his backyard, and he starts pointing to these poles and explaining the potential impact of the sale of MTS and private poles. What I do find somewhat amazing is why it is that the government was not able to take quicker action. In fact, it almost even squeezed by us going through this session. I know there was at least some thought in terms of bringing it in under another bill, but it was decided that it would in fact be out of scope, and justifiably so, and that ultimately led to this bill being introduced today. But there were a lot of people who were out there that were very much aware of this particular problem. We are glad to see the government has finally taken some action on what most of us have known and perceived as a problem.

So I have no problem in terms of it going to the committee. Thank you, Madam Speaker.

Madam Speaker: Is the House ready for the question? The question before the House is second reading, Bill 47, The Municipal Assessment Amendment Act (2). Is it the will of the House to adopt the motion?

Some Honourable Members: Agreed.

Madam Speaker: Agreed? Agreed and so ordered.

Mr. Edward Helwer (Gimli): Madam Speaker, I move, seconded by the member for St. Norbert (Mr. Laurendeau), that the composition of the Standing Committee on Industrial Relations for 10 a.m., Monday, July 12, be amended as follows: the member for St. Vital (Mrs. Render) for the member for Niakwa (Mr. Reimer); the member for Rossmere (Mr. Toews) for the member for Brandon West (Mr. McCrae); the member for Sturgeon Creek (Mr. McAlpine) for the member for Pembina (Mr. Dyck); and the member for Arthur-Virden (Mr. Downey) for the member for Roblin-Russell (Mr. Derkach).

Hon. Darren Praznik (Government House Leader): Madam Speaker, I look to the Clerk's table whether Bills 41 and 42 had yet been referred to committee. If they have not yet been referred to committee, I would refer them to the Standing Committee on Industrial Relations that is sitting on Monday at 10 a.m., Bills 41 and 42.

I would also announce that the Standing Committee on Municipal Affairs will be called for 2:30 p.m. on Monday afternoon to sit concurrently with the House for the continuation of the consideration of the municipal bills that were put before them as well as to this bill that we just passed through the House here, I believe it is Bill 47, will also be referred to that committee, and it will be called for 2:30 p.m. for Monday next.

Madam Speaker: The Standing Committee on Municipal Affairs will meet Monday, July 12 at 2:30 p.m., concurrently with the House, to consider the municipal bills, as well as Bill 47.

Order, please. Is there leave for the Standing Committee of Municipal Affairs to meet concurrently with the House and the other standing committee on Monday?

An Honourable Member: Leave.

Madam Speaker: Leave? Leave has been granted.

Hon. Darren Praznik (Government House Leader): I would ask if you could now call for third reading the bills as they appear on the Order Paper.