(Concurrent Sections)

RURAL DEVELOPMENT

Mr. Deputy Chairperson (Ben Sveinson): Will the Committee of Supply please come to order. This afternoon this section of the Committee of Supply meeting in Room 254 will resume consideration of the Estimates of the Department of Rural Development.

When the committee last sat, it had been considering Item 7.(b)(3) on page 132 in the Estimates book and on page 84 of the yellow Supplementary book. Shall the item pass? The item is accordingly passed.

7. Rural Economic Programs (b) Rural Economic Development Initiatives (4) Programs - Capital $3,700,000.

Ms. Rosann Wowchuk (Swan River): Mr. Chair, I would like clarification. This is the capital funding out of REDI funding, or is it a new area of funding that we have not seen before? If so, how long has the program been in place?

Hon. Leonard Derkach (Minister of Rural Development): Mr. Chair, this is the area through which we fund such things as the additional amount for the sewer and water of $2 million, the development support under the REDI program of $750,000. We have added $200,000 to the conservation districts which is reflected in this number, the Mobility Disadvantaged Program of $50,000 and the infrastructure development under the REDI program of $700,000.

Ms. Wowchuk: Mr. Chair, I am sorry, I have not quite understood. We talked about sewer and water yesterday under the REDI initiatives on the page previous. Is this just the funding for the capital projects? If this is the case, is this the funding that the communities, particularly I have mentioned the community of Birch River which is looking for funding for a sewer project--would they have the ability to apply under this lottery support for capital projects to get sewer into their community?

Mr. Derkach: Mr. Chair, $2 million of the Sewer and Water program was a new component of the Sewer and Water program and we had talked about the global amount previously. This is where the $2 million is reflected.

Mr. Deputy Chairperson: 7.(b)(4) Programs - Capital $3,700,000--pass.

7.(c) Unconditional Grants - Rural Community Development $5,000,000.

Mr. Clif Evans (Interlake): Mr. Chair, first of all, could the minister provide myself, and I think some of our other rural members--I can also pass on any information through my office--I would appreciate if he could provide for me a fully detailed list of all the municipalities in writing like he has, like the department has previously, of the allocations to each community from this fund.

Mr. Derkach: Mr. Chair, I will endeavour to supply a list of the municipalities. I think the question was how much each had received under the program. I will supply that to the member.

Mr. Clif Evans: Would the minister indicate to us just how the formula, the amount of funds that go to the different communities is arrived at?

Mr. Derkach: The basic grant to each community, Mr. Chair, is $5,000. In addition to that, each community gets a per capita amount. The per capita amount is arrived at by taking the amount of money and dividing it by the number of people in the municipalities as a whole. So it is a basic grant plus a per capita.

Mr. Clif Evans: Has the per capita changed at all in the last couple of years?

Mr. Derkach: Mr. Chairman, in 1993-94 the basic amount was $5,000 plus a $5.70 per capita amount. Once the total figures were in we also made an adjustment to every municipality, and that was an additional $2.81 per capita.

In 1994-95 the basic grant was $5,000. The per capita is $9.14, which is a significant increase.

Mr. Clif Evans: Mr. Chairman, I think this has been a contentious issue on this grant with the municipalities. Over the past couple of years they have been requesting, through resolutions and through meetings with the minister, meetings with ourselves, that the portion of the VLT funds be increased to go back to the communities. The government has not responded to those requests.

I am wondering whether the minister is endeavouring to convince his colleagues that the request of the municipalities should be looked at very seriously and considered. Is there any hope that we will increase the funding through this fund?

Mr. Derkach: Mr. Chair, it has been looked at very seriously and it had been considered when the municipalities came forward with their request. The member should know that no other province in Canada right now shares its VLT revenues with municipalities. We are the only province in Canada to share our VLT revenues with our municipalities with no strings attached.

We share 10 percent plus an additional million dollars for small municipalities who basically cannot--and we do that because they are more unlikely to access large amounts of REDI funding. In addition to the unconditional grant that goes to each municipality, we allocate a significant sum of money to Grow Bonds, to REDI. In addition to that we put money into health, into education from lotteries. Therefore there is a large amount of money that goes back to our communities from the whole lotteries pool.

In terms of increasing the payment from 10 percent, there are no plans at this time to increase that beyond the 10 percent level.

Mr. Clif Evans: Mr. Chair, I hope that we will be having a full review of the Crown corporation itself and just see where all the monies are coming from and going out to. I think the concern for some communities out there, and I have heard this quite often, is that even though the VLT money is there towards health and everything else and towards rural development projects, Grow Bonds, REDI program, a lot of communities cannot, because of the availability of their own share of money, get into some of these programs through the Rural Development department because they do not have their share.

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So communities are saying to me, for those of us that are a poorer community, a poorer municipality or jurisdiction, and are obviously putting out an awful lot of money from our own area, it would help us just as much, if not more, if the amount sent back to the communities was increased. It would probably help their financial situation a lot better, and they would be able to do some of the smaller things that they would not have the money to do otherwise.

Mr. Derkach: Mr. Chair, the member should understand also that to help smaller communities we have increased our sewer and water program from the lotteries program by $2 million. Again, that is money that is going back to the rural communities from the lotteries program.

When the member says that there are smaller communities that have difficulty accessing the money, that is precisely the reason why we allocated an additional amount of money so that smaller communities would have unconditional dollars that they could use for accessing other REDI programs, because that is their money.

The REDI programs and the Grow Bonds programs mean that it is not the community, it is not the municipality that has to participate. In fact, the participation comes from projects and proponents that are going to invest in the community and invest in a business, so there is ample opportunity for anybody in the province to participate.

It is one of the most flexible programming areas that we have in government in terms of people being able to access those dollars for development in their communities. Right now I think we have over 200 projects in the province where monies from the REDI program have been accessed. I can tell you that, if you were to look at the map in terms of the distribution, we have projects right from one end of the province to the other. It is not restricted to one area or the other.

We also have introduced, as the member knows, the microloan program, which again is going to allow every community to access a pool of money that they in turn can loan out to small businesses in their communities. This is a community works program. It is one we feel that is important because again we are putting the money in the hands of the community and the hands of the grassroots to be able to lend out to businesses that they feel are going to be successful.

So, as we evolve in this whole area of economic development in rural Manitoba, we are constantly putting more dollars to work in rural Manitoba, into the hands of organizations in rural Manitoba, so that they in fact have access to not only one program but a fairly large menu of programs, larger than anywhere else that I know of. As a matter of fact, we have other jurisdictions across Canada that are looking at our programs, and even in the United States, I might tell the member, that have looked at our programs and are looking at adapting some of our programs to their jurisdictions.

Mr. Clif Evans: Mr. Chairman, the minister indicated that there is a million dollars for those communities that cannot access funds as readily as others. Is there a criteria for those communities? Is there VLTs? Are they Northern Affairs communities that do not have any establishments in them? Who accesses this extra money?

Mr. Derkach: Every rural community in Manitoba.

Mr. Clif Evans: You are saying that there is an extra million besides what is under the Unconditional Grants.

Mr. Derkach: Yes, in the last year we added a million dollars from the REDI program to the Unconditional Grant program so that those municipalities that are small could have a share of that pie, if you like, but every municipal corporate entity receives that money.

Mr. Stan Struthers (Dauphin): I am interested in knowing how would people in my constituency go about accessing funds through the Community Works program then? If I have somebody come to my office in Dauphin and ask me how to get involved in this, what should I be telling them?

Mr. Derkach: The member should tell them to contact our regional office. We do have a regional office in Dauphin. We have professional staff at the office in Dauphin. We have an economic development officer there who can certainly direct them in terms of how they can establish a community development corporation, which is what is required to be able to access the money.

This program is not up and running yet. We are working on the regulations with respect to the program, and we anticipate that that will be ready for announcement in the fall.

Mr. Struthers: Could you give me kind of an idea of what types of groups could access the money?

Mr. Derkach: Mr. Chair, the target for this money is the community development corporation, and the reason I say that is that we have asked that every community contribute something to the pool of money as well. One way they can do that is form a community development corporation which then enables them to levy up to one mill within that jurisdiction for economic development purposes, and that is the money they can use to contribute to the pool.

That money is also meant to bring in the round tables that we have in our communities because through the round tables we can do some of that economic development. We want to involve our chambers within our communities. Those I think are very important entities, and, of course, if there are what we call industrial development committees in communities, those can be used.

We do not want to see yet another layer of organizations developed in a community. Rather, we are asking communities to use the organizations that they now have, including the round tables, and then to form their structures appropriately to be able to access the money.

Once they have accessed the first round of money, which is $50,000, and they have matched it with their portion and have lent it out successfully in a community, there is a further amount of money that can be accessed by these communities so they can continue their operations.

Mr. Struthers: Could a town council or an R.M. council identify a specific project and have that body pass a motion ratifying them to do so and then approach through community works?

Mr. Derkach: The way the program is meant to work is that the community development corporation or the entity that is going to have this money available to it will have applicants come forward to that committee. That committee will make the decision as to how much money and whether or not they will lend the money to that entity. It will not be government who will be making the decision in that respect. Rather, we want to vest more of the authority in the hands of the community.

Ms. Wowchuk: Some of the groups that have suffered in their fundraising are service clubs and people who run bingos to support service groups. Since the video lottery terminals came into rural Manitoba we have heard many of these people say they cannot raise the amount of money they used to to support these services. They are important services that they provide.

This new program that is being set up, will it be available or will the service clubs be able to apply to continue to operate their committees? I think about a number of halls in rural Manitoba who are facing difficulty because they cannot raise money. Will they be able to access under this program?

Mr. Derkach: No. This money is meant for economic development. It is meant to be accessed by small business, new business, home-based business, the manufacturing sector and that sort of thing. This is not a Community Places slush fund kind of approach. This is meant for business development so that community can attract employment into that community for the benefit of the community.

Although I have heard the charge many times even from my own area that we are having difficulty fundraising, we are finding that bingos are up significantly in the province, right through the province. What is down, apparently--and this is from the reports that I am getting--are the Nevada ticket sales, or whatever they are called. I am not too familiar with these. I can tell the member that our minister responsible has shared extra revenue with these entities who sell these tickets to make up that shortfall, or to help to make up some of that shortfall.

Mr. Clif Evans: Mr. Chair, this new program, and I remember the announcement during election time--and I am sorry, please correct me if I am wrong on my thinking. Under this program you are asking groups and organizations in a community to pool together financial resources to have available so that someone, a business from within that community can come to them for dollars, for assistance, and this group would then approve that application, having their own funding in place, and then come to Rural Development, to the department, asking for the other 50 percent of what they are going to provide. Are you creating another banking system within the community doing this?

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Mr. Derkach: No, we are not creating a banking system at all, Mr. Chairman. What we are doing is we are giving a community entity that has been organized, an organization, a pool of money and we are asking them to contribute to that pool of money. That pool of money is $50,000 per community. The community is required to put in $25,000. Then the community can lend out that money to applicants who come forward for whatever business that community thinks is important to that community. It may be a shoe repair business, it may be a manufacturing business, it may be whatever business that community wants to lend its money to on a repayment basis.

Now if they lend out that first $75,000, the community then can apply for another tranche of $50,000 that will have to be matched on a one-to-one basis. Again, they can use that money to lend out to businesses within that community, new and expanding and existing businesses.

Mr. Clif Evans: Basically, I said exactly the opposite of what the minister is saying, of course. The minister is saying that the government is dangling the money out there; it is having it made available. Again, you are going to get these communities to come up with $25,000. Right?

Well, that is my question. How many communities now--and my question earlier in saying that the VLT grants are not sufficient, I have resolutions here from UMM and MAUM requesting that and saying that because of the different troubles that they are having, they cannot access monies from the government? Again, you are saying that you are going to offer that $50,000 to anybody in the province, municipality, jurisdiction, who can come up with $25,000.

Who is going to administer all the financing on that? Who is doing all the work on that?

Mr. Derkach: The community will. This is what the round tables have been calling for. If you will read the requests that have been made by municipalities and community round tables, they have been asking for an ability to access a block of money that they can then in turn lend out to businesses. They have no difficulty with the concept of contributing some of their own dollars to the concept.

This concept is not something that we have dreamed up in the department. This is a concept that was originated 25 years ago by the community of Winkler which, although it is somewhat different, formed a community development corporation, levied a quarter of a mill on their taxpayers and used that quarter of a mill, the money that was raised by that quarter of a mill, to lend out to businesses that they wanted to attract to their community. That is basically how Winkler started to grow.

What we are saying is that model was so successful that we think it will work in all of Manitoba, and that is what community round tables are telling us. They are the ones who are coming forward and are asking us to invest with them a block of money that they can then, in turn, lend out, and they will do the administration of the money and the loans.

Mr. Clif Evans: Mr. Chairman, I appreciate what the minister is saying, but I hope he can prove me wrong. Not only are you providing the opportunity for a municipality at their wish, if they want to do so of course, to add taxes to their community, if their community is already overtaxed on any monies, or asking anybody to put in money, I do not know how many communities can do that.

Mr. Derkach: Mr. Chairman, we are only responding to a request that has been made to us by round tables and municipalities, and the municipalities have a variety of sources that they can draw from. One is that they can draw from the VLT money that they are receiving from the province. They can add to that money by levying, by forming a community development corporation and levying a portion of a mill to help economic development in their area. There are municipalities that have surpluses right now in a general reserve account that can be used, as well, if they form a community development corporation. So, basically, municipalities have sources of money that can be used for this purpose, and we will see.

We know that the program is a new one for Manitoba. I do not know of a program like that in Canada either, but it is not unlike Grow Bonds or REDI. We will launch the program. We will see how the municipalities and communities respond to it. If there are adjustments that are required down the road, as the program matures, we will certainly be flexible and available to make those changes as we can afford them and as the needs arise from the communities.

Mr. Clif Evans: The minister says it is not the same kind of programs as Grow Bonds or REDI or whatever. Now these groups, once they have done their lending out or funding or assisting an organization or small business, if this small business still has some extra money, if and such they do, would they still be able to apply through the REDI program in line with the business? Besides this other program that you have got, can they continue on?

Mr. Derkach: Yes, Mr. Chairman, this program is in addition to the nice menu of programs that we have out there for rural Manitobans today.

If you look at all the programs we have out there, we have the Grow Bonds Program, we have the REDI program, we have the REA program. Under the REDI program, we have the MBA Consulting Program, we have the Development Support Program, we have the Feasibility Studies Program, we have a Green Team program, the Partners With Youth program and the list goes on and on.

This is yet another program that has been added to try and meet the needs of small rural communities that are struggling to rebuild their economies. We are simply responding in a way in which we hope is a positive response to the needs that have been expressed to us by municipalities and by communities.

I might tell the member that right now we are getting a number of inquiries from municipalities about how soon we can launch this program, because this program is targeted for home-based and small businesses that cannot access funds through the traditional banks and credit unions. We have many of those out there and they are in all of our communities.

So when they cannot access those dollars from financial institutions, they can go to this development corporation or this round table and request they be funded or that they be supported through a loan from this organization which is community based and nobody knows a business in a community better than the people from within that community. So we think it will work far better than having people from government come in and make the assessment because people in a local community know the individuals. They know the businesses. They know generally what will work and what will not in a community. They know the needs and they can assess these, I think, in a very practical and a very pragmatic way.

Mr. Clif Evans: Mr. Chairman, let us hope this program does work. The minister rattles off all the programs that they have under REDI, and I certainly hope most of them will work for all the municipalities, not just for the ones that can afford to get involved in some of these programs.

The minister indicated that it is another way--he has a program that provides provincial loan guarantees to banks and credit unions and now he is coming up with another program that is going to provide the same thing. I just hope these programs do work for all the communities.

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Mr. Derkach: Well, I think, Mr. Chairman, there is plenty of evidence out in rural Manitoba that shows these programs that have been introduced do work. Again, this is a program that is designed for the small business, the home-based business. We are starting out with a maximum, a cap on the amount of money that can be lent out.

I am a little disappointed that the member is very pessimistic about it without even seeing the program. I am telling the member that we will launch the program. If the communities come forward and do not use the program because they see it is not effective or it is not practical for them then we will take another look at it, but I think it is at least worthwhile trying to give the community at the grassroots level the autonomy and the authority to be able to use these funds in a way they see fit.

Mr. Clif Evans: Mr. Chair, I just want to correct the minister on one comment. I am not pessimistic about any programs for rural Manitobans. I am far, far from being pessimistic. I am very optimistic. I must say, just to remind the minister, just to remind him, that in 1983, because of my optimism for rural Manitoba and because of my wish to be in rural Manitoba, I have lived in rural Manitoba and I am very optimistic. I do hope some of these programs will help somebody and everybody throughout Manitoba.

Ms. Wowchuk: Mr. Chair, as the minister has indicated, the program has not been spelled out yet and we will look forward to seeing the details of it. He says the program will help smaller communities that are not able to access funds right now. My question is, if you have a municipality or LGD--and I will use for an example the LGD of Mountain which has a low tax base--would a community have to divide itself off similar to a conservation district where then they would be able to draw on that tax base if the municipality was going to be able to levy a mill rate for them to raise some funds, or would that fund have to be levied across the whole municipality?

I am thinking of some of the smaller communities where they might want to raise some money and wonder whether that has been thought through as to how these small communities within a municipality would be able to access the funds?

Mr. Derkach: It can be an entire municipality, or it can be a portion of a municipality, or it can be more than one municipality, as long as two community development corporations do not overlap where taxpayers are levied taxes for this purpose for two jurisdictions. So it can be one, it can be part of one, or it can be more than one, as long as they do not overlap.

Ms. Wowchuk: I am correct to assume then that there has to be a community development corporation put in place first before any of this can take place?

Mr. Derkach: A community development corporation is required under The Municipal Act in order for the municipality to be able to levy any taxation for economic development purposes. That is the only avenue a municipality has to be able to levy any taxes for economic development purposes so that is the reason why we reference the community economic development corporations.

Ms. Wowchuk: The minister indicated that this was a program to help some of the people who access funds, who have not been able to access before, and one of the areas where we have some of our poorest people. People with the least funds are in the aboriginal communities and in the Northern Affairs communities. I realize that Northern Affairs communities do not come under this minister, but I wonder whether there has been any thought given to whether this funding will be available to aboriginal communities or bands. If they have the ability to match, will these funds be available to them as well?

Mr. Derkach: Mr. Chair, we do not fund any projects on reserves so reserves will not qualify for this funding. In northern Manitoba we have the CEDF, which is being accessed by northern communities. In addition to that, this will apply to northern communities as long as they are not under federal jurisdiction.

Ms. Wowchuk: I would ask the minister, although these communities do not come under this government's jurisdiction, the aboriginal people are residents of this province, and I would ask that he take back to his cabinet the consideration to look at some ways that we can help, through lottery funding, if there is a way to help.

Again, the minister talked about very small projects, individuals who might want to be starting a home business to provide better services in the communities. I do not think there is a way for people in the aboriginal communities who want to start these home businesses on their own right now to access funds.

All I am looking for is asking the government to give consideration to that in some way that we might be able to help with this as well. In the long run, if we help get some businesses going and create economic growth it only helps for the betterment of all the people in Manitoba.

I realize this is crossing jurisdictions. The minister is going to come back right away and say this is a federal area, but I know of people in my constituency who would like to get a small business going. If there were ways to help them, then I would hope the funds would be accessible to them as well.

Mr. Derkach: Mr. Chairman, I am surprised because the member's own previous government held the same view, that communities that were the responsibility of the federal government had to be funded by the federal government, not the province. I think that is fairly clear.

In addition to this, we have now struck gaming agreements with many of the reserves where the entire funds that are raised through VLTs are left with that community, so they have ample dollars to be able to devote to all kinds of economic development initiatives. That is not happening. It is up to those communities then to use those dollars for those purposes.

I am not going to sit here as a minister and consent to allowing our dollars, our scarce provincial dollars to then be used in areas which are the exclusive responsibility of the federal government. I think it is the federal government's responsibility to go into those jurisdictions and to launch programs that are going to educate and are going to allow those individuals to involve themselves in businesses.

We have the Community Futures organization in this province. We have a federal jurisdiction that is also participating in the province in economic development initiatives in nonaboriginal, or in off-reserve communities. By the same token, they can do the same on reserves. It is their responsibility, and we will not enter into any activity because that is out of our jurisdiction and we have far more needs outside the reserves than we can meet as it is today.

Ms. Wowchuk: Mr. Chair, I was not asking the minister to overtake on federal responsibilities, but there are aboriginal people outside who are living off reserve who have difficulty. What I was asking about was whether they are able to access the funds, how they would go about it, if there was a way for the provincial government to work with the federal government and encourage the federal government to help some of these small businesses get started, because we have the need for economic development throughout rural Manitoba and in the North, whether it is in the aboriginal communities, whether it is in the farming communities we have to look for ways for economic growth.

I hope the minister would not take such offence when I raise the issue of looking for economic development. I am looking for a way that we might be able to work together instead of just saying, well, that is a federal responsibility, and we have already given them money to video lottery terminal revenue. How is it that we can work together so that we will have economic growth and prosperity in all of rural Manitoba, be it on a reserve, in a Northern Affairs community or in a farming community or in our small towns that are dying? I think it is a matter of us working together to try to help out, not just to say, well, no, this is not our responsibility so we are not going to do anything with it.

I was looking to the minister for some leadership to say, yes, although this is not our responsibility, we are going to work with these communities and encourage the federal government and work hand in hand for the betterment of all of Manitoba.

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Mr. Derkach: Well, Mr. Chairman, I have to indicate to the member that we do work with the federal government with the Community Futures organizations, with Western Diversification for all of Manitoba. Those individuals who do not live on a reserve can access money whether it is in the northern jurisdiction through CEDF or through any of our programs. They are not restricted from participating, but I have to tell the member absolutely and unequivocally that on reserves we do not have any jurisdiction. We have given over all the lottery funding that is generated on reserve to the reserves and we cannot participate because it is federal jurisdiction and that is all that can be said about that.

Ms. MaryAnn Mihychuk (St. James): Mr. Minister, my critic area is actually Energy and Mines, so I would like to ask for communities that go through boom and bust cycles and for some communities it has been very tough.

Mr. Deputy Chairperson: Order, please. Can you pull your mike up a little bit closer so we can hear you.

Ms. Mihychuk: Can you give us an idea of what opportunities there are for communities such as Snow Lake and Lynn Lake where they have gone through some very hard times economically?

Mr. Derkach: Well, I can certainly respond to that question and I am glad the question was asked because it does give us an opportunity to show that we have worked with the northern communities. I have put a lot of my own personal energy into making sure that I am available to the northern communities because they are a distance away, especially the single-industry towns.

Just by way of history, Lynn Lake went through a period of time during the former administration and then it carried on into our administration where the mine was closed down. People moved out of the community, left behind their homes and the homes began to be looted and destroyed by vandals and so did the businesses, and the community was in shambles. We came to the aid of the community, along with the federal government, to launch a program of restoring some of the homes that could be restored, tearing down those that were beyond repair. It was actually the first Welfare to Work program in the province, I believe, because we employed people who were on welfare and people who were unemployed. We had in that first round of work, I believe, 16 or 18 people working throughout the summer restoring the homes and tearing others down, salvaging the lumber.

The program was so successful that in partnership with the community, we held a bit of a thank you evening for the people who had come forward. I have never seen so many thankful people who actually found that they were happy to be off the welfare role. They were doing something that was benefiting their community. They were taking pride in their work.

Out of those 16 people, I believe, most of them are today employed either in the mining industry or in some other occupation. So the experience was an extremely positive one. We were able to access some dollars from the Mining Reserve Fund, and we were able to use some money from our REDI program. We were able to participate with the community to do that.

So where there are single-industry towns, we are constantly talking to them about looking ahead to the time when the mines close down, so that they can look at other opportunities, whether it is in tourism, which is fairly important in the North, or some other type of industry that will sustain their community as best as possible once the mine has been closed and the industry of that community disappears.

Ms. Mihychuk: Can the minister tell me how much money is generated through VLTs through a community, for example, like Snow Lake, and how much money would go back into that community? Does the department have that type of information available?

Mr. Derkach: Mr. Deputy Chairperson, I do not have that kind of information in terms of how much money is generated by the community, but I can provide for the member the amount of money that goes back to a community like Lynn Lake or Snow Lake. I do not know if I have the information with me.

The community of Lynn Lake, in 1994-95, will have received $12,623 under the VLT support program. The community of Gillam, for example, will have received $22,000; Grand Rapids, $9,625. The Snow Lake community received $19,606 under the community development program. In addition to this, the communities also have received dollars from REDI, and there have been no Grow Bonds in the northern communities.

I might also add that we have provided communities like Snow Lake and Lynn Lake, Lynn Lake especially, with financial assistance to do a strategic plan for their community for the future so that in the event that the mine closes down, they have begun the process of strategically looking at their strengths and where they can see their future after the mine leaves. So we have participated in that way with the communities, as well.

Ms. Mihychuk: The minister was talking that the grant is, as I understand it, based on a lump sum plus a per capita amount that is given to each municipality or community. Does this not actually accentuate the boom-bust cycle in mining towns, for instance? When times get tough the amount of revenue or resource they get from VLT revenues also falls, and when times are good and there are more people living in the community, they get an additional windfall. So instead of trying to moderate the boom-bust cycles, and people losing their homes and then coming back, this government is making things worse.

Mr. Derkach: No, Mr. Chairman, it is not making things worse because what we do is--to account for some of the smaller communities we have put in a base grant first and that is taken off the top, and then the per capita comes in as a secondary portion of the grant that they receive. In addition to that, when a community's mine leaves, there is a mining reserve that can be accessed to help that community along when its population goes down.

In addition to that, as I indicated to the member, we are working very aggressively with these communities in the North. We have a regional development corporation in the North which looks after a number of communities in northern Manitoba in terms of economic development opportunities. We have worked with communities on a strategic development plan for their area, so basically we are trying to do what it is we can to ensure that these communities are sustainable even after their resource runs out.

Ms. Mihychuk: Can the minister share with us the number of communities that receive over 25 percent of the VLT revenues that are generated in those communities? You indicated that it works out to 10 percent plus. How many communities are actually receiving more than 10 percent?

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Mr. Derkach: Well, there are no communities that receive more than 10 percent in terms of the unconditional grant that is given to them, but I could not tell the member at this time how many communities would have received dollars from REDI programming. We would have to do a calculation of that. I do not have that number in front of me right now.

Mr. Struthers: I was a little bit surprised, with all due respect, to see the minister get his nose out of joint on the question of jurisdiction over federal and provincial jurisdiction in the area of reserves. The provincial government, it seems to me, spends money already on health, education, social services and a number of things on reserves. I would think you would want to ease the burden on the provincial government of the amount of money that you spend in those areas.

It seems to me that connected with that are the high unemployment rates on reserves. I am going to say something nice abut your community works program, after I said what I just did, but it seems to me that the community works program has a possibility of providing employment, which would ease the burden on your own rolls when it comes to putting out money for health, education and social services. That is why I was a little bit surprised to see you go on that tirade about the federal government.

What I want to point out with the community works program though is that I can see it working very well in communities such as Winkler and probably in my own community of Dauphin, where there is somewhat of a tax base to draw from and where there could be surpluses there already to put up the $25,000.

I want to deal with those communities first and then get to the other ones later. If the community grabs the $25,000 that you are putting out for them and comes up with $25,000 of their own, are there guidelines from your department giving some sort of guidance to those communities on how to go about choosing which projects qualify for the $50,000 overall?

Mr. Derkach: Mr. Chairperson, we will set some regulations with regard to the community works program, but we feel that the expertise that is available in many of these communities is far better than external expertise of the department. We would have to say that we would allow communities to decide which businesses they should invest in. These are not large sums of money. The cap on the largest sum of money they can lend out to a single business is $10,000, so basically we are looking at allowing the community to decide the type of business that that community needs within it and then to support that community with a small start-up loan of $10,000, which is repayable over a five-year period of time.

We will help. We will be there with the community to give them any support and assistance that we can, but we want the decision making to start being made at the local level.

Mr. Struthers: The reason I ask is that I am hoping there are lots of communities in Manitoba, with lots of ideas on how to start their own businesses using the community works program dollars that you are making available. My worry is that if there are a lot of projects come forth, there will obviously be some projects left out.

If you get 10 projects and you can only fund seven of them, are you going to assist the community in deciding on what you do with the last three that do not get in there? I do not want to see a community like Dauphin get into a discussion about who gets the money and having some kind of ongoing or long-lasting feud or debate come out of this kind of a discussion. I think if you were to put some guidelines in place to help the community, there would not be those kind of splits that might develop.

Mr. Derkach: Number one, I hope that there are more applicants than there is money, because that would be a good indication that rural Manitoba is really out there creating employment and revitalizing itself.

Secondly, this is a revolving fund. So once the $75,000 has been used by the community in the first round of loans that they may be extending to their businesses, the community can then, given that there will be activity, apply for another lump sum of money, which will also allow them to then meet the needs of those businesses they may not have been able to meet in the first round.

As the money starts being repaid by the businesses which have accessed that money, the community will then be building up a block of money that they can lend out again; so it is a revolving kind of fund. They may not be able to meet every need in the community to begin with and there might have to be a waiting list that is established, but it is a beginning. I ask the member's patience here so that we can get the program launched first of all and get some experience with it, and then we will be able to adjust in accordance to what level of activity there is.

There is also another element here and that is that there are larger and smaller communities, and there may in fact be a greater demand from those communities that are large where we may be asked to put more money into the larger communities. So we want to get the program started first. Let us walk before we run. Once we have had some experience with it, we will be able then to alter, expand and be flexible in how we adjust to the needs of the communities.

Mr. Struthers: I want to assure the minister that after spending 10 years of my life as a school teacher in the junior high section, I have more than enough patience and I am willing to wait and listen for the good results that I think can come from this program.

I am still a little bit unclear though. You talked about the waiting list and that gets back to the question that I had just asked you. I can see a situation develop--and I have seen this happen in small communities before--where if you have a number of projects that are up for consideration for this amount of money, how do you go about ameliorating the people who do not get funded in the first round if they are not happy with sitting on the second round or sitting on the waiting list waiting for the second round? I just do not want the program to get a hole poked in it by people who have their nose out of joint for not being considered on the first round.

Mr. Derkach: Mr. Chairman, those are all hypothetical. I do not even know if we will have that kind of a problem arise. If we do, we will certainly be hearing from the communities, I am sure. Basically, what we are trying to do is meet a need that is out there. We are starting out with a moderate sum of money. Provincially it is a fairly large chunk of dollars that will be allocated to this program.

If you take a look at $175,000 which would be available to a community in the two tranches, and if you take an average of $7,000 per project as an average, you are looking at in excess of 20 projects per community. That is pretty significant, and you would have to be a fairly large community to be able to have 25 new expanded businesses start up in a community. It may happen, and we hope it will, but as I said, we will monitor and look at the program carefully as we proceed with it.

Mr. Struthers: I realize that I am throwing up some hypothetical situations, and it is always difficult to operate on the basis of hypothetical situations. I want to say, too, that I appreciate the opportunity now to get to talk about a program that I think is going to be good before it actually is put together. So I am really feeling right now like I am actually getting some input into a government program.

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On that line too, if we discuss these hypothetical situations now I am hoping that it will give the minister and his department a little bit of time to consider these should they come up when the time does. I hope he appreciates my bringing these hypothetical questions up.

Mr. Derkach: I appreciate them, and I thank the member for that advice and that counsel.

Mr. Struthers: Still sticking to this community works program, has any kind of decision or discussion taken place on what kind of interest rate would be charged when these loans are taken out and repaid, or is that too hypothetical?

Mr. Derkach: It is not hypothetical. I think it is a little premature though because we have not written the regulations for the program. That is something the department is working at currently, and as we develop the program that will be an issue that will be addressed. I cannot really respond to that in any way right now, but it will be a moderate rate that will be able to be lived with by the business. We are not going to be competing for the highest interest rate in town.

(Mr. Mervin Tweed, Acting Chairperson, in the Chair)

Mr. Struthers: The other half of the questioning that I wanted to get into--I think you have answered my questions on the larger communities that I think would be able to afford this and take advantage of it--I am though worried, and I share the concerns of my fellow members from Interlake and Swan River, about the smaller communities that may not be able to register for the program at all.

I am thinking in terms of a small R.M. in rural Manitoba. The people from there approached me. They had heard about this program during the provincial election and the discussions that took place then. You will be glad to know, at the time even, I told them that I thought there was some merit to the program. They were concerned, though, about raising the amount of money up front that they needed to take advantage of the program.

Is there any other way that a small R.M., which cannot raise the money through taxes, can access the money without having to hit the $25,000 mark?

Mr. Derkach: Mr. Chairperson, there is going to be some flexibility in the program in that if a small R.M., as the member raises the issue--and I do not know that there are that many which cannot find $25,000. If there is, they do not have to access the $50,000 to start with, but it is a ratio of 2 to 1. If they want to access just a smaller amount of money so they can start out with a smaller amount of their share, we are going to be flexible enough to allow that.

The other way we are going to provide some flexibility is to allow communities to join with other communities, municipalities to join with other municipalities, perhaps another neighbouring small municipality, and jointly they may be able to come up with their share of the money and go at it at a 2 to 1 ratio as well.

We are trying to build in enough flexibility so that we can meet the needs of the smaller and the larger communities.

Mr. Struthers: The money then that will be going from your department through the community works program, some of that money will be taken from VLT money that has come from these communities.

Mr. Derkach: Mr. Chairperson, we do not identify how much money has come from each community. What we do through the budgeting process is look at the programs and then allocate through our Treasury Board and budgeting process an amount of money to run a program. Basically that is how we arrive at the amount of money. Where that VLT money comes from is not important to us. What is important is the amount of money we have to run a program.

Mr. Struthers: Yesterday I asked a question about what you just talked about now, where that VLT money comes from. I was told just what you said today, that those figures would not be available. Yet, correct me if I am wrong, but the question in the House today from the member for Inkster (Mr. Lamoureux) to the First Minister (Mr. Filmon) was an accounting of that money. The Premier, at the time, said that he would have those figures as soon as possible. So I am led to believe that those figures can be accessed, and I want to know how quickly we could get it.

Mr. Derkach: As I indicated yesterday, that is not something my department has. What you would have to do is access that information through the Minister of Finance (Mr. Stefanson) who has responsibility for Lotteries.

Mr. Struthers: Okay, good. So if I go through the Minister of Finance, then I can find out, say, that the R.M. of Lawrence has contributed X number of dollars through their VLTs to the Province of Manitoba. Am I correct in saying that?

Mr. Derkach: Again, I have to indicate to the member, he is asking the wrong minister here, because that is the kind of information that would have to be asked of the Minister of Finance. I do not have that information.

Mr. Struthers: What I am worried about here is that a small community like the R.M. of Lawrence, you could tell me how much money they are getting from your department for different projects, just as you did for Snow Lake and some of the others. If I was to ask you how much the R.M. of Lawrence was getting in, you should be able to tell me then, right?

Mr. Derkach: How much it was getting--

Mr. Struthers: How much in a year the R.M. of Lawrence would receive in funding from Rural Development.

Mr. Derkach: Well, Mr. Chairman, of the Unconditional Grants that go to these municipalities, the 10 percent, I acknowledge that, yes, we have that information. I will provide it to the critic. I indicated that I would. So that is the information he is seeking. Yes, we will make that available to you.

(Mr. Deputy Chairperson in the Chair)

Mr. Struthers: Okay, good. Thanks.

Since I raised the R.M. of Lawrence, it is just the one I used to live in, and maybe that is why I am using that as an example.

I realize that the province has taken money out of the R.M. through VLTs and then is turning around and giving it back in community works program money.

Would that money that they take out of the VLTs, could that not be considered part of their $25,000 building up towards community works?

Mr. Derkach: Well, Mr. Chairman, let me say that the R.M. of Lawrence received $10,000 in '94-95. If the R.M. of Lawrence wants to use that $10,000 as part of their contribution towards the community works program, that is their decision.

Mr. Struthers: That allays the fear that I had that small R.M.s like the R.M. of Lawrence would be actually paying twice. My fear was that they would be putting out a lot of money through VLTs and then having to put up money again to become part of the community works program, which I would not see as a fair way to do it, but I am glad you have cleared that up.

Maybe this is not the right place to bring this up, as well, but I am going to try anyway. It has to do with VLTs, and I am worried about the people who are addicted to gambling and the amount of money that is being spent on helping them get off of gambling. Is that something that your department puts money into?

Mr. Derkach: No, Mr. Chairperson. That is not my department. Again, that would have to be asked of the Minister who is responsible for Lotteries (Mr. Stefanson) and I believe the Minister responsible for--is it Family Services or Culture, Heritage? I am not sure.

I am sorry, Mr. Chairman. Because the money goes through the Addictions Foundation, it will be the Minister of Health (Mr. McCrae).

Ms. Mihychuk: Following up on some of the questions my colleague has been asking in terms of the new community works program, can the minister tell us what projections the department has made in terms of what they see as the outlay of revenue in this? How much money do we anticipate is going to be coming this year, next year, maybe two or three years in terms of a projection?

Mr. Derkach: Mr. Chairman, over a five-year period, we are projecting that we will be spending in excess of $3 million.

Ms. Mihychuk: This $3 million is coming from VLT revenues that are accumulated throughout the province, and I understand put into--is it general revenue? What programs are then going to be hampered by the removal of that $3 million? This is money that was in that pot that is now going to be going into rural Manitoba?

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Mr. Derkach: Mr. Chairman, through the budgeting process, we have had increases. Rural Development has been fortunate to get increases in our budget allocations over the last three years, and we are not anticipating any reductions in that. This is money that is established for programs though the budgeting process. We have identified that over the next three years we will be spending $3.5 million.

It is not money that is being taken away from any other program so that we can have this program.

Ms. Mihychuk: Can the minister share how much lotteries money the department gets? What is the total pot? This $3 million, if I understand correctly, would be in addition to what there was last year.

Mr. Derkach: Mr. Chairman, through the lotteries programs, our money is basically in the rural economic programs and in 1994-95, we received $13,006,000; in 1995-96, we have received $17,500,000.

Ms. Mihychuk: For clarification then, the new program will be in addition to the $17 million that you are--

Mr. Derkach: Mr. Chairman, the new program will be part of the $17,500,000.

Mr. Clif Evans: Mr. Chair, I appreciate some of the questions that my colleagues have put forth. We have to also remind the minister that initially when the VLT monies came into play, monies were supposed to stay in rural Manitoba. I would tend to indicate that $17.5 million going back through Lotteries Funded Programs is a small, small portion of the amount of money that comes from rural areas into the general revenues.

I would ask the minister and his cabinet to seriously consider the requests of the municipalities to increase the level of funding from VLT monies back to them.

Mr. Derkach: Mr. Chairman, the money does not just simply go from--the $17 million that we are looking at is not the only money that goes into rural Manitoba. As I indicated before, there are monies that go into rural Manitoba for health, for education, for other services. There are monies that have been put aside for balancing the budget. Rural Manitoba benefits in many ways.

If we look at the $17 million, that is a very narrow way of looking at the whole picture. I only ask that members consider the fact that our resources for government are such that we have to try and spend them in the best way we can. It is for that reason we have indicated to municipalities that we can share 10 percent but we will not be sharing any more than 10 percent at this time.

If you look at the record of other provinces, we stand head and shoulders above what other provinces offer to their municipalities.

Mr. Clif Evans: Mr. Chairman, the minister has indicated the rates for '94-95. Seeing as we are dealing with '95-96, does the minister have figures as to what the amounts for '95-96 will be for municipalities, going back to the municipalities? The '94-95 was $9.14 plus the $5,000.

Mr. Derkach: No, '95-96.

Mr. Clif Evans: Okay. You said '94-95.

Mr. Derkach: Mr. Chairman, our projections are that in 1994-95, the per capita was $9.14. In '95-96, the per capita will be in the range of the $5,000 basic grant plus $11.43.

Mr. Clif Evans: Can the minister just relate from the beginning of the first figures in '93-94 to the '95-96? How do you project the percentage of money going or the amount per capita? How do you project that amount? How do you come to that conclusion to have $11.43, up $2 and some?

Mr. Derkach: Mr. Chairman, that is a forecast that is done by the Minister of Finance (Mr. Stefanson) and the Lotteries Corporation. It is not something we are involved in directly. Based on their forecasts for 1995-96, they are projecting that we will be able to pay out the $11 that I have indicated.

Mr. Clif Evans: So that will be the indication in the Estimates book of the $1 million increase on that line then, an anticipated extra cost of $1 million.

Mr. Derkach: That is right, Mr. Chairman. That is correct.

Mr. Struthers: This weekend I will head back to Dauphin, and I am going to be talking to people. One of the things I am going to mention is your community works program.

Mr. Derkach: It is not announced yet, Mr. Chairman. It could be somewhat premature.

Mr. Struthers: The minister should be looking for allies wherever he can get them even if they are in the opposition benches and if I am going to say nice things about his program, he should at least encourage me and give me the ammunition to do it with. Is that not right?

Well, when I go home on the weekend, I want to be talking to friends of mine who I have with the Chamber of Commerce. There are meetings of the chamber that are coming up, and I want to be talking about this program to them. I do not want to mislead them though in any way and get your office inundated with a whole bunch of calls from Dauphin going for all kinds of programs that you may feel uncomfortable in sending money to even if the local people are making the decisions, which leads me to the Parkland recreation complex.

Even though the complex has already got money from your department, would that sort of a project still qualify for money under the community works?

Mr. Derkach: I do not believe it would, because it is not a small business and the only amount of money you can afford a small business is $10,000. There is a cap on this program.

I would caution the member from making announcements on behalf of government right now, because we have not made the announcement formally in terms of the program yet and although in the election campaign the concept of this program was announced, we still have some detail to work out. I appreciate the fact that he believes this is a good program and can be of benefit to his community.

I would ask him to be patient and let us develop some of the details that have to be developed for the program and then I would be happy to share those with him.

Mr. Struthers: I may be new around here, but I want to assure the minister, too, that I will not be calling any news conferences bragging up his program.

Mr. Derkach: Thank you.

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Mr. Struthers: I do want to remind the minister that in my community of Dauphin when it comes to fundraising, the No. 1 issue is going to be the Parkland recreation complex, and the first thing that will pop into people's minds when they do eventually start to consider projects for community works will be the Parkland recreation complex. Even if it is a cap of $10,000, that is $10,000 towards the goal the community has set to raise for the complex.

Let me tell you that the Dauphin Joint Recreation Commission will be taking any amounts of money from any source they can get. So, if they think there is a possibility of getting money through this program, they will probably check it out and they will be coming to me and they will be coming to you and your department to see if this is a possibility. So I just want to make sure that I am on the same wavelength as what the department and you are.

I might give you a chance to brag here a little bit too, but would a company such as Westman Plastics then, qualify under this program?

Mr. Derkach: I cannot see why it would not. But again, as I indicated to the member, the details have not been put in place yet for this program, but it is an eligible business in the community. It is one that the community may decide to support through the community works program.

The member said it might give me a chance to brag, and I will, because Westman Plastics is one of those Grow Bond issues that has been very successful for the province and for the community of Dauphin. It is the kind of project I think that we in government should be supporting because it is adding value to a product. It is creating a product that is needed not only in the agricultural industry but also in the transportation industry.

I believe that is the kind of project we all should be behind and supporting because it certainly provides high-quality jobs in the community of Dauphin. I think there are one or two engineers working in the plant which brings the skill level in that plant up considerably, and that is what you need in a community like Dauphin or any other small rural community.

Mr. Deputy Chairperson: Item 7.(c) Unconditional Grants - Rural Community Development $5,000,000--pass.

Resolution 13.7: RESOLVED that there be granted to Her Majesty a sum not exceeding $17,500,000 for Rural Development Rural Economic Programs for the fiscal year ending the 31st day of March 1996.

The last item to be considered for the Estimates of the Department of Rural Development is item 1.(a) Minister's Salary $22,800.

Mr. Derkach: Mr. Chair, I know you will be asking staff to leave. Before the staff of the department do leave, I would just simply like to put on the record my appreciation as Minister of Rural Development to the deputy minister and staff of my department who have worked very hard over the last year to bring to rural Manitoba the kinds of programs and initiatives that would help revitalize our community.

I have to tell members around this table that during the Forum 95 staff from my department from all areas of the department worked night and day to put this project on. For weeks and weeks they took time from their families, from their recreational time to work on this event, and that is why it was such a success. I would just like to record that I have a deep appreciation, and so does our government, for the work that has been done by staff of my department.

Mr. Clif Evans: Mr. Chair, I would also like to echo on behalf of our party and our caucus on the fine, fine work that the department people have done in the past couple of years in trying to put together a new form of Rural Development department. I hope that we can work together and make it an even bigger success, certainly with your appreciation and co-operation. Thank you.

Mr. Deputy Chairperson: As I said earlier, the last item to be considered in the Estimates of the Department of Rural Development is the Minister's Salary of $22,800. At this point, we request that the minister's staff leave the table for the consideration of this item.

Mr. Clif Evans: Mr. Chair, I think it is standard procedure under the Minister's Salary that we may ask some questions that were perhaps missed or other members might want to put on record of the minister.

Mr. Deputy Chairperson: It is allowed.

Mr. Clif Evans: Mr. Chair, I would like to ask the minister, with the draft report of the Municipal Act review that is in place now, can the minister indicate to me and to us just where we are at with this report as far as future committee, future meetings.

Mr. Derkach: Mr. Chairman, we have had the committee now go through two rounds of consultations with Manitobans regarding the Municipal Act review. They have taken the draft report back out to rural Manitoba or to all of Manitoba. There has been comment on the draft report. I believe we have a date of around the 16th of June or thereabouts when the committee will present their final report to me. At that time it will be up to government to consider the final report and to take further steps regarding the rewriting of The Municipal Act and related statutes.

The committee basically has completed their consultations. I believe it is just a matter of them now formally presenting the final report to me as minister.

Mr. Clif Evans: Mr. Chair, then the final report will be coming, as the minister has indicated. Is the minister aware whether some of the concerns from the draft report that MAUM and UMM have brought forward to the department for consideration or changing, implementing, not implementing?

Mr. Derkach: Mr. Chair, I will not know that until they make their final report to me in the middle of June.

I have not heard of any concerns raised by UMM or MAUM. Both organizations were involved in the review, so I guess I will know better when they present their final report to me during the mid part of June or the third week in June.

Mr. Clif Evans: Mr. Chair, when will it be made available to other members after the 16th of June? How long does the minister feel that he will have? How much time will he need to go through it before we get copies?

Mr. Derkach: Well, Mr. Chair, this is the committee's report. I do not intend to keep it secret. My intention is to be able to review the report with the review panel so that I have a clear understanding of what recommendations are coming forward. I want to have an understanding of the types of concerns that were raised, and after I am comfortable with those kinds of issues, I will be prepared to share them with members of the Legislature.

Mr. Clif Evans: Mr. Chair, can the minister indicate whether there has been a real good, positive responsive to this review to The Municipal Act? Has he had reports back of any serious thoughts from different municipalities about parts of the draft, in the second round especially?

Mr. Derkach: Mr. Chair, I have to say to the members here that there have been no major issues raised as a result of the draft report that was circulated. As a matter of fact, from my meetings with mayors and reeves throughout the province, I have had nothing but positive comments in terms of the process and the openness of the process.

Yes, there are going to be proposals there that may not be agreed to by each and every municipality, but once again, I cannot even talk about what is in a draft proposal because that may change in the final recommendations that come to us from the board.

By and large, the feeling has been quite positive in terms of process. Issues have not come to me in any significant way.

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Ms. Wowchuk: Mr. Chair, the minister indicated that he expects the final report somewhere around the 16th of June. Is there a possibility that this report could then go into the regional meetings, which I believe are being held towards the end of June, so that councillors and municipal people could have an opportunity to review the final draft?

Mr. Derkach: That is our intention. If in fact everything goes as planned, I will be receiving that report prior to the regional meetings, so it would be our intention to also have that information available for councillors at that time.

Ms. Mihychuk: In my past life, as a woman in a nontraditional career in the field of geology and mining, I was always interested in the opportunities for women and target-group members in terms of the affirmative action program in their ability to move ahead in departments in government.

Can the minister tell us what your plans are in terms of affirmative action? Have you achieved your target? How is that program evolving over the past few years?

Mr. Derkach: I can find out whether we have achieved our target, but I believe we have. I can tell the member that we have advanced women in our department in many areas; for example, the Assistant Deputy Minister of the Local Government Services Division is Ms. Marie Elliot. We have also the individual who is the executive director to MARS Review, Ms. Dianne Flood. There are other positions within the department where we have women who have successfully undertaken responsibility and have done extremely well in their positions.

Mr. Struthers: I am interested in the infrastructure of the Manitoba Water Services Board in relation to the debate that went on about a water treatment plant in Dauphin several years ago. It is a fact that it is going to come up again. When these people on the council start to talk about a water treatment facility in Dauphin, what is the procedure they need to go through in order to some day build one?

Mr. Derkach: Mr. Chairperson, it is almost ironic that the member should raise the issue because the Dauphin community was offered the PAMWI program for the development of a water treatment plant for the community. The money was there. It was a one-third, one-third, one-third sharing program between the federal, provincial and local government. The community of Dauphin rejected the proposal and so that money vanished and was used by other communities. Now if the community is interested in a water treatment plant it is going to be again a matter of going through a process of trying to find enough resources around to be able to do the project. That could be a very big challenge at this time, especially when the federal government has now cut back their PAMWI contribution. The program has been cut back by $10 million.

Mr. Struthers: I realize what the debate was several years ago, and I think the minister is accurate in the description that he gave me.

An Honourable Member: He is always accurate.

Mr. Struthers: Is that right? That is good to know. What I am worried about is that at some point in the future, and I do not think it will be in the too distant future, that this minister again will be approached and so will I as the MLA in terms of the water treatment facility, and I want to know what advice to give the council. I am sure it will be a whole new group of people on council who will be pursuing this again on behalf of the residents.

In the Manitoba Water Services Board, I note that it does not say that the capital would be provided for the water treatment itself, but am I correct in saying that the operation of a water treatment facility would fall under this Water Services Board?

Mr. Derkach: Both. The capital and the operation of a water treatment plant would fall under the jurisdiction of the Manitoba Water Services Board, but I can tell the member that we have a large number of communities who have fairly extensive projects that they would like to undertake, and they go right from Flin Flon down to the very southern tip of this province, and some of these projects are massive.

We are not allocated a great deal of money on an annual basis for this whole area of water and sewage capital facilities, and we are doing as best we can with the resources that we have. The other component is that the community has to be able to have its money in place as well before a project can be undertaken.

I am not going to sit here and be negative about a water treatment plant for Dauphin. I know how much it is needed in the area, but it is the community that will have to come forward and show us their plan and the approach that they want to take with regard to the service that is needed in the area.

Mr. Struthers: Thank you for that. I want to stick with the Water Services Board. It also talks about alleviating water shortages that may occur in the province from time to time. I know that the Minister of Natural Resources (Mr. Driedger) talked today about fighting fires with hip waders on, and it may sound funny talking about a drought in Manitoba these days, but if the weather continues the way it is we could actually end up in that situation later on in the year.

I am interested to note that technical advice and money to alleviate the situation is available through the services board then?

Mr. Derkach: Yes, in terms of domestic potable water for use in the rural part of the province, that is correct. Also, we work co-operatively with the PFRA to address those kind of issues that arise throughout the province.

Mr. Struthers: That includes irrigation projects that are ongoing now or that are planned in the future?

Mr. Derkach: Mr. Chairperson, there are several departments that come into play when we talk about irrigation: the Department of Agriculture, the Department of Natural Resources. Our department is involved to some extent in that regard, Rural Development, and the Department of Environment, of course. So it is not a matter of one department being involved, it is several departments from government.

Mr. Struthers: I realize that. Could you tell me how many irrigation projects are on the go now or where they would be located?

Mr. Derkach: No, I do not know that except to tell you that this province has been very successful in attracting a potato industry into our province. There has been a fairly significant expansion in the whole potato industry which does require irrigation.

I would recommend to the member that when the Department of Agriculture sits next in Estimates that is a question that might more adequately be answered by the Minister of Agriculture (Mr. Enns).

Mr. Struthers: Your department, though, contributes financially and through technical advice to that project you mentioned with the potato industry then?

Mr. Derkach: More of that kind of work is done through the Department of Agriculture. Our department will be involved in perhaps--if the request is made and if it fits under the REDI program, the rural economic development program, basically the Water Services Board will--for example, if McCain were expanding or needed more sewage treatment in a community, that is where we would come in to assist.

Mr. Struthers: Has McCain made that approach to the Water Services Board?

Mr. Derkach: Well, there is ongoing work going on at Portage right now. As a matter of fact under the PAMWI program we are providing a new sewage treatment plant in Portage.

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Ms. Mihychuk: I would like to return to the Affirmative Action program. A lot of the success of these programs is dependent on the support of the senior executive officer and my question is to the minister: Does this minister support Affirmative Action programs?

Mr. Derkach: Yes, I do. I always have.

Ms. Mihychuk: I am very pleased to hear that. My question now to the minister is: What measures have you taken as minister--and I am glad that you are supportive--to reach the goals of Affirmative Action, in particular in the area of aboriginal people which face serious barriers in terms of employment all across the province?

Mr. Derkach: Mr. Chair, when we have an employment opportunity under the Civil Service Commission, there are criteria that are established when we are hiring for various positions within the department.

The applicants are screened according to criteria that are established under The Civil Service Act and personally, from my point of view, as long as we are meeting the targets that have been established and those are the instructions that go out from government. The hiring of individuals in the department is up to the deputy minister and the Civil Service Commission.

Ms. Mihychuk: Can you tell me, are the targets established by the departments themselves? It used to be the practice that departments established targets by an Affirmative Action committee composed of Human Resource people and department representatives. Is that still the process now, are the targets moving upwards, and has this department been able to achieve its targets?

Mr. Derkach: Mr. Chairperson, that is not a question I can answer. That is a question that might more rightfully be posed to the Minister responsible for the Civil Service Commission (Mr. Toews).

Ms. Mihychuk: I would like to change onto a different line of questioning if I may. I would like to ask if the minister supports UMM when they are asking for at least 50 percent of the province's infrastructure money be put into rural development in Manitoba and if so, what measures is he taking to try to secure that type of resource?

Mr. Derkach: Under the infrastructure program the money was divided equally between the rural and the urban part of this province. In addition to that we also extended to UMM and MAUM an ability to form a committee and in essence recommend to government the type of projects that should be proceeded with. They were directly involved in that process, so therefore the money was divided equally. As far as I know, and from my conversations with both organizations, they have been very pleased with the process that was followed.

Ms. Mihychuk: Some of these questions are not coherent. They are sort of a mishmash of questions that I have on rural development. So I am now moving into the area of education, and I know that this minister is well versed in that area from his past portfolio as Minister of Education.

The government has a boundaries report and everyone in rural Manitoba is obviously very concerned about the implications of that report. The movement of a few students could result in the closing of a school in a community, and basically if the school closes the feeling is that the community is virtually dead. Not only that, we are looking at very long bus rides to whatever school they are being bused to so there are a lot of complications in terms of this Boundaries Review.

Have you as Minister of Rural Development considered the possible impact of this Boundaries Review Commission?

Mr. Derkach: Mr. Chairperson, the Boundaries Review of course is undertaken by the Minister of Education and Training (Mrs. McIntosh), but I can tell the member that we have shared the information with all of the municipalities to ensure that they have adequate opportunity to address the issues.

Secondly, we have also made sure that there is opportunity available for people in Manitoba to express their views on the boundaries commission report. As a matter of fact there is, I believe, a communication that has gone out from the Minister of Education and Training regarding opportunities for Manitobans to have some direct input into--as far as their views are concerned--the Boundaries Review. I do not have any direct input in that regard, except that I do interact with municipalities and facilitate a meeting if necessary with the Minister of Education and Training for them to be able to discuss their concerns with them.

Additionally, as MLA, of course, as any of you are, we receive commentary from our constituents which are passed along to the Minister of Education and Training.

Ms. Mihychuk: In terms of rural Manitoba, is it your feeling that the review process now on boundaries is sufficient? The time line in September has been proposed by the Minister of Education (Mrs. McIntosh). Given seeding and farming applications and everything that goes on in the summer months in rural Manitoba, are you concerned about the September deadline and are you going to be looking for an extension for rural Manitoba?

Mr. Derkach: Again, I think that is a question that maybe you should pose to the Minister of Education and Training, but I have had no reaction from either the UMM or MAUM organization with regard to the date. If I receive any commentary in that regard I will certainly pass it along, but to date I have received no adverse commentary in terms of the time lines that have been set out.

Ms. Mihychuk: Another area that I am particularly interested in is in the area of land use management. I noticed that in the convention that UMM had in February there was a concern about the provincial land use policies, and if I could quote: The UMM is concerned that the new provincial land use policies have become too open-ended and permissive, and the document will be of no assistance to municipalities attempting to implement consistent planning practices.

Can the minister provide us with some further information as to the provincial land use policies, the new ones that they have? How are you going to address the concerns of the UMM?

Mr. Derkach: In developing the provincial land use policies, there was consultation with municipalities and rural Manitobans, right through the entire province. There was a document that was put out with regard to land use policy.

I think the area that municipalities have the greatest concern about is the development of industry in a municipality which perhaps has some adverse effects on whether it is the residents in an area, or perhaps it is establishing where it may be negative to the municipality.

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We are certainly in constant consultation with municipalities. We have planning people who are working with municipalities in terms of planning districts and land use and that sort of thing. As much as we can, we are working co-operatively with municipalities. Our policies are based on sustainable development, so that we ensure there is a balance between the protection of the environment and economic enhancement in an area.

However, again, we are always open to municipalities to express their views. I think that was a resolution, if I am not mistaken, that was placed by one region, but it was not something that was expressed as a general opinion of all of UMM.

Ms. Mihychuk: Part of land use management is also two uses for a particular site that may be in conflict. As we try to minimize that, a lot of these policies are sometimes in conflict. What I am referring to here are aggregate sites. Many municipalities and communities choose to use old gravel pits, sand pits that may be unsafe places for solid and chemical waste disposal. I would like to ask the minister if you have certain policies or programs to move those sites, or what is the progress in terms of solid waste management in aggregate sites?

Mr. Derkach: Again, Mr. Chair, that area falls under the Department of Environment, but I can tell the member that municipalities have now probably very effectively moved to establish their waste disposal grounds in areas that are appropriate. Many of the old sites that were, as the member describes, in old gravel quarries, have been closed and cleaned up, and today I think we have, by and large, a fairly safe and much better management of our waste disposal grounds. Now, I am not going to say that we have reached the optimum, but I think municipalities are much more aware of the needs today of protecting our environment and the water resource that we have and are moving, as much as they can, to create safe waste disposal grounds throughout the province.

Ms. Mihychuk: Can the minister tell us if the municipalities and communities have access to resource people to meet their needs in terms of placing solid waste disposal sites?

Mr. Derkach: Yes, Mr. Chairman, under the Department of Environment, again it is not my jurisdiction, but there are regional people who work with municipalities not only to design but to also monitor how these waste disposal grounds are built and operated.

Mr. Struthers: Yes, Mr. Chairman, I want to go back a bit to the Water Services Board. It is my understanding--and I have looked in here in your book of Estimates to try and find this--that your department will provide technical assistance or money for farmers for digging dugouts.

Mr. Derkach: Yes, that is correct. Wells and dugouts for agricultural purposes are assisted by the Department of Rural Development to the Manitoba Water Services Board, and we do that in partnership with PFRA as well.

Mr. Struthers: If I have a farmer or rancher in my constituency, then, or any other part of rural Manitoba that calls me on it, what is the procedure that that producer has to go through before they can actually go out and dig the well?

Mr. Derkach: The process is quite straightforward. They would apply through the Department of Agriculture in their community, to their ag rep, for the support. The support comes in a proportionate way from PFRA and from Manitoba Water Services Board, and there is a formula by which the funding is applied. I do not have it in front of me, but I could certainly share it with the member.

Mr. Struthers: You can send me the formula. It is a written formula you can send me at some point then?

Mr. Derkach: Yes, Mr. Chairman, there is an established formula that is used by PFRA and the Water Services Board.

Mr. Struthers: I am maybe asking questions that are closer related to my colleague here from St. James, but I am concerned about the environment hoops that a farmer would need to jump through before they embarked on creating dugouts and digging wells. Does the R.M. or does the farmer or anyone need to worry about any guidelines that are in place before they go out and start doing the work?

Mr. Derkach: The best advice that we offer is to check with both the Department of Agriculture, to check with our department, of course, and to check with the Department of Environment to ensure that, whatever dugout or water retention area is being created, it is indeed in line with policies of the provincial government.

Mr. Struthers: So, before you flow any money to anybody, you would need to know from the Department of Agriculture, the Department of Environment that it, indeed, is a safe venture that the farmer is undertaking, that they are not breaking any environmental guidelines before you gave any money out?

Mr. Derkach: We have staff in the department who certainly would be aware of the need of doing that, and they would be checking that out as a matter of normal procedure.

Mr. Struthers: You just answered my next question. I have had constituents already talk to me about the beaver program, and I have had almost as many constituents talk to me as there are beavers out there, I think, busily working to dam up all the water that is already there.

Mr. Derkach: No, there are more beavers than there are constituents, I can tell you.

Mr. Struthers: Well, I cannot disagree with the minister there. Can you explain to me the beaver program that you have within your riding?

Mr. Derkach: No, Mr. Chairman, that is not my department's responsibility. That is within the responsibility of the Department of Natural Resources.

Mr. Struthers: It seemed to me that I read it within your Estimates here some place, and I have to try to find it.

Mr. Derkach: It is in the wrong estimate book.

Mr. Struthers: Am I thinking to my own estimates and have read it in there then? I suppose that is where my mistake has been.

Okay. What we were talking about with wells and with dugouts, does the same apply with sewage lagoons? Can anyone undertaking the construction of sewage lagoons get any kind of technical assistance and money from your department?

Mr. Derkach: Yes, sewage lagoons basically come out of the Manitoba Water Services Board again, and both technical advice and usually monetary assistance are provided through the Manitoba Water Services Board. Once again, in some instances, we have the PFRA involved in those as well. The Department of Environment, as a matter of normal procedure, would be involved as well.

Mr. Struthers: Again, that would be operated on a formula the same as there was for the wells?

Mr. Derkach: Mr. Chairperson, yes, there is a formula that is available for that, as well.

Mr. Struthers: In that formula, does that mean there is a cap? Somebody cannot spend limitless on a sewage lagoon--there is a cap there that does not allow them to go over that?

Mr. Derkach: It depends on the project, Mr. Chair, as to how much money is spent on it, but usually those are engineered and designed for the needs of the community and the size of the community, and the community has to put in its share of funding for it, as well.

Mr. Struthers: Over the last few years and quite recently in the rural municipality of Dauphin, there has been a big discussion, pros and cons, both ways, in terms of the sewage lagoons that are associated with the hog barns that have been constructed in the area.

Does Rural Development contribute to the construction of sewage lagoons in relation to hog barns?

Mr. Derkach: No, Mr. Chairperson, we do not.

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Mr. Clif Evans: Mr. Chair, I know that Rural Development does play a role in development in an area for operations such as hog operations. What is the role of his department when it comes to such operations and building them?

Mr. Derkach: Any involvement in issues like that would be through our Planning Division of the department, where if a community has a development plan, and it needs to be amended, we would make sure that we are involved in that regard. Also, the planning district would call on staff from our department to assist them if there is a problem with the location of an entity like that.

Mr. Clif Evans: As the minister is aware, I mean, there have been some difficulties with operations or setting up of operations in the LGD of Armstrong, and Rural Development being involved.

There have been indications to me from local people that the Rural Development side of this committee that is in place seems to not have an influence as much, you know, with the actual study or the committee's report. Has the minister had any such responses as I have?

Mr. Derkach: Not at all, Mr. Chairperson. Our responsibility in terms of the planning side is to ensure that there is a planning statement in the area, that it is adhered to, and the planning district will certainly call on our department to assist them in that regard, but I have had no complaints from communities or individuals that our department has not been involved enough in the entire process. I could say that we want to see economic development in rural Manitoba, and hog production is an important aspect of that to our economy.

If we look at what is happening in our neighbouring provinces and how they are forging ahead in hog production, we certainly are not--I do not think it is wise for us to sit back and watch development in other areas and not allow our province to develop in that respect as well. So as long as we are meeting the guidelines--and we are working very closely with the Department of Agriculture, the Department of Environment to ensure that the proper procedures and the proper land use is made when a hog operation is being developed.

Mr. Clif Evans: Well, that is and has created a problem. The minister indicated about land use and the zoning by-laws that are within different jurisdictions. They are now in a process of trying to re-establish local by-laws within their jurisdiction. Has the minister been made aware of just where this is at with the LGD of Armstrong, and how much input has his department put into this system?

Mr. Derkach: I am not personally aware, but I am sure that if there were concerns the department staff would be raising them with me. I am assuming the work is ongoing in an appropriate fashion. But, once again, I have had no complaints from the LGD nor have there been issues raised by my staff.

Mr. Clif Evans: Mr. Chairman, still with that, I feel that we do have to have some sort of a co-operative basis in jurisdictions when it comes to rural economic development or agriculture, tourism, and I would certainly hope and look forward to the minister's department's input into helping these jurisdictions establish their zoning by-laws that would provide a partnership with everyone in a community, not only the Environment department and the Agriculture department. I think the Rural Development is also very important. We cannot just move on just in one avenue. We have to have different avenues to make way, you know, to get ahead.

Mr. Derkach: I agree.

Mr. Clif Evans: Can the minister tell me just where his department's thoughts and policies are with the 911 service?

Mr. Derkach: Once again, Mr. Chairman, we support the initiative, but it is an initiative that is under the jurisdiction of the minister responsible for the telecommunications area.

Mr. Clif Evans: Well, that may be true, but then in rural areas you are looking at perhaps--or is there going to be, is the minister aware of any extra cost for the people in rural areas with the 911 service?

Mr. Derkach: Well, the 911 service has to be paid for by someone, and I would anticipate there will be extra costs by the users of the service. Once again, those details are better asked of the minister responsible for that area.

Mr. Clif Evans: The two associations have also raised some concerns about the one-tier social assistance program with the minister through their resolutions. Where is the minister's department with that?

Mr. Derkach: Again, Mr. Chairperson, that is not an area that is within the jurisdiction of our department. Therefore, again, I would ask the member to ask that question of the minister who is responsible for that area.

Mr. Clif Evans: Well, then I will ask a question that the minister feels is under his jurisdiction, that is policing.

Mr. Derkach: Part of it.

Mr. Clif Evans: Well, part, not all of it. I would like to know where the minister's department is standing on the policing situation that is out in rural Manitoba?

Mr. Derkach: I guess I could ask the member to be more specific, but as the member knows we just reached an agreement not that long ago on the whole policing issue in rural Manitoba. Again, we put a committee together made up of UMM, MAUM, and we hired an independent individual who headed up this committee, and they actually came forward with a resolution of their own which we implemented last year. To my knowledge the entire policing situation is working very well.

Mr. Clif Evans: Mr. Chairperson, natural gas--I know we have touched on it during the Estimates process, and as the minister will remember that we had in fact brought to his attention and to his government's attention about the potential natural gas lines in the Interlake area. I am now, he may be also, aware that there is a committee formed of different municipalities who have been formed to look at the potential of natural gas on the west side along Highway No. 6 and up north. What input has his department had to this committee?

Mr. Derkach: Well, Mr. Chair, as you know we had the infrastructure committee which worked very hard to bring natural gas under the infrastructure program to many communities in Manitoba. We have some difficulties in the Interlake in the northwest area, Swan River, and also in the southwest area. We appointed a special consultant to work with a committee that has been made up of community members and also department staff to try and resolve some of the issues with regard to extension of natural gas to those communities. Again, under the Centra Gas proposal and in the infrastructure program there are some 21 communities that were identified for natural gas expansion. I believe that has dropped to less than that, but I cannot recall the exact number. We are still moving ahead in that regard.

Which community is the member talking about, Mr. Chair?

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Mr. Clif Evans: Actually communities with the Interlake Development Corporation.

Mr. Derkach: Teulon, Arborg.

Mr. Clif Evans: Bifrost is involved. There are communities, Grahamdale, St. Laurent area, that have put together a group of the reeves and mayors and councillors to look at doing a feasibility study to see whether they, in fact, would have to even come to Centra Gas, what other options they have. Have they contacted the minister?

Mr. Derkach: I have not spoken to them directly, Mr. Chairperson. Again, they could be developing a feasibility study among their organization, and once they have that completed, they will probably approach our government to see whether or not there is a possibility of expansion in that regard, but at this point in time, I have not seen their plan.

Mr. Clif Evans: Would a group such as this then be available under the REDI program for feasibility study funds if they were to provide the 50-50 portion?

Mr. Derkach: If they met the criteria, yes, they would be considered under the REDI program.

Mr. Clif Evans: Now the question of natural gas on the eastern side of the Interlake, he is aware that we have been pushing for getting a line put up to Arborg, through Teulon and into Riverton. Would something like Grow Bonds be available for communities to get involved in as a whole and work towards a Grow Bond issue for natural gas?

Mr. Derkach: We would have to look at a business plan and look at the criteria that have been established, whether it is a business venture, or what it is, but, once again, I cannot sit here and say yes or no. I think we would have to look at the entire proposal and then have our professionals make the recommendation with regard to whether or not it meets the criteria.

Mr. Clif Evans: Our member, the minister, in questions during Estimates, I believe it was last year, the year before, they had put forward criteria before the infrastructure program came into light, and the communities were not able to meet some of the criteria. Again, it goes back to the basis of what certain communities can afford to do or not afford to do. I would hope that if the future development north of Riverton goes ahead, the natural gas line--and I am sure that will be coming to the government, of course, again, to see if we can get a line up to that area to not only service that proposal but also the pellet operation just south of Arborg that they are proposing. I would like to sort of research more the availability of some of the programs under REDI and the Grow Bond issue to see whether the natural gas issue would be available.

Mr. Derkach: Mr. Chair, we have been working with those communities in an attempt to resolve the issue, but they have not come forward with a definite request at this time and a business plan to show us that it is in fact feasible and that they are in fact ready to put up their share of money as well.

Mr. Struthers: I want to continue on with the discussion on natural gas as well, but from the western side of the province. I have sort of been watching at least from a distance but the discussion has taken place around natural gas into the Swan River Valley, and I want to ask a couple of questions in regards to that.

Yesterday I did not quite catch--I came in part way through the discussion that the member for Swan River (Ms. Wowchuk) initiated on natural gas. Your department has committed some dollars in the past towards feasibility studies on natural gas in the area, am I right?

Mr. Derkach: I cannot recall off-hand what amounts or where, but I could certainly find that information out.

Mr. Struthers: The figure that I do remember yesterday was a figure of $1.2 million, and that is not the feasibility study, but I did not catch what that dollar amount represented either.

Mr. Derkach: Mr. Chairperson, that $1.2 million was the commitment made by the government under the Infrastructure Program as the province's share towards the Centra Gas development of natural gas service in the Swan River area.

Mr. Gregory Dewar (Selkirk): Has your department been approached in recent times to fund a further feasibility study for this project?

Mr. Derkach: No, we have not. We have been asked for support for the actual placement of the service in the area. We have asked the community to come back to us with a business plan which is not an onerous task or not an expensive way to go, but we have asked that they work on a business plan for natural gas. We have also hired a consultant to work with the community to try and arrive at some solution for them for natural gas, so we have certainly gone beyond what we have done in any other community in the province in terms of providing technical assistance and expertise for them.

Mr. Struthers: Now, it is my understanding, though, that there are certain minimums in terms of a sign-up that has to occur before natural gas will be brought into the Swan River Valley.

Mr. Derkach: Under the Centra Gas proposal there was a requirement that, I believe, 60 percent of residents in a community sign up for natural gas service in order to make it viable in a community, and I would think that even under any other entity that would be supplying the service there would be a minimum requirement of a sign-up before you could make it feasible.

Mr. Struthers: That is the residential sign-up. Is there not another percentage on the business side, a commercial sign-up as well?

Mr. Derkach: Yes, there is a requirement for a commercial sing-up as well. That one, I believe, is based not on the numbers of businesses that sign up but rather the volume of usage of natural gas that would be used by those businesses.

Mr. Struthers: In the recent campaign to get natural gas air, did they reach those targets?

Mr. Derkach: No. They did not.

Mr. Struthers: In light of that, is your department still going to commit the $1.2 million to the project.

Mr. Derkach: Mr. Chairperson, we have told the community of Swan River that if they come forward with a plan to put natural gas into the area, that as far as we were concerned, we would live up to our commitment that we had made under the Centra Gas proposal. That commitment still stands.

Mr. Struthers: Even if there is less than 60 percent of residential sign-up, and even though there is a low volume of usage, your department is committed to the $1.2 million that you spoke of earlier?

Mr. Derkach: No, Mr. Chairperson. The business plan that has to come forward is one that makes the entire service viable in the area. Therefore, we are waiting for that business plan. We will simply not go ahead with a contribution in excess of a million dollars without seeing a business plan which makes it viable and which shows that there is long term viability to the project.

Mr. Struthers: My understanding is that it is the towns of Swan River, Bowsman, and Benito that will be included in the percentage or included in the service eventually for natural gas?

Mr. Derkach: Those were the communities that were identified in the beginning. I believe that Bowsman was dropped off by the community or by Centra at the time that they were looking at the service in the area and Louisiana-Pacific was added to this as well, and I believe Minitonas, if I am not mistaken.

Mr. Struthers: As soon as I had mentioned those towns I realized that I had forgotten Minitonas. I am interested in Louisiana-Pacific as well. Have they made any commitment as far as how much natural gas they would need in a year?

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Mr. Derkach: Yes, I do believe there is an amount that has been identified by Louisiana-Pacific. I do not have those numbers but in considering the feasibility of natural gas in the area, Louisiana-Pacific were a fairly major player in terms of making the project viable in the region.

Mr. Struthers: I just want to switch a little bit here from the natural gas. I appreciate the answers that the minister has given me on that.

I want to say that my belief is that conservation districts play an integral part in the development of rural Manitoba. At least my understanding of what a conservation district is. I do not understand the limits that conservation districts have. I know there main purpose but I do not know how far they can range in their projects they do or the good that they can actually accomplish for an area. Could you help me out a little bit on this and explain more the mandate of conservation districts?

Mr. Derkach: Conservation districts, by and large, have an association that each of the conservation districts belong to and their mandate is fairly specific. It has to do with conservation issues. It has to do with enhancing the landscape, protecting the resources in the area and making them as usable as possible to the residents in the region. They have certainly expanded their work. They are now offering field trips. They are offering educational programs to residents and to students in their jurisdictions. So, by and large, they focus on issues such as drainage, such as water retention, such as enhancement of land, protection of land from flooding, if that is necessary. They take care of crossings as well. They do the educational program, as I have said. Basically, those are the areas that they concentrate in.

Mr. Struthers: I was aware of the educational side of it, as I have had several of my school groups out to different conservation districts, and I understand the educational value of a conservation district. Are these districts solely funded by your department or are there other departments involved in that funding?

Mr. Derkach: The basic grant funding is done through the Department of Rural Development, but in their projects conservation districts access money from municipalities to begin with. They also get basic funding from municipalities because the grant system is made up of I believe it is 25-75 percent basis. They also access money from individual farmers when they are doing work in the area. In addition to that, from time to time I know that they have been able to access dollars from the federal government and federal departments as well.

Mr. Struthers: How difficult is it to establish new conservation districts?

Mr. Derkach: It is not a difficult process, but it does take some time because you have to get agreement from municipalities within a watershed to participate in the conservation district. It would be very difficult to have a single municipality conservation district, especially where you have sparse population. We as a department try to co-ordinate that for regions. Once a decision is made, it generally takes a year to a year and a half to get a conservation district up and running.

Mr. Struthers: You said that one RM probably could not take on the responsibility of creating a conservation district. Is that because of size or is that because of funds?

Mr. Derkach: We try to establish conservation districts within a watershed area. Because conservation projects which might be embarked on affect more than just a single municipality, it makes it very awkward for one municipality to be able to do a lot of work if it were to become a conservation district of its own because of the impact of the surrounding areas. So that is why we looked at grouping municipalities within a watershed area for a conservation district.

Mr. Struthers: Okay, that is all clear. Does the district, the land area itself, does it have to have a certain speciality about it or a uniqueness in order to become a conservation district?

Mr. Derkach: Not at all, Mr. Chairperson. Simply, we try to include municipalities within a conservation district that share the same watershed.

Mr. Struthers: The conservation districts then, do they form part of the 12 percent that is set aside by the province in relation to the Gro Brundtland Commission?

Mr. Derkach: No, Mr. Chairperson, they do not.

Mr. Struthers: Why would they not?

Mr. Derkach: Mr. Chairperson, these are not--conservation districts are not lands that are set aside. Conservation districts include municipalities, and what they are is lands--they have jurisdiction in areas where the land is owned by private individuals. There could also be some Crown land in that area, but it is not part of the accounting of the 12 percent that is set aside, because this is not land that is set aside.

Mr. Struthers: Okay. That kind of leads me into something else that I think falls in the area of Rural Development that I worry about. If those do not fall into that 12 percent, what exactly does?

Mr. Derkach: Well again, that is a question that is better posed to the Minister of Natural Resources (Mr. Driedger) who would be able to answer it more accurately than I could.

Mr. Struthers: I understand that the bulk is going to fall into the area of Natural Resources, but a good part of our province is the prairies, the areas outside of the vast North area that we have that we can set aside. I am wondering about the impact on your department in Rural Development of the land that we need to set aside for that 12 percent, and is that going to have an impact on farm communities?

Mr. Derkach: Mr. Chair, I cannot respond to that with any knowledge. All I can say is that the Department of Natural Resources has jurisdiction over this area and they have jurisdiction over the entire province in the areas within the mandate of natural resources. So lands that are identified as special places because of their uniqueness will be set aside as part of that 12 percent. Where those lands are, of course, is something that is not identified by my department but rather through the Department of Natural Resources.

Mr. Struthers: Okay, I will try to be more specific then. In rural Manitoba there are, let us say, areas where there has been a branch line abandoned and that line sits there empty now. I am thinking of how rural Manitoba can use the area of land that had once contained a branch line of CN or CP. Can rural Manitoba be using that for something else, or does that come under the 12 percent that this province, your government, has committed itself to?

Mr. Derkach: Again, Mr. Chairman, I suggest that question be posed to the minister who is responsible for that area.

Mr. Struthers: Okay, we will move on a little bit. The member for Interlake (Mr. Clif Evans) brought up policing a little while ago, and if I did not talk a little bit right now about the detachment that is being proposed in Dauphin, I would have several R.M.s and Dauphin town councillors breathing down my neck when I go back to the riding.

Is your department involved at all in any funding for the building of the detachment in Dauphin?

Mr. Derkach: No, my department is not involved in that at all.

Mr. Struthers: But your department is involved, though, in providing funds, I understand, for policing in rural Manitoba.

Mr. Derkach: Could you just pose that question again? I am sorry.

Mr. Struthers: Now you are forcing me to remember it. I understand there are jurisdictional problems again, but your department does give some money to policing in rural Manitoba, but it would not include what I have mentioned in terms of the detachment that is being proposed in Dauphin.

* (1710)

Mr. Derkach: Mr. Chairman, under a formula that has been arrived at, there is support that goes to municipalities for purposes of policing, but that does not include any capital facilities that are being built by the police force, whether it is the RCMP or municipal police force. Our sharing of costs goes by way of payments to the municipalities.

Mr. Struthers: Do you have any criteria then to the municipalities as to where that money would go, and, specifically, would that money be earmarked for any specific projects?

Mr. Derkach: No, what we do is, through a formula that has been arrived at, we allocate a per capita amount of money to each municipality for the purposes of policing. It is then up to that municipality through the Justice department to establish an agreement, if it is the RCMP form of policing, or in some instances some municipalities have their own police force and they can utilize that money to fund their own police force.

Mr. Struthers: The original question that I had in terms of your involvement in funds available for police detachments was, of course, the facility that has been promised for a number of years to the Town of Dauphin. But, as I listen to your answers, I was reminded of a Chamber of Commerce meeting that I attended in Dauphin where we were approached by several groups of citizens who were concerned about policing in their communities. They were concerned about inaccessibility of the police force in their vehicles, and they were talking about getting police on foot patrols and bicycle patrols. If they are going to be purchasing bikes and different gear to go along with the bike patrol, would it be possible for your department to earmark monies specifically for that?

Mr. Derkach: No, Mr. Deputy Chairperson, we do not get involved in that respect with regard to policing. Our only function in the whole area of policing is that we provide a per capita amount of money for each municipality for policing. It is up to the municipalities and either the RCMP or the Department of Justice to establish the arrangements with regard to policing.

Mr. Struthers: My fear is that if that is coming out of that same pot of money, that if the local municipality goes ahead and comes up with a foot patrol that costs them extra money or a bike patrol that costs them extra money in some way, then there is no incentive for creative programs that local people can come up with--whether it is Dauphin or wherever else in rural Manitoba. That means that they are taking up more of their share of the dollars with a program that they may think of.

Mr. Derkach: I apologize for not being able to follow exactly what point the member was making. I guess the only response I can give to the sort of tone in which it was being asked, is that it is up to the municipality to determine the kind of policing that it requires and to then make the adjustments accordingly. We do not, as a department, get involved in that at all.

Mr. Struthers: My other fear in the area of policing is that it seems to me by looking at the estimates in your estimates book, that money for policing has been decreased over the last several years.

Mr. Derkach: No, Mr. Deputy Chairman. Again, I can get the detail for the member. In essence, what we have done is there is a tax-sharing formula that is used for policing. Previously, rural municipalities were not paying a large portion for policing, whereas rural-urban municipalities were. There has been a shift in terms of the amount of money that rural municipalities now pay for their policing services. There has been an increase in the cost to policing in rural municipalities and, I guess, a decrease in the cost of policing in urban municipalities because of the shift in tax sharing that is done between the province and the municipalities.

Mr. Struthers: I am looking right now--it is Appendix II on page 92 of the estimates. If I am reading it correctly, I was right in my supposition. If I am not reading it correctly, I wish that the minister would straighten me out on it. It says that 1991-92 was $1.4 million, same as 1992-93, and then 1993-94 was $200,000. If you continue on through to the last two years, it is nil. Am I not reading these figures correctly?

Mr. Derkach: Mr. Chairperson, that is the kind of detailed question that was really meant to be asked when staff are here, so they can provide the technical advice in that regard.

I can probably get that information for the member privately, but it is not information I have at my disposal right now.

Mr. Struthers: That sounds fair. Generally speaking, you are saying that the funding has not decreased, and R.M.s across the province can still count on funds from your department for policing.

Mr. Derkach: Can I ask the member to repeat his question, please?

Mr. Struthers: I realize that without staff, and it may not be the appropriate time to be specific, but in general terms then, what you are saying is that the funding has not decreased and that you are still funding to the same extent that you were, at least the same extent that you were two years ago or three years ago.

Mr. Derkach: Mr. Chairperson, the only shift that has occurred is as a result of the policing agreement that was arrived at between municipalities, urban and rural municipalities, through the policing agreement that was signed about a year ago.

That is done through the provincial-municipal tax sharing dollars. In terms of withdrawal of dollars from the general area, that has not happened.

* (1720)

Mr. Dewar: I just want to ask a few questions of the minister related to the upgrade of the Selkirk water supply. I raised the issues in Question Period on May 26. Unfortunately, the minister was unable to answer the questions.

Mr. Derkach: I do not recall the questions.

Some Honourable Members: Oh, oh.

Mr. Deputy Chairperson: Order, please.

Mr. Dewar: Well, as the minister is aware, the agreement was signed by the three levels of government in 1993 under the Partnership Agreement on Infrastructure, the PAMWI agreement it was called. The project, of course, is designed to get Selkirk off the emergency reliance on the Red River for our water supply. I recognize and I do want to thank the minister for being a partner to that agreement. It is very important for us in our community to end this emergency reliance on the Red River, and we do applaud and support the government.

The problem is that the second phase of the project may be in jeopardy. There are two phases. Phase 1 is the construction of a storage container to increase the capacity of the storage ability of the infrastructure in Selkirk. Phase 2 was the digging of a well, a well that is required to fill the storage container of Phase 1. The problem is that the project may be in jeopardy because the federal government has given notice that they are unwilling to participate in Phase 2. My question is: Is the minister aware of the problem, and is he prepared to take some action to help the constituents of Selkirk?

Mr. Derkach: Mr. Chairperson, I am aware of the problem. The problem has resulted because of the withdrawal or reduction in funding by the federal government to the PAMWI agreement.

(Mr. Frank Pitura, Acting Chairperson, in the Chair)

That came on a very untimely basis because we were in the middle of approval and in the middle of construction of some of these projects when that news came, and what it did was, it did not allow communities to complete some projects. There are several communities that found themselves in that situation. We cannot make up the difference that has been cut back from the federal government. I have written to Minister Goodale. I have written to Minister Eggleton. I met with Minister Eggleton to discuss the problem. I also wrote to Minister Axworthy to try and impress upon him the importance of this program for rural Manitoba. It seemed very contradictory that they would cut this program, which is basically an infrastructure program and at the same time enter into a new infrastructure program.

I can only say that we cannot make up that shortfall that has been reduced by the federal government. All we can do is continue to impress upon the federal ministers the importance of expanding this program so that indeed we could complete some of the work that has been started. It is such important work and I understand it, but Selkirk is not the only community that finds itself in that position. There are several others, and we just do not know how to respond at this point in time because we do not have those dollars.

Mr. Dewar: Have you received any response back from Minister Axworthy?

Mr. Derkach: Mr. Chairperson, I have received a response, I believe, from Mr. Eggleton and from Mr. Goodale. I am not sure that I have received a response from Mr. Axworthy; I cannot recall. I know I have received some of the responses. There is one of the people I wrote to I did not receive a response from. Basically the message has been that it is a budgetary matter, and they basically are not telling us that they will increase it at this time.

However, we are continuing to talk to PFRA because that is the arm that delivers the program, and we are keeping the channels open so that if the funding should be there, we would only be too happy to accept it and continue the projects that we started with.

Mr. Dewar: In August of '94 I too sent a letter to Minister Axworthy. I have not heard anything from him yet, but there was a press statement made in the local paper last week from our M.P. and he said that, oh, the money is on its way. Then he went on to say it is the Jets deal that is holding it up. I do not know if the money is on its way or not. He seemed to indicate that it is, but I do not know if that is for just Selkirk or for throughout Manitoba. I do not know what we are going to do in the community. We have the storage capability yet we have no well to fill that tank. So you do not see the province taking on a bigger role in any of this?

Mr. Derkach: Well, Mr. Chairperson, we do not have the financial capacity to be able to make up the shortfall of these projects, because as I indicated it is not just this project. There are several in the province that we find are in this same position. If the money is on its way, we will certainly welcome it, and it will be put to immediate use to live up to those commitments that were made under the agreement. But I have to tell the member that our commitment is solid. If that money from the federal government comes, our money is there immediately. As a matter of fact, we would even like to see an increase in that program because we think it is a very important program for communities outside of Winnipeg.

Mr. Dewar: What is the federal shortfall? How many dollars are needed to finish these projects?

Mr. Derkach: The total figure is almost $10 million.

Mr. Dewar: And that would be for all the projects that are unfinished in Manitoba. What are some of the other areas that are finding themselves in the same situation as Selkirk?

Mr. Derkach: There are a variety of communities, Mr. Chairman, and I do not have the list with me at this time. I can provide it for the member. Instead of trying to recall each community that is in that position, I would rather provide that list for the member in the next day or so.

Mr. Dewar: I hope that the minister here will go forward and take the issue up with perhaps Minister Axworthy or relay it on to the Minister of Finance when he meets with Minister Axworthy. I understand that they meet to discuss the arena proposal.

Will he make the commitment that he will ask the Minister of Finance to bring this up the next time he meets with the federal Minister of Human Resources?

Mr. Derkach: Mr. Chairman, that has already happened. Minister Stefanson has already broached that topic with Minister Axworthy in their discussions. However, nothing has come of it yet. We continue to hold out our hope.

Mr. Dewar: So do I. Let us speak a little bit about the REDI project. Are there any grants or any projects in Selkirk that are receiving money under the REDI program at this time?

Mr. Derkach: The question was, I believe, are there any programs in Selkirk?

Mr. Dewar: What are the projects that are applying for REDI money that you are aware of?

Mr. Derkach: I do not know the specific projects, because I do not keep track of them. We have something like 200 projects that have now been approved under the REDI program. I can tell the member that companies like Black Cat Blades, Sterling Press have been major participants in our programs. Certainly they have been very positive ones, because they have produced a significant number of employment opportunities in that community.

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Mr. Dewar: As the minister recalls, I believe it was last year there was a firm, the firm is still interested in moving to the Selkirk community--TACO, it was called, or Saskatoon Heavy Industries. They received a conditional loan from the province for $2.5 million and, as well, they were going to apply for a Grow Bond of equal amount. Can you give us an update on that?

Mr. Derkach: Again, that is not the kind of technical information I have at this time but, once again, we are continually working with individual businesses like that to bring the jobs into any community that is interested. I do not know the status of it but, again, I can research that and get back to the member.

(Mr. Deputy Chairperson in the Chair)

Mr. Struthers: One of the first events I was invited to after becoming an MLA was the rural deal-making forum that took place in Dauphin. I want you to note that that was not looking in here and getting my research done, that was right off the top of my head. It was spontaneous.

The rural deal-making forum took place just after the election and I was invited to speak. Unfortunately, my grandfather's funeral was the same morning and I could not get to speak to it, but my constituency assistant did attend and spoke for us. I am interested in knowing what kind of feedback you have on the success of the forum.

Mr. Derkach: Mr. Chairperson, I have not had the specific debriefing on the forum as of today, but I can indicate to the member that this is the kind of activity that we are trying to promote throughout the province.

In this case it was encouraging to see that it was the community that actually came together and put this forum on rather than depending on a department of government to put it on. That is what we are finding right through rural Manitoba. Communities are waking up to the fact that if something is going to happen within their community, it is not going to be government that is going to drive it. It has to be from within the community and within the grassroots. That is a complete change in attitude in our communities than it was five and 10 and 15 years ago.

It is a pleasant change because our forefathers who came here did not wait for government to develop this country. They undertook the responsibility by themselves. If our communities are to survive for the long term, I firmly believe it is up to the communities to undertake that responsibility and to take the leadership role. As a department and a government, we can be there to facilitate that action and to be there to support them and to provide, whether it is resources in terms of bringing in experts who have something to offer in fields that they are exploring, but in terms of driving initiatives, it has come from within the community.

I was encouraged to see that the community of Dauphin had come together to put together the forum. We are seeing other communities in rural Manitoba do that. I am looking forward to talking to staff about the results of that forum, and I guess the proof of the pudding will be if we find that community to look at attracting new businesses to that community and also creating businesses from within the community to stimulate economic development and job creation.

Mr. Struthers: I agree almost wholeheartedly with what the minister has just said. I think that he is accurate in saying that our forefathers pioneered rural parts of our country, predominantly without relying on big government to help them. I want him to also understand that they did it without big business to help them as well. In most cases it was the co-operative efforts of a lot of our ancestors who built strong communities, and I just wanted to make sure that he does not forget to include big business in his group of people that we have not relied on in past years, not just the government side of it.

What impressed me the most in looking through the agenda for the rural deal-making forum and talking to one of the minister's staff, Mr. Lloyd Talbot, was the amount of co-operation that was going on between business and between his department and between the local businesses in the community of Dauphin, and not just the community of Dauphin but the whole Parkland area. One of the things that was evident at the forum was that it was more than just a Dauphin forum, it was Parkland and it brought a lot of innovations in from smaller communities, which I feel tend to be ignored in the big picture when government or business or anyone comes out into rural Manitoba to make their mark. I was really impressed that those folks were also included in the deal-making forum.

My hope is that it will be continued again in Dauphin next year. What I would be interested to know is, the people who organized it within Dauphin, have they indicated to the minister a willingness to do it again in Dauphin next year?

Mr. Derkach: I have not had any direct correspondence with the good folk in Dauphin since the deal-making forum, but the member is correct. It has to be a regional approach because for too long every small community has been looking after its own little needs and almost looking at envy if something happened in a positive sense in a neighbouring community.

Slowly we have tried to instill some different thinking into communities by asking them to look not only at their community, which was very important, but also to look at what is happening on a regional basis, because whether new business locates in my little town or not is not that important if it locates within a neighbouring area within the region. It is going to help our entire region. Therefore, this deal-making forum that the member speaks of was an excellent beginning at bringing the whole region together and examining what the strengths are of that whole region now.

We have round tables that look at the strengths of their own communities. Now we need to look at the strengths of the region and see what we can attract to a region that would make economic sense that would provide opportunities for job creation and would also bring wealth to the area.

Mr. Struthers: The last point I want to make on that is that it followed right on the heels of a very successful, very large Kinsmen trade fair which attracted thousands of people into the community of Dauphin. One of my worries at the time was that there would not be a lot of people coming back for the rural deal-making forum in such close proximity to the Kinsmen Trade Fair. When you do get your information back from people, I hope that you remember that it was within a matter of weeks following that, and it may have had a negative impact on the numbers that would have attended the deal-making forum. I wanted to say that, hoping that you are not discouraged by low attendance.

* (1740)

Mr. Derkach: Mr. Chairman, I do not simply look at the numbers of people who were there. Any attempt to bring people together I think is a worthy one in terms of sharing this kind of information. Because this was the first attempt, we naturally have to learn from that. It does not mean that, just because the numbers were low or we expected more participation, we should abandon the idea. I think that what we need to do is look at the areas where we could improve and perhaps do a better job at communicating, strategizing how we structure the day. I think that it can become a very positive event.

Mr. Deputy Chairperson: Is it the will of the committee to recess for five minutes?

Some Honourable Members: Agreed.

The committee recessed at 5:40 p.m.

________

After Recess

The committee resumed at 5:47 p.m.

Mr. Deputy Chairperson: Come to order, please. We are debating 1(a).

Mr. Clif Evans: It is more of a comment to the minister than a question. The question will come, but a comment--because the rural development corporations--I think the minister has heard me make many comments before about the support for rural development corporations. The Interlake Development Corporation, of course, has been an ongoing corporation since inception of these corporations. Does the minister have any specific plans to expand the availability of these RDCs to expand within themselves? Is there some guidance that the department will be providing in the future for RDCs?

Mr. Derkach: I do not quite know what the member means by expand within themselves, but I can tell him that we are looking at all of our delivery systems within the province. As the member may be aware, there are some duplications within the province in terms of service delivery. If you were to, as an example, look at what happens with community futures organizations and our own regional development corporations, they tend to do the same kinds of things and they seem to go after the same kinds of entrepreneurs and businesses and opportunities. I guess my question is, as minister, how many of these organizations do we need out there doing the same job. Secondly, are we confusing the entrepreneur who is starting a business and asks himself, where do I go first? Do I go to the Community Futures office? Do I go to the Regional Development office? Do I go to the Rural Development office? Do I go to I, T and T? Where is it that I go to get service? I think we can co-ordinate and do a better job of streamlining the way we do economic development delivery of services in all of our province and that is what we are presently looking at.

* (1750)

There is no intent on my part to diminish the role of the regional development corporations. I think they do have a responsibility and a role to play, but that is not to say that their mandate and their structures may change down the road. But that is still premature. We are simply studying the matter right now, and we will be in a better position down the road to make a recommendation to government.

Mr. Clif Evans: Mr. Chairperson, yes, I agree that better services should be provided for information and resources to rural areas, but I want to remind the minister, I found that when I became a member of our RDC as mayor of Riverton, I thought at that time, and I still do, that it is probably the better grassroots organization within the provincial government which we certainly do need, the grassroots part of it, because only the municipalities and communities and people who are involved in their local RDCs know exactly what is good for their communities or their specific region or specific area.

I would certainly hope the minister's department would consider, if improving, fine, but maintaining would be for my best interests and the best interests, I think, for the rural communities.

I did not see a line as far as the amount of money provided to the RDCs this fiscal year. I might have missed it. If you could just tell me if the funding is the same.

If the minister cannot find the figures right now, I would just appreciate his getting back to me on that through his department.

Mr. Derkach: Mr. Chairman, the regional development corporations still are an important element in our delivery of programs in the province. I can tell the member that we support them again on a 75-25 percentage basis in terms of their operating grants that are provided.

As a matter of fact, we just a formed a new regional development corporation which is called WEDA, and that is the one in the southwest part of the province. Additionally, we also split the Parkland regional development corporation into the East Parkland and the West Parkland Development Corporation, which gives them an ability to respond better to their communities.

The funding, I can tell the member, has not decreased. It has probably stayed the same. I have the numbers here, Mr. Chairman. In total we have contributed, in 1995-1996, $544,989 to the development corporations. That is the same number, a slight increase, from the previous year.

Mr. Clif Evans: I thank the minister for that information and I would also like to thank the minister again, and his staff, for their indulgence in this Estimates process. We look forward to working with your department and in the future to maintain our rural economic development and our rural areas.

Mr. Derkach: Mr. Chair, if we are concluding, I would simply like to thank the critics, both from the official opposition and the Liberal Party, for their co-operation in the past. I would also like to thank the new members of the opposition who have posed some very thoughtful questions over this Estimates debate, and I look forward to working with them and to provide them with any assistance that I can as minister responsible for this department.

Thank you very much.

Mr. Deputy Chairperson: Item 1.(a) Minister's Salary $22,800--pass.

Resolution 13.1: RESOLVED that there be granted to Her Majesty a sum not exceeding $1,244,000 for Rural Development for the fiscal year ending the 31st day of March, 1996--passed.

This completes the Estimates of the Department of Rural Development.

The next set of Estimates that will be considered by this section of the Committee of Supply is the Estimates of the Department of Agriculture.

Committee rise.