Mr. Cummings for Mr. Schuler at 3:15 p.m.

Ms. Cindy Skanderberg, Private Citizen

Bill 39–The City of Winnipeg Charter Act

Mr. Glen Murray, Mayor, City of Winnipeg

Ms. Julia Van De Spiegle, Private Citizen

Mr. Nick Ternette, Private Citizen

Mr. David Sanders, Colliers Pratt McGarry

Mr. Chuck Chappell, Private Citizen

Ms. Iris Ingram, Private Citizen

Mr. Michael Mercury, Q.C., Private Citizen

Hon. Jon Gerrard, MLA for River Heights

Mr. Harry Enns, MLA for Lakeside

Mr. Larry Maguire, MLA for Arthur-Virden

Bill 39–The City of Winnipeg Charter Act

Bill 39–The City of Winnipeg Charter Act

Mr. Chairperson: Good morning. Will the Standing Committee on Municipal Affairs please come to order? Our first order of business is the election of a Vice-Chairperson. Are there any nominations?

Mr. Daryl Reid (Transcona): I nominate the Member for The Maples (Mr. Aglugub).

Mr. Chairperson: The Member for The Maples has been nominated. Are there any further nominations? Seeing none, the Member for The Maples is appointed Vice-Chairperson.

This meeting has been called to consider the following bills: Bill 27, The Safer Workplaces Act (Workplace Safety and Health Act Amended); Bill 39, The City of Winnipeg Charter Act; Bill 41, The Manitoba Hydro Amendment Act; Bill 49, The Purchase of Winnipeg Hydro Act.

We have a number of presenters registered to speak to this bill and I will read from the list. Rob Hilliard, John Doyle will be presenting for him. This is on Bill 27. Paul Moist; Pete Walker; Shelly Wiseman; Iris Taylor; Harry Mesman; Diana Ludnick will be presenting for Carol Loveridge; Peter Wohlgemut will be speaking for Brian Ardern; Cindy Skanderberg; Dave Angus; Paul LaBossier will be speaking for Bill Gardner; Graham Starmer; Ellen Olfert; Wayne Bergen; George Fraser; Ed Hubert; Jim Baker; Maureen Hancharyk; Jim Carr; Chuck Fossay; Arlene Draffin Jones.

Bill 39: Mayor Glen Murray or Jenny Gerbasi; Jae Eadie; Julia Van De Spiegle; Nick Ternette; David Sanders; Dave Angus; Paul Moist; Chuck Chappell; Doug Forbes and Larry Beeston; Brian Grant; Jim Baker; Harry Lehotsky; Ken Simpson; George Fraser; Shannon Watson; Gordon McIntyre or Mary Williams; John Stefaniuk; Iris Ingram; Harvey Smith, Councillor, Daniel McIntyre Ward, City of Winnipeg.

Bill 41: Bill Bage; Ray Berthelette; Grand Chief Francis Flett and/or Michael Anderson; Todd Scarth; Gloria Desorcy; Charles Cruden; Chief Roy Redhead.

Bill 49: Paul Moist; Gloria Desorcy; Charles Cruden; Patrick English.

If there is anyone else in attendance who wishes to speak to these bills, please register with the attendant at the back of the room.

We have a number of out-of-town presenters in attendance today as indicated by an asterisk on the speaking lists. The out of town presenters are: Cindy Skanderberg, Ellen Olfert and Wayne Bergen of Bill 27; Bill 39, nobody; Bill 41, Bill Bage and Ray Berthelette; and none for Bill 49.

Is it the will of the committee to hear the out-of-town presenters first? [Agreed]

I would like to further inform the committee that two presenters for Bill 41 have asked for special consideration regarding the order of presentations. Mr. Bill Bage, No. 1 on the list, has travelled here from Flin Flon, and Mr. Ray Berthelette has travelled here from Thompson. They are both hoping to get home today and have therefore asked if they might be able to present first. Does the committee agree to these requests? [Agreed]

Also, Chuck Fossay of Keystone Agriculture Producers, on Bill 27, has an appointment at 10 o'clock, and he has also requested special consideration. As I said, he has an appointment at ten o'clock. Is it the will of the committee that he present first, on that basis? [Agreed]

For the information of presenters, 20 copies of any written versions or presentations would be appreciated. If you require assistance with photocopying, please see the attendant at the back of the room.

How does the committee propose to deal with presenters who are not in attendance today but have their names called? Shall they be dropped to the bottom of the list and then dropped from the list entirely after being called twice? [Agreed]

In what order do we wish to hear presentation of bills this morning?

* (08:40)

Mr. Reid: Mr. Chairperson, it would be my recommendation that we hear bills in the order of Bills 41, 49, 27, followed by 39.

Mr. Chairperson: It has been proposed that we deal with Bills 41, 49, 27 and 39. Agreed? [Agreed]

Okay, we will deal with those who asked for special consideration first.

Did the committee wish to set time limits on presentations?

Mr. Reid: Mr. Chairperson, considering the number of presenters and bills here today, it is my recommendation that we have 15 minutes for presentations, followed by 5 minutes for questions and answers.

Mr. Chairperson: It has been proposed that we deal with presentations with 15 minutes and then 5 minutes for questions.

Mr. John Loewen (Fort Whyte): We do not have any objection to that, just hope the committee will show some flexibility if we are near the end of a presentation, a couple of questions here and there.

Mr. Chairperson: It is agreed, then, that we will allow for some flexibility on a case-by-case basis.

Finally, as a courtesy to presenters, are there any suggestions as to how long the committee should sit today?

Mr. Reid: Mr. Chairperson, it is my recommendation that the committee sit this morning until 12 noon and then reconvene this afternoon at 3 p.m. until conclusion of all bills and presentations.

Mr. Chairperson: It has been proposed that we sit till 12 noon this morning and then reconvene at 3 p.m. and sit until completion.

What is the will of the committee? [Agreed]

Mr. Chairperson: I will call Mr. Chuck Fossay, Keystone Agricultural Producers, to present on Bill 27. Mr. Fossay, do you have a written presentation for the committee?

Mr. Chuck Fossay (Keystone Agricultural Producers): Yes, I do.

Mr. Chairperson: You do.

Mr. Fossay: Yes.

Mr. Chairperson: Okay, sir, proceed when you are ready.

Mr. Fossay: Thank you very much. On behalf of the Keystone Agricultural Producers, I wish to thank you for this opportunity to present our organization's position with respect to Bill 27, The Safer Workplaces Act.

Mr. Chairperson: Could you speak a little closer to the microphone, sir?

Mr. Fossay: Okay. Is that better?

Mr. Chairperson: Yes.

Mr. Fossay: Okay. Thank you very much. On behalf of the Keystone Agricultural Producers, I wish to thank you for this opportunity to present our organization's position with respect to Bill 27, The Safer Workplaces Act.

KAP is a democratically controlled general farm policy organization representing and promoting the interests of agriculture for producers in Manitoba. It is an organization run and funded by its members and farm units throughout Manitoba. Over the past years, our organization has worked for the survival of the agricultural industry in an economically sustainable manner; therefore, we want to ensure that this legislation does not have a negative impact on that sustainability.

The family farm is a unique workplace when compared to almost all other industries. The farm is not only the place where we work, but also where we live and raise our families. Farmers are the owners, managers and often the main workers on their operations. In addition to this, the farm family members are often the main workforce.

Keystone Agricultural Producers believes that the best way to deal with farm safety and health issues is by continuing and expanding upon existing education programs. We also believe that the Government can play a more active role in creating an awareness of existing programs. There can certainly be a role for agricultural representatives and other extension staff who have the ability to allow a continuous flow of information through farm meetings and farm visits. Safety programs should also be started in the schools, educating our youth about the importance of machinery shields, staying away from moving machinery and the proper way of working with tools. These programs should continue to provide information and education to producers as their operations grow and change.

In some sectors of our industry, such as the hog sector, they are already being proactive by creating their own educational awareness programs. Commodity specific programs can be useful, but have to be developed by that specific commodity in order to reflect the needs and diverse conditions of that sector.

KAP encourages farm equipment dealers and input suppliers to have, readily available at their business locations, the safety supplies and instruction manuals for implements and/or inputs. Also, dealers and suppliers of used equipent should ensure that all safety shields are in place and in good condition before resale of such equipment.

We do not believe that inspections and fines on family farm operations will achieve anything but angry producers. A lot of family farms are struggling to survive the current hard financial times and do not need another layer of bureaucracy and regulations imposed upon them.

KAP and its members are aware of the high level of fatalities and injuries that occur on the farm and want to work with the Government to reduce these injuries. We believe that the role of a farm safety officer should be one of promoting awareness and education. A farm safety officer could fill the gap of resource person or co-ordinator when a farm operator asks for assistance in implementing a farm safety plan for their operations.

One of the great tragedies of farm life is that so many of the deaths and injuries that occur strike the very young and the very old. Because of the very tough financial conditions on farms these days, farm wives often take off-farm jobs to help pay the bills. If they have children, this means their spouses often have to watch the children while doing daily chores, because there is a lack of child-care centres in rural Manitoba. The province should investigate the possibility of creating programs that will encourage the development of affordable child-care centres in rural areas to provide options for farm parents in busy seasons. Such programs need to be affordable and designed to reflect the busy seeding and harvesting seasons which have extended hours of labour. This would help reduce the potential risks to farm children.

The average age of farmers is increasing, but many producers do not want to believe that they cannot do the same chores at 65 that they could at 40. This is a difficult problem and is, again, best dealt with through educational programs that can provide farmers with ideas on different and safer ways of doing chores.

KAP also encourages the Government to develop, in co-ordination with producers, a voluntary self-assessment program of potential farm accident areas that can be used by the farm community. A template for safety assessment can prove to be a very important and more effective tool than enforcement. We believe that Government can play a role in encouraging all farm employers to develop a farm safety policy plan that they review with their families and employees to follow strictly.

It has been suggested that Workers Compensation Board should be more involved in the agricultural industry. If Workers Compensation Board was to be involved, it would have to be on a strictly voluntary basis and not compulsory. The Workers Compensation Board, in consultation with industry, should develop affordable programs that can meet the needs of farm owners and operators. By doing so, the WCB would have available, on a voluntary basis, programs which farmers could want to buy into.

In closing, we will recap our recommendations that we request the Government to give serious consideration to the following: continuation and expansion of existing education programs; play a more active role, including financial, in creating an awareness of existing programs; safety programs starting in schools; recognition of the current income situation that would only be heightened by inspections and fines; investigation of the possibility of developing programs that will encourage the placement of affordable child-care centres in rural areas; developing a self-assessment program in conjunction with farmers of potential farm accident areas; recognizing the need that a farm safety officer's role should be one of awareness and education, not enforcement; and playing a role in encouraging all farm employers to develop a farm safety policy plan that they review with their employees and follow strictly.

We have to ensure that agriculture is not negatively impacted by this legislation.

In closing, we would like to thank you for this opportunity to present on Bill 27 and hope that the Government will give utmost consideration to the concerns that we have raised.

Mr. Chairperson: Thank you for your presentation, sir. Are there questions from the committee?

Ms. Becky Barrett (Minister of Labour): Thank you very much for your presentation. This will be very useful as we work towards our system of, not only the legislation, but the other programs that we have in place.

I wanted to let you know that we do have a provincial farm safety co-ordinator who has a number of years of experience both in health and safety within the Department of Labour, and also experience in dealing with the unique challenges that are facing agriculture today. You have outlined these very succinctly and very clearly for us, not only in the health and safety, but in a lot of other areas.

This presentation will be very helpful for all of us as we work together; because we all have the same goal of ensuring that every workplace, whether it is urban, rural or agriculture, manufacturing is as safe as it can possible be. So thank you very much. I appreciate your very thoughtful presentation.

* (08:50)

Mr. Chairperson: Mr. Fossay, a response to that.

Mr. Fossay: No, I do not think so.

Mr. Stuart Murray (Leader of the Official Opposition): Thank you very much for your presentation. It is very well thought out. I wondered if you could tell me: Did you have a chance to meet with the Government and put your views forward prior to, or as the legislation was being developed?

Mr. Fossay: Yes, we attended the series of rural meetings that were held by, I guess, the committee last year, and I believe we also made a presentation. Our former president, Don Dewar, made a presentation, I believe, to this committee as well.

Mr. Stuart Murray: You make a comment in here just that you say you want to ensure that this legislation does not have a negative impact on that sustainability, talking about the sustainability of our agriculture industry in Manitoba. In your opinion, as the bill sits now, do you believe it has a negative impact on, or potentially has a negative impact on the sustainability?

Mr. Fossay: In general, I do not feel that there are any real restrictions at this time. But, like any bill, I guess it is in the details and how the legislation is actually implemented and policed.

Mr. Stuart Murray: I just would like to, again, comment and recommend that one of the things that you have done here in a very succinct way is lay out some issues that clearly are going to help your industry, rather than hinder. I just want to commend KAP and your entire organization for taking time to bring some specific recommendations to this that will help improve, rather than have a negative impact. I want to thank you for your presentation.

Mr. Fossay: Thank you very much for your comments, and we very much want to work with the Government to make sure that legislation benefits everyone.

Hon. Jon Gerrard (River Heights): Just to clarify, the major concern that you raise with the bill really is in the punitive sanctions, the punitive approach to problems, where they arise in safety. Is that right?

Mr. Fossay: Yes, that is correct. Our main concern is, like I said in the presentation, quite often, people who are affected by accidents on the farm are the producers themselves or their farm members. So really, fines and penalties against people who are probably suffering already–because if it is a family member, that is the worst thing that could happen to you. If it is something that happens to yourself, it does not benefit anybody to apply additional fines to that.

Mr. Chairperson: Any further questions? Thank you for your presentation, sir.

Mr. Chairperson: We will now move to Bill 41 and hear two out-of-town presenters. I call Mr. Bill Bage, Local 7106 USWA, United Steel Workers of America. You may proceed when ready.

Mr. Bill Bage (United Steel Workers of America (USWA), Local 7106): Through my presentation to this committee, I welcome the opportunity to participate in the discussions regarding the proposal to share Manitoba Hydro profits.

I am president of the United Steelworkers of America, Local 7106. My membership includes employees of the Snow Lake School Division, R.M. MacIsaac Drilling and employees of Hudson Bay Mining and Smelting in Flin Flon and Snow Lake. We have approximately one thousand members. Since the Budget of 2002, we have had some informal discussions regarding this proposal, and I am here to put forth our views for your consideration as you debate this legislation.

Residents of northern Manitoba, along with the rural areas, have for many years paid a higher rate for hydro than the southern urban areas. Recently, this Government changed that practice to equalize rates so that everyone pays the same rate. Given that the hydro actually begins in the North, it is only fair that we now pay the same as southern consumers. I mention this only because, so long as Manitoba Hydro remains a Crown corporation, the Government can continue to ensure good service provisions to all Manitobans.

This cannot be said about our telephone system. Since the privatization of MTS by the former government, we in the North have seen our rates increase, our access to cellular telephone service stall, and access to high-speed Internet is sporadic at best. When there is need for repairs, many communities now face long delays because it is not cost-effective to send technicians into the isolated communities. When it was a Crown corporation whose assets were built by the taxpayers, there was some accountability to the people of Manitoba, not to shareholders who are looking for a profit.

We are pleased to hear that Manitoba Hydro will continue to be owned by the people of Manitoba to provide some of the cleanest, most efficient and certainly renewable resources to our residents. When we heard about the proposal put forth by the Minister of Finance (Mr. Selinger) to have Manitoba Hydro contribute financially to our operations of the Province, our education, our highways, social services, we welcomed this suggestion.

The province of Alberta, who enjoys a large resource sector which is non-renewable, reaps great benefits from the oil and gas industry. These funds allow that province to have a lower tax base than many other provinces, but eventually those non-renewable resources will run out.

Manitoba Hydro, through its sales of excess power, will continue to serve the citizens of Manitoba and to provide some of the lowest hydroelectric rates in North America to all of its residents.

In northern Manitoba, it is essential that we have a reliable method of heat for our homes and for our businesses. As a Crown corporation, Manitoba Hydro is accountable to the people of Manitoba and thus responds to concerns about outages and service problems almost immediately.

Specifically, we are in favour of having Manitoba Hydro contribute to the operations of our province. When Limestone was built, Northerners and Manitobans benefited by being given first access to those construction jobs. Now, since its completion, Manitobans have benefited because of our ability to export our excess power as interruptible service. This ensures our needs are met first, and then we can sell the excess for a profit.

After MTS was sold to private shareholders, and I dare say that I believe many of those profiting are not even from Manitoba, the consumers in Manitoba were asked to make up the shortfall for payment of income taxes which it did not pay as a Crown corporation. To have Manitoba Hydro contribute an amount which would be small in comparison to the amount of income tax it would pay if it was applied is a small request. If it benefits all of Manitoba, we see nothing wrong. After all, we still own the dams, we still own the asset, and we still have our access to our low hydro rate to heat our homes, farms and businesses.

Given the choice of cutting the provision of programs like the Northern Patient Transportation Program or limit access to the inter-universities north first degree university courses, or to have our highways return to their state of pre-2000 condition, I believe most northern residents would say that it is fair for Hydro to pay some of the costs. Through its contribution, Manitoba Hydro would be helping to keep our population healthy and educated, keep our roads safe for travel, keep our hospital beds open and keep our trained workers in Manitoba.

I have looked into some of the other payments made by other hydroelectric companies in Canada to their respective government bodies. I would like to share some of those numbers with you. In the City of Winnipeg, Winnipeg Hydro, which, I understand, may soon become part of Manitoba Hydro, paid to the City $16.5 million in the fiscal year 2000-2001. The province of Saskatchewan, for the same period, received $69 million from SaskPower. The province of Québec received $539 million from Hydro Québec, and British Columbia received $372 million from B.C. Hydro. It is my understanding that Manitoba Hydro is being asked to pay $288 million over a three-year period.

* (09:00)

All Manitobans will benefit from these contributions. We all enjoy our health care system. We all enjoy good roads, highway maintenance, and those employed in the affected sectors will enjoy some security knowing that their pension liability is being addressed by this Government.

While researching for this presentation, I learned a bit about the operations of Manitoba Hydro. I learned that Manitoba Hydro, after the completion of the Limestone generating station, has seen its earnings increase substantially from $159 million in '92-93 to $1.088 billion in 2000-2001.

In the 1986 legislation, called the Manitoba Energy Foundation, provisions were made for the profits of export sales, after cost, to be divided between Manitoba Hydro and the Manitoba Energy Foundation to support social structure in Manitoba. In the 1980s, the opposition of the day opposed that legislation which allowed all Manitobans to profit from our renewable resource and the profit it generates. On August 1, 1986, Harry Enns said: One can certainly take the position that it is preposterous to talk about profit flowing at any time as a result of our generation of hydro.

I am glad that the government of the day did not take his advice, chose to invest in our future, the future of Manitobans. I also found a statement by the former premier, Gary Filmon, during his visit to Thompson in 1999 when he announced that he was mandating Manitoba Hydro to double its export sales over the next 10 years. He was quoted as saying: Any increase in earnings from sales outside of Manitoba will go toward keeping hydro rates low and fund infrastructure development in northern Manitoba.

I must admit that I find the position of the current members of the Opposition, many of whom were in the Filmon government, puzzling. Their opposition to the Minister of Finance's proposal is confusing based on the commitments of their former leader. How can you be in favour of something at one time and opposed to it the next? Is it not better for Manitoba Hydro revenues to be used to benefit all Manitobans?

In closing, I would like to stress that we support the concept of Manitoba Hydro putting some of their profits into the operation of the Province, to the benefit of all Manitobans, while continuing to be owned and enjoyed by all of us. Thank you.

Mr. Chairperson: Thank you for your presentation, sir. Questions from the committee?

Hon. Greg Selinger (Minister charged with the administration of The Manitoba Hydro Act): I do not have a question. I will just thank Mr. Bage for his presentation and putting his comments on the record.

Mr. Chairperson: Mr. Bage, comment?

Mr. John Loewen (Fort Whyte): I would, too, like to thank Mr. Bage for his presentation. I would encourage you to look at the transcripts from the Public Utilities Board hearing of May 27 and June 3, which will indicate quite clearly that officials of Manitoba have indicated to the Government that they will have to borrow the money in order to pay this dividend. I would also encourage you to look at some of the information that was supplied by the industrial power users group which clearly indicates that this year alone the Government of Manitoba will require Manitoba Hydro to pay them between $415 million and $488 million in cash. That is in a year in which projected earnings are roughly $100 million. I would just like to ask you to look at those issues in your research, too.

Mr. Chairperson: Further questions? Seeing there are no further questions, thank you for your presentation, sir.

I will now call Ray Berthelette, Thompson Labour Committee. Mr. Berthelette, do you have a written copy of your brief?

Mr. Ray Berthelette (Thompson Labour Committee): No, I do not. This will just be an oral presentation.

Mr. Chairperson: Proceed when ready, sir.

Mr. Berthelette: First of all, I would like to thank Brother Bill for giving us a good rundown on the macro level of what Hydro can do and what was done before, so there is no need for me to get into that. That will make my presentation even shorter.

Thompson Labour Committee represents about 2300 people. Although we are basically situated in Thompson, we also get a flavour of all the other labour organizations in northern Manitoba, including Flin Flon. I have been elected to that position for about a year now, and part of what we have been working on is developing some policy initiatives. One of the policy initiatives is working with the constituency level people and helping them get a flavour of what labour can do in the North. At this point, we feel we are succeeding, and, as a result of that, that is one of the reasons I am here today.

We, the Thompson Labour Committee, support the bill 100 percent. We feel that this is a vision that the Government has. It is a great amendment to the bill, and it will further the residents of Thompson and the labour people in Thompson, as well. When I say it will favour, we have some action happening, I guess, in the North that, with previous administration, we never had before. When I was driving down here yesterday, the seven-hour, seven-and-a half-hour trip took about an extra hour, and that was because they are actually doing some road repairs. Part of those road repairs comes from the increase that the provincial government has allotted, of 15.5%, and we are finally getting an adequate portion of what we should be getting for road repairs for the North.

Secondly, we are also benefiting in the school taxes by Thompson getting an increase of 7 percent or making an amendment which is giving Thompson an extra $1 million, directly going towards schools, which will, in effect, reduce our taxes or not raise our taxes in Thompson city this year. We have also got some other projects on the go, the recreation centre, a nursing home, which, without this amendment, probably would be shelved. The Thompson Labour Committee and a lot of the people in Thompson, because we are a strong labour town, feel that this is a dividend, and it not only benefits Thompson, but it will benefit the province as a whole.

I look at the alternatives. What alternatives do we have if we do not use this great vision of the Government? There are a couple of things, I guess. We could not pay down the debt this year. I am sure that the Opposition would probably not follow that way. We could cut tax cuts. The Conservative government has a strong idea that we should be cutting taxes and cutting taxes and cutting taxes, but we should not be giving anything back to the people. We believe we should be giving back to the people.

I was in Thompson for the worst-case scenario. The worst-case scenario was when the previous administration sold MTS. Not only did they sell the corporation, but they sold a whole bunch of jobs of real-life people. These real-life people, I happen to know a whole bunch of them who had jobs at MTS who no longer do. What do we have representing MTS in Thompson right now? We have got a for-profit private sales office in the middle of one of the malls. What we had before is we had a bunch of working people, single mothers who, when they found out they did not have a job, were crying on the streets in front of the building because they did not know what their future was gong to be. At least, with the dividend from this bill, we know that, for the next three years, we have a plan, a vision of the Government that we can follow through with some of the initiatives that the constituency has in the Thompson region.

I believe, and the committee believes, that this is an equitable way of addressing a bad situation because nobody likes to run a deficit. Nobody ever wants to run a deficit, so we have to do the alternative, and I believe we have to take the dividend from Manitoba Hydro. Thank you.

* (09:10)

Mr. Chairperson: Thank you for your presentation, Mr. Berthelette. Are there questions from the committee?

Mr. Selinger: Thank you, Mr. Berthelette, for your presentation. I take it from what you said that you believe that the shareholder, the people of Manitoba should have this dividend from Manitoba Hydro?

Mr. Berthelette: Yes.

Mr. Chairperson: Mr. Berthelette, I have to identify you for the purposes of recording. Any further questions?

Mr. Selinger: Have you had a chance to receive the annual report this year of Manitoba Hydro?

Mr. Berthelette: No, I have not.

Mr. Selinger: I am going to ask that we make a copy available to you so that you can see the whole story about Manitoba Hydro's retained earnings having grown to $1.3 billion.

Mr. Berthelette: Thank you.

Mr. Loewen: I thank you for the presentation, as well. When you do get a copy of the financial statement from the minister, I would encourage you to look at page 47, which also indicates that Manitoba Hydro carries a debt load of over $7 billion. You might want to give some thought to what constant increases in that debt load might have, what effect that may have on the corporation.

Mr. Chairperson, I would also encourage you to look at the transcript from the Public Utilities Board for May 27 and June 3. That may give you further insight into some of the risks that are inherent with Manitoba Hydro and why we object to this policy of raiding Manitoba Hydro simply to cover, as you indicated, the Government's deficit.

Mr. Berthelette: Thank you.

Mr. Chairperson: Any further questions? Seeing none, thank you for your presentation, sir.

Mr. Chairperson: We will now return to Bill 27 to hear a couple of out-of-town presenters. I might add that Ms. Ellen Oldford has informed the attendant at the back that she is not from out of town, so her name will be called in general order.

I will call Ms. Cindy Skanderberg, private citizen, to come forward. Ms Skanderberg, do you have a written copy of your presentation for the committee?

Ms. Cindy Skanderberg (Private Citizen): Yes, I do.

Mr. Chairperson: You may begin when you are ready.

Ms. Skanderberg: This is a presentation to the Manitoba Legislature on Bill 27. It is an act to amend the Workplace Safety and Health Act. It is presented by myself, and it is written by my sister, Shirley Post.

Mr. Chairperson, ladies and gentlemen, my name is Cindy Skanderberg. On December 8, 1999, my 19-year old son, Michael, became a workplace fatality. It breaks my heart to think that this death was completely avoidable and preventable. If he had lived, he would be halfway through his electrical apprenticeship program, a trade he dearly loved. It breaks my heart to think that if he had apprenticed in any other province in Canada, chances are he would still be alive today.

It breaks my heart to think that we ever returned to Manitoba with our three children in 1998. Little did we know that we returned to the province which had the reputation of having the most unsafe work culture in all of Canada, a province which had the distinction of having the highest time loss work injuries, and which had not reviewed its safety and health legislation for over 25 years. There is no system on this earth that can withstand the test of time without regular maintenance and/or reviews to keep it in touch and successful in our ever changing world.

Without the proper nurturing, that system becomes stagnant, outdated and ineffective. Bill 27 is going to help pull Manitoba out of that quagmire into which it has sunk. Without it, the work culture in this province will never change. It will only get worse. We have all heard the statistics. We have all seen the results, and my son has paid the ultimate price for this obscene negligence. Life is precious and that is the reason I stand before you today, to ask for a life in a safer workplace, not only for my daughters, but also for your sons and your daughters.

On the night that Michael was killed, he was working alone on a fluorescent light fixture in a Beausejour school when 347 volts of electricity surged down his arm and through his torso. His employer, Clearwater Electric, pled guilty for failing to provide training and supervision on procedures for working with electrical equipment. For many months after December 8, I experienced hate in its very purest form, a hate so intense that, when combined with a mother's grief, it totally consumed my mind and my body. I could not work. I could not eat. I could not sleep. I could only hate, and I could only cry. It was totally debilitating.

Only the love and support of my family and my faith in God helped to pull me back from the brink of that very dangerous world into which I almost slipped. I began to realize that the cause of Michael's death was more than just Clearwater Electric. It was more the fault of our Manitoba laws which allowed companies like Clearwater Electric to exist. It was more the fault of the Manitoba laws which have not been reviewed in 25 years.

The Workplace Safety and Health Act deals very inadequately with the death of a worker. The proposed changes being set forward in Bill 27 are missing some very key issues. There are three areas that should have been included in the Bill. They are: mandatory inquests into any fatality in the workplace; director liability for negligence, even after bankruptcy or lack of prosecution; and an increase in fines for prosecution.

We must learn from our dead in order to protect our living. We must have director liability, and fines must be more meaningful. These changes would even the playing field between those companies that already comply with the laws, to those that do not. Manitoba fines are ridiculously low and that fact is compounded when fines are used as tax exemptions.

At this time, I must digress for just a moment so that I can bring you up to date on my own personal struggle for justice over the death of my son, Michael. I do so because it substantiates the need for change in Manitoba. In all honesty, there has been no justice.

Clearwater Electric was fined a total of $27,500 which they could pay in interest-free instalments of $1,000 a month. Each month after the sentencing, I faithfully phoned the cashier at the Law Courts to make sure that Clearwater paid their monthly instalment. All went well until the summer of last year, when monthly payments suddenly dropped to $250 a month. Why?

Tony Bruneau, owner of Clearwater Electric, had gone to the cashier with a box of Kleenex and a few tears, and had been able to negotiate a reduction in his monthly installments of $1,000. I could hardly believe that a cashier could negate a judge's recommendation, but was told that this kind of thing happened all the time.

* (09:20)

On July 9 of this year, I was further advised that Clearwater Electric had been dissolved. That means that after paying only $10,000 or less, Clearwater has been absolved. Owner Tony Bruneau, is free to set up shop under any other name, and free to operate in any province in Canada. He is totally exonerated. He is free to enjoy the luxuries of life while spending the summer at his massive cottage on Lake of the Woods. Smart businessman, lousy justice system. What is the point of a lengthy, expensive workplace safety and health investigation, followed by a lengthy court case, when there is absolutely no consequence for the guilty party? It is an absolute atrocity.

Bill 27 must plug these kind of loopholes. I look around me here today, and this is where the difference starts. This is where the laws are made. This is our opportunity to give the people who work with this antiquated system the proper tools to do their jobs effectively.

The proposed changes in Bill 27 are not earth-shattering changes. In fact, they are very subtle, but they are a step in the right direction. Amongst many changes, the bill expands the duties of employers and supervisors, and also establishes the principle of administrative penalties. These penalties include a guarantee of pay for workers during stop work orders and while exercising their rights to refuse dangerous work.

The employers who currently defy the clauses of the act will be the ones who will be more resistant to this change. If these added costs impede their right to do business, then I must ask why the fear of a fine due to a worker's injury or death does not instill the same concern. Could it be that the fine is not substantial enough to cause a concern? Is it less expensive to risk an employee's health or life than it is to pay an employee's wages while a dangerous situation is corrected? That, indeed, is a sad thought, and one that compliant companies do not even consider. As an employer myself, I do not fear this change. In fact, I embrace it.

If for whatever reason I have overlooked a potentially dangerous situation, then I want to be made aware of it. After all, we are a family run business in a small community, and the lives of my husband, my daughters and the members of my staff could be in jeopardy. Personally, I am not willing to take that kind of risk.

As you recall, negative reinforcement was used to encourage seatbelt usage. When fines were imposed for non-usage, there were outcries from individuals who claimed that they should be given a choice. Eventually, the cries died down, and so did the fatality rate. What I am trying to say is that we cannot not change because we fear opposition. We must change because it is the right thing to do.

Over the last year, I have accepted the fact that big changes do not happen overnight. They happen over time propelled by people who are dedicated to a cause. I am no longer driven by hate, but I am angry, and I am driven by a deep resolve to change the work culture in this province. I have made numerous workplace safety presentations to hundreds of school-aged children throughout this province in the hope that the message gets out there. You have the right to refuse dangerous work. We cannot just focus on training and educating our people if we do not change our existing work culture. That would be the very worst kind of abuse.

I could not save my child. Perhaps we can save yours. This is a picture of the child we could not save. This is a picture of my son, Michael William Skanderberg, aged 19 years. For every workplace fatality, there is a face, there is a story and a preventable death. No acceptable justice has ever been served for even the most heinous of any past Manitoba workplace crimes. Bill 27 will not bring justice to our dead, but it will bring us all a fresh new hope for tomorrow. Thank you.

Mr. Chairperson: Thank you for your presentation. Questions from the committee?

Hon. Becky Barrett (Minister of Labour): Not a question, a comment. Your presentation was wonderful. You have been a remarkable force. You have taken what is an inexcusable tragedy that every parent, every family member in this world fears. It happened to you. It happened to your family. I cannot even begin to imagine what you have gone through. You have done such a wonderful job in reminding us and pushing us all to make something positive happen out of this.

Your presentation this morning is just a continuation of that. I think all your comments are very well right on the money, but your comments that, if we do not change the work culture, we are not going to change anything is exactly what is behind this bill. As you say, it steps in the right direction. I think we, on the Government side, and people in Manitoba agree that workplaces must be safe, and everything we can do we have a responsibility to do to ensure that, as much as is humanly possible, people who leave their homes and their families can come home to their homes and their families.

That is a right and a responsibility for all of us. I thank you for having done the work that you have done. I am just so horribly sorry that you have had to do this, but you have done a remarkable job. Thank you from all of us, and thank you for all the young people and the workers that your work is going to help save.

Ms. Skanderberg: Thank you very much.

Mr. Ron Schuler (Springfield): Cindy, thank you very much for coming forward with your story. Of course we remember reading about it in the newspapers. It is always a tragedy when we lose a young Manitoban. Nineteen years old is far too young. Certainly, we cannot understand the pain that you feel in a mother's heart.

What I think is very telling about your presentation is you got over that anger and that bitterness which you initially feel. You say in here: I have made numerous workplace safety presentations to hundreds of school aged children throughout this province. Do you think that part of this should also be a focus on education, and should there be more in the bill dealing with the whole education side of this?

Ms. Skanderberg: I believe that school-aged children right from toddlers should be taught workplace safety. I think it should become part of the curriculum, work culture. It has to be implanted in our brains to work safely, and that is why going out to the schools and with the workers of tomorrow, that it is so important that we get this message across to our children, because I do not ever want it to be you standing up here begging for a safer work culture and for a safer Manitoba.

Mr. Schuler: Thank you.

Hon. Greg Selinger (Minister of Finance): I just want to thank you again for turning your grief and your anger into positive action for all Manitobans. That is a true act of citizenship and parenthood on your part. Thank you very much.

Ms. Skanderberg: Thank you very much.

* (09:30)

Mr. Chairperson: No further questions? Thank you for your presentation.

Mr. Wayne Bergen has since informed the attendants at the back that he is not from out of town, so that means that is all of the out-of-town presenters. We will now return to the regular order and return to Bill 41.

Mr. Chairperson: We will now return to the regular order and return to Bill 41.

I will call to the microphone Grand Chief Francis Flett and/or Michael Anderson from MKO. Mr. Anderson, do you have a written copy of your presentation for the committee?

Mr. Michael Anderson (Manitoba Keewatinowi Okimakanak): I do, Mr. Chair, thank you.

Good morning, Mr. Chair, and members of the committee.

Mr. Chairperson: Okay, pass it around, please, and begin when you are ready.

Mr. Anderson: Grand Chief Flett sends his regrets. Basically, on the notice that we had, and with your busy schedule, he was not able to come down from northern Manitoba where he is currently touring several of our communities.

As a matter of observation for preparing our submission, notwithstanding the fact that we registered to appear shortly after first reading, the Hansard, for second reading of the bill and referral to committee, is not available on the Web site yet, so our submission, I must say, is prepared absent to the ability to read the debate of the honourable members in the House, but we are here. I look forward to reading it, by the way.

In respect of the legislation, we prepared a bit of a summary which all of the members, of course, are familiar with, as a way of a background for central positions on the bill. Shortly after the government was elected in December 1999, there were indications, mainly through the media and others, that the Government was considering mechanisms for accessing the net revenues from profitable Crown corporations of which, of course, Manitoba Hydro is noted.

Mr. Chairperson, on February 7, 2000, the Winnipeg Free Press published an article headlined: Hydro profits may be in the NDP's spring budget. It was not at that time, but it was also reported that the Crown Corporations Council was asked by the minister to file a written report on the matter. Since that time, of course, national and international events have provided additional rationale for Manitoba to propose accessing the export-related profits of Manitoba Hydro.

On April 22, in the Budget Address, the minister summarized the circumstances, financially, of Manitoba Hydro; that is, the corporation is projected to make in excess of $400 million in profit between 2001-02 and 2003-04. The minister discussed the struggles the Province is facing as a result of the federal taxation error, and, of course, the corporate tax downturn, and indicated that he was intending to seek $288 million in export revenues from the corporation which, of course, is embodied in the bill before us today.

There was a schedule for setting out withdrawals from the bill, which I do understand, from the interesting discussion of the annual report of Manitoba Hydro, may be varied depending on the actual financial performance of the corporation. On July 2, of course, the bill was given first reading. On August 6, it was given second reading and referred to you.

Some of the observations that have been made regarding some of the testimony, for example, that was brought out on May 27 before the Public Utilities Board I would like to review, and comment on one of the matters raised by the minister in response to the comments made by a previous presenter.

The so-called special export payment, as it was described before the Public Utilities Board, required to be paid retroactively for 2002: If you include the increases in the water rental fees, also for 2002, the amount of the provincial debt guarantee fee, which also increased in 2002, and the addition of the sinking fund charge, plus corporate tax, that would mean that, in 2002, remembering that the bill does imply retroactive payment, Manitoba Hydro would contribute $354 million total to the Province of Manitoba, all fees, taxes, payments included.

* (09:40)

The $354 million represents approximately 30% of Manitoba Hydro's total corporate expenses of $1.2 billion, which is a 20% increase over the previous year. These numbers were confirmed by Ms. Wray and Mr. Warden in cross-examination by PUB counsel. Many of you have reviewed the transcript.

Mr. Chairperson, another comparison that Ms. Wray was brought to by Ms. Kalinowsky was that all of these payments together would also represent, on a different comparison, 45% of Manitoba Hydro's total domestic revenue requirement, including Winnipeg Hydro, of $791 million.

That is all the money that the corporation needs to raise to meet its obligations. This amount in total–all contributions together–represents almost 45% of that amount. Whether or not it compares to the global percentages in Saskatchewan, Québec or British Columbia, I do not have the data at this point to indicate, but it is a substantial amount of money relative to the corporation's operations.

The 50 000 members of MKO, of course, pay rates. They are all customers of Manitoba Hydro, and so we were keenly interested as registered interveners in the cross-examination on this point. On May 27, it also became clear that, because of the cash position of the corporation–and I understand that Mr. Brennan is there, so he knows the numbers like no one else–would require approximately $257 million in short-term borrowings in order to meet these payments. That is partly because, as I understand it, retained earnings is not necessarily cash, and the corporation indicated in its cross-examination that: "Its cash position fluctuates wildly" from year to year. That was Ms. Wray's testimony in her cross-examination.

So the requirement of the corporation to potentially borrow will create different financial circumstances in terms of rates, which means it creates additional expectations–certainly on the performance of the export operations of the corporation–to meet not only the payment schedules over the next three fiscal years, but the $257 million in forecast borrowings. That number was calculated by Public Utilities Board staff, and was confirmed by Manitoba Hydro at that time.

Of concern to MKO, in addition to the pressures on the corporation to keep rates stable, is that Bill 41 continues to direct the benefits and revenues of resource developments, within the MKO region, in a manner that does not take into account the treaty obligation to guarantee equitable access to natural resources by treaty First Nations persons, for the purpose of obtaining at least a moderate living through the harvested resources. That is, where the actions of the Crown, in allocating resources or authorizing resource developments, have the effect of denying equitable access by Treaty First Nations persons to natural resources. These actions represent an infringement of the treaty harvesting and livelihood right, and appropriate resource revenue sharing mechanisms must be established to ensure an equitable sharing of the benefits and revenues from such resource developments.

Simply put, MKO First Nations perceives correctly that there are large amounts of dollars coming from the largest resource corporation operating within the MKO region. The MKO region extends from Indian Birch on the west side of Manitoba, Wuskwi Sipihk Cree Nation, all the way to the Nunavut boundary, across to the Hudson Bay coastline and then down the east side to Island Lake. That is a tremendous part of the region. It is the majority of Manitoba Hydro's operations, and all of their major facilities.

The Northern Manitoba Economic Development Commission, some 10 years ago, did some tallying of all the resource values. First Nations clearly perceive that the share in terms of their continuing access to resources is not available. Not only is there not a direct stream in some form of sharing the resource revenues, but access to the resources, which were the central point of entering into treaty, has also been substantially infringed through very large mineral allocation, through exploration permits and claims, to exceedingly large allocations to forest companies. For example, Tolko's current licence area is approximately 100 000 square kilometres of Manitoba, all of it now in the MKO region, as well as the substantial water power reserves established by the Crown along waterways, along the Saskatchewan River, the Nelson, Lake Winnipeg shoreline, the Churchill. Basically, all of the major flowing waterways in northern Manitoba are allocated to Manitoba Hydro.

Compared to the benefits returning to the communities, MKO First Nations look at this proposal and recognize that it is time to enter into discussions with the Crown on resource revenue sharing. The intent of treaties, as shared by the elders, was that it was not simply a surrender and a relocation to reserves to be encased in islands of poverty. The issue was that the Crown, Her Majesty's government, through her policy, established with the treaty promise that the lands would be shared forever.

* (09:50)

The Supreme Court of Canada has restated this kind of perception as equitable access. They used this precise language in their decisions on the Marshall case where they determined that the Mi'kmaq of the east coast had a treaty right to engage in a commercial fishery. That is, the Supreme Court determined that the treaty simply would not make sense if, in entering into peaceful relations with the Mi'kmaq, the Mi'kmaq were not able to, at least, provide for a moderate livelihood by having a guaranteed access to resources and, in their treaty, the ability to trade in the resources they harvested.

The meanings of the Prairie Treaties, which the Supreme Court examined as well, also carried forth this principle of economic aboriginal self-sufficiency. They refer to the intent and the language in some of the documents surrounding the original Prairie Treaties.

In our case, when we look at resource revenue sharing within our region, the only document that I am aware of that Manitoba Hydro had published on it was in their submission to the 1999 Interchurch Inquiry into Northern Hydro Development. Their document was entitled: Issues Associated With Proposals to 'Share the Benefits.' In this document, Hydro examined and dismissed the concept by saying: ". . . 'sharing the benefits' implies payments that go beyond making sure that local residents are no worse off. It involves payments to some group of people to improve their situation, simply as a result of having lived in the correct location in respect to the development."

In our submission, Mr. Chairperson, Manitoba Hydro completely missed the point. Location is everything. The fact of the matter is that these projects are developed within First Nations' traditional territories, affecting signatories to documents entered into with Her Majesty based on an explicit promise of continuing ensured equitable access to resources.

So the fact that their projects are built adjacent to certain communities is the entire point. The Supreme Court of Canada in Sparrow indicates that where a right is expropriated, compensation must be paid. The similar situation and analogy is the same here. Where the equitable access to resources for the purposes of pursuing self-sufficient economic activities and a moderate livelihood are infringed or denied, there must be some mechanism for an ongoing sharing of the benefits and revenues of those same economic activities.

More recently, of course, the present provincial government has directly linked the proximity of a First Nation to a requirement to directly involve a First Nation affected by a proposed hydro electric development, appropriate mechanisms to ensure an equitable sharing of the revenues from these proposed developments, and has described this requirement as a treaty obligation.

This occurred, of course, on December 15, 2000, when Minister Robinson rose in the House to make a ministerial statement saying, of course, "for the first time in the history of this House, the Government of Manitoba recognizes that the Northern Flood Agreement is a modern day treaty and expresses its commitment to honour and properly implement the terms of the Northern Flood Agreement as recommended by the commissioners of the Aboriginal Justice Inquiry in 1991."

The minister also described the agreement that had been recently entered into with the Tataskweyak Cree Split Lake Cree First Nation regarding the development of the proposed Gull Rapids project.

We also note that on November 13, 2001, in the Speech from the Throne, the comment was made: "A special focus will be the development of partnerships with First Nations and the Métis community for resource management and development. One model for partnership is the equity and training agreements recently signed by Manitoba Hydro and the First Nations of Split Lake and Nelson House. Other models of resource co-management are being developed with First Nations and Métis organizations."

More recently, in the minister's Budget Address, he said: "Pending final approval, the Wuskwatim dam project will be constructed in partnership with the Nisichawayasihk Cree Nation (NCN). Apart from ensuring no significant environmental impacts in the project's design . . . ." And we have highlighted these next two comments in our submission.

Mr. Chairperson: Mr. Anderson, you have less than two minutes left. We are going to allow some latitude, but I ask that you start working towards your conclusion.

Mr. Anderson: Fine. Two minutes will just about do it, Mr. Chair, and thank you for the comment on latitude.

"The equity partnership will provide NCN a revenue stream for community and economic development. The NCN will build their own future with new economic tools derived from resources on their traditional lands," which is precisely what the treaty implied in a modern context. "There are other projects being developed with First Nations that follow this innovative model."

In Manitoba, Mr. Chairperson, we agree that it is an innovative approach in terms of equity and resource benefit sharing. The comment is that securing a "revenue stream for community and economic development . . . with new economic tools derived from resources on (First Nation) traditional lands." Combining those two key statements in the Budget speech succinctly describes the central objective of First Nations and government for establishing appropriate mechanisms for resource benefit and revenue sharing.

We have approached it with communities that are directly adjacent to the projects in northern Manitoba, contrary to Manitoba Hydro's earlier submission to the Interchurch Inquiry. The committee might be interested to know that, in the original Liberal red book, the federal government committed itself to entering into discussions with the provinces on resource revenue sharing. It was a commitment that the present federal government made to all First Nations in Canada.

In 1998, Saskatchewan, Canada and the Federation of Saskatchewan Indians entered into governance discussions which included fiscal tables, which explicitly included resource revenue sharing as an objective. Many of you may be aware of the agreement recently signed by the government of Québec and the Grand Council of the Crees of Québec, which is, in essence, approximately $3.1 billion over 50 years, where, as the payment schedule ramps up, the government of Québec has promised to pay a minimum of $70 million per year to the Council of the Crees of Québec in exchange for a wide array of releases on legal actions the Crees had advanced, but also to make way for new Hydro projects.

So the concept of resource revenue sharing is a direct contribution of dollars to First Nations in recognition for their reduced equitable access to those resources that were promised in treaty is a topic of discussion across Canada. This particular bill, I must say, triggered that discussion, or renewed it within the MKO First Nations once again, largely because of the magnitude of the dollars involved, because of the possible borrowings involved, and so forth.

Summarizing all of these, I would also point out that the reasons for doing this are on pages 5 and 6 of our submission. One of the issues, of course, is that more recent case laws indicated that the Province does not have the authority to infringe unjustifiably the exercise of their right; that is a key phrase, "infringe unjustifiably." So where access is reduced to resources for the purposes of exercising the livelihood right, the Crown must justify it. To most extents, that has not been done within Manitoba for existing projects. It is being done for the future ones during a rather expanded and considerably more detailed environmental assessment mechanism that is in place for Wuskwatim and Kiask.

But I would say that what we recommend as an amendment to Bill 41, and, eventually, we hope, to all resource and utility legislation in the province is at the bottom of page six, that "where the actions of the Crown in allocating resources or authorizing resource developments and/or where the facilities and operations of Manitoba Hydro have the effect of infringing or denying the equitable access by Treaty First Nations persons to natural resources for the purpose of obtaining a moderate living, the Minister shall establish, in consultation with the affected First Nation persons and Manitoba Hydro appropriate mechanisms to ensure an equitable sharing of the benefits and resources from such resource developments.

That, Mr. Chair, members of the committee, is our submission. Thank you very much.

Mr. Chairperson: Thank you for your presentation, sir, and I note you did not really get through your full written brief. Would you like to have it included in its entirety in the text of the transcript?

Mr. Anderson: With the committee's assent, that would be appreciated. Thank you.

Mr. Chairperson: Okay. Is that the will of the committee? [Agreed] Okay. So ordered. Questions for this presenter?

Hon. Greg Selinger (Minister charged with the administration of The Manitoba Hydro Act): First of all, thank you, Mr. Anderson, for your presentation. It is very thoughtful as I found your other presentations and informative. You bring a lot of knowledge to the subject.

Would this argument that you have made here in substance and form be the same argument you would have made at the time that Manitoba Telephone System was privatized?

* (09:50)

Mr. Anderson: At the time that MTS was privatized, the theory of it is similar in terms of Crown assets and resources. The physical occupation of land by MTS is relatively limited in terms of its land use. Considerably different, of course, than Manitoba Hydro.

If it could be demonstrated that the microwave transmitting stations and tower sets, and in the case of Churchill, for example, the underground fibre optic connector to get it away from the storms on the coast, infringe the exercise of the right, that would be an identical argument. I think this similar analogy would be large forest companies, mining operations and others. On that point, minister, resource sharing and benefit agreements are common in federal jurisdiction. North of 60 they require it. The National Energy Board requires them. That in cases where the Government is required to consider the Aboriginal and treaty rights of First Nations people, these agreements are mandatory. Thank you.

Mr. Selinger: Secondly, I noted your comments about how we are proceeding on future projects. I take it at this stage of the game you are satisfied with the process and the mechanisms put in place to look at sharing of the resources with First Nations communities?

Mr. Anderson: I would agree that the process that is undertaken is innovative for Manitoba. It is a welcome change from the manner in which previous projects were developed. The First Nations have an opportunity to engage themselves in an equity partnership to the extent largely of their financial capacity, as I understand the arrangements, although there are caps. It is certainly an expensive proposition to become a partner with Manitoba Hydro in the construction of a station and the training initiatives that are associated with it certainly would be quite different than even the best efforts under Limestone.

A former MKO First Nation chief once described the persons leaving the Limestone program as the most highly trained unemployed people in Manitoba. So the process that is being undertaken with these two projects appear to be aimed directly at ensuring capacity development and training that is effective in obtaining employment and so forth. It is a welcome change, minister. Thank you.

Mr. John Loewen (Fort Whyte): Thank you, Mr. Anderson, for a very well-thought-out and well-researched presentation. You have hit the nail on the head in a number of instances, but in particular, in identifying the negative ramifications not only to the corporation through the increased debt but also to your communities through a lack of consultation.

The most serious problems, and we have a lot of problems with this piece of legislation obviously, but one of the most serious problems is the fact that it is primarily there and has been treated basically as an ad hoc cash grab in our view to bail the Government out of a very damaging financial situation and has not been done as you are recommending and as the business council has recommended with the view of a long-term strategy in terms of how the possible resources of Manitoba Hydro should be shared throughout the province with all the stakeholders.

It is our belief that a lot of that would have been flushed out and would have been well served by following what we believe would have been proper process, would have been taking this issue to the Public Utilities Board where an intervener, such as yourselves, could have been prepared to question officials of Manitoba Hydro and got to the information behind the facts. I just would like to know how you feel about issues such as this going to the Public Utilities Board prior to being dealt with through legislation in this House.

Mr. Anderson: The core position of MKO is that matters that affect the interests of our members should be subject to adequate consultation between ourselves and the Crown on a government to government basis, precisely as Minister Robinson indicated in his December 15, 2000, ministerial statement.

The Public Utilities Board, as it is, is a vehicle for examining proposals which may affect Manitoba Hydro and, certainly, their rates. As I had indicated before, all of our members are customers of Manitoba Hydro, so we are keenly interested in any financial matter that may have the effect of affecting the rates paid by our members and the service provided to them. The Public Utilities Board, at the present time, is the vehicle for examining it.

Having said that, on the basis of a government to government arrangement, though, MKO has, for quite a while, demonstrated a keen interest in utility and resource issues and in government fiscal relations. There could be, prior to legislation being submitted, consultations outside the Legislature, including the legislative members, with organizations like MKO that have some record and expertise. For example, we have participated, I believe, in every regulatory proceeding affecting Manitoba Hydro since the NEB hearings in 1984. So we have a substantial record and some considerable knowledge of the corporation.

Mr. Selinger: Just a quick point. If there was a government to government relationship entered into between, say, Manitoba Hydro as a Crown corporation and a First Nations community, are you comfortable with that going in front of the Public Utilities Board?

Mr. Anderson: The fact that an arrangement between a single First Nation and Manitoba Hydro is done with a MKO member–there are 27 MKO First Nations, and we would certainly desire the opportunity, if there are impacts that may affect rates and services, to comment on it.

As I understand, Minister, as we are registered interveners in the status update proceeding, there are questions being asked by all the interveners regarding the costs, for example, with Wuskwatim and Kiask arrangements. We have not objected to those questions. We believe that if it is a good deal, it is a good deal, and that by asking questions and having them thoughtfully answered, the benefits of the projects will become evident.

Mr. Chairperson: No further questions? Thank you for your presentation, sir.

Mr. Daryl Reid (Transcona): Mr. Chairperson, with the leave of the committee, I am looking through the list of presenters here today, and I am wondering if the committee would give leave to allow presenters who are listed on several of the bills to make presentations back to back for the convenience of the members of the public.

I wonder if there is leave of the committee to allow that to occur.

An Honourable Member: Agreed.

Mr. John Loewen (Fort Whyte): We have no objection to that, of course, if that is what the presenter wishes to do. If they would rather present at a separate time, I think that is how they should be handled.

Mr. Chairperson: Okay. That is agreed then.

Mr. Chairperson: I have been informed by the attendant at the back that Peter Wohlgemut, speaking for Brian Ardern, is from out of town. He is No. 8 on Bill 27. Therefore, we will return to Bill 27 for his presentation.

I am sorry, sir. I note that the minister is not in her chair, so we will ask you to wait. We will call Todd Scarth on Bill 41, and then we will return to you immediately after that.

I see the minister is now back in the building, so we will deal with you at this point in time.

Do you have a written copy of your brief, sir, for the committee?

Mr. Peter Wohlgemut (Manitoba Teachers' Society): Yes, I do.

Mr. Chairperson: Okay. You may proceed when ready.

Mr. Wohlgemut: Thank you. My name is Peter Wohlgemut. I am a member of the provincial executive of the Manitoba Teachers' Society. For your information, I also am a president of the Borderland Teachers' Association, and my worksite is a small country school in the Borderland School Division.

I am here today representing the 14 000 public school teachers of Manitoba. I am pleased to have this opportunity to share my views on Bill 27 and workplace safety and health issues as they relate to public school students and teachers. Workplace health and safety is extremely important for teachers, as schools are our worksites, and, in fact, the act defines students as workers. So, in effect, I am here speaking on behalf of over 200 000 Manitobans.

Workplace safety and health affects our working lives, the safety and performance of our students, and the health of everyone that sets foot in our schools and classrooms, including parents, secretaries, EAs and various other members of the public. The society believes that Bill 27 is a step forward in improving workplace safety and health in Manitoba. The amendments in this bill will help reduce workplace injuries and death, but this legislation must be reinforced by better education and training; something we, as teachers, know a bit about, and which I will deal with more specifically later on.

* (10:00)

Currently, some school divisions in Manitoba have workplace safety and health committees that work effectively. Unfortunately, many do not. In some cases, the committees meet for a quick hour before the start of school, or after school. This may be sufficient for minor issues, but does not lead to effective discussion of real problems. The existing situation undermines the whole effort of workplace safety and health, and that is why the society is pleased that Bill 27 spells out and expands the duties of these committees. By giving them the duty to make recommendations, conduct safety inspections at regular intervals and investigate accidents, these committees will have more teeth.

In addition, Mr. Chairperson, these amendments will help ensure that committee members can carry out their duties without loss of pay. We are also encouraged that the employer is required to respond to the recommendations of the committee with a timetable for implementation. However, committee members need more time and training to understand the act and the responsibilities within it. Since the committees are charged with keeping a safe workplace, training should be expanded beyond the two days that currently exist so that the members have the knowledge necessary to fulfill their responsibilities.

Students in schools are rarely consulted on workplace safety and health situations, despite being defined as workers under the act. Teachers are frequently isolated, and are accused of being hypersensitive when they do raise a concern. Sometimes, the teachers transfer to another worksite while nothing is done about the offending workplace. In such situations, students are even more at risk. We already know the effects on children who have been exposed to second-hand smoke. We should not ignore the long-term effects of exposing sensitive children to harmful substances for long periods of time.

Air quality is a matter of money. In winter, fresh-air intake is significantly reduced to save money, even though less fresh air often causes sickness. Mould and glue substances are also significant factors that cause illness. There are school divisions that have moved quickly to solve problems by checking behind walls for mould, ensuring the air-handling system is clean, making certain that waste products, cleaning products and toxins are handled appropriately, and by checking carpets. We applaud those efforts.

Unfortunately, some school divisions spend too much money on testing air quality and not enough money on improving it after poor test results. We are optimistic that the expanded duties of the workplace safety and health committees will help address these kinds of workplace problems.

In far too many cases, tar, paint and other substances are applied while schools are occupied. Although there are two months in summer when the schools are empty, the convenience of contractors often takes precedence over the health of teachers and students. In addition, such work is often done without any advance notice.

Teachers would like notice when work that produces noxious odours is being performed at their schools. These substances can severely affect teachers as well as students. We are pleased that Bill 27 will now give our members a means to be assigned to another worksite, or pay in lieu, until the workplace is made safe.

School divisions should be responsible for the safety of their employees and students. Thus, the effective suppression of workplace violence and harassment, be it verbal or physical, should be taken seriously as a matter of workplace safety and health.

Currently, many school divisions have lofty policies on this matter, including zero tolerance policies. In actual practice, execution of these policies is often inadequate. Political pressure by parents, the fear of such pressure, or merely the attempt to make the school look good often prevent effective action. Some school divisions do a good job, but improvement is required.

Teachers are encouraged that this bill will give the Government power to make regulations to prevent and respond to violent situations, and to outline measures that employers can take to prevent harassment in the workplace.

As an earlier speaker pointed out, proper safety precautions are an attitude, not merely knowledge picked up in one course. That is why the Manitoba Teachers' Society believes that it is vital that portions of workplace safety and health instruction–in particular, prevention methods related to sound, air, light and chemicals–be included in the curriculum at various levels in the school system.

Too many young people are killed on the job or injured during their very first job because of their lack of experience and training. We are hopeful that this legislation will address the training issue, but these deaths are also the result of a failure to teach our children that safety must come first. This must start when students enter school.

Younger students should learn safety measures based on their experience and exposure to the working world. Students at the high school level should learn more advanced techniques, along with information about their legal rights in the workplace.

If taught over the entire span of a student's life at school, Manitoba graduates will have the knowledge and habits to ensure safer worksites. As a result, we may be able to save lives and prevent injuries to our young people. The fact that one-third of the injuries that result in benefits from the Workers Compensation Board involved workers from 15 to 29 is a statistic that teachers are willing to change.

Thank you for this opportunity to present teachers' views on workplace health and safety in our province and the merits of this new legislation. The Manitoba Teachers' Society believes that the measures contained in Bill 27 will result in improved workplaces for all employees in Manitoba, including teachers and students. Thank you.

Mr. Chairperson: Thank you for your presentation, Mr. Wohlgemut. Questions for this presenter.

Ms. Becky Barrett (Minister of Labour): Thank you very much for your presentation. You have raised some very pertinent issues that I know that the department will be looking at.

I wanted to let you know that part of the whole workplace safety and health effort on the part of the Government, which is more than just this legislation, also does include working with the Department of Education on curriculum. As you and Ms. Skanderberg have very accurately pointed out, we do need attitude changes and information. As you, as a teacher, know, you start young, you can inculcate good habits into young people, and that will go a very long way.

I appreciate this, and look forward to working with the teachers and the education system in this very important part of our entire workplace safety and health process. Thank you very much for your presentation.

Mr. Wohlgemut: Thank you very much. I appreciate hearing that those efforts are ongoing and look forward to working with you.

Attitude is terribly important. I know in my situation in the school I teach in, I require my students to wear helmets when they play hockey, but I know, also, at the end of the day, when the supervision is gone, so are the helmets. So attitude is something we need to work on.

Mr. Ron Schuler (Springfield): We spent yesterday evening in committee together, and welcome again, and thank you for presenting.

What you very well articulated in various areas of your presentation, and I quote from page 1, "but this legislation must be reinforced by better education and training," and you talk about how that is something well known to teachers. Page 6, you talk about failure to teach our children that safety comes first. Younger students should learn safety measures, based–and then it goes on and on.

When the minister did consultations, and there was a committee put together by labour and management, one of the key areas that they came up with was: a component of this bill should be education. I take it you have had an opportunity to read the bill, and get a good understanding of it. Are you concerned that the Government's focus seems to be on punishment and has left out the education component?

Mr. Wohlgemut: In response, I guess, I would refer back to the minister's previous comments that the education portion will be addressed, not necessarily in this particular bill, but in discussions with the Department of Education and in working with teachers. So while it is not contained in this particular bill, my hope, and as was mentioned also, the hope of the previous speaker that was referred to, would be that this will be addressed. We do know that attitudes do need to be affected.

If we look in the areas, for example, efforts in regards to smoking. We know that I have had students who have gotten their parents to quit smoking. We know that educating our children can have that impact, and so, while it is not in this bill and there is a focus on, in a sense, I guess, punishment, or addressing problems that exist, I am confident that education efforts will be there; if not here, elsewhere.

* (10:10)

Mr. Schuler: And thank you for that, Peter. You are right. There are a lot of different areas that have to be covered off, and you have talked about second-hand smoke and mould and various toxic fumes. I think this bill is also supposed to address manufacturing areas, where, again, the issues are somewhat different, and the education component is not in there for them.

It is interesting to hear the minister is going to work with the Department of Education in regard to teachers, but are you not concerned, for instance, the education that the 19-year-old who died in an accident in 1999–that some education for him, should have been part of this bill? Your comments.

Mr. Wohlgemut: I take it you are referring then more to the training of workers onsite, that sort of thing? One of the comments I did make early in presentation, specifically referred to the committee, of course, is that even in that area we do think that the members of the committees do need additional training, beyond the two days that are currently in the act.

I would think that same sort of increase in training would be appropriate for other members, other workers as well. If the committee members need more training to become familiar with the act, and what their responsibilities are, and how to address issues, I would certainly think that other workers would also benefit from knowing what their rights are, what sort of things they can be expected to do, what their rights are when there is a dangerous situation. Expanding that training would certainly be beneficial to all workers.

You mentioned that this bill does address sites other than schools that are rather different than schools, but even in schools, we do have various chemicals. We do have various dangerous situations that can arise and making sure that workers are aware of what their rights are I think would benefit all of us.

Ms. Barrett: Following up on the questions of the Member for Springfield (Mr. Schuler), you are a professional educator. Would you agree with the statement that while you are trying to educate students, but there does come a time when sometimes, in some circumstances, with some students or in some situations, education itself is not enough and that there are some situations that do require an authoritative kind of–what is the word I am looking for?–mechanism to ensure that compliance with basic educational situations in this example and your example are there, that there needs to be a range of activities and sometimes education, in and of itself, is not enough?

Mr. Wohlgemut: I would certainly agree that you do also need to have something in place, so that if there is a dangerous situation, that it can be addressed, and that there are some teeth, for example, to the committees, so that they can deal with dangerous situations and employers cannot wiggle out of addressing some of these situations.

Education is certainly an important component, though. As was pointed out, I think, this bill is making sure that some of the, to use your phrase, authoritative mechanisms are in place so that when a problem does occur, there is something there that can be used to deal with it. A component of education would be making sure that our workers in Manitoba are aware of that, and are aware of what those mechanisms are, but, of course, for them to work, they have to be there. That is what this bill is putting in place.

Mr. Chairperson: No further questions? Thank you for your presentation, sir. Thank you.

Mr. Chairperson: We will now return, once again, to Bill 41. I call Todd Scarth, Canadian Centre for Policy Alternatives. Is Mr. Scarth here? Mr. Scarth will be dropped to the bottom of the list.

I call Gloria Desorcy, Manitoba Branch of the Consumers' Association of Manitoba–

Floor Comment: Canada.

Mr. Chairperson: Correction. It is Ms. Desorcy of the Manitoba Branch of the Consumers' Association of Canada. Do you have a written presentation?

Ms. Gloria Desorcy (Manitoba Branch of the Consumers' Association of Canada): Yes.

Mr. Chairperson: It is going around. Okay, you may begin when you are ready.

Ms. Desorcy: Good morning. My name is Gloria Desorcy and, as was just explained, I am here today on behalf of the Manitoba Branch of the Consumers' Association of Canada or CAC Manitoba. CAC Manitoba is a volunteer, non-profit independent organization working to inform and empower consumers and increase awareness of consumer issues in Manitoba. On behalf of our organization, I would like to thank the committee for the opportunity to present our comments on Bill 41, The Manitoba Hydro Amendment Act.

CAC Manitoba is opposed to Manitoba Hydro remitting $288 million in retained earnings to the Government of Manitoba. We believe that this is not in the best interests of consumers in this province, for a number of reasons.

Firstly, any removal of net income from Manitoba Hydro will result in higher interest charges. At the recent Public Utilities Board hearing into Manitoba Hydro's rates, information provided by the corporation indicated that all net revenue is allocated for some purpose, such as paying down existing debt. Any removal of earnings from net revenue, whether due to rate decreases or payments to government, would result in increased interest expenses for the corporation. The Hydro panel testified that the total cost of paying $288 million to government including interest expenses could amount to more than $500 million. These increased expenses could be passed on to ratepayers.

Secondly, transferring additional funds from Manitoba Hydro to provincial general revenue could be considered a regressive tax measure. Unlike income tax, however, which is income based, this tax, if you would, would be based on the amount of electricity used by each consumer. Consumers with the most limited income sometimes use the most electricity due to poorly insulated housing and old appliances that do not meet current standards. There is no way to ensure that those consumers with the least disposable income would not end up paying the larger share of any cost that might be passed on to consumers.

Thirdly, Manitoba Hydro already pays an annual sum to the Province for water rental and debt guarantee fees. This amount has almost doubled from 2001 to 2002. Add to this the $288-million payment, and Manitoba Hydro's total contribution to government becomes among the highest when compared with other electricity Crown corporations in Canada. If water rental and debt guarantee fees continue to rise, these increased costs could be passed on to consumers in the form of future rate increases. This might be avoided if export revenues were used to pay down current debt load, or to create a fund for the purpose of mitigating future rate increases.

Finally, consumers have the right to expect accountability and transparency from Manitoba Hydro. If Manitoba Hydro's revenues are being used for purposes other than providing electricity, it becomes impossible for consumers to know, with certainty, what they are paying for when they pay their Hydro bill. CAC Manitoba urges the Government of Manitoba to assure consumers in this province that Hydro rates will be used to cover Hydro costs, and that any retained earnings will be used to keep electricity rates low for ratepayers in this province. We urge the Government to defeat Bill 41.

Thank you for your time and attention.

Mr. Chairperson: Thank you for your presentation. Questions for the presenter?

Hon. Greg Selinger (Minister charged with the administration of The Manitoba Hydro Act): Thank you, Ms. Desorcy, for your presentation.

On a couple of the points you made on your last page there, are you aware that the guarantee fee that Hydro pays to the Government allows them to borrow at the Crown rate of interest, which saves them money?

Ms. Desorcy: I understand that, yes, that that does save them some money. But the fee has certainly increased in the last year by a very large amount. Again, if adding that to the $288-million payment, the total amount that is being remitted to government is quite large. I have no information indicating how much money it is actually saving the corporation.

Mr. Selinger: Just on your last point, our estimates are that it saves them about 25 basis points, or about $20 million a year, $19 million to $20 million a year. So that it is a good value for Manitoba Hydro to have the ability to use the Crown as its guarantor of the borrowings that it makes, and that the fee they pay is very competitive in the marketplace. In fact, if they did not have that guarantee, that their costs for borrowing would be significantly higher, $19 million to $20 million a year; for your information.

* (10:20)

Ms. Desorcy: Thank you for that information.

Mr. Selinger: My second question is: Are you aware that Manitoba Hydro does not pay corporate taxes?

Ms. Desorcy: Yes.

Mr. Selinger: And that if they did, that the cost of them would be an additional $93 million a year?

Ms. Desorcy: No, I would not have any information on the cost.

Mr. Selinger: For your information, that would be the additional cost if they were not a Crown corporation. In the private sector, they would pay an additional $93 million a year in taxes.

Ms. Desorcy: Would that be to the provincial government?

Mr. Selinger: Combined federal and provincial taxation for corporations. Thank you for your presentation.

Mr. John Loewen (Fort Whyte): Well, thank you very much for your presentation. You have summarized very clearly a number of issues and concerns that we share with you, with regard to this bill, and just with regard to the last few points raised by the minister.

While Hydro is able to borrow at a reduced rate, certainly the Government is on the hook for the debt. So that is sort of a moot point. Also, $93 million in taxes would have been paid last year. This year, based on projections, it probably would have been somewhat less than $50 million, in a year in which the Government is going to take over $400 million out of the corporation. So you might want to consider that in the context of the minister's statements.

With regard to providing the funds that the Government feels it needs to provide services to Manitoba, would you, and in the cases we have here where that results in them spending more money than they have–would you and your association prefer that the Government borrow the money directly, or would your preference be that they do as they are doing in this bill, which is asking Hydro to borrow the money to give to them?

I guess, to simplify the question, if the Government needs to borrow money, would your association recommend that the Government borrow the money, or that they ask Hydro to borrow the money for them?

Ms. Desorcy: I think the key factor there for our association would certainly be what is the most visible process. If the Government is using the money for things that are typically considered government purposes, then it makes sense that the Government somehow acquire the money through whatever means they are going to acquire it. To take it out of Manitoba Hydro removes the transparency and visibility, from our perspective.

Mr. Loewen: Just to go back to the Public Utilities Board's transcript from May 27, it deals with the issue that you have raised with regard to potential rate increases. For the record, a question from Ms. Kathy Kalinowsky who is a lawyer for the Public Utilities Board: With a swing of $550 million, Manitoba Hydro still does not think that it has to revise its rate increases or decreases; and the answer from Ms. Carolyn Wray: It was a policy decision by the Government and announced as such that there would be no changes to rates as a result of the special payments–obviously indicating that the Government has told Manitoba Hydro that they should freeze their rates.

Again, Mr. Chairperson, I would ask in light of your comments regarding rate increases, would you prefer that Manitoba Hydro follow its policy, as it has done for many years, where it takes the need for rate increases to the Public Utilities Board where interveners such as yourselves have the opportunity to question the officials and get behind the information, as opposed to the Government determining at the Cabinet table that Manitoba Hydro will have to hold off any rate increases in the present year and deal with it at some later time.

Ms. Desorcy: Our association would definitely prefer that potential or proposed rate increases come before the Public Utilities Board.

Mr. Loewen: Have you been provided with information from Manitoba Hydro which indicates that in their presentation to the Public Utilities Board which was developed prior to them having knowledge of this withdrawal, that they had forecast rate increases beginning in the year 2003 over a series of years at 2 percent a year?

Ms. Desorcy: That was some of the information that was presented in preparation for the hearing that is still ongoing, yes.

Mr. Loewen: Are you fearful, Mr. Chairperson, given that the corporation already indicated its intent to increase rates consistently over a numer of years to meet their needs prior to their knowledge of the dividend, and now, given the fact that not only the Government has taken the dividend but has ordered them to freeze rates, is it your concern that at some point, possibly after the next election, Manitoba Hydro will be faced with a situation where they might have to raise rates dramatically?

Ms. Desorcy: I think we believe it has to be one way or the other. Either Manitoba Hydro has sufficient additional revenue to cover expenses like this, in which case they would not have needed a rate increase, or they do not, in which case they did need a rate increase.

I do not want to say whose numbers are right or whatever, but I am just saying I think it has to be one way or the other. If they were forecasting that they did need a rate increase to increase their revenue, then they did, then they will not have, I do not believe, the additional revenue without a rate increase. If they, in fact, did not need the rate increase or if they do have the additional revenue to pay this, then perhaps they did not need the rate increase to begin with.

Mr. Loewen: Just one last question. Have you seen the March 31, 2002, financial statements, and if so, are you aware that at that point the corporation–and this, I might add, is prior to the Government taking any of the $288-million dividend–has $14 million in cash on hand?

Ms. Desorcy: I have seen the report, but I have not had a chance to look at it. So, no, I am not aware of that.

Mr. Loewen: Thank you.

Mr. Chairperson: We are eight minutes into questions already. However, she only used four minutes for her presentation, so I am going to allow latitude for further questions. Is that okay with the committee? [Agreed]

Mr. Selinger: Are you aware of the fact that the former government had a water power rental agreement with Manitoba Hydro, whereby Manitoba Hydro paid for government projects in exchange for a freeze on the water power rental rate?

Ms. Desorcy: No, I am not aware of that.

Mr. Selinger: For the record, I want you to know that that agreement was there for several years. It was not reported in the Legislature or debated in any of the budgets. It was noted in the footnotes of the Manitoba Hydro annual report but it was not particularly a transparent agreement known to members like yourself in the past.

So I just want for the record for you to know that we ended that agreement and then brought the water power rental rates up to a market rate which is still cheaper than other provinces.

Secondly, are you aware that Manitoba Hydro has retained earnings of $1.3 billion?

Ms. Desorcy: I do not know the exact amount, but I believe it is in that ballpark.

Mr. Selinger: Have you received the most recent copy of the annual report of Manitoba Hydro?

Ms. Desorcy: I have received it, but, as I was saying, I have not had a chance to look through it yet.

Mr. Selinger: I would ask you to look at page 68, the definition of retained earnings, where it says net accumulated earnings that a business has not distributed to the shareholders, in this case the shareholders being the people of Manitoba through its government.

On the basis of that, retained earnings which have increased dramatically in the last several years, we thought it appropriate to take a dividend. It is an undistributed retained earning that we have decided to take as a special payment this year in the Budget. I am just drawing that to your attention.

Ms. Desorcy: I am surprised to hear that, given that at the hearing we were told quite clearly that all net income is allocated for something in Manitoba Hydro and that any removal of net income would require increased interest charges, so that does very much surprise me.

Mr. Chairperson: Mr. Loewen has a question, and at this point I want to advise members of the committee that question and answers are for questions and answers. I would encourage them to keep that in mind. If they want to debate this bill, there will be ample opportunity at the end of this process when we go through clause by clause.

So with that caution, I am going to allow one more question to Mr. Loewen, and then we will move on.

Mr. Loewen: I just have one more piece of information for you and I would recommend that you review the transcript from the Public Utilities Board on May 27, in which case Ms. Kalinowsky clearly indicates that in spite of having retained earnings of over a billion dollars, that does not translate into cash.

Further, on June 3 and June 5, it was indicated quite clearly by officials of Manitoba Hydro that that billion dollars could be wiped out by a five-year drought which has a 20% possibility.

* (10:30)

Mr. Chairperson: I am not sure that was a question. Would you like to respond to that, Ms. Desorcy?

Ms. Desorcy: Well, I would just like to say that that is actually what I was referring to when I responded to the minister.

Mr. Chairperson: If there are no further questions, I thank you for your presentation.

Mr. Chairperson: I note that Ms. Desorcy is also listed to present on Bill 49. I would give her the opportunity at this point, as agreed previously by the committee, to present at this time. Ms. Desorcy, do you have a written copy of your presentation for the committee? Okay, I ask that you hand it to the Clerk and then begin your presentation when ready.

Ms. Gloria Desorcy (Manitoba Branch of the Consumers' Association of Canada): I guess I will dispense with the first two paragraphs since you just heard them.

CAC Manitoba's comments on Bill 49, The Purchase of Winnipeg Hydro Act, will not address the merits of the purchase of Winnipeg Hydro by Manitoba Hydro or the details of Bill 49. Our organization does not believe that it has access to sufficient information or expertise to evaluate the purchase or the bill. Our comments will focus on the venue chosen to make this decision.

CAC Manitoba believes that the Public Utilities Board, as the province's independent regulator, is in the best position to determine whether or not the proposed sale of Winnipeg Hydro is in the best interests of both Winnipeggers and Manitobans. We urge the Government of Manitoba to request a PUB review of the proposal before making a decision on Bill 49 for the following reasons.

The Public Utilities Board process brings together the experience and expertise required to properly evaluate the impact of this sale on consumers both as Winnipeggers and as Manitobans. It provides consumers with access to more detailed information about the proposal and to the expertise required to make a meaningful contribution to the debate.

The PUB is in the best position to set objective benchmarks for monitoring the realization of projected cost savings and acquisition costs.

The recent PUB review of Manitoba Hydro-Centra integration has clearly demonstrated the importance of long-term monitoring of this type of acquisition. Since the Public Utilities Board reviews utilities on a regular basis it is able to ensure accountability on behalf of Manitobans.

In the delicate balance of the marketplace management and ownership perform a very different function than regulation in the case of a monopoly. As managers and owners of Manitoba Hydro, the Government of Manitoba already has a formidable job to do and should not be expected to perform the function of regulator as well. Maintaining the checks and balances of the regulated marketplace in Manitoba is clearly a job more suited to the PUB.

This acquisition will give Manitoba Hydro control of all power sources available to Manitobans. The larger the monopoly the greater the need for strong regulation. As Manitoba Hydro grows it becomes even more important for government to utilize a regulatory system that works to protect ratepayers' investment in the utility and to ensure the corporation's transparency and accountability to Manitobans.

Finally, section 82 of The Public Utilities Board Act requires Public Utilities Board approval for the sale of any utility in Manitoba. While Manitoba Hydro is exempt from that requirement, Winnipeg Hydro is not. CAC Manitoba urges the Government of Manitoba to comply with section 82 of The Public Utilities Board Act before making a decision on Bill 49. Thank you for your time and attention.

Mr. Chairperson: Thank you, Ms. Desorcy. Are there questions from the committee?

Mr. John Loewen (Fort Whyte): Well, thank you, and I appreciate once again your presentation to the committee. It coincides with the position we have taken with regard to this bill. In fact, while we do not object to the purchase of Winnipeg Hydro by Manitoba Hydro, we do feel it is important that the process be followed. The correct process we believe would be to take it to the Public Utilities Board before closing.

Has your association been made aware with regard to this transaction of what type of capital will have to be invested by Manitoba Hydro after the acquisition to bring the, if you would accept the phrase, the plant and equipment of Winnipeg Hydro up to modern-day standards?

Ms. Desorcy: We have the information that is in the bill, of course. We have the information that was distributed publicly when the proposed sale was first announced. That does not ring a bell but it could be in there.

Mr. Loewen: I do not believe it is. It is unfortunate that it is not because that, in fact, will be a big cost to the ratepayers of Manitoba Hydro, that investment that will be required by Winnipeg Hydro.

Has your organization been given any indication of what–I hope this term is familiar to you–the hurdle rate that Manitoba Hydro used in determining how much its annual payments would be? In other words, that is the rate where they are saying that profits will justify an expenditure of, as they have indicated in the acquisition, $25 million a year and $20 million and then reducing to $16 million forever.

Ms. Desorcy: Again, I am not sure we have that much detailed information. I think that is my point, or that is one of my points. That is the kind of stuff that we do not even maybe really know to ask for because we are not experts in this area and, yes, we do not have the access to the expertise of the PUB to flush out that information and find out what we need to know. That is the issue.

Mr. Loewen: Thank you.

Mr. Ron Schuler (Springfield): Gloria, thank you very much for both of your presentations. We appreciate you coming forward.

My question to you is: At any time were you consulted as an organization on Bill 41 or on Bill 49?

Ms. Desorcy: No, we were not consulted, although we have initiated discussion with Mr. Selinger about Bill 41, the previous one, prior to it being called Bill 41 a long time ago.

Mr. Schuler: So I guess it would be a fair statement to say that the Consumers' Association and the people you represent, basically us, the public, have not been consulted on either of these two bills.

Ms. Desorcy: I would say, in a formal sense, not, not before this forum, no. I mean, certainly there has been some information in the media for consumers, but if you mean by consultation an opportunity to offer comments, some kind of public review, no.

Mr. Schuler: Thus your recommendation is to go to the Public Utilities Board because then the public actually has the right to make a presentation, to ask questions and to express concerns or support either.

Ms. Desorcy: You are talking about Bill 49 now? Yes, certainly to go to the Public Utilities Board because the public has the opportunity to ask questions and get information, and also for the purposes of long-term sort of maintenance of the agreement, the acquisition and the change over and all of that sort of stuff, which we have seen with Centra, and how that goes. The Public Utilities Board is in a better position to oversee all of that. If they are in on the decision making in the beginning, then they are able to monitor that decision in the long term and make sure whatever is contracted is carried out.

Mr. Jack Penner (Emerson): Gloria, thank you for your presentation. I think it is only a few hours that we saw you here last night. I certainly commend you for getting involved at both ends of the spectrum because we think this issue is a very important issue.

I want to ask you specifically from maybe a more rural-oriented position, this Government made much to-do about reducing the rates in rural Manitoba and what they called an equalization process. I believe the average saving to the rural Manitoban, the rural average farm, is probably $20 a year by doing that. We do not discourage that. Let me not be critical of that.

However, the issue is that many rural people are now asking, the $288 million that Hydro is going to have to pay to the provincial government in dividends and the interest costs incurred by borrowing that money to deliver to the Province will probably increase the hydro bill–I say probably because we do not have firm numbers on this–by $700 a year. Now we think that is a significant offset in costs incurred and could cause significant hardships to the small producers in rural Manitoba, when we already know those producers have to operate at 50 percent of the income of American farmers.

Has the Consumers' Association taken a look at this at all?

* (10:40)

Ms. Desorcy: I guess until we know what we are talking about as far as the magnitude of a rate increase it is difficult to determine the impact it will have. Certainly concerns about small producers, concerns about people in remote areas and concerns about low-income consumers everywhere are at the top of our list, yes, but until you know how much the increase is going to be it is difficult to really evaluate the impact.

Mr. Chairperson: No further questions? Thank you for your presentation.

Before we move on to the next presenter, I have been informed, on Bill 27, Maureen Hancharyk of the Manitoba Nurses' Union, No. 18, and also Arlene Draffin Jones, No. 21, of the Manitoba Lung Association, are not able to orally present today. Their written presentations have been circulated to the committee. I need leave, however, of the committee to have their presentations included into the transcript. [Agreed]

For the viewing public, I just want to make the offer at this point that they have that option. They can present their written briefs and they will be included into the transcript. So if anybody wants to take advantage of that, they can approach the attendant at the back of the room.

Mr. Chairperson: With that said, we will now move back to Bill 41. I call Mr. Charles Cruden of the Manitoba Society of Seniors. I note that he is also listed to present on Bill 49, so therefore I give him the opportunity to present on both bills at once as did the previous presenter.

Mr. Cruden, do you have a written brief for the committee?

Mr. Charles Cruden (Manitoba Society of Seniors): Yes, I do.

Mr. Chairperson: Okay, sir. It will be distributed to the committee.

Mr. Cruden: Yes, I have given them both bills.

Mr. Chairperson: Okay. You are going to distribute both at this time. You may begin on Bill 41, please, when you are ready.

Mr. Cruden: Good morning. My name is Charles Cruden. I am a volunteer member on the Issues Committee of the Manitoba Society of Seniors, MSOS. I wish to thank this panel for the opportunity to make this presentation on behalf of MSOS.

To say that the Manitoba Society of Seniors is concerned at the thought of the Manitoba government levying an additional $288 million on the Manitoba Hydro Crown corporation would indeed be an understatement, as MSOS is very concerned with the potential financial effect on current and future Manitobans.

At recent public utility hearings it was discovered that, not only could Manitoba Hydro be required to pay the $288 million, but that the additional cost of requiring borrowing could be as much as $276 million, for a total cost of $564 million. This is an abhorrent amount of money considering the population of Manitoba. It could also be considered another form of taxation on the general population in view of the massive portion of residents of Manitoba that pays for hydro-electric power.

As a Crown corporation owned by the people of Manitoba, is Manitoba Hydro obligated to offer the best possible rates to residents of Manitoba or is Manitoba Hydro obligated to be a source of income to the provincial government to sustain and replenish expenses incurred? In the estimation of MSOS, certainly best possible rates is a given, and also MSOS accepts the fact that Manitoba Hydro should contribute to the support of the Province of Manitoba.

Since 1996, Manitobans have seen increased expenses charged by the Manitoba provincial government to the Manitoba Hydro for capital tax payments. Water rental rates increased from $1.62 mills per kilowatt hour to a current $3.341 mills per kilowatt hour. Provincial Guarantee Fees increased from .5 of outstanding debt to a current .095.

In actual dollars the increases are as follows, and the source of the information was from the latest Hydro 51st Annual Report: water rental rates from $47 million in 1996 to $107 million in 2002; Provincial Guarantee Fees from $25 million in '96 to $72 million in 2002, capital and other taxes from $31 million in 1996 to $55 million in 2002, for a total of $103 million in 1996 to $217 million in 2002, considerably more than double the amount paid in 2002 by Manitoba Hydro to the Manitoba provincial government than in 1996.

Regarding capital and other taxes, it should be noted that the capital assets in service have increased from 6,866 billion in 1996 to 9,072 billion in 2002, an increase of 32 percent. However, the capital and other taxes have increased by 77 percent.

Manitoba Hydro is believed to be the highest percentage of gross revenues payer at 10.2 percent to provincial governments in Canada through dividends, debt guarantee, water rentals and corporate capital tax. New Brunswick Power pays 1.5 percent. Hydro Québec pays 9.9 percent. Saskatchewan Power 9.3; B.C. Hydro 8.4, and the Northwest Territory Power 6.2.

Do these costs and amounts paid by Manitoba Hydro to the Province of Manitoba not indicate substantial increased revenues for the province? If Manitoba Hydro has to borrow an additional amount to pay the $288 million, it is apparent that the provincial government has an additional source of income through the Provincial Guarantee Fee at a cost to Manitobans. For in the end it is the end user, the consumers of Manitoba Hydro, that will pay all costs.

Bill 41 states that Manitoba Hydro has accumulated substantial retained earnings as a steward of public resource. The Province of Manitoba faces exceptional fiscal challenges in light of: (a) the economic slowdown that followed the acts of terrorism on September 11, 2001; and (b) the significant impact of a federal accounting error on the Province's revenue.

If Manitoba Hydro has accumulated substantial retained earnings, which is questionable in view of the possibility that they may have to borrow the $288 million, should they be penalized for their ability to generate funds? What is Manitoba Hydro's incentive to be good fiscal managers if the Province of Manitoba is going to legislate funds from them?

The provincial news release April 22 stating: Third quarter reports project positive balance for 2001-02 indicates how the slowdown in the economy has impacted on the Manitoba government. Even if there is a shortfall in revenue, should Manitoba Hydro be held responsible for the shortfall? At the time of preparing this presentation, I am not aware of any decision that has been rendered regarding the overpayment from the federal government.

A Free Press article, August 2, states that Mr. Selinger has been told by Ottawa that the Province will not be unduly harmed by the multi-billion federal accounting error. This being the case, is the provincial government seeking funds that may not be required? If a payment is required, again, should Manitoba Hydro be the source of obtaining the funds?

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Manitoba Hydro has a long-range expansion program that will require considerable funds and ability to obtain loans. Is it possible that the proposed $288-million payment by Manitoba Hydro to the provincial government could put in jeopardy future expansion plans of Manitoba Hydro that, if completed, could prove to be a benefit to the population of