LEGISLATIVE ASSEMBLY OF MANITOBA

Thursday, June 23, 1994

The House met at 9 a.m.

ORDERS OF THE DAY

(continued)

COMMITTEE OF SUPPLY

(Concurrent Sections)

HIGHWAYS AND TRANSPORTATION

Mr. Deputy Chairperson (Marcel Laurendeau): The Committee of Supply meeting in Room 255 will resume consideration of the Estimates of the Department of Highways and Transportation.

When the committee last sat, it had been considering item 5.(a), on page 95 of the Estimates book.

Mr. Daryl Reid (Transcona): When we last sat on the Estimates, I had asked the minister to provide us with some information relating to Caribou Ventures or Caribou consultants, who, I believe, were working in conjunction with several government departments relating to the Arctic Bridge agreement.

I am wondering if the minister has had a chance to find any information relating to that and any Order‑in‑Council that may have been place to pay for the services of Caribou.

Hon. Glen Findlay (Minister of Highways and Transportation): Mr. Deputy Chairperson, I have information here for both critics on a number of topics, including an analysis of Caribou Ventures.

An Honourable Member: We need a third copy. Thank you.

Mr. Findlay: You got it, you had it. She did not say you need to retain it.

An Honourable Member: I need to retain it.

Mr. Findlay: You did not say that.

An Honourable Member: I need to have it tabled.

Mr. Findlay: Just do not take it away in case I need it.

An Honourable Member: Okay.

Mr. Reid: In an effort to give me a chance to read this information on Caribou, I will just switch for couple of moments to more general terms relating to the Arctic Bridge agreement. Maybe the minister can give us some update on what successes the government has had with respect to the Arctic Bridge agreement and whether or not we have seen any progress in traffic by way of the agreement with Russia.

Mr. Findlay: Mr. Deputy Chairperson, for the member's information, the departments that are involved are EDB; Industry, Trade and Tourism; Northern Affairs and Highways.

The consultant was hired to submit a report on what economic opportunities existed for two‑way trade, and that report is due fairly soon.

Mr. Reid: Well, this agreement has been going on since 1991. I believe the original one was struck, and the Premier and the Minister of Agriculture at that time, who is now the Minister of Highways, went to Russia to sign the agreement or were involved in the original signing of the agreement in '92, so‑‑[interjection] Okay, the Minister of Agriculture was involved in some way in the discussions surrounding it at that time.

Two years have passed since, and I have not seen any announcements come out of any progress. I am just wondering, since I had asked at the time, what type of monies were expended with respect to Caribou Ventures. I do not see any information here relating to the amount of monies relating to the hiring of Caribou Ventures and whether or not there was any Order‑in‑Council that would have been signed. That is my question. Where is the information?

Mr. Findlay: Caribou Ventures was hired as a consultant for, I believe, the amount would be around $100,000, not fully expended at this time, and they were hired through Treasury Board, so there is no Order‑in‑Council.

Mr. Reid: I thank the minister for that information. I would like to switch for a moment to talk about air bilateral agreements. It is my understanding that there is some discussion recently that I have heard, that the governments of Canada and the provinces may be looking at moving back to the table to talk about bilateral agreements with the United States.

Can the minister tell me, have those discussions commenced? If so, what stage are we at, and are we at the table participating to protect Manitoba's interests?

Mr. Findlay: Mr. Deputy Chairperson, on April 28, the Transport Minister Doug Young travelled to the United States and met with Transportation secretary Mr. Pena. That would be, as I said, April 28. There was not much agreement that came out of there other than to continue discussions at the officials' level.

We are meeting, as the member knows, in the beginning of July in Calgary as a council of ministers. We have asked it to be on the agenda. We have taken the lead from the provincial point of view that it be on the agenda for further discussion.

There is a strong desire by the private sector to have better access into the U.S, as our trade patterns continue to improve and the volumes of trade with the U.S. continue to improve. I think the figure is a 40 percent increase with Mexico last year, 20 percent increase of Manitoba trade to the United States last year‑‑20 percent increase. We are obviously doing business. To effectively compete, our people need to be able to move to the locations efficiently and effectively. From a Canadian point of view, we would like more direct flights into major centres in the United States, as opposed to circuitous routes.

From a Canadian point of view, we want access to the U.S. I think it is important we give access to Americans that are coming up here looking to buy goods and services. They can efficiently get into our major centres to do business. We are hoping that the discussions can continue in a productive fashion, particularly for Manitoba and western Canada.

Mr. Reid: We have not moved out of the problem areas for the airlines to this point in time. There was, at this time last year, some significant discussion taking place with respect to Canadian airlines and Air Canada and Gemini, of course, who also had jobs in this province. [interjection] They may have helped the situation somewhat from the previous federal government, but I am sure that they were not the sole reason why the problem was solved.

Can the minister give me some idea of what is taking place with respect to the problem that had been encountered with the two airlines? We know that Gemini has moved into the information highway network, I believe is where they are going to be shifting their emphasis now. Have we retained all of the jobs for Gemini in this province, or are we going to see a loss of jobs there? What is taking place within the Air Canada network? Has the minister met with the company CEOs to find out what the long‑term plans are for the Winnipeg maintenance bases for both the airlines and their staffing levels in this province?

* (0910)

Mr. Findlay: Mr. Deputy Chairperson, our information is that there are no job losses in Winnipeg. Actually, the episode we were in about a year ago looked very, very bleak in terms of Canadian, Air Canada and in terms of Gemini. Then, through the sequence of processes, at this stage, obviously, both Canadian and Air Canada are refocusing their efforts with their new partners‑‑American Airlines with Canadian, and Continental with Air Canada‑‑to improve their operating profits. I think the last figures I saw would indicate that they are looking at much better operating end results for this year than last year. The member comments on Gemini getting into the information highway business. Absolutely, a growth area, substantial growth area. All the jobs that were in Winnipeg will be retained in that process.

A year ago it looked very bleak for all three involved, and today‑‑I will have to admit that neither airline is out of the woods yet in terms of economic pressures and competition, but they have got a much, much better future now than they had as recently as six months ago. It looks good for Winnipeg in all aspects there.

I think it will also look much better for Winnipeg if we can get more direct flight access into major American centres. It will just improve the job potential here.

Mr. Reid: What efforts are being made to secure other routes other than the ones that we have? It is my understanding we just recently got the Winnipeg‑Chicago route back via Air Canada, not that long ago. What other efforts are being made to secure other routes to other destinations in the United States or in the Northern Hemisphere?

Mr. Findlay: Just to further answer the previous question. The staff have certainly been meeting with CEOs of all three, Air Canada, Canadian and Gemini, over the past period of time, as everybody is going through the refocusing, restructuring process. The air bilateral process is the major way of trying to improve access to markets in the U.S.

I think it is fair to say that, personally, I would think that the local airport authority would be a good move, to have more initiative from the local level, to be proactive in advancing opportunities of Winnipeg Airport. The process that is now ongoing is that the federal government is looking at additional accountability elements in the local airport authority agreement. We have no problem with that, but I think it is the improved accountability principles that have been talked about that sound good.

The federal minister, my understanding is, has it in front of the cabinet at the federal level. It is probably fair to say there are at least 15 other airports across the country looking at a similar principle. My understanding is that Winnipeg is next on the list, and it was the next one to have been negotiated and still is. I think that would be positive to allow local interest to promote the airport in a very aggressive fashion.

I know I have always said that the airport is, in a transportation sense, the key focal point for the future, and everything else works in conjunction with it; in harmony with the airport, ground transportation, rail or road, for cargo and then for people. Good integration between all modes is the way of the future, and then we can have local responsibility. I rather think it will improve the capability of this airport. It is a 24‑hour airport. It must be maintained that way, and further developments in and around the airport are critical to allowing it to expand to meet opportunities.

Mr. Reid: Before I get into the airport authority line of questioning, I want to ask first, does the department keep employment statistics, or are they advised of what the employment statistics are by transportation sector within the province, and whether through the airlines within the province, airport staff, rail employment, employment in trucking? I am talking direct employment here now and not the spin‑off related employment.

Mr. Findlay: Mr. Deputy Chairperson, the University of Manitoba Transport Institute does the analysis and develops the numbers. I have numbers here; I have '83, '89 and '92. Unfortunately, '92 is the last figures we have for total employment in the air industry: 3,000 in '83; 3,500 in '89; 3,100 in '92. It is hard to say whether in '94 that is up or down. We update every two years, so we will get a '94 update. So the most recent is 3,100 jobs, air related. Those are direct air transport services.

Mr. Reid: Does the minister also have figures relating to rail and to trucking as well?

Mr. Findlay: On exactly the same sheet, I will give them for the same three years: '83, '89 and '92. I will just repeat the air ones: 3,000; 3,500; and 3,100. Truck for the same years: 6,000; 6,900; 5,900. CN Rail: 7,400; 6,100; 4,900. CP Rail: 4,400; 2,800; 2,500. VIA, the first figure we have for VIA, is for '89, which is 600 jobs; in '92, 420. Public transit: 1,700; 1,800; 2,100. There is a category of Other. I will give you the category of Other; probably it is fair to say it is taxi and jobs of that nature: 4,700; 4,600; 5,600. For grand totals of 27,700; 26,300; 24,500.

* (0920)

Mr. Reid: I thank the minister for the information. If he has a sheet there, maybe he can ask the Clerk, if she is agreeable, to provide us with a copy of the information.

Getting back to the air and the air carriers and air employment, are we currently involved in any discussions with other provincial jurisdictions or the federal government dealing with the national air carrier policy? Are there any studies ongoing with that, and are we involved in any way in those discussions?

Mr. Findlay: Mr. Deputy Chairperson, there are discussions at the officials' level involving all provinces on the national air policy for the future.

Mr. Reid: Can the minister provide us with any kind of background information relating to any of the discussion items that would be forming a part of that air carrier policy, the national air carrier policy discussion?

Mr. Findlay: We do not have all the items in front of us. We will supply it to the member very quickly.

Mr. Reid: All right. I thank the minister for that. Also, I want to switch for a minute to the Winnipeg International Airport. There have been some discussions of late regarding the airport authority. I know the previous federal government had started to move in that direction, and it looks like the current federal government is continuing with that course of action.

There have been some concerns raised with affected groups in that‑‑and I had the opportunity recently to attend the first annual Winnipeg Airport Authority general meeting‑‑there does not appear to be any representation from the province currently sitting on that board even though‑‑well, my understanding, the province is entitled to one seat there‑‑from that last meeting anyway, that seat is currently vacant, and I believe the federal government's position is vacant on that board as well at the last information that I had.

Also, at the same time, there does not appear to be any representation from consumer groups considering that there are over 2 million passengers that use the airport a year; and, at the same time that the minister has already given us figures relating to the number of airline employees in this province, we do not have any of the people associated with the airline activities represented on that airport authority.

So it seems to me that we need to have some expertise not only from the consumer groups, but from labour as well, from the employees that work it, to have some vested interest as well in what happens with the airport. I am just wondering if we have ever made representation to the federal government, saying that we would like to have that type of representation there to represent those interest groups, and at the same time, can the minister indicate to me‑‑first if we have not filled the position to which we are entitled as a province‑‑why we have not?

Mr. Findlay: Mr. Deputy Chairperson, there was a task force set up to explore the desirability, feasibility of a local airport authority. We were involved in the task force, and funding was in place from Western Economic Diversification, the province and the city to fund the process. It is what we have evolved to as an airport authority with current officer, Sandy Hopkins, as chairperson; Otto Lang as vice‑chairperson; Ernie Halligan as treasurer; Robert Gobor as secretary; and Fred Fulcher as executive director.

The future in terms of the enhanced accountability principles will have an additional composition on the board, one representative each from the business community, organized labour and a consumer group. Neither the federal nor the provincial government will have direct representation. We will have the right to nominate one person from the province and two from the federal government, but those nominees are not to be elected officials or government employees. So they will be from the public at large, nominated one by us and two by the federal government, in addition to the business community, organized labour and a consumer group. The new composition of the board is proposed under the new accountability principles, which we support. There is no problem with them, but, at this point, not approved by the federal government. Certainly we are expecting it to be, but to this point it has not happened.

Mr. Reid: It is my understanding that these changes went through federal cabinet some two or three weeks ago from information that I had received from the authority itself or was supposed to have gone through cabinet at that time. I am wondering why the minister indicates that the changes have not been made, what the holdup is. At the same time, if we are entitled to have someone represent us on that board, I mean, I take a look at the composition of the board and, outside of Mr. Prentice from the University of Manitoba, everybody else is either directly connected with pure business activities in the commercial sense or past members of federal government. I am wondering why we do not have the other groups that have been excluded from the process by way of consumer groups and labour and why we do not appoint our person now to allow them to be a participant in the original discussions setting up the Winnipeg Airport Authority before it is turned over, I believe, in August of this year. We should have somebody there representing our interest to make sure that our needs are met as well.

Mr. Findlay: Mr. Deputy Chairperson, I do not know what the federal government is doing at this precise moment, but we all understand that it went to cabinet, as the member said, two or three weeks ago. The best information we have is that it has been withdrawn, for whatever reasons known only to them, to do what they want to do with it. I have no reason to believe that they will not proceed with it. So, at this stage we do not have‑‑until it is approved, it goes through cabinet, and the structure is set up saying that this will be the new composition of the board. We do not really have any authority to appoint somebody. Now, on the advisory committee, we have Mr. Rollie Savoie.

So it is an ongoing process. I think that the existing board is somewhat frustrated. They want to get on with life. They have no problem with the additional composition, but they need the clearance and the authority to move forward, and that has not come yet. As I said earlier, clearly Winnipeg is the next airport to set up an official airport authority, and whatever guidelines are used here will obviously be the recipe for at least 15 other airports across the country. I think the member is aware that there are already four airport authorities in existence: one at Montreal, one in Edmonton, one in Calgary, and the other at Vancouver, operating reasonably successfully.

Mr. Reid: So if I understand the minister correctly it is the federal government that is the bottleneck in this process, and they have not come back with any information relating to final decisions on the structure of the board for the authority. The minister indicates that Mr. Savoie is representing our interest currently during the discussions taking place?

* (0930)

Mr. Findlay: Right.

Mr. Reid: Then are we only sitting there as an observer, or are we actively participating in any of the discussions surrounding the transfer and the setup of the authority?

Mr. Findlay: As I said earlier, Mr. Deputy Chairperson, Mr. Savoie is on the advisory committee, not on the board itself. He attends every advisory committee meeting that is held, but the board still meets separately, deals with items separately, but calls upon the advisory board in a very regular fashion.

Truthfully, I think the member has recapped it properly. We need a decision of a go‑ahead from the federal government as to what is the process. If we do not like the process they bring forward, we have a chance to comment then, but I think we just need to have them make a decision and get on with things.

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

I have no reason to think that whatever they will come down with will not be acceptable by us at this point in time, unless they make some violent change in the perceived direction we see at this time.

Mr. Reid: If the minister is going to the ministers meeting on July 7, I believe it is, I take it that the federal minister would be involved in those discussions as well. Would it be possible for the minister to raise Manitoba's concerns?

I should ask, is the minister agreeable, first, in having these groups represented and Manitoba play an active role in the setting up of the airport authority to make sure that more than just pure business interests are involved in the debate, in the discussion and the activities surrounding the airport authority, and whether or not it would be advisable for the minister at his meeting with the federal minister and other Transport ministers of provinces to discuss at that time, to indicate that we would like to take our seat as soon as possible on that board?

Mr. Findlay: Mr. Acting Deputy Chairperson, as far as we know, the federal minister will be there at the beginning of July in Calgary. It is not 100 percent confirmed at this stage, but I certainly cannot imagine why he would not be there.

I have full intentions of discussing with him to find out what the holdup is and where he is at, as part of Team West, which is the grouping, as I told the member earlier, of the western provinces and the two territories to work together on issues of common importance in transportation.

This is clearly one item that we want to have discussed very thoroughly because I feel Winnipeg right now is at a competitive disadvantage with Calgary and Edmonton in terms of trying to get out there and hustle air routes and air traffic for both people and cargo.

As far as I know, any discussions I have had with existing business people on the airport authority, they have no problem with the addition of these other people, no problem at all. And I have no problem with business people being involved either. The member seems to have a little bit of a hangup, but I think for true accountability, in the final analysis, we need the balance. No problem there, and I am positive that nobody who is currently on there has any trouble with it. We just need to get on with it.

I also like the idea that the provincial and federal representatives will not be elected people. Particularly, I like that, because you get so many vested interests brought to the table there, and probably it is better that they are not government employees. It is somebody we appoint who represents our interests.

So I think the process that is proposed is good, but we just need to get on with it so we can start competing to make more things happen in Winnipeg. You have traffic volume and passengers here in Winnipeg that are way below Calgary, and we are cities of comparable size.

Mr. Reid: The minister indicated that he thought I had some problem with the fact that there were only business people currently sitting on the board. I have already indicated in my earlier comments that we had someone from the University of Manitoba by way of Mr. Prentice sitting there, so it is not just purely business people who are there now with commercial interests. What I am asking for here is some balance to be struck, that we have representatives from other groups and a representative appointed by government as well on that board so that we make sure that we are in on the ground floor or as close to it as possible as the discussions progress. That is why I raised the issue.

There was some problem in the past with the accountability as well. I know they have to have, I believe, annual general meetings to inform the public. Is this new airport authority going to be responsible for having a public tender of any contracts that they may be awarding for any of the activities which they may undertake?

Mr. Findlay: Mr. Acting Deputy Chairperson, in the accountability principles, there certainly is an item on tendering publicly. There is some debate going on, on what the upper limit would be for nontendered and then everything over that has to be tendered. We certainly would favour that limit being as low as possible.

There is a proposal now, and it is being discussed. It is not firm at all, so it is probably better I do not mention any figure, but the interest right now is to keep that limit as low as possible.

I cannot comment on what the federal cabinet is thinking, but it is an item that is under debate as to what the limit should be.

But the basic principles, there will be public tendering. There will be a lower limit under which there is, I would say, the discretion not to go to public tender, but our preference always is in public contracts. In the vast majority of cases, no matter what limits are set, public tendering should be the first priority.

Mr. Reid: There was some concern originally at the beginning of this year, end of last year, that these contracts could be let first without public tendering, and in fact there could be some millions of dollars that could be expended without going through that process.

What would the minister see in his estimation or the department's estimation would be a reasonable limit set for the lower level of public tendering?

Mr. Findlay: I think in terms of what I have already said, the desire is that there will always be public tendering, and when you talk million contracts, absolutely 100 percent. Whether our limit should be $40,000 or $50,000, the basic principles, first priorities should be public tendering. Where they will end up as to what figure they will put in their final decisions, I would assume it would be somewhere in that vicinity of $40,000 or $50,000 that would be the lower limit for public tendering, but we would always advocate that public tendering should be done in absolutely every case unless there are extenuating circumstances.

* (0940)

Mr. Reid: Well, $40,000 or $50,000, I not sure, it seems like there would be a lot of smaller items that would fall outside of the bounds of the tendering process by having a limit at that level. That could be a bit of a concern in the future should conditions change, and we see contracts let even in portions of under $40,000. We know contracts can be broken up into smaller components to have that take place, so I am not sure that we would be in agreement with a level of $40,000.

Has any discussion taken place, since we have obviously sat in at some of the discussions, to determine how there is going to be an apportioning of the costs associated with the airport's operation? Is it going to be based on the number of aircraft flights, arriving and departing the airport, based on commercial and passenger? Is that how it is going to be apportioned for costs? Is the terminal going to be separate? Is the cargo section going to be separate from the activities of the airport? Can the minister give me some indication of how we are going to apportion those costs?

Mr. Findlay: Mr. Acting Deputy Chairperson, currently the Winnipeg Airport, in terms of its revenues and its expenses, operates at a loss. What is being negotiated would be classed as a negative lease. In other words, there would be an ongoing subsidy of some amount to make the airport viable, moving eventually over the course of the time to a total user‑pay principle where the revenues are obtained when moving either people or cargo does pay for all the operating costs. The time frame of what that negative lease will be is probably subject to events of the future, and the idea that, as revenues increase from either cargo or from the movement of people, the amount of the subsidy will decline. I think it is widely accepted that you cannot instantly balance the books in terms of the operation of the airport. The intention is to proceed towards it.

(Mr. Deputy Chairperson in the Chair)

There is no question that if the local airport authority in terms of the fees it charges for cargo or for passengers is out of line with other jurisdictions, they are going to lose business. So there is a marketplace, self‑limiting ceiling on what there will be, but the intention is‑‑and I do not think there is any question the new Minister of Transport believes that the operation of transport systems has to move to a more market‑oriented, user‑pay kind of principle, with the lease being prepared or, I mean, negotiated, having a subsidy in the early years. Without that, it would be very difficult for Winnipeg to instantly move to a fully balanced book in terms of annual operations.

Mr. Reid: The minister indicates an ongoing funding support. I do not want to call it the term that the minister uses because that has been taken on a negative connotation these days with respect to other transportation and I am inclined‑‑

Mr. Findlay: The difference between the income and expenses. How is that?

Mr. Reid: Yes, okay, that is it. I like that term better.

Mr. Deputy Chairperson: . . . only from those federal Liberals.

Mr. Reid: Yes, we will not get into that debate, Mr. Deputy Chairperson.

Can the minister indicate what type of funding support, which is, as the minister indicates, due to fade or reduce over a period of time, what type of time period are we looking at, and what type of funding initial amounts are being considered?

Mr. Findlay: Mr. Deputy Chairperson, there is no perceived time period that is fixed, at least not at this point, in terms of when we move away from the income support system that would be needed to make the airport viable. The annual loss right now is certainly $1 million or above, and that loss will not move to zero until the revenues from the movement of freight or people is able to pay for it, and our expectation is it may be at least 10 years before there is a balanced book in terms of income and expenses with the airport. But there is not a two‑year or five‑year or seven‑year time frame when it says it must balance the books. The principle on the lease says, as the volumes are able to pay the expenses, the degree of income support will be decreased, but only will be zero when the volumes warrant it to be zero. It could be, as I say, 10 years or more, under current projections.

Mr. Reid: The federal government, by way of Transport Canada, I believe, picks up a portion of those costs, or do they pick up all of the costs that are associated with the airport? If the airport switches to an authority, will the City of Winnipeg and the province then be responsible for any of those anticipated costs?

Mr. Findlay: In the process of striking this agreement with the local airport authority, the federal government remains 100 percent responsible. There is no offload of subsidy to the province or to the city or to anybody else. They have paid 100 percent of the income shortfall to this point and will continue to pay 100 percent in the future.

Mr. Reid: We have recently heard about the Vancouver Airport Authority having to charge, I think it is an $8‑‑

An Honourable Member: Ten dollars.

Mr. Reid: A $10‑dollar gate fee for their passengers that are moving back and forth, and it is my understanding that that money is going to be used to upgrade the facilities including the runways at Vancouver International Airport. When I talked about the apportioning of the costs here earlier, I had the Vancouver situation in mind. I am wondering, looking at the Vancouver experience, has the commercial air traffic out of that operation had to pick up any of the costs as obviously the travelling public would have to pay through their $10 gate fee?

Mr. Findlay: Mr. Deputy Chairperson, the local airport improvement levy that is in place in Vancouver, our knowledge is that it is only charged on the passenger list. There is no similar levy on the cargo that moves in and out of Vancouver, and it is a levy designed to collect funds for additional runway or runway improvements. But the member is looking for the answer as to whether cargo is paying too, and at this stage we are not aware that they are.

Mr. Reid: Mr. Deputy Chairperson, that is a concern that I have, because there is potential for that situation to occur here at the Winnipeg International Airport as well, and if you have a hypothetical situation where you have 50 percent of the aircraft commercial and 50 percent passenger and the passengers are picking up 100 percent of the costs, then you do not have a fair apportioning of the cost associated with the operation of the airport.

So it would seem to me to be reasonable that we have some policy or program in place that would say that we should have a fair balance struck between who is going to be responsible for picking up the costs of maintaining and operating and any improvements for that operation. I hope the minister will take that position, and maybe he can indicate to me if he would be in agreement with that, and, if so, would he be willing to take that position to his meeting with the transport ministers?

* (0950)

Mr. Findlay: Mr. Deputy Chairperson, I certainly reflect the thinking of the member. I have always been an advocate that, if you are running a facility, there are always going to be upgrades that must be done. You know you never know what they will be. If you are running in a relay, you do not know whether it is the roof or whether it is the ice or whether it is the change rooms. In this case, you do not know whether it is going to be the runway or it is going to be the terminal facilities for passengers or whether it is the cargo facilities.

You should always set up a capital replacement reserve, and everybody should contribute. All the users in some agreed apportionment fashion should pay. Cargo certainly does pay landing fees and this sort of thing, and certainly passengers pay fees in their tickets. If you are going to put any special levy that is towards improvements, everybody should be participating and putting money into that pot. You might have certain passengers or certain companies that are moving cargo for two years and not for the next 10, and whenever you are involved in using the facility, you should be participating in setting up that reserve so that the people in charge can have the resources to make the appropriate decisions whenever a capital improvement is needed.

The decision as to how you do it, in my understanding of the process, would be a local decision. If Winnipeg or Edmonton or Calgary or anybody else decided they wanted to set up such a reserve, they would decide who would pay and how much. It would be a local decision. That is good. It allows you then to decide how much you can charge and still remain competitive with keeping your customer and cargo activity high, and still prepare for the future. So it is a balanced business decision, controlled and conditioned by the marketplace.

I believe everybody should contribute to that because everybody benefits in the long term in terms of any capital improvements that are done.

Mr. Reid: Well, I am not sure if it is a unique situation here in Manitoba where we have the Public Utilities Board that has the powers to review other fees set by Crown corporations, whether it be MTS, Manitoba Hydro, Centra Gas.

I am just wondering if there would be a role to play for the Public Utilities Board here in setting any fees that may be required by way of people or either passenger or commercial interest that would use the airport, because the minister has not indicated to me whether or not he would be willing to take this matter to his federal minister's meeting in July.

Mr. Findlay: Mr. Deputy Chairperson, there is no legal responsibility or right for the province to regulate those fees. If there is any legal responsibility, it is national. You know you mentioned PUB. He knows in the telephone area we used to do the regulation provincially; it is now done nationally because decisions are made there. If you have provincial decisions made in isolation of other provinces, you have an unlevel playing field for all the players, and this is another example of where national decisions should‑‑there should be uniformity across the country in what those decisions are. So it is a federal responsibility in the regulatory sense.

Mr. Reid: I understand that the airports are federally regulated, but since you are moving to an airport authority which is going to become locally operated, and even though the federal government is going to be responsible for the supporting costs over a period of time, once those fade out, then there is going to be, from my understanding, no responsibility of the federal government to that operation outside of the safety aspect and some other regulatory matters dealing with tower controls, flight services. It would seem to me to be reasonable to have the Public Utilities Board as a public body that could oversee any fees that may be charged.

If we are not going to talk with the federal minister about this, I mean, we are in the negotiation stage right now; it is my understanding that the final contract has not been signed for the airport authority. This would seem to me to be the appropriate time, while we are in those discussions, to move in a direction of making some recommendations on what we would like to see by way of protection for the public.

Mr. Findlay: Mr. Deputy Chairperson, my answer is not much different than the previous answer, that we have no rights or responsibilities in terms of setting fees. It is simply a national jurisdiction. I could lay out a scenario for the member that if you had provincial regulation but, nationally, the federal government carries the entire liability, and if the fees charged never allow the operation here to be financially viable and they constantly pick up the shortfall of the operation‑‑they carry all the liability, and yet we are allowed to have regulatory control to keep the cost down‑‑they would never accept that.

I think it is fair to say that probably the auditors, the federal auditors that are looking at the situation, would say, the federal government has to have a fair bit of say in what decisions ultimately come from the local authorities because the federal government wants the authorities to move to more market viability, more user‑pay principle, and yet if they allow them to make decisions to keep fees down and never allow you to get there, they are defeating their own initiatives.

So I think it is fair to say, if there is regulation or ultimate decisions, there is a federal responsibility. We always want them to have 100 percent responsibility at the end of the day in terms of economic shortfall. So they will never give us authority or rights to step in and provincially regulate, and probably we would never want to do that and then say, well, we will accept some liability for the regulatory decisions. We just cannot afford to get into that financial dilemma.

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The process of broad representation on the board allows a lot of public input in the process of making those ultimate decisions on what the fees will be, but I think it is fair to assume that at the end of the day on certain kinds of major decisions the federal government through their Treasury Board will still want an opportunity for ultimate capacity to say no.

Mr. Reid: I will not carry on any further on that point, except I will just conclude on that part with the comments that since the minister has already indicated that the federal government's share of funding for the operation of the airport to cover the losses are due to be eroded over a 10‑or‑so‑year period, and after that, since we are looking at signing a 60‑year lease for that operation, we have another 50 years after that where there are a lot of things that can happen in that 50‑year span, the federal government would obviously have no financial vested interest in the operations there for any of those losses. If that is the case, that is why I asked the questions relating to some process that would oversee or regulate in some way the fees that could be charged and apportioned to those that utilize the airport services and facilities.

I will leave that with the minister, and I hope that he will look at raising that with his federal colleague when he meets with him in July to make him aware that we have some concerns on that.

Mr. Findlay: I just want the member, Mr. Deputy Chairperson, to understand very fully that even though there may be a desire to move to balancing the books by fees charged in 10 years or whatever‑‑I just use that as a ballpark figure‑‑the agreement that would be signed, if it is whatever number of years, if it is 60 or whatever it turns out to be, the federal government will always have a responsibility for any shortfall. You know, we might balance the books at year 10 and at year 15, and we are in terrible deficit. They would always be there to balance the books. They would always be there to supplement the income shortfall. So they are always there as a backstop responsibility financially, and I think that is good for our protection.

You never can predict the future. Once you get to a balanced book, it does not mean you always stay there. Things can negatively happen. They have to remain, and we would always want them to remain, and there is nothing on the table right now that would indicate they would not remain there as the ultimate responsible entity from an economic point of view.

Mr. Reid: That is an interesting concept then, Mr. Deputy Chair. The operations would be turned over to private interest for a 60‑year lease arrangement, and then they will have no true responsibility for any of the operating losses or any of the capital investment in those operations. It seems to me that they have the best of both worlds, whoever is going to be utilizing the facilities, whether it is the passengers or the commercial aspect. Neither one of them will have to cover any of those losses if the federal government is ultimately responsible for those losses.

Mr. Findlay: Well, let me give it to the member in a different angle. I mean, just think about it, if you are asked to be a member on this board representing organized labour and they say, by the way, once you sign in you are responsible for losses, you would never sign in as a board member. So the board has to be protected in that respect. It cannot be held responsible financially for any shortfall that might happen.

You can have the wisdom of Solomon and still not make this fly. The broad representation of the board can only be effective, can only have the personal freedom to come forward if you know that you will do your best job, and of course if you do not do a good enough job you might get replaced by the people that nominated you or the people that appointed you, but you can never think that the people on the board are responsible to pick up the losses down the road. I mean, why would we ever start the process? We would never come forward.

I think there has been an episode in Ontario where directors of companies‑‑a person accepts an appointment as a director, and the thing goes down, and then he can be personally sued. I mean, that is an untenable position to get yourself into as a citizen. We want citizen input, so you have to give them protection, so at the end of the day, even though some decisions may not work out right, there is a backstop in terms of their financial liability.

Mr. Reid: The minister is right. It is exactly what we want. We want citizen input, which to a large degree, we do not have.

Mr. Findlay: But they cannot accept liability.

Mr. Reid: I am just worried that the taxpayer is still going to be on the hook after this moves into private hands and that the government is not going to have any direct say in any of the day‑to‑day operations, but I will not belabour that.

My last two questions here relate to the salaries of individuals who are going to be sitting in on the airport authority, any of the paid staff. Is that going to be public information? Also, the agreement that Transport Canada is going to sign with the airport authority people, is that going to be confidential or is that going to be released to the public?

Mr. Findlay: Mr. Deputy Chairperson, in terms of the new accountability principles‑‑in terms of the projected ones, not the approved ones, but I do not imagine whatever is approved would be much different than this‑‑annual public meetings must be held within 135 days of year‑end. It specifies a 30‑day public notice and minimum content of public meeting reports, including remuneration of directors and officers. So that would be public information at the annual meeting.

Mr. Reid: And the agreement, the final agreement‑‑

Mr. Findlay: The final agreement between the airport authority and the government? [interjection]

The situation that exists at this point is that there are agreements with four airports and there are intended to be agreements with many other airports. I guess the federal government's position is that each agreement is a commercial agreement, and it is fair to say, they are not going to be standard. Naturally, they are trying to strike the best deal they can with the people they are dealing with at each jurisdiction. So they feel it is a confidential agreement between each and at this stage not likely wanting them to be public.

In terms of commercial content‑‑in broad detail, I cannot imagine why it would not be, but there is always some confidential business information. The federal government is there to negotiate what it can, and every situation is slightly different. If you made every one public, and I am almost defending them now, you can see everybody would say, well I want every advantage they got and then I want these other ones.

This is an evolving area.