EXECUTIVE COUNCIL

Mr. Chairperson (Marcel Laurendeau): Will the Committee of Supply please come to order. This section of the Committee of Supply will be dealing with the Estimates for Executive Council. We are on item 1.(b), but by leave the committee had agreed to consider the Estimates for Executive Council as a whole, as I recall.

Mr. Gary Doer (Leader of the Opposition): Last June 24 in this Chamber--and I want to start asking some questions about the participation of the Premier in the Winnipeg Jets--the Premier tabled a statement in this House dealing with the Burns committee. I do not know whether he has read it recently. He does summarize the position of the NDP in that statement on page 8 of the document.

Sometimes I think that he has changed not only his own position on Burns but also tried to change his position that he said was our position on the issue of the hockey situation because he did state that the Leader of the Opposition would not build an arena without substantial funding from the private sector and no new tax dollars should be put into the arena was his quote. Then he went on to quote the Leader of the Second Opposition. He also went on to talk about: I could not in good conscience expect Manitobans to fund an $111 million facility and, of course, at that point the Premier departed from the proposal to deal with the June 30 deadline.

Of course, I was asked by the Premier to go to one meeting and I did attend it, and yesterday I was rather disappointed that the Minister of Finance (Mr. Stefanson) would then say that the Leader of the Opposition refused to participate in the process. Can the Premier indicate how many meetings he invited us to attend after that one meeting in June and how many did we refuse to attend?

Hon. Gary Filmon (Premier): Mr. Chair, I do not have any information on that.

Mr. Doer: Mr. Chairman, I would assume that any time the Leader of the Opposition is invited to a meeting with the Premier, the Premier would approve it. The Premier, the minister--I do not recall. I checked with our appointment staff. The one time I was asked to attend--all the occasions I was asked to attend meetings on Meech Lake I attended. All the occasions I was asked to attend meetings on the Constitution at Charlottetown I attended. All the occasions I was asked to attend meetings on saving the base I attended. All the meetings I was asked to deal with on the Portage base I attended. All the meetings I was asked to attend as a member of this Legislature first, a Manitoban first. I was asked to attend on dealing with Shilo; I attended.

I would like to ask the Premier--our records indicate that the Premier only invited us to the one meeting on June 27 and after that he never invited us to any meetings. Will the Premier please check his records because his Minister of Finance was publicly saying yesterday, we refuse to participate in meetings with the government. How can that be true if you are not invited?

Mr. Filmon: I will check our records, Mr. Chairman.

Mr. Doer: Mr. Chairman, I think it is safe to say that the government invited us to one meeting and it did not invite us to other meetings after that. That is their prerogative; I respect that. But I think it is unfair and inaccurate to have a defence for questions in this Chamber that the Leader of the Opposition or the member from Concordia refused to attend meetings of the government. If I had been invited to a meeting and refused to go, I think that is fair comment.

If we have only been invited to one meeting and attended it, then I think it is a very unfair statement. I would ask the Premier--I was very disappointed in the answer of the Minister of Finance (Mr. Stefanson) yesterday. It is one thing to have a disagreement, and I expect we will have disagreements in this Chamber. It is another thing to create a straw man, if you will; you refuse to go to meetings when you were not invited. The Premier did not invite us to any other meetings from June 27 date on. That is his right; that is his prerogative. That is his democratic mandate. But do not say that we did not attend meetings if we were not invited. I would ask the Premier, is he aware of any meetings that I did not personally attend on the Jets?

I happen to believe I am a team player when I am asked to join in on things. We may disagree on matters. I did not agree with everything the Premier agreed to on Charlottetown, and the Premier knows that. I tried to be a Manitoban first. I did not agree with everything we were doing on some of the base closures. I did not agree with everything we were doing on Meech Lake, but I tried always to be, as an individual, a team player.

I was invited to one meeting by the Premier. I did attend and there were no other meetings after that. I would just like the Premier to set that straight on the record. I think that is an important point of integrity, certainly for myself, because I never refused to go to one meeting.

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Mr. Filmon: Mr. Chairman, I would just say that the Leader of the Opposition chose to play pure politics with this issue. He grandstanded all over the place. He criticized, dumped all over everything that this government did with respect to the efforts to maintain NHL hockey in Manitoba. I am sure that it would have served no particular purpose to have him at any meetings because of the negative and destructive nature, and the highly political nature of his comments. I would gladly say that he was not included in any of the meetings after the first meeting, at which he left the meeting and certainly did not want to be a part of any joint solution, but only wanted to be a part of destroying any climate for maintaining NHL hockey in Manitoba.

Mr. Doer: I would ask the Premier to check back on June 24 when he stood in this House. He quoted our position on the NHL situation. He quoted his own position of $111 million as unconscionable. It is a position that he took at the meeting with Mr. Jim Burns on the Monday. It is the same position I took. We both equally challenged Mr. Burns on one of the assumptions that we could put it in a fund that would not show any losses or depreciation. We both cited hydro dams that have to be in a sinking fund or some other way to be calculated. So we did not even buy his assumption about how we could pay for it. I supported the Premier on June 24, publicly. I thought that he was right. His conscience was right, $111 million was too much. At that point I agreed with the Premier.

We have had disagreements since then on the site. I just want to put that on the record. I was not invited to any meeting; therefore, I did not refuse to go to any meeting. To say otherwise is--unless the Premier invited us to a meeting, and I have gone through it with both the people working in our office, I have gone through it with everybody, just to make sure yesterday that the Minister of Finance--just in case I was invited to something I was not aware of, we went through the whole appointment schedule and all the phone messages, et cetera, and there were not any on this issue. I just want that on the record.

The December agreement, the operating-loss agreement which was signed by the Premier and the former mayor, William Norrie, was, of course, a matter of some debate last year when we finally received from the Auditor information that the government knew in the fall of 1991, based on I, T and T projections--the Premier knew and cabinet knew that the losses would be $43.5 million in the length of the agreement. The government chose, subsequent to their statement on June 24, to renegotiate or extend that agreement or amend certain deadlines in that agreement.

Can the Premier table today, insofar as we are a party to the agreement in that we pay the losses, insofar as we are a party in the agreement because we are an 18-percent owner of the hockey team--can the Premier today table in the House and make available to the public the addendum agreement to that operating-loss agreement and have that made public?

Mr. Filmon: I wonder if I could ask the Leader of the Opposition what addendum agreement he is referring to and what changes he is referring to.

Mr. Doer: Prior to June 30--the deadline for purposes of exercising certain options was June 30. The government reported to the House, subsequent to that, that certain provisions had been amended. Mr. Shenkarow and the Premier were in communication with each other. The agreement then changed the date from June 30 to May 1. It also changed the ability of the public--one of the scenarios being put forward in the sports media was that the public sector, i.e., the province and the city, should buy the team and then use that as an asset, something which the Premier rejected. That was amended in the agreement as well. So the date was amended, and certain conditions were amended, and we had never received a copy of that. Would the Premier table--obviously the agreement was amended, and can the Premier table that today in the House as an 18-percent shareholder in a privately owned hockey team?

Mr. Filmon: What in fact happened was that a group called Manitoba Entertainment Complex Inc. exercised the option that was contained in the agreement, which could be assigned by the province and the city government. They exercised that option on behalf of the city and the province, and that is what took place. If there is any paperwork surrounding that, I will look into it, Mr. Chairperson. That is all that happened.

Mr. Doer: Well, one assumes that the date change would require an amended agreement, the date change of June 30 pursuant to the December 1991 operating-loss agreement. One assumes that there is paperwork either in the form of some kind of contract or language, and given the fact the province is an 18 percent shareholder could the public not see that document, and could the Premier not table that in the House? I understand the documents are tabled at the NHL, and I think it is appropriate the documents be tabled here in the Legislature--as I say, 18 percent shareholders in this team.

Mr. Filmon: Mr. Chair, I believe that there was an exchange of letters. I do not think the original agreement was amended, I believe there was an exchange of letters, so I will look into that and assuming that there is no commercial confidentiality, I will be happy to table it.

Mr. Doer: Who in the government service was involved in the negotiations and the discussions dealing pursuant to the June 30 deadline and the new deadline of May 1, or the reported deadline of May 1? Who was the staff involved on behalf of the provincial taxpayers in these negotiations?

Mr. Filmon: My recollection, Mr. Chair, but I can verify it, is that it would have been Michael Bessey and Julian Benson.

Mr. Doer: How often were they briefing the Premier on the state of play and affairs of the hockey team, the Jets hockey team?

Mr. Filmon: I am not sure I understand. There may have been months and months on end in which nothing pertaining to the agreement or to the operation of the Jets was required in which I would get no briefings. It is simply on an as-required basis.

Mr. Doer: After the NHL signed the players agreement, which contained (a) no salary cap and (b) no revenue-sharing agreement--there were words that they would look at revenue sharing perhaps down the road; I remember Mr. Bettman's press conference--was there an analysis prepared to the government insofar as Mr. Mauro and Mr. Burns both recommended that the deal would be razor thin, Mr. Mauro at $30 million investment, Mr. Burns at $111 million investment? Both stated to the Premier that the deal would be razor thin unless a revenue sharing or salary cap would be in place.

Was there an assessment of that to the Premier further to the NHL players agreement, the negotiations of which we put a lot of stock in? A lot of people talked after June 30 that this would be the pivotal play to save the team in Winnipeg. Obviously, both of those conditions--salary cap and revenue sharing--were not resolved, certainly not to my satisfaction and, I do not think to the Premier's satisfaction. Was there an analysis prepared for cabinet and the Premier pursuant to those negotiations?

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Mr. Filmon: Mr. Chairperson, circumstances were such that nobody really could definitively say what the new collective bargaining agreement would produce in the long term. Therefore, we requested and, in the company of the representatives of the interim steering committee, received a briefing from Mr. Shenkarow, who had been at the table for the entire negotiations, as to how he felt that the collective bargaining agreement would impact on salaries and what his perception was as to the possible magnitude of revenue sharing that might occur. The result of that was that he indicated that he felt that there would be some considerable dampening effect on the growth of salaries.

Ultimately, the level that was plugged in for the MEC analysis of $26 million of annual salaries was based on his perception of what this would do to salary growth. That is for the 1997-98 hockey season, when they would be in a new arena. That was the base level that they were choosing to construct all of their cost estimates on. That was based on his perception and it compares to a current salary budget of about $20 million for the team. They were assuming that in two more seasons it would increase by about 30 percent and they felt that was a reasonable expectation.

I believe that the salaries have doubled every three years for the past six years, so it would indicate a dampening effect of the increase in salaries, and that is how they arrived at their projection. My recollection is that Mr. Shenkarow suggested that he felt that the amount of revenue sharing that would ultimately be arrived at, by virtue of the discussions that had been held, would be somewhere around $4 million annually. These are all, I might say, Canadian dollars, both the salary packages I am talking about and the revenue sharing. To give the Leader of the Opposition some comparative idea, the estimate that Mr. Bettman provided us with in late April or early May when he came here on a Saturday, was that he thought that $2 million U.S., which would be about $2.8 million Canadian, was more likely the kind of level of financial support that could be expected by small market franchises. All of these, of course, were "guesstimates" and are "guesstimates," based on listening to people who have experience with the operations of the team.

Mr. Doer: Has the government received a written briefing from the Department of Industry, Trade and Tourism, the I, T and T department, through Mr. Bessey and through the Treasury Board to the cabinet, on the short-term projected losses and the medium-term projected losses? If one recalls, when we finally received from the Auditor last year the documentation that I, T and T had indeed had a loss provision that in its macro number is going to be remarkably accurate, it was overestimating the losses for a couple of years but underestimated for another couple of years, and the macro number is going to be pretty close to being accurate and they prepared that in October of 1991, as I recall. Have I, T and T and the person who was responsible for providing those numbers initially to cabinet prepared those other numbers to the government, and can the Premier share those with us today?

Mr. Filmon: I do not have any further numbers to share. I do not know of any other briefing notes that were prepared. The only thing I can say is that, in terms of the continued review of it, we were satisfied that the worst case scenario that was represented in those numbers that the Leader of the Opposition quoted extensively throughout the province, and I might say he deliberately obfuscated the numbers by suggesting that we, the provincial government, were responsible for $43 million when in fact we were responsible for half of that. As time has demonstrated, the last two years are unlikely to be picked up by the province because the trigger date of decision was this spring and we would either be out of the agreement or would be into development of an arena and so on.

These are all things that I say to him have, I think, probably distorted and misrepresented a lot of the issues, but that is his prerogative. If you are looking at the global issue, our share of $21.5 million, had the agreement run full term, would still have been the likely target, in my judgment.

Mr. Doer: The Premier may recall that when the initial agreement was signed by both him and Mayor Norrie the numbers that were released by both him and Norrie at that time were that the losses were probably up to about $5 million on the life of the agreement, and that was, quote, a small price to keep the team here. They already had a document in October of 1991 prior to the press conference that said that the losses would be $43 million.

Perhaps it would not have been an issue in the public if we had received the numbers and information that the Premier had. If everybody in the House and in the public had received the information prior to the Auditor having to go and ferret those numbers out from the department that were made available to the cabinet and to the Treasury Board, perhaps there would not have been such public concern about those numbers.

Mr. Benson and Mr. Bessey were briefing the Premier on this issue. Our sources say or tell us that in the end of March and April the MEC group became increasingly concerned that the proposal could not go forward as it was constituted, and I would like to ask the Premier when he was first advised by Mr. Benson and Mr. Bessey, who were part of this set of these negotiations--Mr. Bessey is the government's representative, I think, on the interim management group. When was the Premier first advised of this?

Mr. Filmon: Firstly, I point out that the numbers to which the member insists on referring were worst case scenario numbers. When he says that I said that $5 million was the most likely target, it turned out to be $9 million, so that is not far from what we were projecting.

The second thing is that Mr. Bessey is the representative on the interim steering committee. The interim steering committee had absolutely nothing to do with any of those deliberations that MEC was pursuing. So Mr. Bessey, as a member of the interim steering committee, would not be plugged in on any discussions.

I do not know who the member is referring to that advises him that MEC had different numbers by the end of March, because Mr. Loewen, who is the head of MEC, has absolutely denied that publicly. So, if he is calling Mr. Loewen a liar, then he had better state his source, because nobody publicly from MEC has stated that they had different numbers at the end of March or early April.

Mr. Doer: The NHL met with some of the MEC representatives on April 13.

Mr. Filmon: That is not the end of March.

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Mr. Doer: I said March and early April. The NHL met with--[interjection] Well, if you think in anybody in Winnipeg believes that you did not know until April 26, you can go ahead and keep telling people that. Just when was the Premier briefed further to the NHL meeting of April 13 with the MEC?

Mr. Filmon: I will put on the record that I did not know those numbers before the end of the election campaign on April 25. As an honourable member, the member is either required to accept my answer or provide any evidence to the contrary, and I demand that he do that or withdraw his allegations.

Mr. Doer: Mr. Chairperson, the Premier did not answer the question. I asked the Premier whether he was briefed after the April 13 meeting that took place. The Premier indicated that Mr. Bessey and Mr. Benson were involved in the discussions. We saw Mr. Bessey and Mr. Benson in the Premier's office many mornings, Mr. Chairperson.

Point of Order

Mr. Filmon: On a point of order, I did not say that Mr. Bessey and Mr. Benson were involved in the discussions on April 13. I said that they were our contact persons with MEC. I have no knowledge that they were involved in any April 13 meeting. I ask him now either to withdraw his allegation that I knew prior to the election date of a changed scenario or changed numbers or to withdraw the statement.

Mr. Chairperson: Order, please. The honourable First Minister did not have a point of order. It was a dispute over the facts.

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Mr. Doer: Mr. Chairman, did Mr. Benson and Mr. Bessey meet with the Premier between the dates of April 13 and April 25?

Mr. Filmon: I am certain that I would have had contact with them during that period of time, but at no time did we debate, talk about or did they provide me with new information or new numbers with respect to any changed MEC business plan.

Mr. Doer: Mr. Chair, we saw Mr. Benson and Mr. Bessey coming out of the Premier's office on quite a regular basis during that period of time. Is the Premier saying that they did not have any knowledge between April 13 and April 25 of the deteriorating situation as it related to the hockey team and the ownership and the May 1 deadline? They had no knowledge of what was going on, or they had knowledge and did not brief the Premier?

Mr. Filmon: I am saying, Mr. Chairperson, that I had no knowledge. It was not provided to me by anybody, whether it be Mr. Bessey, Mr. Benson or anybody from MEC who would have knowledge of this. The fact of the matter is, if you listen to Mr. Loewen, who is the president of MEC, he tells you very clearly that they did not have that information until after the election campaign. So why would you make that allegation if you have no evidence to substantiate it?

Mr. Doer: So the Premier is saying that the two individuals, two very high-priced public employees, who were assigned by him to deal with this very, very, important file and portfolio, had no knowledge between the dates of April 13 and April 25 of the deteriorating situation with the proposal to deal with the Winnipeg Jets hockey team and the May 1 deadline?

Mr. Filmon: Mr. Chairman, of course they would not have any knowledge when Mr. Loewen says that knowledge was not available. He said so publicly.

Mr. Doer: Is the Premier saying that on April 21 when he participated in a public debate and said that he would limit his contribution to the hockey team, the only thing he would put on the table would be $10 million, that is his limit, he would cancel the operating-loss agreement, he had no knowledge of the deteriorating situation of the finances of the Winnipeg hockey team when he made that public commitment to all the people of Manitoba? Is that what he is trying to say?

Mr. Filmon: That is absolutely what I am saying. In fact, if you listen to Mr. Loewen, he says that only a matter of days before the public announcement of concerns was made they became aware and were asked to take a look at how salaries had changed from the time of the collective bargaining agreement signing until that present time, and only then did they realize that their projection of $26 million was inadequate.

Mr. Doer: Did the Premier not say in this House that $111 million was unconscionable as a contribution from the public sector on June 24, 1994?

Mr. Filmon: Mr. Chairman, I said before that given the lack of commitment by the private sector, I did say that. When the private sector faced us with a new proposal in which they would come up with $111 million, that put in a different perspective the request that they were making for the public sector to build and own the arena for future generations' enjoyment and use over a long period of time. That is the new proposal on which our new response was made.

Mr. Doer: Did the Premier not say on the CBC debate in March, the Taxpayers Association debate in April, and again on the CJOB debate on April 21--on all three occasions the Premier said, my limit is $10 million, full stop. The Premier did not say if the private sector comes up with something else, blah, blah, blah--my limit is $10 million, that is our commitment, that is our government's commitment. On three separate occasions the Premier gave his word, which was consistent with the word he gave in the Legislature on the $111 million in his conscience. In terms of the $111 million, did the Premier not say, without equivocation, on all three occasions--and I have the tapes for the Premier if he wants to hear them--the $10 million is the limit?

Mr. Filmon: Yes, Mr. Chairman.

Mr. Doer: I would like to ask the Premier why he broke his word after the election on the amount of money that would go to a new facility. Where did he receive a mandate to go from a $10-million commitment before the election to a significant amount of money after the election campaign? He made that commitment. He was making it in rural Manitoba where they were concerned about the operating-loss agreement; he was making it all across the province, $10 million is the limit. What mandate does the Premier receive?

He has got a mandate for $10 million. If he was writing a cheque today on behalf of the people of Manitoba for $10 million at a site we did not even agree with, I would have absolutely no difficulty. He does indeed have a majority and a mandate to proceed with that. What I am concerned about is making a specific promise with no equivocation in the election campaign, three times in a public arena and multiple times across 57 constituencies, and then proceeding in a different direction. What mandate does he have to break his own word?

Mr. Filmon: Mr. Chairman, as I have indicated countless times to the Leader of the Opposition, the private sector faced us with a new proposal in which they would come up with considerably more money to not only purchase the hockey team and repay its debts but in fact to set up an endowment fund that would see them fund future losses. They suggested that in order to do that the public sector would need to build and own the arena, and we in response to that changed proposal made our commitments.

Mr. Doer: The Premier has stated that he was not advised between the dates of April 13 and April 25. He has also advised us that he was committed only to $10 million during that campaign. Has the Premier discussed the fact that he was not advised with the senior staff responsible in light of the fact that this forced him later on to break his word to the public in terms of what he could commit or not commit. Has the Premier discussed this fact with Mr. Benson and Mr. Bessey in terms of their--the people I know believe that the Premier should have known if he did not know. Has he discussed this lack of information, because it undermines the integrity of his own word? If there was information available between April 13 and the CJOB debate of April 21, what kind of discussions has he had with those two senior staff who were responsible for this file?

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Mr. Filmon: Mr. Chairperson, Mr. Loewen, the president of MEC, has indicated that information was not available on April 21.

Mr. Doer: I know Mr. Loewen must work with this government. They are getting a $111 million facility built by the Premier, contrary to his own word. Obviously, they have to have a co-operative working relationship between the two of them. The private sector is not raising 50 percent of the money, when you look at the shares that government holds. They are not raising the money for the capital asset that they promised in their so-called plan in December of 1994. They are not raising the amount of money for purposes of what they stated publicly prior to the election campaign. I am not privy to the discussions that go on between MEC and the provincial government. I am not privy to the fact that the process that takes place for a proposal to go from $10 million of provincial money to $37 million. I am not privy to the kind of discussions that have gone on.

I just believe that the Premier should have known, and he should have known well before giving his word, or if he did not know before he gave his word he should have kept his word. Does the Premier not think that this situation has put his integrity and his promise in a very awkward position? People everywhere we listen to are saying, even the people that are in favour of the proposal with the Jets are saying, how can he say $10 million in the campaign? How can they go to my doorstep and say it is only going to be $10 million in the election campaign and then two to three weeks later change it by four times? Does this not bother the Premier in terms of the process that went on with MEC, and does he not think he only had one option to keep his word on this proposal?

Mr. Filmon: Mr. Chairperson, if the alternatives were to see the Jets pull out of Winnipeg and go elsewhere or look at a new alternative that would involve a changed position by the provincial government, given that seeing the Jets pull out and go elsewhere would lose a revenue stream of $6 million annually to the provincial Treasury, and the loss of an additional $10 million on the potential construction of a new facility, I felt that I was obliged to look at the new circumstances and make a decision in light of it.

Mr. Doer: Then why was the Premier's promise not, I will do whatever it takes to keep the team here, because those circumstances were the same on April 1, on March 1, on February 1? The same alleged benefits were the same well ahead. Why did the Premier not then say, we will do whatever it takes to keep the team here, instead of saying our contribution will be limited to $10 million, and if they cannot do it with $10 million then the MEC will have to proceed accordingly. He did not promise that he would do anything possible to keep the team here; he promised $10 million. So why was the promise not we will do whatever it takes, which would have given the Premier the mandate to proceed accordingly?

Mr. Filmon: Because at the time, based on what information we had, $10 million was all that appeared necessary.

Mr. Doer: Mr. Chairperson, that comes back to my original point then. Why were you not informed? Why did your officials not inform you that $10 million was not enough when you were out there making this promise day in and day out, street in and street out, farm in and farm out, community in community out? Why were you not informed by the private sector and your government representatives, two of the highest priced help in government, with close working relationships to the Premier, people that have worked with the Premier before he was in government and now are working in very, very senior positions in government. Why were you not informed?

Mr. Filmon: The Leader of the Opposition is obviously not listening or else he does no want to hear. That information was not available.

Mr. Doer: The Premier is saying to us today that he only was advised of this information on April 26, four days before the deadline. Is that what he is saying?

Mr. Filmon: Mr. Chairman, I think it was even later than that. I think it was the 27th or 28th, from my recollection, because on the 26th I know I was tied up all day long doing interviews from 6:40 a.m. on Canada A.M. I spent the entire day going through that, so the earliest I could have been informed would have been the 27th or 28th. I am trying to recall what I did on the 27th, but my recollection is it was several days past the election campaign that we got a briefing ultimately from MEC's people about what they saw was a changed projection for their salary component, which was a key part of the operational costs of the team.

Mr. Doer: So the staff of the Premier's Office, who are meeting with the Premier throughout the pre-election period, the election period and the post-election period, knew nothing of the deteriorating financial plan of MEC and advised the Premier of nothing about the deteriorating situation of the MEC plan in terms of financing this proposal until after the election date and a couple of days before May 1.

Mr. Filmon: The Opposition Leader is deliberately missing the point again, and that is that it was not my staff that knew nothing, it was MEC itself that knew nothing. That was what Mr. Loewen has said publicly. [interjection]

May I just say one more thing? The member from Transcona keeps saying, Bettman says otherwise. Mr. Bettman, the president of the NHL, said that the terms and conditions for transference of the lease were what was conveyed on the 13th of April to MEC, not projections on salaries. If the member for Transcona has any information on that I invite him to lay it on the table, because I have never seen Mr. Bettman make that comment.

Mr. Doer: So the government is saying that they did not know. The Premier is saying he did not know. He establishes the loop in June, and then he is out of the loop that he establishes. He has senior staff that are not aware of what is going on, a major public issue. [interjection] I did not miss it. No, no, we did not miss it. We have not missed anything. We know your promise on $111 million. We know your promise on $10 million, and when you knew and who informed you. We obviously will agree--well, we will continue to ask questions, and that is our responsibility in the democratic process.

Does the Premier have any confidence at all in this so-called risk-taking group of MEC? When they left the province and the people of Manitoba three days, two days, depending on what scenario the Premier goes through to deal with a multimillion dollar decision, a multimillion asset, and the Premier's own word that had been put at risk, does the Premier have any faith at all that this is the group now that he is handing over another $111-million facility to? Is this the kind of confidence that we can have in the business acumen of this group of so-called risk takers?

Mr. Filmon: Mr. Chairperson, the member knows full well that the money that was being raised by MEC has now been substantially increased by the participation of other people in the process, the public at large, Mr. Asper, Mr. Cohen, and others who have upped substantially. I think they are somewhere close to $70 million that they have now raised and are on course to raise $111 million. Obviously, my confidence has been based on the additional influence and fundraising capability of other people to make this a much more secure package than what was originally proposed.

Mr. Doer: So the answer to the question is the Premier does have confidence with this group that left the public--well, did not become aware of the so-called deteriorating situation until a couple of days after the election and a couple of days before the deadline.

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I know the Premier has confidence in the MEC group as constituted and feels that they should be entrusted with a $111-million facility that we are going to build, the taxpayers are going to build. The Premier has confidence with the way in which they have dealt with the last 12 months of their affairs and the kind of roller coaster of emotions that the public has been put through, the kind of knowledge that the Premier had and the word that he was able to give to the public. Who holds these people accountable for not knowing about what went on early enough, so that we would know who holds them accountable? Why are we just handing over another $111 million in public investment to people that I do not think have performed in terms of dealing in the public in a very, very appropriate way?

The public has been kept out of the loop, out of the loop, and now it is their money that is going to save the loop. We are dealing with a group that allegedly, or is reported by the Premier to have only informed him and his staff after the election date and just before the May 1 date, does that warrant public confidence?

Mr. Filmon: Mr. Chair, as we have said many times publicly, the construction of an arena is a long-term asset. The construction of an entertainment complex is a long-term asset for the enjoyment of the people of Manitoba, for putting on of rock concerts, of performances by philharmonic orchestras, all sorts of things that cannot be done in the current arena because of its acoustics, because of all of those kinds of things. This is a facility that will be there for the long-term enjoyment and benefit of the people of this province. That is why the public sector is making this investment.

Mr. Doer: Mr. Chairperson, the Premier knows that the philharmonic orchestra and the concerts and all these other proposals were there on July 1, August 1, September 1, November 1, February 1, last year. If it was his intent to spend $37 million or more than his $10-million commitment for all these other things, why did not he say so in the election campaign? If that was the reason for moving from $10 million to $37 million, why did not the public know about it well in advance, so they could be involved, they could be fully informed, they could get accurate information?

All the conditions which the Premier has described have not changed from his June 24 statement in this Chamber, which I have a copy of. I will send a copy back to the Premier. I am sure he has read it, about his conscience and the $111 million. Why throw back the other concerts, et cetera? That has not changed. I asked the question of the Premier about his confidence in a group of people who promised to raise private money to build an arena, failed to do so, failed to keep us informed, failed to analyze the situation, failed to make it public before the election, failed to make it public until just before the May 1 deadline. Are these the kind of people you are going to hand over a $111-million facility to? What public confidence should we have?

Mr. Filmon: Mr. Chairperson, the Leader of the Opposition (Mr. Doer), it would not matter what my response to him was, he would not be satisfied. He deliberately took a position opposed to any support for the Winnipeg Jets, any support for a public facility. He would not commit $10 million. He would not commit a nickel. He was opposed to anything, and he made great politics over it throughout the province from the length and breadth.

He used slogans about if cows had hockey sticks that they would get more money. He used it everywhere. He had great fun. It probably won him seats in places like Dauphin and Swan River and all those places that he made a huge issue of this, the Interlake and other things. It is a political issue that he has milked to the hilt, Mr. Chairman. There is nothing that I could tell him that would satisfy him that we are doing the right thing.

We believe this is the kind of public-private partnership that normally would be supported by New Democrats, that they talk about, in which there is a role for the public to do something like creating a facility as we did in the Centennial Concert Hall, as we did in the Museum of Man and Nature, as we did in the Manitoba Theatre Centre and all these kinds of things in the past--the existing Winnipeg Arena, the former auditorium. All of those things have been built by public-sector funds in the past. They are the kinds of things that New Democrats normally would support, but in this case, he sees great opportunity for political hay, and that is what he is doing with it.

There is nothing I could say that would give him any assurances about what we are doing, and I say to him that I believe what we are doing is the right decision. He has the right to take whatever he can out of it and milk it for his political benefit, but there is nothing I could say that would convince him otherwise.

Mr. Doer: Mr. Chairperson, the Premier also promised to cancel the operating-loss agreement that contains two or three elements. One is the losses being covered, and the second component is the 18 percent share of the team. I am wondering why the Premier now, and he confirmed in the House on Monday, is maintaining public ownership in the private part of the team through the maintenance of the 18 percent share.

Again, when we heard that there was a so-called massive amount of money to go into the new facility, in fact 100 percent public money to go into the new facility. The Premier indicated that we will build the arena and they will take care of the hockey team. Well, the public, it seems to me, have 36 percent in that hockey team. Given the fact that the Shenkarow group of owners has six parts to it, and they reportedly are going to have between 20 percent and 22 percent share in the hockey team, so each partner would have perhaps one-eighth or a little more, a little less, not of the whole team--the MEC group is going to have a number of shareholders, will this now mean that the Province of Manitoba is the largest single shareholder in the private risk-taking part of the hockey team, along with the city?

Mr. Filmon: No, Mr. Chairman, we would not be part of the risk-taking aspect. We hold those shares so that should there be a disposition of the assets or should the assets increase in value in the future, we would be able to collect money on those shares, but we bear no responsibility for the losses.

I might just say for the record, Mr. Chairman, I have received a letter. After we made our commitment to the provision of public money to build the arena that says as follows: It is dated May 17, 1995.

Dear Gary:

The people of Saskatchewan are known as the greatest fans in Canada and, as such, support you and all Manitobans in your bid to save the Jets. As your neighbours, we share your pride in western Canada and wish you the best of luck in the coming hours. We know the importance of having professional sports teams in western Canada. We look forward to attending many more Jets games in Winnipeg.

Good luck. Hope to see you at the Grey Cup in November.

Yours sincerely,

Roy Romanow, Premier.

There are people who look at things differently, even New Democrats.

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I repeat that this is cheap politics by the New Democrats and particularly the Leader of the New Democrats who speaks out of all sides of his mouth when he says privately to people that he would do anything to save the Jets and he would have saved them when it appeared as though the deal was collapsed. Now, of course, he finds all reasons to oppose anything that is done by this government for his own cheap politics.

Mr. Chairperson: The honourable member for Inkster.

Mr. Kevin Lamoureux (Inkster): It is okay. Mr. Chairperson, I believe the Premier was going to table a letter.

Mr. Doer: I think everybody is happy to keep the Jets in Winnipeg. The question is, at how much public money and what did the Premier's word indicate?

I find it rather ironic that the Premier is finding comfort with the Premier of Saskatchewan's letter about keeping Jets in our community. I think it was two days ago he was taking shots at the Premier of Saskatchewan about the trade agreement. I guess he takes a cheap shot at him two days ago and now he uses him in comfort on breaking his own promise in the election campaign.

Is the 18 percent share that we now hold the largest single shareholder now in the hockey team along with the City of Winnipeg? There are two consortiums apparently--the Spirit of Manitoba group and the Shenkarow group of six original investors--and then the public sector. In the public sector there are two individual shareholders of 18 percent. Are we now the largest single shareholder in this agreement?

Mr. Filmon: Mr. Chair, firstly I did not take a cheap shot at the Premier of Saskatchewan. He will tell you that philosophically he has concerns about--in fact even during the Charlottetown Accord discussions he had concerns about entrenching a commitment to the removal of interprovincial trade barriers as part of the Constitution. He always has maintained that as a New Democrat he felt there was a need to have public--I believe that both the New Democrats in British Columbia and the New Democrats in Saskatchewan believe that the use of public procurement for economic development purposes is a legitimate public purpose to which New Democrats subscribe.

I just point out to him when he was knocking us about leaving holes in the interprovincial trade barrier agreement that he was going against New Democrats in other provinces in Canada who wanted those holes left there. That is not a knock. I accept Mr. Romanow's philosophical differences and I still get along with him because I believe that he is an honourable person.

Mr. Chairperson, with respect to the holdings, under the new equity holding arrangements we would have 9 percent, the city would have 9 percent, each of the current owners would have just a touch over 5 percent, which collectively runs something in the range of 21 or 22 percent, and then approximately 60 percent would be there from the collective investments of all of the other shareholders represented by the Spirit of Manitoba group. That is the way it works and that is how the equity interests would be.

I repeat that we would not have responsibility for the losses. The losses would be further supplemented by the endowment fund that is being set up.

Mr. Doer: Can the Premier indicate to us how much money the province is getting by moving from 18 percent equity to 9 percent equity in the so-called equity share agreement?

Mr. Filmon: I take all that back, Mr. Chair. I do not have all of this at my fingertips and I do not have all the numbers. All of the shares are being diluted by the additional money that is being put in, and obviously part of the impact of the dilution is that we are not responsible for losses as part of this process. What remains is an equity that would be repaid to us if the team were subsequently sold or if in fact it begins to make money and somebody wants to acquire our shares. If it does make money, I might say, we do get returns on the equity that we hold and somebody may then choose to buy our shares.

Mr. Doer: I just want to ask the Premier because when I asked the Premier I believe on Monday on the team he indicated that the province would be maintaining the 18 percent share. I respect the fact that he maybe wants to reconsider what he answered just a moment ago, but it is a pretty big issue about whether we have gone from an 18 percent share to a 9 percent share.

So I want to ask the Premier, he indicated in the House that it was 18 percent we were maintaining. Can the Premier please advise us, with his staff here today, what the proposed equity share agreement is? Surely it would be 18 percent or we would get some financial return in recognition of shrinking our equity from 18 to 9 percent.

Mr. Filmon: Since all of this is tied up in discussions that are currently ongoing I cannot give any firm and final information on this. I believe that the information I gave in the House on Monday is accurate, and I do not have anything further on it. I was confusing our share as being half of 18, but in fact it is 18 and 18, us and the city. But that would still leave the Spirit of Manitoba MEC group with 42 percent which is larger than our share.

Mr. Doer: I agree that the Spirit of Manitoba consortium that the Premier indicated, a number of separate investors, would have a larger global amount of shares in the team. That means that the Shenkarow group and the Moffat sector group would be in the 24 percent range then as indicated by the Premier, maybe down to 20. It has been reported between 20, 22 and 24 percent.

But, if Mr. Richardson has a share in the Spirit of Manitoba, if the investors have a share, if Mr. Gray has a share, et cetera, they are all going to have a smaller piece than 18 percent. This is what I am trying to get at. The 18 percent share that the province now holds and the city is holding is in fact the largest single shareholder.

There are three consortiums. There is the public group, there is the existing shareholders or partners, and there is the new Spirit. It seems to me that we are going to be the largest single shareholder. Even Mr. Richardson is not going to have as much equity or share in this team as Mr. Filmon is going to have. I am just asking.

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Mr. Filmon: The member will have to bear with me as to detail. Our share equates to essentially the $9 million that our 18 percent would have been worth. The whole equity capital structure is now being expanded. So Mr. Gray at $10 million would have a greater share in it than we would as a provincial government because his $10 million is higher than our $9 million in the bigger capitalization.

That is the way this works with the capital for the purchase of the team now being put in at an additional $48 million over and above the current ownership distribution which would have been $9 million city share, $9 million provincial share, $32 million imputed value of the shares of the Shenkarow group of which not all of them are being purchased. They are being left with a 22 percent equity. So they are being paid $32 million for a portion of their equity and then the remaining equity is being put in by the new sector. So it does work out that we end up having 9 percent of the new share structure approximately.

Mr. Doer: Well, that means that Mr. Shenkarow's shares have appreciated and our shares have remained static since the time that the operating-loss agreement has been put in place. The one thing we do agree with the Premier on, and I have always agreed with, is the one thing that has happened since '91, notwithstanding the losses, is there has been an appreciation of the asset. We have 18 percent of the asset. If the Premier is now saying that part of the agreement is to shrink the asset the provincial government has from $18 million to $9 million, has he not shrunk our equity in this team? I would ask the Premier (a) did this go to cabinet, (b) did we get anything for that?

Mr. Filmon: In fact, the manner in which this is done is based on a new value to the team because the team is now worth $90 million Canadian.

Mr. Doer: Mr. Chairman, if the team is worth $90 Canadian, then our 18 percent would be about $16.2 million--I am just going off the top of my head--about $16.2, $16.3 to $16.4 million as opposed to where the previous evaluation was at $9 million. If the Premier then has taken the 18 percent share of $50 million--because it was $32 million with the Shenkarow group and $18 million for the city and province, which worked out to 18 percent each out of a 100 percent group. The Premier is now saying that we have gone from an 18 percent share of $50 million to a 9 percent share of $90 million. Have we not lost $7.5 million in this transaction? I am just doing the arithmetic on the top of my head. I know the government would have Treasury Board submissions, et cetera, and it would be much more precise.

Mr. Filmon: I do not have the information. The figures are confusing, so there is no sense in my going over it until we have all the information.

Mr. Doer: Mr. Chairman, they are not confusing for me in the sense that 18 percent of $50 million is better for the province to have than 9 percent of $90 million.

I guess my question to the Premier is, did this proposal go to cabinet this Wednesday, complete with Treasury Board submission, as required under The Financial Administration Act of the province?

Mr. Filmon: The answer is no, because there has been no agreement to this point in time. That is what all of the discussions and negotiations are taking place among the various interested parties.

Mr. Doer: Will this go to cabinet before a public announcement of the so-called agreement?

Mr. Filmon: When we have a proposal that needs approval of cabinet, it will go to cabinet.

Mr. Doer: So there will be no public announcement of the so-called proposal until at least after next Wednesday when the next cabinet meeting is.

Mr. Filmon: I remind the Leader of the Opposition that cabinet can meet at the call of the Chair.

Mr. Doer: That I am not surprised to hear.

I guess my question is, who is negotiating the equity share of the provincial government on our behalf? Who is representing us? I say this in all seriousness. I am quite worried about what I hear being negotiated. Maybe I am wrong, but who is representing us at a table? I mean who is representing our 18 percent at the table? Who is our representative at that table? The Premier is not. The Minister of Finance probably is not. I do not know. Is it a cabinet minister? Is it Mr. Benson and Mr. Bessey? Who is at the table on our behalf?

Mr. Filmon: Mr. Chair, I just want to, so that the Leader of the Opposition understands, so that he does not try and make something out of this that is not there, our only imputed contribution, which has already been written off in terms of provincial government involvement, is the $9 million because we paid zero for our shares in the Jets. We paid zero. We have covered $9 million of losses, so if you want to imply that is our investment you can do so, but that has already been paid out as losses.

If we want to take shares that have a greater value, we have to take responsibility for losses. We are saying we do not intend to take responsibility for future losses. We do, of course, want to retain some mechanism that allows us perhaps to be able to recover something should there be a sale of the team or should the team make profits. That is what we have to do. That is what we are currently attempting to ensure we have on behalf of the people of Manitoba.

I do not want him to run out of here saying that somehow we have given away something such as the responsibility to accept more losses, which he would be even more critical of, or that we would have given away something that we paid money for which we have not done either. These are not things that now all of a sudden he is going to clutch to his bosom and make some big deal over, because the fact of the matter is, (a) we did not put out any money for those shares; and (b) we do not want to have liability for future losses. That is what we want to ensure happens as a result of the negotiation of any agreement.

If we can also put the taxpayer in a position to possibly recoup something on the shares that we still hold, we will want to do that as well. You cannot have it both ways. You cannot say that you are going to get something for it and have an equity portion of it unless you are prepared to pick up losses. That is something that we have to, obviously, put into the mix.

Mr. Doer: This is not just a floating figment of my imagination about the 18 percent. As I recall it is documented in the Auditor's report. It is a specific 18 percent equity share in exchange for covering the losses. It is not a floating share based on how much losses we paid for out of a $50-million asset. It is a specific, I would say, one of the positive parts of the operating-loss agreement in '91. I have said that before publicly.

I come back to the question, who is negotiating this issue on our behalf at this point?

Mr. Filmon: I have indicated that the people who continue to represent us in any discussions on this issue are Mr. Bessey and Mr. Benson.

Mr. Doer: Mr. Bessey is at all these discussions, all these lawyers that are involved, et cetera. Mr. Bessey and Mr. Benson are at those negotiations on our behalf?

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Mr. Filmon: No, Mr. Chairman. Much of the negotiations and discussions have to do with arrangements and agreements between the various private sector individuals. We have certain considerations that we want to ensure happen. That includes, as I say, assurances that we are not going to be responsible for future losses, No. 1; and No. 2, the possibility that if things go well in the future after the era of projected losses that there is some recompense for investments that have been made previously that we would benefit along with others who have made investments.

Mr. Doer: Mr. Chairman, we have had some disagreements with negotiated agreements with Mr. Bessey in the past. In fact, even opposite members' former colleagues have expressed some concern about the Repap agreement and its so-called binding nature. Who is legal counsel for the government dealing with this agreement?

Mr. Filmon: The legal counsel of record for the interim steering committee that has looked after our interests with respect to the city-province dissipation in the agreement of 1991 and the holding of the shares in trust and so on was and is Ross Yarnell, Q.C.

Mr. Doer: The interim steering committee consists of the Shenkarow owners and the province and the city, or is it the interim group that reports just to the city and the province that this individual is the lawyer of record that the Premier indicated is reporting to? Is the legal counsel for the province reporting as well along with Mr. Benson and Mr. Bessey in terms of the legalities that are going on right now with this set of negotiations?

Mr. Filmon: Mr. Yarnell, as I say, is employed by the interim steering committee, which was chaired by Mr. Mauro which now is chaired by Mr. Crewson, and continues to look after the city and province's interests in terms of their ownership interest and their responsibilities for the 1991 agreement.

Mr. Doer: The Premier answered that this individual is reporting to Mr. Crewson and the group. Is he reporting who is providing legal counsel to the government on the negotiations and the wording? We hear stories it is reported that the lawyers are in rooms and lawyers are in rooms and lawyers are in rooms--I am sure that gives the public a lot of comfort. We have some esteemed members of the bar here today, of course. Who is the legal counsel for the government of Manitoba? Is it the same lawyer who is the legal counsel for the interim steering committee?

The Premier will know that I was quite critical about some of the--and I am not going to revisit Repap, but we had our disagreements in the past, especially after we got our copy of the agreement purported to be negotiated by Mr. Bessey in the past. So I would like to know who the legal counsel is here. So Mr. Bessey and Mr. Benson are negotiating the share, and somebody else is making sure the paperwork is done properly. I just want to know who that is.

Mr. Filmon: I know that the Leader of the Opposition will continue to be critical of us no matter what agreements we enter into, so I will just suggest to him that the legal counsel that we have had on this issue and has been consulted on aspects that impact on us in certain manners has been Mr. Yarnell. There may well be other counsel involved when it gets to points of consideration that impact on the provincial government's areas of responsibility.

Mr. Doer: Can the Premier indicate whether the provincial government has taken any position to the federal Department of Revenue dealing with the charitable status of Mr. Asper's group and Mr. Shenkarow's group and all the private risk takers that are involved in this program?

Have they supported the proposal to create a charity for Mr. Shenkarow's group, and have they supported the concept of making Mr. Asper's group or Mr. Loewen's group a charity with Revenue Canada? They have taken positions before on these matters.

Mr. Filmon: We have not supported them.

Mr. Doer: Has the Minister of Finance (Mr. Stefanson) written a letter to the Department of Revenue, which they have done in the past on other tax matters that affect the provincial Treasury, advising them that you are opposed to this proposal?

Mr. Filmon: We have not seen any proposal.

Mr. Doer: The federal Department of Revenue indicated this week publicly that the matter may come before them. Is the government going to write a letter to them? The government takes positions on other taxation matters, other mobility matters. It takes a strong position, say, on cigarette tax issues that affect our revenues. This will affect our revenue. Will we be taking a similar strong stand in writing to the federal Department of Revenue, or will the government put this in writing to the federal Department of Revenue?

Mr. Filmon: I repeat, we have indicated that we do not support a proposal for some sort of tax-free status. On the other hand, we acknowledge that under existing laws that limited partnerships have certain tax treatment entitlements. Obviously, that is something that pre-exists, that in fact applies to the existing Jets ownership.

Mr. Doer: Has there been any written communication between the Department of Finance, who is also the lead minister assigned to this file, moving from him, from I, T and T to obviously finances, since the file has moved with him? Has there been any written communication on tax matters that the Premier can share with us today in the House on this issue?

Mr. Filmon: I know of no correspondence, Mr. Chairman.

Mr. Doer: I am almost finished my questions on the Jets.

Can the government table today, in light of the fact that they are going to be 100 percent of the shareholders of the--or 100 percent of the providers of the building. It has been reported that the new private ownership which includes the public sector will be leasing the facility for a dollar a year. Can the Premier report today on what the revenue projections are for that asset that we are building?

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Mr. Chairperson: Could I ask the honourable Leader of the Opposition to repeat that question, please.

Mr. Doer: It has been reported that the public sector will spend $111 million on the new arena facility. It has been reported that the new risk takers will be able to rent that facility for a fairly modest price for a long period of time.

I would like to ask the Premier, are we going to get our investment back in terms of rental and other conditions of that arena that we are paying for through concessions and parking and other revenue items? What is the budget for that arena and can the Premier table that today in the House in terms of projected revenues from that arena that is projected to be built for the '97 year?

Mr. Filmon: As I have indicated publicly, our payback comes from the operations of the hockey team in that arena which would amount to some $6 million per year of tax revenues to the Manitoba taxpayer.

Mr. Doer: Can the Premier table today the budget revenue for that facility? Is it $1 a year as reported or do we give away the concessions to the team, do we give away the parking to the team, do we give away all the other components of that potential revenue to offset our investment in that building, from that team? Is everything just given to the so-called risk takers on the other side?

Mr. Filmon: Mr. Chairman, as I indicated, the payback to the provincial taxpayer is firstly $10 million of revenue from the construction of the facility in which we get direct tax income of $10 million and $6 million a year of direct taxation revenues from the operation of the Jets hockey team in that facility.

Mr. Doer: Can the Premier table today a budget for that facility that we are building. We are spending at least 33 percent of the amount of money. There is a revenue shortfall of some $17 million from the federal government. How is this revenue shortfall going to be picked up with the existing answer from the Premier?

Mr. Filmon: Firstly, we continue to discuss with the federal government various possibilities for additional commitment on their part to the construction of that arena facility, and we continue to believe that they ought to come to the table with additional funding because of the fact that they receive the biggest benefit, some $20 million of direct tax revenue from construction and $12 million a year from operations of the hockey team in that facility in Manitoba. We believe that they ought to come forth with additional contributions and we will continue to pursue that.

Mr. Doer: Can the Premier indicate whether the Pan Am Games Committee that also has reported to government and cabinet as one of the partners, have they approved the facility reallocation of money, and have they expressed any opinion about the impact of the capital changes to the arena on the Pan Am Games and security at the Pan Am Games?

Mr. Filmon: I believe that both the chairman and the president of the Pan Am Games society have indicated that they believed that $5 million was doable in terms of a contribution from the funding to the Pan Am Games.

Mr. Doer: I believe the chairman is Mr. Riley and I also believe that Mr. Riley is part of the MEC group. I just want to make sure--and Mr. MacKenzie and Ms. Huck are one level, answering to Mr. Riley who is the overall chair. Have I got that right just in terms of who is doing what? So Mr. Riley, who is also part of the MEC, has agreed to this proposal, and Mr. McKenzie has also agreed to this proposal. Has the Pan Am board committee, the full board committee, been apprised of this and have they concurred with this by a board motion?

Mr. Filmon: These two individuals speak for the Pan Am society so I do not know what process they would have gone through in order to examine that issue.

Mr. Doer: We will await other advice about these proposals from people who are involved. We will have to deal with that.

Can the Premier table today all the wording dealing with the length of stay that the team will stay in the city of Winnipeg? As the Premier probably knows, the New Jersey franchise has a lease with the Meadowlands Arena which of course the owner is now contemplating buying himself just by paying the rental costs, and the team is now potentially going to Memphis. It is one thing to have a lease, it is another thing to have an agreement from the owners to stay here for the period of time that the Premier promised in the House.

Can the Premier table today the iron-clad wording that he has committed to the people of Manitoba on this duration which goes way beyond the lease period?

Mr. Filmon: Although it is not put in legal language at this point, Mr. Chairman, because nothing is put in legal language at this point, the principle that has been accepted is that the franchise would be pledged as collateral for the lease so that if for any reason, that is a catastrophic situation that exceeded all of the losses and used up all of the endowment fund, we would have the franchise as collateral for the lease. The proceeds, obviously, from the sale of that franchise would be utilized to cover costs that might accrue to the owners of the arena who would be left without a major tenant.

Mr. Doer: You have a $90 million asset, a certain percentage of which we already own. You have a $111 million facility. Is there not already a shortfall? Even if we get beyond the two-year endowment fund, is there not already a shortfall on the asset versus the cost?

Mr. Filmon: Firstly, if you say that we get $10 million of return for the construction of the arena and $6 million a year of tax revenues from the operation of the team, we would have within the first two years $22 million in hand from the construction of that facility in the operation for two years. So that would exceed the shortfall right there.

Mr. Doer: Again, we are not privy to the negotiations but we have been told by some people that have been around that they would want to make sure that if in four or five years from now, after the year 2000--we get a little suspicious about election dates, and why should we not--that the team would have the ability to relocate.

There is not wording that says you shall stay in Winnipeg for 20 years which was, of course, the ironclad agreement that the Premier gave us when we were discussing Mr. Pocklington's shopping around of the Oilers with the Northlands Coliseum, a facility which was already paid for. They were just talking renovations and concessions, a commitment the Premier made in '93 here in this Chamber.

Mr. Filmon: Mr. Chairman, we always talked about having the franchise as security against the lease, so if catastrophic circumstances occurred that required the action to be taken, that we would then have the choice of either picking up the ongoing losses ourselves or selling the franchise and recouping any investment that we had in the facility.

Mr. Doer: If the nightmare scenario developed and the losses continued dramatically because of salary escalations and the inability to have a salary cap and a revenue-sharing agreement and if a few years beyond the endowment fund this team was losing massive amounts of money, what wording do you have from the NHL?

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The asset is only an asset if you have co-operation from the NHL. So do you also have negotiations with the NHL, because they can do almost anything with the franchise under their by-laws? Do you have a subsequent agreement if the club team is collateral for the $111 million of public spending? Do you have a collateral agreement or another agreement with the NHL about how that will be a useful collateral, as opposed to something that is just dictated by people that would potentially render this collateral useless?

Mr. Filmon: First and foremost, the NHL's preference is to keep the team in the city in which it is. Secondly, the concept of setting up an endowment fund is on the basis of disaster scenario projections of losses, not on the basis of reasonable projections of losses but worst-case-scenario projections of losses. Under those circumstances, the concept is that the endowment fund would be able to cover at least something in the range of seven years or more of losses on a worst-case-scenario basis.

Most people believe that that worst-case scenario is not going to be achieved, and so they would be looking--and the other possibility is that--and it certainly has been talked about--they would continue to raise money to replenish the endowment fund as another means of operation.

Mr. Doer: Can the Premier indicate how much money is going into the endowment fund? There is obviously an amount of money to deal with the operating-loss agreement signed December of '91 to deal with the up to $15 million a year for the next two years to '97 in the old facility. Can the Premier indicate beyond $30 million how much more is in that fund in terms of the proposal?

(Mr. Mike Radcliffe, Acting Chairperson, in the Chair)

Mr. Filmon: Approximately $60 million of the total would go to the endowment fund initially.

Mr. Doer: So there is approximately $60 million going into the endowment fund, and it will not be effective, I hope, August 15, 1995, because that will mean we cover another three months of losses from the May 1 date, and the year-end date of the Jets, I believe, is June 1 or June 30. It would potentially have the taxpayers of Manitoba carry up money, so does the endowment fund click in May 1, 1995, or August 15 in terms of our liability? Is it appropriate to assume that we will lose $30 million in the first two years of that endowment fund and be left with $30 million after that?

Mr. Filmon: It would be effective the closing date of the transaction. It could be July 31, it could be June 30; it could be, at the latest, August 15.

Mr. Doer: Well, the Minister of Finance and the Premier promised to cancel the operating-loss agreement effective May 1, 1995, so that promise now is broken. The taxpayers of Manitoba are now picking up losses of the hockey team past May 1, 1995, into whatever the transaction date which, by the letter we tabled today, appears to be August 15, 1995.

Mr. Filmon: As we have always indicated, based on a sale transaction, that can be done. I mean, if the sale does not go through, for instance, we are still on the hook, so we cannot unilaterally. That was always known; based on a transaction date, it is over. From everybody's perspective, we want to get the transaction date done as quickly as possible.

Mr. Doer: Of course, we knew that. We were surprised that the Minister of Finance would say we were unilaterally cancelling the operating-loss agreement May 1, '95, when in fact the agreement went to '97. I do not want to continue on the point; the point being the operating loss is in existence today. It was not cancelled May 1, contrary to the Minister of Finance's word. Obviously, our share of the losses are still subject to the taxpayers further to the '91 agreement signed by the Premier and the former Mayor Norrie.

The $30 million then will be outstanding for the new facility in terms of operating losses. That does not leave very much money per year. I know that the government has given fairly generous, very generous conditions to the private owners with obviously giving them concessions and parking and the building, et cetera. Can the Premier table today a budget for those first five years, from '97 to year 2002, on the losses or surpluses of the hockey team?

I am particularly worried--I know the last budget, we assumed the Jets would be in the playoffs the last couple of years. Besides our political disagreement, I think all of us enjoyed going to the games, the play-off games particularly.

I am a little worried about where this thing is going in the NHL if you look at who is in the final four. I may be close to winning a nonprofit pool we have with friends, just on hockey pools in terms of players. But look at Detroit and Chicago and New Jersey and Philadelphia are the final four. There is not one Canadian team. The final eight had only one Canadian team in Vancouver.

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I know it is an atypical year, but it just appears to me, watching what happened with Philadelphia and Lindros and all this money that is being generated, every time I hear next year the salaries are going to be flattened out or depressed, I see another marginal defenceman signing for $2 million or $3 million.

There was a news report today that Lindros is up for auction for $3 million, et cetera. I guess, I am really worried about the situation, so does the Premier have a budget for the next five years, from '97 to year 2002, that he could share with members of this House?

Mr. Filmon: Mr. Chairman, it is not our budget, it is MEC's or the Spirit of Manitoba's budget and in fact it is why this whole thing has been restructured because the $26 million that was originally projected they revisited after getting their payroll reassessed by two different individuals. The current management of the Calgary Flames and the former management of the Buffalo Sabres gave them those kinds of projections, and they did anticipate worsening situations, just as the Leader of the Opposition has put forward. That is the basis on which all of the new information has been projected and the basis on which they are making their decisions. So when those budgets are available we will certainly have them.

I might also say that in the next two years in the existing arena things could be dramatically better based on just simply more ticket sales. The season tickets, for instance, for this past year were less than 6,500. Given the outpouring of support that was part and parcel of the Save the Jets campaign they have very strong expectations that they will get considerably more season tickets sold for these next two years, particularly if, as an incentive, they allow those who have season tickets in the old arena to have priority on season tickets in the new arena in the new facility.

There are many reasons to believe that the projected, say, $30 million losses over the next two years could be considerably less than that. Those are all things that we will be looking at when we have those projections and we have a closer idea, and we will obviously have that before closing takes place on all of these things before closure takes place on August 15.

Mr. Doer: I have only got a few more questions on this. One, are the ticket price projections based on the Mauro and Burns numbers at this point in terms of ticket prices for the consumers?

Mr. Filmon: I believe that they are still going with those assumptions.

Mr. Doer: Is there any plan to relocate the casino from the Fort Garry Hotel to the new arena complex?

Mr. Filmon: I will be very forthright with the Leader of the Opposition and say that we are currently in a situation in which the Hotel Fort Garry has given indication to the Lotteries Corporation that they no longer want the casino to remain there, so the Lotteries Corporation at the end of their lease, which is up I believe about 1999, will be looking for a new location. If they are able to make any negotiated agreement with them, it would just be on the basis of them paying rent and leasehold improvements as they normally would at any other location.

I believe that it is fair to say that the Lotteries Corporation sees many merits in locating in a facility like the Manitoba Entertainment Complex because they would have access for their customers to parking and food and beverage establishments that would be open basically throughout the course of a week; secondly, they would have access to tens of thousands of people who would go throughout the course of any month to events in the facility. On the other hand it would be a benefit to the operations of the Entertainment Complex because those people would use the food and beverage facilities and the parking facilities and provide a revenue stream for them. So, certainly, without having any discussions at this point, we are leaving that matter open for discussion between the Lotteries Corporation and the Entertainment Complex people.

Mr. Doer: The casino relocation, the proposal to put the arena, the MEC site at The Forks does start to create a bit of a changing economic magnet in terms of urban planning in the city of Winnipeg moving further east. Does the government have any studies of the impact of what it will do to the retail business in downtown Winnipeg, the downtown Winnipeg being in the Bay-Eaton's area, and what impact it will have on both the hospitality and retail sectors in those areas of the city?

Mr. Filmon: Firstly, I want to emphasize that no decision has been made with respect to the possible location of the casino over there. So that is not something that we have looked into. Secondarily, those changing patterns would be ones that the city would be responsible for analysing and reviewing, and the locus of economic activity of all sorts has shifted and changed within the downtown area by virtue of every single decision that has been made along the way over the last couple of decades.

Location of the Convention Centre shifted the locus, the development of Broadway as a commercial entity has shifted the locus, the creation of the Trizec complex and the Richardson Building shifted action. Then the redevelopment of north Portage shifted action, and ultimately the creation of the Toronto-Dominion tower shifted action, and so did the Forks. It is all in the downtown area and quite frankly there would be increased activity, particularly for restaurants, beverage establishments and all of those things within the whole downtown area as a result of having that entertainment complex facility. Whether it is in the Portage Avenue east site or whether it is at the Convention Centre site it would have impact throughout the downtown area.

Mr. Doer: I have a number of questions. I would like to move off the hockey team and move on to federal-provincial relations, but I will defer to the member for Inkster for a few moments.

Mr. Lamoureux: Mr. Chairperson, actually very briefly because I think that the whole issue of the Jets and the arena has been well discussed, and I appreciate the remarks put on the record from both the New Democratic Leader and the Premier.

I guess, ultimately, the other day I asked in Question Period, with respect to the question of the endowment fund and we did have some concerns that what happens if the endowment fund does expire. Our primary concern, of course, and I believe the Premier shares it, and I guess I seek what I asked the Minister of Finance (Mr. Stefanson) is some sort of reassurance that if in fact the endowment fund does expire, that the public at no point in time in the future would in fact be held to any ongoing operational costs that could in fact occur if in fact the endowment--and it was really interesting listening to the provinces share in the whole question of equity and so forth.

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I was of the previous opinion that the 18 percent and that 18 percent, much like any given corporation, if there is profit to be had you get that 18 percent of the profit, if there is a loss to be had, you pay the 18 percent. I am getting a better understanding through the Minister of Finance in earlier discussions this afternoon that in fact we will not get any benefits in terms of profit or losses. I guess I would seek that assurance from the Premier ultimately that the public, the taxpayer, will not in any way have to meet any sort of obligation for operational losses in the future.

Mr. Filmon: Firstly, I can assure the member for Inkster (Mr. Lamoureux) that we will not be responsible for ongoing losses under any scenario that we are negotiating or discussing. Secondly, should there be profits from the joint operations of the arena and team in future--and as much as we have been talking disastrous scenarios here for the last while, I can tell you that both Mr. Bettman and the league believe that things will continue to improve for them, and that by the year 2000, there may be some very real possibilities of net revenues coming from the operations of the team and arena facility.

They see that by virtue of, firstly, some expansion revenues that they are definitely planning on; and secondly, for additional television contracts on a worldwide basis. They actually see television in Europe of NHL hockey and greater television coverage in North America.

The concept is that any net returns would be split between the public and private sector in this whole scenario, given the equal contributions that are being made to the (a) construction of the facility and (b) purchase and endowment fund of the team.

Mr. Lamoureux: Mr. Chairperson, the majority of my questions are with respect to intergovernmental relations, but before we enter into that with the Leader of the New Democratic Party (Mr. Doer), I did want to do a bit of a follow-up with the question that I posed earlier today with respect to the gambling committee that the Premier and the government had established.

We were very strong advocates for having this independent gambling committee, if you will. We appreciated and applauded the government at the time in terms of making the appointment, of having this gambling committee, but one of the primary reasons why we wanted to have a gambling committee, that being independent, was because we felt that through the years that we have not seen any real form of public debate, whether it was inside the Chamber, in standing committee or wherever else it might be allowed to occur. We were always of the opinion that a public gambling committee would allow for members of the public to be able to vet their concerns.

I used to be the Lotteries critic for our party, and I can recall numerous stories of the problems that were being created, in particular, in rural Manitoba and the emphasis 95 percent of the time was on the VLT machines.

We were quite happy to see that the committee on gambling was established, but we had anticipated that there was going to be widespread public--or at least the opportunity--for widespread public input and to the same degree which we saw in terms of the school division boundaries and other committees that have been out there and have sought public input.

I was somewhat disturbed when it was brought to my attention last Tuesday that in order for the oral presentations, to make oral presentations, the deadline was coming today, and I had no idea. I had missed the little article, I guess, that was put into the Free Press, and right offhand I was quite relieved to see that deadline has been extended. It goes to show that if we do take some action inside the Chamber that we can get some results for it, so we were glad to see that it was extended.

This afternoon what I was looking for from the Premier was to try to make available what I believe and the Liberal Party believes is very important data. We know that Manitoba Lotteries does have or should have this sort of information virtually at their fingertips. We are trying to assist the public and interest groups that might be out there, in terms of helping present before the gambling committee, that we would want to encourage the release of information that could be valuable for their participation.

That is the reason why I felt that it was important that we get the community-by-community breakdown of the VLT revenues. The Premier has indicated in the past that this is something which he has no problem in releasing. It would be beneficial to have that prior to things such as the annual reports. The last time, as a standing committee, it was almost two years ago when we had last met to discuss the annual report.

I believe that was the '92-93. The '93-94 report has actually be tabled, but most importantly the '94-95, I believe, by legislation is not due for another four months. Again I am sure that there has been a lot of work that has been put into the '94-95 report. In fact the Premier was wanting to see that report pushed up and made available--it does not have to be in the glossy book and so forth, but the content is important--again to do what he can to ensure that this sort of information is made available prior to the public hearings taking place, once again because we believe in the party that it would be beneficial to have this information at hand. I believe ultimately that this will assist the board and government and even opposition critics to be able to better address the issue.

I am hoping to get a response from the Premier in terms of some sort of a better idea than what was alluded to during Question Period in terms of does he really feel that it is possible to get this very important information before the public prior to the public meetings?

Mr. Filmon: Firstly, I want to say that we definitely do attempt to respond to the legitimate concerns expressed by members of the opposition, and in particular the member for Inkster has raised an appropriate issue when it appeared that there would not be sufficient opportunity for people to respond in public hearings to the Desjardins commission.

I will state publicly as I have in the past that it is our desire to have the commission do as thorough and as open a review as possible unfettered by government restrictions. So we have not in any way restricted the Desjardins commission from either holding public hearings or limiting their scope of their study. We have tried to run the fine line between being seen to be thorough and complete in reviewing this situation so that the recommendations to government are meaningful, and, on the other hand, from being seen to direct every move of the commission. It should be independent in our view and that is I know the view that was expressed by the Liberal Party when they urged this kind of review.

So we have to be able to be credible on both sides to (1) leave as much room for the commission to maintain its independence but (2) to respond to legitimate concerns being expressed. I think that is what we attempted to do in urging that the committee do extend the time line for people to respond and for people to come before the committee.

There is another aspect to the question.

An Honourable Member: The annual report.

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Mr. Filmon: Oh, the annual report, I do not know what we could do to speed up the 1994-95 annual report. These things have a time line that involves auditors, that involves all sorts of people in the preparation of those numbers. But I do know that utilizing previous years' reports, they are currently working very diligently to get the information out of the breakdown by community of Lotteries revenues, and that will be done as quickly as we can.

Mr. Lamoureux: Mr. Chairperson, I know that under the VLT agreement with the different municipalities, no doubt the government must have some sort of an idea because a certain percentage of the VLT revenues that are collected from those communities is in fact returned to the communities. I am wondering if the Premier can indicate, if he does not have from the current fiscal year, if there is a previous fiscal year community-by-community breakdowns of VLT revenues.

Mr. Filmon: Mr. Chairman, that is the easy part because it is done on a formula basis which is a base amount per community or municipality, plus a per capita payment. As has been pointed out by many people, there are some communities that have no VLTs but still get the money, because they are within a catchment area of a municipality and they get so much per capita. So that is part of the perceived inequity, and so what is paid out I believe is readily available, but what is taken in per community is not necessarily readily available.

I might just say in addition to that we are limited so that where there are three or fewer outlets in a community, we are not going to be able to make that public because that would be commercial information that would enable people to identify almost how much goes into each particular outlet and something that under The Freedom of Information Act we are limited to do.

Mr. Lamoureux: It does put some limitations in terms of what was going to be the following question I was going to ask in terms of if you in fact have payouts, those payouts should give us some sort of an indication in terms of what is actually going in and was coming through government revenues because again it is based on some of a formula. I am wondering, the Premier makes reference that this is more so the exception, like you are talking the odd two or three catchment areas, if you like. Does the Premier then, I take it those have access and the 95 percent let us say of the catchment areas in which there would not be too much of a problem in terms of letting the Chamber know where the payout is going?

Mr. Filmon: What they are working on, as I understand it, is a proposal that basically gives the information for all municipalities, all municipal jurisdictions except those in which there are three or fewer outlets with VLTs, and those will then be lumped together as one line, say "all others." I think they amount to less than 20 percent of the total, so you basically will be able to get it for all areas other than that whole grouping that involves three or fewer outlets in a municipality.

Mr. Lamoureux: Can the Premier indicate when we would be able to get access to that sort of information?

Mr. Filmon: I must admit that I urged them to hurry up and get the information as soon as we were preparing for the opening of the Legislature because I knew that this would be a question on the agenda of members of the opposition, and I was surprised actually that it took until today to be asked. The sooner the better, as far as I am concerned.

Mr. Lamoureux: Well, I can assure the Premier it is not because of me. If I had two or three questions a day, I can assure you I probably would have asked it sometime within the first couple of days.

Mr. Doer: Five questions.

Mr. Lamoureux: Of those five, two have been on the gambling.

Because I do want to move on to Intergovernmental Relations, I would conclude my remarks with respect to the gambling issue by indicating I appreciate the concerns the Premier expresses in terms of the independence of this particular committee. I will respect that, yes, when you do appoint an independent committee you have to respect the fact that it is independent, but a government does give directions to these independent committees when you do appoint them, and one of the things that we had felt was very important, of course, was that public input. In filling the independent committee, providing that ample opportunity for public input into gambling policies and issues, hopefully we will see the government providing forums for that public input, because we do believe very firmly that there is a lot to be learned by consulting with the public on this particular issue and again emphasize that it is important that whatever information that we can provide--and I have made reference to a couple of pieces of information that we should strive to get before the public meetings get under way. I believe that will enhance the levels of discussions that would take place and add to the presentations being made before the committee.

(Mr. Chairperson in the Chair)

Mr. Doer: I agree with everything he has said and I will not repeat it--on gambling and the public process. [interjection] Far be it from me to talk about any decisions the Speaker makes.

We have already asked questions on the interprovincial trade, traded words across the bow, as they say. I want to start with agriculture, the massive change in agriculture which not for partisan reasons I want to raise, but was contrary to the red book which said that there would be a long-term transition in agriculture.

I have already stated I thought there was no regional equity to the reduction and investment in the Crow rate and the massive withdrawal of the Crow rate investments over the next short period of time. Changes in pooling and other reductions in farm subsidy programs, I think, will have a definite impact on the bottom line of Manitoba producers, on Saskatchewan producers and on the quality of life and standard of living in not only at the farm gate but also in all of our communities because agriculture is a major industry, almost represents 10 percent of our economy.

I would like to ask the Premier, has there been any co-ordinated effort between the western Canadian provinces in dealing with this federal government withdrawal of support on the Crow rate? We all agree it is not fair; it is not equitable, when we compare the Quebec dairy situation, the Ontario dairy situation. Is there a transition strategy with the federal government that the government can table dealing not only with the Crow rate loss but other transportation options, such as the Port of Churchill, which I think is very vital for the future of many producers.

Mr. Filmon: In terms of detailed proposals that are going back and forth and being discussed, I would urge the member for Concordia to raise that with the Minister of Agriculture (Mr. Enns). I can tell him in general terms that I was intending to be raising this issue on the agenda of the Western Premiers' Conference, which Premier Romanow had to cancel unfortunately because of his election campaign, probably fortunately for him. But this in fact was the topic in which I was to be the lead speaker on transportation issues, principally Churchill and The Western Grain Transportation Act changes.

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It was our hope that we could get some common western position on the issue. I am not sure how altruistic our partners would be in this whole battle. Certainly there will be general agreement that they will want to push the federal government for as much money as possible in the transition payments. On the other hand, in terms of the splitting up of the pie, I am not sure that they would recognize what is very, very apparent and that is Manitoba's claim to far more of the transition funding. A legitimate claim in my judgment, because Manitoba farmers will see a 300-percent increase in their costs of transportation, with the pooling removed at the same time as the WGTA support compared to Saskatchewan farmers getting an increase of 100 percent and Alberta farmers 50 percent, there will be clearly a huge additional burden on the Manitoba producer in terms of the additional cost of transportation.

So we will have to do our very best to try and convince Mr. Goodale of our greater needs and our greater, I believe, entitlement to transitional support. It remains to be seen whether we can get a common position out of the West that will see others willing to give up some of their share of the transition money in order to help Manitoba farmers.

These are all matters that we hope to discuss but very recently, of course, as the member probably knows, Mr. Goodale has put on the table instead of a two-stage approach in which we would have the WGTA removal and then the loss of pooling a little later down, he is now wanting to go at it very quickly and do the whole thing at once.

We, of course, are making many proposals to him, not the least of which is that part of the answer to addressing the severe impact on Manitoba producers would be to give them preferred access to grain shipped to the U.S. using Emerson as a port of export and therefore allowing Manitoba farmers to get preferential treatment in shipments to the U.S., a greater share of the shipments to the U.S., because that would be their least-cost approach in all likelihood.

Secondarily, a greater utilization of the Port of Churchill is also a least-cost approach to Manitoba farmers and farmers within that catchment area close to the Manitoba border in northeastern Saskatchewan. All these we would hope to get a little bit of support from, at least Saskatchewan if not other western provinces, on the issue.

Mr. Doer: First of all, I agree that Manitoba farmers will be the hardest hit by the changes both in Crow or the WGTA and pooling, and we believe that the reality of the reduction should be equalled with the reality of the transition. We also believe that the transition is taking place a way too quickly. It is disproportionate to eastern Canada or central Canada. It is disproportionate to the rapidity of which producers can adapt. It is disproportionate to any kind of value-added strategy. It is disproportionate to any other strategy on transportation and so notwithstanding any other factor, we are with the government on this. Any support we can provide to that effort and utilizing the Port of Churchill and other means of transition, we would support.

I note that when the former federal government was involved in some of the deficiencies in grain support payments, I think we all participated in an all-party way. I just believe that we are united in this House, and I think we should stay united in this House on our producers. I really worry about it. A lot of farmers sitting around a kitchen table at the end of this crop year, once they deal with the crop and all the realities of getting the crop in and out of the ground, all of which has started a couple of weeks late, that a lot of producers are going to be facing a pretty serious challenge for the '96 year. Even durum wheat has moved down slightly in the markets, even though canola maintains a very, very positive state.

I have read comments of the Minister of Agriculture (Mr. Enns). Sometimes these kinds of self-reliance statements, you know, we are okay, we have always survived, we can do it, Manitobans can do it, we are the greatest in the world, all of which I believe and sometimes it is, you know, darned the federal government, they do not understand, they do not understand and they are not being fair.

Is there somewhere in between there any transition strategy, or is there any strategy the government, (1) to stop the massive changes from being combined; (2) the massive changes in the next two crop years, (3) the lack of any other proposals for a long-term, value-added strategy? Is there any strategy, is there anything we can say, yeah, okay, we agree to, the Premier took a little shot at our ag credit because we would not sign a document in March which said that we applaud the federal government from withdrawing from this program because over the long haul the price of land will go up. We did not sign the document because we did not agree with that sentence. We do not believe we can be critical of a federal government on the one hand and sign that document on the other. But beyond that and statements were made in Question Period prior to the election, is there anything now that we can work with together, a transition strategy we can work on together in this House?

Mr. Filmon: The continued efforts towards diversification of the agricultural sector of our economy are going to be very important as a response to the removal of WGTA. I do not think there is any doubt that the payment itself did distort decisions that farmers made as to what crops they grew. Now there are going to have to be far more market-oriented, they are going to have to look for far more value-added and diversified crop alternatives. We of course announced during the election campaign the financing system that would see farmers get some preferred financing through MACC to make investments in valued-added and diversified farming decisions.

Of course we will try to continue to convince the federal government to go slow on the transition to provide additional funding and to recognize the differential impacts that their decisions are going to have on producers in this province versus Saskatchewan and Alberta. The Minister of Agriculture (Mr. Enns), I know, will be visiting with Mr. Goodale, and in fact I think he is going to be part of a committee that meets next week to look at this issue, and he will strongly argue on behalf of Manitoba producers for (a) more transition funding and (b) more time between the various stages of this change that is going to take place. The impact is large. The impact is dramatic. I know that the Minister of Agriculture will fight on behalf of Manitoba farmers very strongly.

Mr. Doer: Has the provincial government received any definitive word on the Port of Churchill report? Of course, we know that there are members of the federal caucus now, government caucus, in Ontario that are opposed to the report dealing with the Port of Churchill. We know that Manitoba supports the Port of Churchill report, including the federal lead minister, the Honourable Mr. Axworthy. Obviously, I know that the federal government would be sensitive to elections in Manitoba and Ontario. Is there any word on when they will announce their position on the report that is before the federal government on the Port of Churchill and the investments that must be made that were signed by Saskatchewan, Manitoba and the federal government and the private groups?

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Mr. Filmon: I am informed, Mr. Chair, that we are still waiting for an official response from the federal government, that we have endorsed the Gateway North Report and that the federal government did initiate some unilateral consultations with communities throughout the Port of Churchill catchment area region. It did not include us as a provincial government in those discussions. We have to assume it was probably because of our election campaign or the impending decision on an election campaign. We certainly endorsed that report and support the establishment of the Gateway Marketing Agency that it referred to, but we have not had any response from the federal government, and we will pressure them on that.

Mr. Doer: I wish the government well on this endeavour. I know that the members participated in a community event with the federal government. The Minister of Northern Affairs and Native Affairs (Mr. Praznik) and the member for Rupertsland (Mr. Robinson) attended the Ottawa meetings. I know they were happy about some meetings and disappointed they did not get a meeting with Doug Young. So we wish the government well, and obviously we are all committed to Churchill in this Legislature. The Golden Boy faces north, and it is something I think we should all remember.

I just want to move quickly along the agenda just to get an update on these items. We have already made most of our statements about what we think about them, but just dealing with the federal budget, does the government now have a full analysis of how many jobs have been lost directly through the budget, the direct public service and indirectly through military decisions and other decisions of the federal government?

Mr. Filmon: The Air Command, somewhere between 2,200 and 2,500. It is a little difficult to get definitive figures because the federal government admits that all of its departments have not made their final decisions as to how they will meet their fiscal targets.

Mr. Doer: When we reviewed the military decisions, civilian decisions at Shilo versus Bagotville and Cold Lake, when we looked at some of the decisions on the relocation of the Air Command, it was our perception that there were a disproportionate number of jobs lost here in Manitoba. Relocation, first of all, is not a cut. We are against that proposal. Do we have an analysis? I know that the agricultural analysis is that it is regional inequity between Ontario and Quebec. Is there a regional analysis now that the dust has cleared? We can discuss this after the election campaign as opposed to in the more charged atmosphere in a campaign or prior to a campaign?

Mr. Filmon: As I have said publicly, we believe that we were harder hit than any other province in the country and that when you did all of the analysis, some regions benefited by shifts, but in our case, everything was a loss. There was no interprovince shifts.

Even in Alberta, in places where they were being cut, they were also adding in other places within that province. The Prime Minister made the comment to me that Ralph Klein did not criticize him when he cut CFB Calgary out, and that was because he was getting more in Edmonton at the same time, but in our case, everything was a loss, including the transference out of Air Command.

Not only did we this time suffer proportionately the worst cuts in defence jobs in the country, but if you combine it with the last three or four years and therefore add to it things like Portage la Prairie, the Shilo cuts, CFB Winnipeg cuts with PPCLI and so on, if you took the continuum of three of four years that this province has been--and obviously that includes decisions by the predecessor administration which we are also critical of--we have certainly suffered the worst cuts in defence employment in the country.

Mr. Doer: We participated with the government on the committee that was struck by the minister, in fact in an emergency debate proposed by the member for Sturgeon Creek (Mr. McAlpine). I suggested that we all get together on this--I think it was my lead question last December dealing with the parliamentary report recommending the relocation of the Air Command, which I think is, again, contrary to our vision of Canada, where everything is located in the Ottawa-Hull area of the country. The committee met a few times together and met once with the federal government.

I notice the Minister of Industry, Trade and Tourism (Mr. Downey) does not seem to have a lot of briefing books on his desk. It looks like he is reading Alberta Report more than anything else, but I am sure that is not true, so I withdraw that statement--[interjection] Nothing, except that there is work to be done. [interjection] There is work to be done. I guess that is my point.

Will the Premier order his Deputy Premier (Mr. Downey) to reconstitute that all-party committee so we can get back working on behalf of Shilo, on behalf of the long-term prospects of Portage la Prairie and to follow through on our commitment to the people of Winnipeg to fight, go and meet directly with Collenette on the decision and lack of merit for the relocation of that base from Winnipeg to the Ottawa-Hull area? I do not care if he does not want to meet with us. I think we should still go down there and demand a meeting, and I say, after the election, now that the rhetoric may be a little bit lowered, except from the Deputy Premier, that it is time to get on working on behalf of those people.

Mr. Filmon: Mr. Chair, the Department of Industry, Trade and Tourism continues to work diligently on that file. It would appear as though there is no possibility of changing the federal government's mind, and what we now have to do is identify opportunities to try and maximize the use of the facilities. There are obviously plans and proposals being developed by the department to try and do something productive with the assets and facilities that will be left behind.

Mr. Doer: Will the committee meet and go over that with the private sector that is part of the committee? Business, labour, government are all part of that; all parties are part of that committee. Will we have a chance to follow up on this issue? I offer that again to the Premier and Deputy Premier.

Mr. Filmon: I would just encourage the Leader of the Opposition to continue to press the federal government, as we will. We will invite the private sector to do that, whether it is Mr. Axworthy, whether it is Mr. Harvard, whether it is Mr. Collenette, any of those people. We will need all the support we can get, all the help we can get in pressuring those people to deal fairly with Manitoba and the use of the facilities that they are abandoning here.

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Mr. Doer: I am disappointed the government will not be reviewing this decision, because we have never received the facts under which this decision was made, and I find that regrettable. Of course, the CF-18 was another example where merit played no part. As I say, if there is anything we can do, we remain committed to the jobs where Manitobans are first. We remain committed to that economic base that we need, and we are very concerned about the longer term decisions and how it affects the aerospace industry here in Manitoba in terms of procurement policy and other decisions that will be made.

We are also worried about the 17th Wing. We are told that usually commanders like Wings at their disposal, and that is a lot of people, as well, here in the province.

I want to ask a new question to the government. The government is projected to lose $85 million next year in health and post-secondary education. Could the Premier advise us on the status of the Minister of Finance's (Mr. Stefanson) pledge to meet with Paul Martin and get that money reinstated before the '96-97 fiscal year?

Mr. Filmon: I am afraid the member would have to ask the Minister of Finance that.

Mr. Doer: Again, we are opposed to the reductions, both philosophically and financially, and we have made those points before in the House. We have made those points on disentanglement and on the reduction, on the streamlining, time and time again. I would point out that we remain opposed to the federal government's change in the way in which they are going to have health care and post-secondary education combined in one lump payment with the reductions per year of massive amounts of money, and we do not include equalization which are transfers of monies from Ontario, British Columbia and Alberta to Manitoba, Saskatchewan and the other Atlantic provinces and Quebec. We call those equalizations. We do not call those medicare, and we do not support this program. I just want to put it on the record again. We have discussed this in the past and I remain opposed to it.

I would like to ask the Premier, on the status of negotiations with the federal government on the national child care program, again a promise that was made if the economy grew by 3 percent, we were to have a national child care program in Canada. Can the Premier advise us of the status of that proposal?

Mr. Filmon: My impression is that the federal government has backed totally away from its commitment to the national daycare plan, that there is nothing in their Estimates for this year for that plan despite the relative buoyancy of the economy.

Mr. Doer: Mr. Chairperson, I want to touch on another item when the Premier mentioned estimates. Under the Western Diversification we are getting kind of two stories on what is in the estimates and what is potentially in the estimates on the ski hill proposal, Asessippi ski hill development. On the one hand, we are hearing federal government representatives saying there is no money in this proposal from the federal government to build the ski hill at Asessippi, and we are hearing from other government representatives outside of the city that there is money to build the ski hill subject to the environmental hearings.

Can the Premier advise us on the status? Is there money in the federal budget, if the environmental assessment is approved, for that proposal that was agreed to by Mr. Mayer and subsequently by Mr. Axworthy or are we just seeing a situation where people just want the proposal to go away through an environmental process?

Mr. Filmon: We do not know if there is money in the federal budget for the proposal, but we do know there are letters on file from the federal government to the proponents that they would adhere to the commitment that was made to fund the ski hill subject to the receipt of a favourable decision by the Clean Environment Commission.

Mr. Doer: Can the Premier table those letters? Can we get a copy of those letters because out in the public debate there is a great deal of confusion about the willingness to participate by the federal government, and we get asked to raise it here and I think we should know what is going on. I know the government has been fairly straightforward on the proposal. I know the environmental assessment is reviewing the material. This is an issue that was raised at the Taxpayers Association to all three of us. I would say that we probably provided the mushiest answers in that forum, but I think I said that to the person who asked us, I think we were all dancing around the issue a bit about what is there and what is not there, what we stand for. I have to say, I want to review the file myself just to make sure. I hate to give answers like that sometimes to questions, but one also must be consistent with what one said back at the community. You do not want to say one thing in Russell and another thing in Winnipeg.

Having said that, I think there are a lot of things being said in Russell that are not being said in Winnipeg and a lot of things in Winnipeg that are not said in Russell. I want to know what the deal is just so I know what is being said, and I would ask the Premier if he could provide those letters. I will move on to another question.

Mr. Filmon: If I can obtain them, I will. The letters, as I understand, were sent to the proponents, so they are their correspondence with the federal government. If I can obtain them, I will provide them for the Leader of the Opposition.

Mr. Doer: In this decisive decision making we have on this issue, I noted the Minister of Finance said, if their money is not in, our money is not in. After you, Alphonse, and the feds are going. If their money is in, our money must be in. I just want to know what the letters say, if we can see that, because it is federal, provincial and private money. It is a tripartite proposal.

I want to move along. The GST harmonization proposals or the various proposals on the GST, now I know we were going to abolish the GST. I know that that was promised in Brandon. [interjection] Yes, I have the Prime Minister on tape, not that he cannot get away with it, obviously. I know that Sheila Copps said she would resign if it is not abolished by the next election. Having said that, could the Premier advise us, are we abolishing the GST or are we just abolishing medicare with the reduction in payments to the province?

Mr. Filmon: I have always been in favour of abolishing the GST, Mr. Chairman, but it is not within my power to do it. My understanding is that the federal government has backed away from the commitment entirely, even to the extent that it was not raised by Mr. Martin at his most recent meeting with his provincial counterpart Ministers of Finance. This may fall into the realm of unsubstantiated information, but the word from the federal officials was that they were awaiting the results of the provincial elections that were anticipated this spring in Canada and that, given favourable results that they interpreted as being the election of Liberal governments in three provinces, Ontario, Manitoba and Saskatchewan, they then felt that they could proceed with their harmonization proposal, which was their way of fulfilling their election commitment. Obviously that is not likely to happen now, so it will be interesting to see what they now do as a response to their election promise of removal or replacement of the GST.

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Mr. Doer: We have to worry about Ontario. Well, we all have different opinions about what is going to happen there, because I have heard--our unsubstantiated information dealt with Ontario and its size and its complete volume of transactions and, along with Atlantic Canada being the sort of liberal wedge on this GST, but that is unsubstantiated, and I would never bring unsubstantiated stuff to this Chamber, as the Premier knows full well. So the GST is just another promise in Brandon, at the University of Brandon, that is floating in the wind.

I want to ask a question on the process of moving from the Department of Indian Affairs to self-government here in Manitoba. Can the Premier advise, is this a matter that is dealt with routinely in cabinet? Are we full participants in this process? Just give us an update of how that is proceeding in the province. Not a long--just the status of how we are dealing with what the federal government has promised.

Mr. Filmon: The federal government is absolutely cutting out the provincial government from any part in the process, and the AMC appears to be in full agreement with this. We are not involved in any way.

Mr. Doer: Is the Minister of Northern Affairs and Native Affairs and Energy and Mines the lead minister on this matter for the province?

Mr. Filmon: He would be if there were any role to play, yes.

Mr. Doer: We will hold him accountable for any disagreements we may well have, of course, consistent with his oath of office here in Manitoba.

I want to ask a further question. I have stated before on this issue, and I want as much as possible--I mean, when we look at the disagreement between Diane Marleau and the chiefs themselves on whether health is a treaty right. I believe that health is a Canadian right and medicare is a Canadian responsibility. I just hope that this process works, because the past I do not think has represented us very well, and if we can be part of the solution as opposed to being in the bleachers or not being anywhere at all on this, I just encourage the First Minister to--if there is any way of reconciling the disagreement that may exist, I would encourage very strongly the First Minister to find a way to put this back on the rails.

I just really believe that this is an important process. I think it is important to Manitoba. If he looks at the demographic projections for the next 20 years, we have all looked at those, and there is a pretty strong--it is like, we can deal with it now or we can deal with it later, and the later is much more serious than the now. The Premier has often used the term--not often, I have heard him use this term once, so I do not want to exaggerate--he has used the term, the best time to plant a tree is 20 years ago; the second-best time to do it is now.

I would suggest that this is the same kind of comparison. I would like to deal with it now. We should have dealt with it 20 years ago. We should have dealt with it 125 years ago. I just encourage the Premier very strongly to get this thing moving.

I want to ask the Premier just a couple of brief questions on interprovincial issues. Can the Premier advise us of the status of the Langenburg proposal in Saskatchewan and whether in fact we are going to have a full federal-provincial environmental assessment of that project and its downstream effect on Manitobans?

Mr. Filmon: During the course of my visit out to western Manitoba to view the extreme flooding that was taking place along that Saskatchewan border--that was, I believe, the 27th of April--I said to the local officials, the municipal leaders there, that I had been informed of the concerns during my visit there and we had flown over the specific areas. It was pointed out to me by the Minister of Rural Development (Mr. Derkach), who is the member for the area, entire areas of road were washed out, culverts ripped out, bridges damaged by massive flows of water that were the result of the drainage changes that had taken place already in the area.

Of course, that is only a small part of a bigger proposal for the Langenburg area. What I committed to was that we would express our concerns to the Saskatchewan officials, and we have indeed been doing that through the senior officials of the Department of Natural Resources and Department of Environment. We do believe that there is plenty of reason to believe that there could be very, very significant downstream negative effects to Manitoba, and we are working very hard to convince Saskatchewan that the proposal as it exists ought not to be proceeded with, but it will of course have an impact as an interprovincial disagreement that could be escalated to a substantial proportion if we cannot get agreement from Saskatchewan. So we would prefer to try and negotiate the issue to as much as possible eliminate negative downstream effects for us before we go threatening any other things.

We do ultimately hold in reserve the possibility that the federal government be asked to come in through a federal environmental assessment process trying to help us to fight the negative impacts of what we see in the proposal.

So at this point we are trying to do it through senior administration in our Environment and Resources departments, but if that fails then we will do everything that we can to fight the proposal, at least the negative aspects of the proposal, and use whatever tools which are at our disposal.

Mr. Doer: I totally believe that any--you have heard me say this before--the cross-border transfer of water that affects downstream, impacts downstream other provinces, I have the same belief about the Langenburg proposal with the existing Saskatchewan government as I had with Rafferty-Alameda with the previous government, so I have not changed my position.

I also have the same position on Shoal Lake drinking water, and I would just like the Premier to advise us on that situation. I know that there was some thought last fall that the gold commodity prices were going up. Now the gold prices have gone down, and now they seem to be going up a touch more. I know that Consolidated is ready to go.

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Can the Premier just advise us on that Shoal Lake watershed. I know he has a good working relationship with Premier Rae.

An Honourable Member: For how much longer?

Mr. Doer: Well, I have had only one prediction with the Deputy Premier (Mr. Downey) about Saskatchewan. I spend more time in Saskatchewan.

I would like to ask the Premier about the status of the Shoal Lake situation.

(Mr. David Newman, Acting Chairperson, in the Chair)

Mr. Filmon: As the member knows, it was on the agenda of my very first meeting with Premier Rae after his election, and it continued to be on the agenda through many bilateral meetings that we had. He put the process off to one that was chaired by, I believe it was Minister Wildman who was the Minister responsible for Native Affairs in his province.

We have been urging the acceptance of our watershed management plan, which has not happened. The watershed management plan, of course, is our long-term solution to that issue. It would make it very, very difficult for them to proceed with the gold mine under the watershed management plan.

Premier Rae and his people were reluctant to accept that solution which was our preferred solution, and of course in fairness, this has been dealt with not just as an issue between the governments of Manitoba and the governments of Ontario but rather a tripartite issue with the First Nations' involvement. Depending on our assessment of the threat, we could also bring the federal government in to use its authority on the matter. We have always suggested that if we are not satisfied that our interests are being protected, we would go to the federal government to try and ensure that that was addressed.

We will do all things possible to eliminate the threat to Winnipeg's water supply, but at this point the government of Ontario does take the position that they are the ultimate authority in terms of licensing of any potential gold mine.

Mr. Lamoureux: Mr. Chairperson, I believe that over the next few years potentially this could be one of the greatest challenges, federal-provincial relations, and in terms of myself, in trying to filter through the political rhetoric that might at times come to the Chamber. You know, in listening to the questions and answers with respect to federal-provincial relations--and we talked about the Crow rate and how bad the federal government is. We talked about job losses and how bad the federal government is, the transfer payments and again how bad the federal government is, national daycare plan and how bad the federal government is, Indian Affairs and how bad the federal government is, and then of course the GST and how bad the federal government is again, and for me--[interjection] There is no doubt a common enemy for the official opposition and the government, and I guess in time I will learn to get a better appreciation of why it might be in their best interests to ensure that the federal government and the politics of the issues are there before all of those different issues. But suffice to say, the issues that have been talked about are in fact very important issues.

Mr. Acting Chairperson, as I have indicated, over the next while I intend on speaking out on issues that Ottawa makes decisions on that have a significant impact on the province of Manitoba, all of those issues which were briefly touched upon this afternoon, or some of those issues which were briefly talked about this afternoon.

I share some of the concerns with respect, for example, on the Crow rate. We will acknowledge there is that transition fund, a fairly significant size of a transition fund that is being made available. The Premier quite correctly points out that the province of Manitoba is in the worst situation in terms of additional costs as a result of the Crow rate disappearing, and there is a valid argument to put forward and to be made to ensure that Manitoba gets a bigger share of that pie.

(Mr. Chairperson in the Chair)

I would anticipate that all members of this Chamber are going to do what they can to ensure that the transition fund reflects in terms of which area of the regions are mostly affected in the size of funds that are needed in order to assist in that transition.

It was interesting in terms of the job losses. The Premier made reference in terms of we were the worst defence cuts in the country. He made reference to, while in Calgary he met with the Prime Minister, and the Prime Minister said, well, you know, we closed down the base in Calgary, and I did not hear Ralph Klein complaining about it. The Premier said, well, but he shifted the base over to Edmonton. I posed the question from across the floor to the Premier, was there a net gain or was there a net loss? I believe there was a net loss to the province of Alberta in terms of defence jobs.

When we take a look at what has happened across the country, I guess we would ask the question: Is the government and the New Democrats of the opinion that we should be increasing the size of the Canadian Forces or do we believe that we can reduce the size of the Canadian Forces? I would expect, in particular, from the New Democratic side that there is an acknowledgement that the world situation has changed quite dramatically and we have to look in terms of the way in which our military can best serve us given the scarce resources that are out there.

The Premier makes reference to jobs, 2,200 to 2,500 jobs. You know, I believe this is over a period of time that the federal government is talking about--and it would be interesting to hear in terms of how many of those jobs actually turn out to be lost. My best guess is that it will not come anywhere near close to the 2,500, but, Mr. Chairperson, I would anticipate that time will prevail and we will be able to find out just what sort of an impact it will have.

We talked in terms of transfer payments. Yes, health care, education are very important to us. We have to ensure that the federal government continues to play a very significant role in these two areas of expenditure and something which we are committed to doing.

It was really interesting the comments, and I guess when we sit down and we want to talk about intergovernmental discussions that take place between the Premier, other Premiers, the Premier and the Prime Minister there was one comment with respect to the GST. I guess I anticipate future discussions that we have with respect to the Executive Council will be more of the what is the government doing in terms of trying to co-operate with the federal government.

I give you a specific example. The Premier and the Leader of the New Democratic Party were quite content in saying, well, the federal government made a commitment that they were going to abolish the GST. Everyone knows, all Canadians know that the GST was in fact dealt with in the red book. What does the red book say about the GST? A Liberal government will replace the GST with a system that generates the equivalent revenues, is fair to consumers and to small business, minimizes the disruption to small business and promotes federal, provincial and fiscal co-operation and harmonization.

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I am sure the Premier actually has a copy of the red book, and if in fact he does not have a copy of the red book I am sure we can provide him a copy, and it expands upon that. I guess maybe in the spirit of co-operation I would ask the Premier--because it is not only a question of the GST, there are a number of different issues that I want to very briefly comment on--what does he feel is in the public's best interest in the province of Manitoba in terms of trying to resolve the GST problem that is actually out there?

The federal government was looking at alternatives. One of them was in fact some form of harmonization. It was believed in terms of duplication of services--I have often heard ministers and in particular the former Minister of Finance talk about how much duplication is out there and that we have to start working together as governments--and I am wondering if we can put some of the political differences to the side and discuss the issue at hand, and is it reasonable for us to be looking at the possibility of some form of a harmonization of, for example the GST, the PST, or is that something which this government has ruled out completely.

It is very easy for us to--I do not need to forewarn the Premier. I am sure he is well aware of it, that I think the onus of responsibility is going to be on all political parties across the country if in fact we want to deal with this issue. It will be interesting to see how different political parties in different regions of the country do ultimately come to grips.

I hope and I trust that in fact the federal government will materialize on its commitment to replace the GST. The question is, what is it going to replace it with? If we put up roadblocks and say we do not want to co-operate with you, then if the Prime Minister wants to materialize on his commitment, we might not necessarily get the best form of a taxation, or we might have been able to have done better, had there been provincial co-operation. That is why I would ask the Premier in terms of what role, or what is this government prepared to do in terms of trying to address the issue of replacing the GST?

Mr. Filmon: Mr. Chairman, far be it for me to give political advice to the member for Inkster (Mr. Lamoureux), but the reason that he is sitting there with only three members in the House is because he insisted on staying in lock step with his federal Liberal colleagues. Continuing to support and defend everything they do in this House is not designed to get him any more support. I think the public of Manitoba have spoken very strongly that they do not want him to be here as an apologist for his federal counterparts. They want him to represent his people here in Manitoba, but I do not want to give him any political advice.

Mr. Chair, I would also say to him, just to give you a sense of what other provincial Liberal parties are saying, none of them are adopting this kissy face, huggy bear approach to the federal government. They are taking an independent position. I have got the clippings of the response of ministers and premiers from the four Liberal governments in Atlantic Canada, for instance, to the federal budget of Mr. Martin. Mr. Allan Maher, the New Brunswick Finance minister, his reaction was: Ottawa's plans to reduce transfer payments to the provinces could translate into deep spending restraint at the provincial level in the coming years, New Brunswick Finance minister Allan Maher said last night.

He goes on to tell all of the damaging effects of the federal Liberal government on his provincial administration.

The government of Nova Scotia, quote: This budget seems to achieve what the feds want, but we have to say it has been more significant in terms of transfer cuts than we thought, Premier John Savage said. The cut to transfers will take an estimated $230 million from the province's bottom line during the next three years.

Quote: If there was ever a classic case of mixed feelings, it was our reaction to this budget, said Finance minister Bernie Boudreau.

Same thing from P.E.I., same thing from Newfoundland. You should be at least honest enough to be able to acknowledge the negative impacts of federal decisions that are made on our province and its people, I would suggest to the member for Inkster (Mr. Lamoureux). I would also suggest to him, when he says that he does not believe that the reduction of between 2,200 and 2,500 staff by the federal government in Manitoba is going to materialize, then their projected savings and their move to reduce the deficit will not be realized either, because that is the basis on which they have projected that deficit reduction, so they are not going to meet their targets if they do not meet those reductions of 2,200 to 2,500.

With respect to the GST, I will tell him that we have provided a clear alternative to Minister Martin, and that is that we will disentangle, and we will achieve all of those things that the former Minister of Finance talked about and that the current Minister of Finance in Manitoba are talking about, and that is to get the federal government and the provincial government away from stepping on each other's toes, to save bureaucracy, to save expense for all of our taxpayers, our collective taxpayers, and that is to turn over--our proposal is to turn over the sales tax revenues and jurisdiction for sales tax in our province to the feds, and they in turn turn over collection of income taxes to us.

The transfers, as I recall, are approximately equal, and we would end up getting similar revenues and so would the feds for the transfer. We would eliminate overlap and duplication by getting both of us out of the sales tax and both of us out of the income tax field. That is a proposal, I might say, that gained the support of more than half the provinces when it was put forward on the table. It is viable and it is a sensible proposal, and it would save our collective taxpayers money, but we have not seen the federal government approve of that.

Mr. Lamoureux: Mr. Chairperson, only because of time I will forgo this continual discussion with respect to the GST. I appreciate the advice that the Premier offers, and I can assure the Premier that there are times in which I will disagree with my federal counterparts, as I know that the Premier himself has disagreed on certain areas.

One of those areas in which there was disagreement was a very important issue to the Province of Manitoba, that was being the immigration aspect to the budget, and I have had opportunity to discuss concerns that I have had. We do not feel that it was appropriate to charge a $975 fee. This is in fact something in which I believe a majority of individuals, at least that are acquainted with me, are familiar with. As opposed to trying to focus a provincial election on the provincial Liberals supporting, it knowing full well that the support was not there, what I felt was more important was to ensure the constituent that I represented was aware what was important in terms of for the province of Manitoba was the bilateral immigration agreement. The bilateral immigration agreement has wonderful potential if the Premier in this government were to take it more seriously. We have had at least one province that has had a bilateral immigration agreement for years now, that being the Province of Quebec.

I have had numerous discussions at all different levels with respect to this bilateral agreement. I heard representation over on Juno, which was the Philippine centre, from civil servants from the Minister of Culture, Heritage and Citizenship. I was a bit disturbed, to be quite honest with you, when it was indicated to the group of people there that, look, what we want to be able to do is to get our fair share of immigrants to the Province of Manitoba. I had asked the question: what do you believe is the fair share? The response was we should be entitled to in and around 3.7 percent in order to get our fair share.

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I made reference to this in my opening remarks, and I really do believe that that is the wrong way to be approaching any sort of negotiations with Ottawa with respect to the number of immigrants coming to the province of Manitoba. What Manitoba should be doing is saying how many immigrants, what sort of classifications and so forth, can we absorb in any given year? That is in fact our starting point. That is where we should be going to Ottawa, not that we want 3.7 percent of whatever Ottawa determines that it wants, because as we saw eight months ago I believe it was, when the federal government had a reduction in the number of immigrants coming to Canada, had we been given that 3.7 percent, we still would have received a reduction. Would that have been in Manitoba's best interest? I would ultimately argue no, that would not have been in Manitoba's best interest. What is in Manitoba's best interest is to get a better understanding in terms of what it is that Manitoba can absorb in the different types of classifications.

We have benefited tremendously because of the family reunification program. If it were not for the family reunification program or reuniting families, if you will, Manitoba would be worse off in terms of the number of immigrants coming to the province.

These are the types of things that we should be articulating and talking about, not only when the Minister of Culture, Heritage and Citizenship (Mr. Gilleshammer) meets with the Minister of Immigration, but I believe it has to be a higher priority of this government. We have waited; there is a memorandum of understanding. I believe there was supposed to be something in place by March 1. It is the province that has to play the lead role on this issue.

The government, from what I understand, is quite prepared to sit down and negotiate a bilateral agreement. Other provinces, and particularly the Province of Quebec, was quite aggressive in terms of achieving that bilateral agreement. I would like to see the Province of Manitoba more aggressive on trying to achieve a bilateral agreement. My question to the Premier is: When he meets with the Prime Minister, what does the Premier believe we should be arguing for? Should we be arguing for 3.7 percent of the total number of immigrants coming to Canada, or should we be arguing for what we believe the number of immigrants that Manitoba can sustain in any given year? If he believes in the latter, what does the Premier believe is in Manitoba's best interest in terms of numbers and types of classifications?

Mr. Filmon: Firstly, Mr. Chairperson, that number is not what is stopping an immigration agreement from being signed. What is stopping it is the federal government, and for the member to say that somehow we should be the lead agency on this--nothing can happen unless the federal government, which currently has constitutional authority over immigration, is willing to give up part of their authority to a province. If they stonewall us and say no, there is nothing we can do. They have not said anything other than they continue to talk, and they will not sign an agreement. There is no magic in the 3.7 figure other than a target that you can aim for.

What is known is that 15 years ago in the early '80s we used to get 3 percent of the immigrants coming to Canada coming to this province. That we have now slipped down to between 1 percent and 1.5 percent is my recollection. So we clearly have lots of room to grow, and if we could get an agreement, we could start growing again. That is what our objective is. That is one of the reasons why we want to have this kind of agreement. Another reason is, of course, so that we can better match the skills of the immigrants to the skill shortages of our province, that we can perhaps get a greater share of entrepreneurial immigrants and others that are coming to our office, for instance, in Hong Kong, our representative in Hong Kong and other places, but simply cannot be given authority through the very, very slow and complex federal system, that we could help in the process.

Clearly, we want to do everything. I would like to know if the member would be willing to write a letter to the federal government urging them to deal with Manitoba expeditiously to try and achieve an agreement, because that is what we need. We need his support, not his criticism.

Mr. Lamoureux: Mr. Chairperson, can the Premier indicate what correspondence he has requesting agreement, or better yet, does the Province of Manitoba currently have a proposal? If they do have a proposal, what is it that they are actually requesting from the federal government in terms of numbers?

Mr. Filmon: We are requesting an agreement, and we have an entire proposal that has been worked on for four years now. I mean, it goes back to dealing with the Mulroney government, with the Campbell government. The member may recall that it was one of the issues in the one meeting that I had here with Prime Minister Campbell in her visit as Prime Minister to Manitoba. I raised that particular issue as one of the foremost issues, and it has carried on. So there has been plenty of staff work done by senior staff. The question is when the federal government is going to be willing to enter into such an agreement.

Mr. Lamoureux: The Premier indicates that he has a proposal. Would the Premier be prepared to share that proposal with all members? If the Premier is sincere in wanting for me to lobby and other members, no doubt, to lobby, I am sure he would be prepared to at least provide us the information that he is using in order to get this immigration bilateral agreement accomplished.

Mr. Filmon: We signed a memorandum of understanding with the federal government that was the basis of our proposal six months ago, and as is the case in federal-provincial correspondence and agreements, both parties have to agree to make it public. Our understanding is the federal government did not want to make it public.

Mr. Lamoureux: Would I take it, then, Mr. Chairperson, that the Premier is quite content to allow it to go public at this point in time? If the federal government says yes, the Premier would have absolutely no objection to it?

Mr. Chairperson, I am pleased that the Premier has given the authorization, and one of the things I will do is take advantage of that offer and see if, in fact, I can get some additional information on it. Again, I am very cognizant of the time. What I will do is go through a lot of the things that were discussed this afternoon and possibly try to get some additional feedback, and quite possibly wait for concurrence and if time allows in concurrence possibly to continue this line of questioning in terms of the federal-provincial relations. Thank you very much for the opportunity to speak.

Mr. Chairperson: Is the committee ready to pass the items? 1.(b) Management and Administration (1) Salaries and Employee Benefits $1,853,700--pass; (2) Other Expenditures $420,300--pass.

1.(c) Intergovernmental Relations Secretariat (l) Salaries and Employee Benefits $332,100--pass (2) Other Expenditures $66,000--pass.

1.(d) Government Hospitality $10,000--pass.

1.(e) International Development Program $450,000--pass.

1.(a) Premier and President of the Council's Salary $33,300--pass.

Resolution 2.1 RESOLVED that there be granted to Her Majesty as sum not exceeding $3,165,400, for the Executive Council, General Administration, for the fiscal year ending the 31st day of March 1996.

The hour being 6 p.m., committee rise. Call in the Speaker.

IN SESSION

Mr. Deputy Speaker: Order, please. The hour now being 6 p.m., this House now stands adjourned until 10 a.m. tomorrow (Friday).