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Mr. Chairperson (Ben Sveinson): Good morning. Will the Committee of Supply please come to order. The committee will be resuming consideration of the Estimates of the Department of Industry, Trade and Tourism. When the committee last sat it had been considering item 10.2.(c)(1) on page 91. Shall the item pass?
The minister's staff can come forward now, if you would, please. The minister might want to introduce his staff present or, at least, those that he has not introduced already.
Hon. James Downey (Minister of Industry, Trade and Tourism): Yes, Mr. Chairman, we have as well today Mr. Garry Hastings, with Manitoba Trade, who is with us, as well as, my deputy, Murray Cormack, and Mr. Jack Dalgliesh, who were here before.
Mr. Tim Sale (Crescentwood): I have a couple of questions in regard to the developing--I suppose we could call it a crisis or at least the unrest in Eastern Bloc and Asian markets, in particular, but certainly a lot of volatility in Latin America as well. What is the exposure of Manitoba's export trade to the markets that are most unsettled at the present time? I am thinking of Asia, Russia and the Eastern Bloc, Mr. Chairperson.
Mr. Downey: Mr. Chair, maybe he could clarify when he uses the word "exposure." What do you mean by the word "exposure"? Is that the amount of trade we are now doing with those countries?
Mr. Sale: Yes, Mr. Chairperson, for example, Pauwels transformer plant exports a great deal of its product to India. I believe they have had export markets in Pakistan, Indonesia, Thailand, Singapore. I am not sure about Korea. It is a very good company, very significant investments made to bring the plant up to high standards of productivity and safety.
I am wondering: what is the relative exposure? What has been done by Manitoba Trade to determine that exposure and, what, if any, steps have been taken to try and manage this issue?
Mr. Downey: Mr. Chairman, again, the majority of trade that the province carries out is with the United States. As he knows, that is by far the largest amount of trade. Of course, Japan is a major trade partner as well, next to the United States. So we are talking in quantum terms of about $4.5 billion in 19--sorry, year to date: the United States would be over $5 billion, an increase of 19.3 percent; Japan is up as well for the year 1997 to $410 million as it relates to, for example--China is down considerably. Not really that much change in most of the other areas, for example, Mexico, '97 over '96 is about the same as year over year; Indonesia, 1997 over '96 is up slightly. We would not be able to get a read as it relates to the current numbers out of what I have here. South Korea, '97 over '96 was up marginally; Taiwan was about the same.
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Eastern Bloc countries, again, the trade activity into those countries is very, very small at this particular time. It is an area we have been working on. I would say as it relates to the Asian market, again our greatest amount of trade takes place with Japan, and I do not think they are having, although they are having some difficulties, near the amount of some of the other Asian countries such as Indonesia. The total trade with Indonesia, just to give him an idea, is under $70 million.
So, anyway, the point I am trying to make is that I think it is a little too early to tell as to what the impact will be with some of the problems that are both in Asia and in the Eastern Bloc, but, again, because the quantity of trade is important to us, it is not as significant as if something had happened with the U.S. market. Probably the longer term would be what impact will the Asian flu have on the U.S., and what does that roll over to their purchasing of products from Canada?
So, again, I cannot give him any more definitive answers. I am sure that when these things are happening there will be impacts which at this point are not measurable. Again, as long as we maintain our major trading partner the United States, it should be minimal.
Mr. Sale: My figures on Japan show a very substantial loss in Canada as a whole as against, again, in Manitoba, which I hope is not just a short-term fluctuation.
The issue I was raising was to see whether any companies--I am not suggesting the minister should name them, but whether any companies have approached government and trade officials expressing concern about the situation, expressing vulnerability, and whether any strategies have been developed to mitigate that problem.
Mr. Downey: Not that I am aware of, although I will tell the member that we still have some companies that are very interested in doing business in those countries. They have not backed off. They are still very aggressive in their marketing program because even though the economies may have softened in those areas, they still have to buy and develop their countries. It is a matter of having to reassess how much it is going to cost them to do some of the project development that they are looking at.
So all I can report at this time is that I have not been informed of any companies that are concerned and/or in fact are backing off. There is the same interest in the developing of markets internationally as there have been previous to the meltdown of the Asian economy.
Mr. Sale: Mr. Chairperson, a year ago, the minister reported on a trade mission to South America, and one of the issues of controversy was the potential visit of some tourism officials which was talked about. Did that visit take place?
Mr. Downey: Not the numbers of tourism people, but there has been some interest again, and it was followed up in our trip on Team Canada, which I was a part of this year. In fact, I can tell him that I think some of the successes that we were able to accomplish from our original trip to South America were further highlighted as it relates to the Team Canada trip, the fact that we had been there, we had established some direct contacts with both political and tourism and other leaders, particularly as it relates to the Pan American Games that are coming up in 1999. All of that time, effort and money that was invested we believe is going to pay off and will do so in a substantial way.
Mr. Sale: I appreciate the minister's answer, but for the record I think it is important to simply note that the hoped for visit by the Tourist Association that was spoken about in Estimates did not take place. Is that correct?
Mr. Downey: I would have to further check as to what portion of that or what part of that group came, Mr. Chairman.
Mr. Sale: Mr. Chairperson, the association told us that they had an event every year in which they travel to a destination or destinations, that they were considering putting Manitoba on that list but that it was a consideration only. The minister had indicated a somewhat more certain outcome than that. The association told us it was only under consideration. My information is that they did not, in fact, as an association function, come to Manitoba, which is regrettable, but I am simply wanting to ascertain for the record whether my information is correct.
Mr. Downey: Well, one could consider they are still considering it.
Mr. Sale: Mr. Chairperson, the minister loves to play these little games. The information that was put on the record previously was that they would be coming last year. Our conversations with them were that they might come last year. My information is that they did not come last year. That is what I am attempting to ascertain. Did they or did they not come as a travel association to Manitoba last year?
Mr. Downey: Mr. Chairman, I will have to double-check, but I do not believe--I do not think they came. However, it may have been because they read some of the press or some of the comments made by the opposition members and not found that it was that friendly a place with the kind of climate that was here. That may have been one of the reasons that they did not come, but I will not accuse the member opposite directly of that. I will find out a little bit more as to why they did not come.
However, I can tell the member that we did have one individual who was very much responsible for--I am not sure whether he is a member of the association but he is a writer, a communications person that has been working very actively and was here, visited Manitoba--of promoting particularly Churchill and a lot of the activities, because the polar bear tourism product is very popular, particularly in Argentina. This individual has been here, has visited. It was a result of the trip that was made in September, some two years ago, of which myself, my department and my spouse participated in Argentina and South America.
Mr. Sale: I thank the minister for that answer. I believe it confirms what we believe to have been the fact as well, that the association decided not to make Manitoba one of their stops in their trip last year.
Mr. Chairperson, in terms of trade issues, the one concern that Canadian analysts have consistently had over the years is the growing dependence on the American cross-border trade with the United States. Whereas our trade with the United States was always in the range of 60 percent or so, it is now significantly above that and growing each year. I think trade patterns--everyone who looks at the Canadian economy knows we have shifted from an east-west economy to a much more north-south economy, which is one of the things that helps to weaken national ties.
It has benefits and it has costs, but certainly one of the costs is that we become a peripheral part of the American market as opposed to an integral part of a Canadian market, because of the north-south polarization and the fact that we are on the north end of that and not in the middle of it. So we are dependent on specific expertise, specific niches in which we export, and therefore are very vulnerable to American economic developments. I am sure the minister is aware that, for example, if the American currency is strong and appreciating, and that is not what is happening in Canada, then the economic policies required to deal with those two issues would be different in the two countries. It is extremely difficult for two countries to have different economic policies when one is a tenth the size of the other.
There is a pressure that is very significant, so we are under great pressure now or our currency is under great pressure now because our interest rates are anywhere from 50 to 100 basis points below the United States in a number of places in the yield curve, particularly the short end, yet our economy is far from a full employment economy. The American economy is at this point much more robust, although it has real problems. So the bottom line here is that we are more and more dependent on the United States as our major trading partner. We continue to maintain a trade deficit with the United States of over a billion dollars a year at the present time. It narrowed somewhat briefly but it has widened again.
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So, really, we have become even more dependent on our ability to sell goods in the world market, to be able to finance a very significant trade deficit with the United States. That, of course, is the opposite in Canada as a whole. We have a modest trade surplus with the United States.
I am wondering whether the department, the government, has any concern about this issue in the first place, and what they are doing to deal with the trade imbalance that we have with the United States.
Mr. Downey: First of all, Mr. Chairman, that is one of the areas that we have been working on as it relates to diversifying some of our trading activity into other jurisdictions, continuing to support and encourage, particularly, trade with Japan. We are focusing, as well, into the European communities, particularly some Eastern Bloc countries but basically some of the more traditional United Kingdom and some of the more traditional markets which we have enjoyed. Again, South America is, as well, an area that has been targeted. Again, those are some of the strategies that we are developing to further offset our total dependence on the United States.
However, because of our physical location, because of our trading patterns, because of our agreements, whether it is NAFTA or the Free Trade Agreement with the United States, it is just a natural that the United States continues to be the major market for Manitoba products that are produced and manufactured here. That I do not anticipate will change in a major way, although again the point I am making is we are looking for a little bit of diversity in our marketing activities, I want to remind the individual again, as a percentage of our imports versus our exports, as our exports as a percentage of our imports continue to grow. So it means that we are in fact benefiting in the overall export business to the United States. A lot of the equipment--again I will emphasize this. I know it is on the record before. I will put it on the record again. A lot of the equipment, a lot of the purchases that are coming in from the United States are in the area of production equipment, and I will use the agricultural industry for an example.
I do not believe that there is an industry in Canada today that produces combines for the agricultural industry, a huge import of that type of production equipment. Again, the same thing applies to some of the power units, although we are extremely pleased that we have a New Holland plant here in Manitoba, which is one of the larger tractor manufacturing plants. But again, a lot of the production equipment--I will go back to the development of the plant at Carberry where the expansion of the processing plant for french fries took place--and a lot of the equipment that was put in there came from the United States. What are we doing? We are processing the potatoes that are growing here, further refining a raw product, putting them back into the U.S. market which creates jobs and economic wealth for Manitoba, which quite frankly is not bad.
So I guess the bottom line is that we have a highly trained and skilled workforce. We have companies such as New Flyer that continue to grow and expand into the United States market with a product that they are producing. The fact that the U.S. market has been opening up and continues to grow for us, we want to make sure that Manitoba companies are in fact able to do it.
I know that he would love to talk about the call centre business. Again, there is another opportunity that we have been able to--
An Honourable Member: We will get around to that.
Mr. Downey: We will get around to that. I did not want to leave that out as part of the debate here. To encourage American companies to operate out of Manitoba, selling services into the United States, and the service industry continues to grow and expand.
So I do not see it as sitting back or particularly companies sitting back, not doing something about trying to diversify. It is a matter of fully maximizing our opportunities and adding value to the products that are produced here. Yes, we will have to continue to buy some production equipment from the U.S. However, as we do that, we think that production equipment that is bought will further add value to some of the product that is produced here, generated here, and we sell more value-added product into that U.S. market.
So, we can go on for days on this subject, but I do not have a lot more to add at this particular time.
Mr. Sale: I just have one last question in this area. Could the minister put on the record his understanding of how--[interjection] I thought you were Protestant, Mr. Chairperson.
An Honourable Member: Sign language.
Mr. Sale: Sign language, right. We can exchange a story about the meaning of that at some point.
Would the minister put on the record his understanding of how, in economic terms, we finance a trade deficit? Our trade deficit last year was $600 million in total, in aggregate. Our trade deficit with the U.S. was over a billion. How does that get financed in economic terms?
Mr. Downey: I will take, in part, the question as notice to try and see if we can get a professional answer--how should I put it that way--from the financial gurus that are available to us. I would put it in this context, in my understanding of it, that it is probably taken into account as part of the overall Canadian picture as it relates to Canada's surplus with the United States. I think that is probably, without pretending that I know exactly how it is covered, would be generally how it would be accounted for as part of that overall Canadian picture.
He may have some additional information that he could put on the table that would help get the answer. If he does not already know, he could probably be a little more specific in trying to flush out what might be more of his intent in the question.
Mr. Sale: I just think it is striking that the Minister of Trade does not have an answer as to how trade deficits are financed by a provincial economy within a larger national context. I do not see how you can have a strategy or an understanding of the macro issues if the minister and his officials at the table are not able to provide an answer as to how a nation or a province finances a trade deficit. So I will appreciate hearing an answer, I hope reasonably soon, as to how this takes place because it seems to me that it would be pretty important that the minister responsible for it have a conceptual understanding of what it is that is going on here. I will look forward to that, and we could pass this item.
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Mr. Downey: Mr. Chairman, if he is intending to try and embarrass me, he is not, because I think it is a complex subject of which a lot of people who are in the financial community would probably have to take some time to get all the specific details. Again, what I can tell him is that it is a matter of, as far as I am concerned, being dealt with through the overall process of when payments are made for products that are brought in as it relates to that against the sales that are made as to a timing factor. It is not quite as clear cut as you would put it on a balance sheet. If it is, I have told the member I would be more than pleased to get the information in a more professional way, but I have a general understanding that that is how it would be handled. But it is in fact a part of the overall Canadian picture of which we are in a trade surplus with the United States.
Mr. Chairperson: 10.2. Business Services (c) Manitoba Trade (1) Salaries and Employee Benefits $1,128,400--pass; (2) Other Expenditures $2,096,700--pass; (3) Grants $250,000.
Mr. Sale: Could the minister tell us what this grant list is?
Mr. Downey: Basically, Mr. Chairman, this is the support that is given to companies that want to participate in international trade shows for the promotion of product that is produced here in the province of Manitoba. That is basically what that covers.
Mr. Chairperson: 10.2.(c)(3) Grants $250,000--pass; (4) Less: Recoverable from Rural and Urban Economic Development Initiatives ($1,000,000)--pass.
10.2.(d)Telecommunications Marketing (1) Salaries and Employee Benefits $308,600.
Mr. Sale: Mr. Chairperson, this is an important area of the government's initiative to develop employment. I believe, just so we do not have to have a long discussion about it, that we are looking at something like 7,000 jobs roughly in the industry at this time. That has been an area of very rapid growth. Some of the jobs are good, well-paying jobs. Some of the jobs are terrible, high-turnover, lousy paying jobs. Some of the centres are extremely central to the operation of companies like CN, which has an amazing call centre that we had the opportunity to tour this year. It is a stable and well-paying operation that controls all of CN's traffic in North America. It was fascinating visiting just at the very end of the Quebec ice storm to see how they had set up an emergency operations department within the call centre and were busily rerouting traffic to allow for emergency equipment to get through and were handling that ice storm essentially out of Manitoba, which probably very few Manitobans realized. So we were privileged to tour that centre at that particular time.
I am also aware of the opening of the new Royal Bank Direct Call Centre on Taylor in my constituency. I spoke just last night with their new manager, Lucille Cozier, who was telling me that they are already in operation to at least a limited extent and that they had some 2,400 applications for the 700 positions which they hope to hire in the next period of time.
So I am aware that there are some very good jobs, particularly where the telemarketing services are in support of a specific company's operation. I think it would be probably widely agreed that the best jobs and the jobs with the best career paths attached to them are ones where the companies themselves are operating their own call centre to support their own operations, either from a direct service to their customers perspective or from a marketing perspective. CN does both, as I am sure the minister is aware, and so will Royal Bank.
The other side of the industry, though, is considerably less impressive. It is characterized by extremely high rates of turnover, low wages, no security, no guaranteed hours and in some cases, and I think these are probably the extreme cases, but in some cases, unsanitary conditions, equipment, for example in one very major call centre, a complete absence or an almost complete absence of head sets, so that employees on an eight-hour shift are holding a phone in their ear which I think is a fairly good guarantee that they either they will not stay there long or the government will be faced with some Workers Compensation claims.
It is an industry that is characterized by rapid growth, very uneven standards and no regulation to speak of. Mr. Chairperson, last summer we held a press conference on a company well known to the government, called TeleSpectrum. I have continued to receive very large volumes of complaints from that company and I am led to believe that the Labour Board has a long list of complaints for unfair practices in regard to wage payments. I want to explore what the government does, in broad terms, to monitor its investment and the performance of those companies in which it has invested, and I want to focus on TeleSpectrum because I raised this last year. I have no sense that the government did anything at all in response to the public concerns that were raised or to the concerns that I raised in Estimates.
I want to begin these questions, first of all, by having a very clear explanation as to how the government monitors the performance. What office of government and what steps are taken to actually audit or monitor whether or not companies are meeting targets for which they received grants, incentives, loans or whatever?
Mr. Downey: Mr. Chairman, I want to just make a general quick comment. I do not want to take all the member's time, but I want to make a general comment that we, I would say in general terms, are quite pleased with the overall development of the call centre initiative in the province of Manitoba, creating some, as the member has indicated, probably in excess of 7,000 jobs of which the majority, I think, are extremely good jobs. He is less than critical because of the fact that there is one being established in his constituency. He seems to be supportive of that, at least I did not get it totally clear on the record but he is kind of hedging a little bit, I think, as to whether or not it is good or bad. I think he has left me with the impression that he kind of likes it. Now I am not exactly sure on that, which I think would be a credit to him if he is prepared to stand up and say that he is pleased to have this call centre in his community and he is pleased with that.
I am not critical of him pointing out other areas there may have to be some improvements. He asks specifically what is the involvement of the department in their difficult situations. There is a call centre association which is basically working to make sure that there are not the difficulties and there is not the impression left that there are a lot of improper activities being carried out. He is also aware of the fact that we have a Department of Labour, as it relates to those kinds of things that fall within the laws of the Province of Manitoba, of not paying peoples' salaries or abuse in the workplace or that kind of improper activity, which is fully available to any individual or any company that finds itself in this position.
To further express what the province does as it relates to the association, which is trying to make sure that any problems are dealt with, the head of the Call Centre Team, Mr. Steve Demmings, who is at the table with us, also sits on the association as an ex-officio individual so that we have in fact an ongoing knowledge of what work that association is doing and if there is, again, some improprieties or areas which should be carried out by the law which the Labour department has in place to protect individuals, then in fact that is available to them.
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So that basically is it, and there is no one in this government wants to see anybody work in conditions that are not acceptable and be dealt with in conditions or ways which are not appropriate. So I can assure the member that, through the laws that are available to us and if there are improprieties of which on checking on some of the accusations that have been brought to the table, have not in fact been quite the way in which they have been portrayed at other times by the member. But I will say this very seriously. It is not our intention to have improprieties or improperly dealt-with people. Again, I want to emphasize that there is the Department of Labour which is there with the laws to fully be carried out to protect individuals who are in the workplace.
Mr. Sale: Mr. Chairperson, for the record, the Royal Bank Call Centre--I was present at their groundbreaking ceremony along with other government officials, elected and bureaucratic, as well as members of the Manitoba Telecom Services. I have said for three years now that in general in the industry it seems that the sound operations are the operations where the sponsor of the centre is providing inbound service, Purolator or Canada Post or whatever it is, as well as doing marketing of their own services, because they have a long-term interest in developing their business and in maintaining quality employment, because obviously they have a direct stake in the centre. I have always made that distinction.
The problems in the industry tend to centre around those companies that do mostly outbound calling, campaign calling. There is GWE in Brandon, for example, where there have been major concerns raised, Marusa, similar kinds of concerns though not nearly as many as there have been about TeleSpectrum.
So I am pleased to have, as the minister is pleased to have, jobs in the information industry, which is really what we are talking about with CN and Royal Bank, for example, where they are providing very technical, complex services to a wide range of clientele. They are being paid well, they are being trained well and they bring credit to our province in and for the work they do. I have always made that distinction.
The concerns that I have raised about the industry have always made the distinction between outbound and inbound. I think the minister probably knows that, but there is some level of politics being included in this discussion, and he has to make his points and I presume I make mine, as well.
I want to go back to the question that I asked, which was: could the minister tell us in some specific detail how Manitoba monitors performance of companies for which grants have been made? I think in the terms of Faneuil, for example, AT&T Transtech, TeleSpectrum. What are the specific steps that are done to audit compliance?
Mr. Downey: There is an annual audit made of the company of which there has been support given to make sure that they are in fact living up to the terms and conditions of the agreement which has been entered into. That is basically the way in which we deal with the ongoing activity. I will further check if there is another step.
Basically, as far as it relates to the participation of the province and the monies that have been loaned to these companies, there is an annual audit which is carried out by the department with which we have to be satisfied that they have in fact lived up to the terms and conditions of the agreement.
Mr. Sale: Mr. Chairperson, could the minister describe the audit process in terms of whether it is onsite, open records, whether it involves payroll reviews? What is the level of the audit that takes place?
Mr. Downey: Mr. Chairman, because the work is carried out by the Manitoba Development Corporation, that is who the funding flows through. I am told by the department that there is an onsite visitation that takes place. The onsite visitation and the audit is made up of the T4s which they have to provide as it relates to the number of employees that are employed in that facility to earn the benefits which they have entered into as it relates to the provincial support.
Mr. Sale: Mr. Chairperson, are grant monies advanced during the year against the audit, and recovery is then undertaken, if necessary, after that period of time?
Mr. Downey: I am informed by the department, Mr. Chairman, the program that he is talking about is that they are a conditional loan. If they do not meet the conditions of the loan, then they have to be repaid under the conditions. It is my understanding, as well, from information provided that we do not have anyone that I am aware of that is in default.
Mr. Sale: Mr. Chairperson, some funds were advanced to TeleSpectrum. For example, a cheque in the form of $18,000 and some dollars and cents was paid. During this last period of time, there have been other cheques for similar smaller amounts. What are these cheques for?
Mr. Downey: Mr. Chairman, I will have to check on it. The member made reference to $18,000 being advanced to TeleSpectrum, which is a small portion. If any has been advanced of the initial 60-month $1,375,000 that was initially approved, it is my understanding and I have been told, and if $18,000 has been advanced, I will have to check it. It is my information that I have, and this is subject to checking with the department, I am not aware of any money being advanced.
Mr. Chairman, I will check as to whether or not there has been any money, but the information I have, this was a conditional forgivable loan of $1,375,000 that has not been advanced to TeleSpectrum.
Mr. Sale: Mr. Chairperson, so the minister can ascertain, I have been told that there have been at least three cheques that were for relatively small amounts that did not make sense to me as part of the $1,735,000, because I was aware of the total loan, that they were in the $18,000 and some hundreds of dollars and some cents, which seemed also somewhat strange to me. It would be strange. That kind of a number, I would have thought that the minister may discover that there is another department involved, possible, I do not know whether that would be Industry or that would be Education and Training in regard to wage subsidies for welfare recipients or whether it is Workforce 2000. I would appreciate it if the minister could find out whether monies have been advanced to TeleSpectrum and in what amounts.
Mr. Downey: Mr. Chairman, again, I want to emphasize to the member that as far as I know from our department, and I am informed that we are not aware of any money that has flown under this particular program, although I will check the specifics of which he has put on the table as it relates to any monies that have flowed to them, and I will find out specifically where that has come from.
I think the other point that the other member wants to be aware of, and he is probably critical of the jobs or he is indicating that he is critical of the jobs and the conditions of which I again want to emphasize that there is a system in place, there are laws in place which are available to employees if they are not happy with the situation that they can in fact go to. If he wants to remember, as well, there have been several hundreds of jobs that have been in the province under TeleSpectrum for some time now that have been contributing to the provincial economy and the employment base.
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He is very tough on TeleSpectrum. I am certainly of the mind that we have done what we should do in a responsible way, again, not in any way supporting any misappropriate dealing with the employees, but again, there have been considerable jobs here which people are free to take or not take if it is their desire.
Mr. Sale: People, Mr. Chairperson, who are desperate for work are rarely free to take or not take a job, no matter how demeaning that job is. If they are looking at the choice between no food on the table and some food on the table, they take the food on the table, and the demeaning work is accepted until something else comes along or until they cannot stand it any longer. In the case of TeleSpectrum it has been both, and for some months, the new hires have barely replaced the people leaving. There are lots of new hires at TeleSpectrum all right, but also a tremendous turnover, very typical of the American rates which were one of the reasons why people cited companies coming here was to enjoy the lower turnover rates.
I want to ask the minister why no money has been advanced to this company, when it was trumpeted as a major government achievement to attract the company, and a great deal was made of the announcement in the press and in the government's own press, the grant loan, forgivable loan. It was announced more than a year ago. The company changed from PR Response more than a year ago. Why has no money been advanced?
Mr. Downey: Mr. Chairman, basically there has been some restructuring, and the member has raised some of the name changes that have taken place. They have, in fact, made some changes in the United States. In fact, they have closed some of their centres. I guess it is a matter of making sure that they carry out and are going to be here as a permanent corporate citizen, and we want to make sure that all conditions are in fact going to be met.
There is no point of entering into an agreement and flowing money if in fact it is not going to be lived up to, or the intent of the use of that money is not going to be lived up to in the interests of the people of Manitoba. I am not critical of TeleSpectrum in any way. It is just the manner in which we in the department have dealt with this particular file. I suppose the member is upset that we have not flowed the money to them, and that we are not dealing with a difficult loan collection of some kind here. I do not know where he is coming at. I thought what we have done, and the department have done dealing with this is a responsible way to go, and we will see how the development take place in the next few weeks and months.
Mr. Sale: Mr. Chairperson, I am very puzzled by a government that announces a forgivable loan and makes a great deal of press about it, and does not give the loan. My understanding of the announcement of a forgivable loan, of whatever amount, is that the loan is given, the performance is audited. If the criteria are met, the conditions of the loan then are met in terms of the level of forgiveness, but I do not know what a forgivable loan means if it has not been loaned. What it means to me is that the government wanted a really great announcement, got it, and has not ever provided the company with the support that it promised the company for whatever reasons. So it seems to me that we have another case of a government announcement gone awry.
Mr. Downey: Mr. Chairman, I am quite amused to put it in the context. Probably that is inappropriate, but I am amused at the member and how he is approaching this particular subject. First of all, he is not happy with TeleSpectrum.
Mr. Peter Dyck, Acting Chairperson, in the Chair
He is unhappy with the way in which they have performed, and he raises all kinds of concerns and issues. His biggest criticism that he has right now is that the government has announced that there are some several hundreds of jobs coming to the Call Centre Team in which there was an availability of a loan to this company if certain conditions were met. What I have told him is that there are certain concerns that have been raised within the department, that the money has not flowed.
Now I say that what we have done is a very responsible way in which the province's money is being handled. I will further get some more details for the member, but I think he has got a philosophical problem here. On the one hand, he is for it; on the other hand, he is against it. Then we have not flowed any money. If we had flowed the money, we should not have flowed it. I mean, he is really trying to maximize some political mileage out of this particular issue that, quite frankly, is not there.
Mr. Sale: Mr. Chairperson, what is there is a large number of employees who have been very badly treated, and obviously the government knows this because they would hardly have made an announcement in which they garnered all sort of press for: call centre to create 700 new jobs in the city. First round of some 2,000 new job announcements, blah, blah, blah.
The whole business of the $1.375 million conditional loan is featured as a major issue in bringing this new call centre to Winnipeg. I do not remember seeing any announcement that no money had been flowed under this because the government was concerned about the operation of the call centre. The call centre was the centrepiece of the government's reports last year of its success in attracting work here. Clearly, from the very outset, the government is now admitting that it had deep concerns about this company, that in fact this $1.375-million forgivable loan was not in place when the company opened, was not agreed to, that in the year--I suppose a year and--I am not sure how long since it became TeleSpectrum--conditions have still not been met. So the money still has not flowed.
Eleven call centres owned by this operation have closed in the United States and Canada. This is the last one available and open in Canada. The Toronto centre is closed. The manager has been fired; allegations of fraud; equipment has walked out the doors; people do not have headsets. The minister seems to not be willing to be forthright with the people of Manitoba and say: we have not flowed any money to this company because it is not performing properly. He is continuing to say: well, maybe it will, maybe it will be okay. Maybe these lousy working conditions will just go away somehow.
We have allegations of fraudulent numbers. You have an accountant in your department, Diane Bampton, who apparently calls in regard to numbers. She is given numbers over the telephone. Those numbers may or may not bear any resemblance to reality, but you apparently use them for your reports. That is her job. She phones; she gets answers; she writes them down. There might be 10 people in the centre that day; it might be shut down; there might be a thousand; but she takes whatever she is told over the phone.
Now maybe there is an audit at the end of the year; maybe there has been an audit. But, clearly, this call centre is a source of real concern for the government because it has not flowed its loan. It is not meeting the conditions that it appeared to say it would meet when it opened up.
So let us go back to the audit. Has there been an actual audit of TeleSpectrum's job creation?
Mr. Downey: Again, I will have to go over this process with the MLA for Crescentwood who does not seem to, in my mind, quite understand the way in which this has been dealt with. A company came to town based on some discussions and, first of all, the opportunities that they saw to place a call centre in the province of Manitoba. With the department, through the Call Centre Team, there was a forgivable loan that was negotiated and approved. The company came, established. It was at last year's Estimates a member of the Legislature raised considerable concerns about the work conditions and activities that were carried out by TeleSpectrum that would give anyone who works for the Department of Industry, Trade and Tourism concern as to say: what are the conditions? Some work was done.
We now proceed another year, and the company is still in operation. I understand they probably have something like 600 employees. It must be performing for the company. They have closed other places. Conditions which have not been satisfied by the department--that there is, in fact, the kind of situation which the department could agree with--have not come to fruition that would cause for the flowing of $1.375 million.
The member is saying, now, is there an audit? There has not been the money flowed, Mr. Chairman. There is no audit; no money has flowed. He still raises more concerns today, but his concern now is that we have not flowed the money, that we should flow the money for some particular reason because he thinks we should flow it.
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I cannot quite understand where he is coming from, Mr. Chairman. As this debate goes on, maybe he will clarify his position more, but we have had 600 or that neighbourhood of people working in the call-centre business. The company is apparently satisfied with what is going on here. The employees, granted, if they are not happy, have the Labour Board to go to. They also have other call-centre jobs which are developing in the province of Manitoba, which he has referred to himself, in his own backyard, in his own constituency. There is also a major call centre being established by Air Canada, which is taking over the old Free Press building, as he knows, downtown in Winnipeg. So it is not a matter of other job opportunities not coming on stream.
Again, I cannot understand him, other than the fact that he is probably upset that the money has not been flowed to a company that he questions the way in which they treat their employees, so that we can, in fact, be criticized for flowing money to a company that he is not happy with the way in which it operates. If we had flowed the money, then he would be giving us a hard time because we would have flowed it.
I, again, Mr. Chairman, think he has a political problem. He is not able to extract the political mileage out of this particular case that he would like to. He is upset that there was a headline that said we got a new call centre. Well, we, in fact, have got a call centre of that magnitude of jobs. Again, that is a problem that he has. He should write a letter to the Free Press that there was a call centre at--it is not that there was inaccurate information because, in fact, the capability for a loan was established by the Department of Industry through the call-centre team. All the ducks are in a row, except the member for Crescentwood (Mr. Sale) just cannot seem to get them lined up in his mind.
He still has a political problem which he is trying to extract or bring to the surface so that he can criticize me. That is his job. We understand that, but, again, there has to be merit to what he, in fact, is putting on the table. To this particular point, during this debate, I would have to say I have not been able to, quite frankly, extract the merit of his debate, and he has not convinced me that we should flow the money at this particular time.
If he wants me to flow the cheque, if that is what his position is, Mr. Chairman, then I would suggest that he, in fact, say so. Put on the record that he wants us to flow the money to the call-centre team which he is talking about. If not, I would suggest he should give a vote of confidence to our call-centre team and say we think you are handling this affair properly and get on with the next item in the Estimates.
So, Mr. Chairman, I would ask the member to say, yes, flow the $1.3 million or do not flow it and carry on and make sure that there is a responsible way in which this money is handled. I ask him to come forward with his position.
Mr. Sale: I suppose the best defence is sometimes a voluble offence, but it does not usually serve.
The issue, first of all, around the grant loan, forgivable loan, is that the government announced this as a done deal and a reward, in effect, for the company coming. In other words, they deliberately gave the impression that this grant loan had been approved in all of their releases. It now turns out that it may have been approved to be flowed, but it was conditional on certain things that the company had to meet. So, in fact, there was no flowing of the loan.
I want the minister to tell us what the conditions were of the loan that obviously have not been met.
Mr. Downey: Mr. Chairman, I will put it in this context. Again, does he want me to flow the money or does he not? I mean, that is the question that he has to answer. I, through the advice of the department and through the administration of government funds, have decided not to flow the funds because of certain concerns that the department has. We have that capability. I would ask him does he want me to flow the money? Is that what he is advocating at this particular time, yes or no?
Mr. Sale: Mr. Chairperson, the minister is obviously confused. He thinks he is in opposition, and he wants to ask questions. That is not what goes on in Estimates. Perhaps he is wanting to be in opposition, and we could help arrange that and certainly will do our best to do so. He would be fun to have as an opposition critic. I think that would be a very enjoyable process for all of us. It is not his role to ask me questions, but what I am interested in is accountability, and that is what Estimates is all about.
Obviously, the government led people to believe they had flowed money under a set of conditions. Obviously, the conditions have not been fulfilled in terms of our knowledge of the company, but until today we were not aware and I do not believe the public of Manitoba was aware that this loan was a mirage, that it had never, in fact, been flowed to this company. I can well imagine there might be reasons. In fact, I am encouraged to know that the government has some reasons for not flowing it because it means that the questions we have been raising for the last year on behalf of many, many employees of this company were not groundless. In fact, the minister is telling me that many of the things we raised were, in fact, perhaps parts of the reason why he has decided not to flow the loan, and that is probably a very good thing.
I return to the question that I asked which was what were the conditions of the $1.375-million forgivable loan?
Mr. Downey: Mr. Chairman, I can give him the general conditions. One was that they had to meet certain employment targets and maintain them. The reason, I understand, that the department has continued to maintain not flowing the loan at this particular time is that there has been some information requested as it relates to the restructuring of their company, information which is pertinent to overall long-term decisions of the department, and we have not had that information provided, so the department has not, in fact, recommended flowing the funds.
Mr. Sale: Mr. Chairperson, did the conditions include the hiring of certain numbers of people off public assistance through training arrangements with Red River or other programs?
Mr. Downey: Mr. Chairman, I will have to double-check. I do not believe it was a condition that they would have to hire people off of social service support programs, although I am aware of the fact that there have been something like 200 people who are recipients of social support who have, in fact, found employment with this company.
So I do not believe it was a condition. I believe it was overall employment numbers that had to be targeted and met, but because we have not flowed any money, there has not been an audit which would tell him, but I do think the company has been open enough to tell the staff--I think there are something like 600 jobs at this particular location at this particular time. So, again, he does not need to give me, but if he wants to I am quite prepared to sit and listen to it, a lesson about what opposition's and what government's role is.
I have seen his type in government for far too long, Mr. Chairman, and I do not think he clearly understands when in government what the NDP party responsibility is. It sure came a long ways in a lot of cases from acting responsibly as it relates to the spending of taxpayers' money, after $27 million was spent in Saudi Arabia telephone systems which we will never see again.
This that we are talking about is money that has not been forwarded, advanced to a company who is setting up a call centre in Manitoba. It has quite a bit to do with the telephone system by the way, too, as well.
So I want to remind the member of that, and I think it is fair in any political debate, the public would want to ask what the New Democratic Party would do in this case. I am just asking on behalf of the people of Manitoba, would he have flowed the money or would he not flow the money? Now, if that is bothering him, I will withdraw the question, Mr. Chairman, and go to the people and say the member of the New Democratic Party is not prepared to answer any questions as to how they in fact would carry out governing of the province of Manitoba. Is that what he would sooner that I go forward and say on his behalf when I am out campaigning for the next provincial election whenever it may be called?
Mr. Sale: If indeed the member still has a seat to campaign in and is not facing some competition from some others for a reduced number of seats in western Manitoba, it will be interesting to see who runs for what.
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I think to give him a slight insight into what I might have done in his situation, though of course I can only speak personally, I would not have announced a loan that I had not made. I would not have brought people to believe that I was doing something that I was not doing in regard to this operation. I think that it is very important that there be the kind of accountability that he is saying now there is. After having defended the company and having told us we had no concerns that were valid and everything was well, he is now obviously admitting that everything is not well, that the company had in fact threatened to close earlier this spring, and indicated a final date of July as a closure date at one point. Whether that ever became public or not, I do not know, but it was certainly well known inside the company.
I want to know if the minister is aware of how many claims for how many people are currently before the Labour Board for this company.
Mr. Downey: I will take that question as notice, Mr. Chairman.
Mr. Sale: Mr. Chairperson, is an audit of employment going to be performed by the branch, regardless of whether the other questions asked in regard to the corporate structure and stability of the Canadian side of the operation meet the requirements or not?
Mr. Downey: Mr. Chairman, as it relates to the audit of the company, if there is not any provincial money in their company as it relates to the MIRI program that he is referring to, I would see no reason to do so. However, I do not believe that the company has in any way withheld information, that, if the Call Centre people were to ask them how many employees they have, there is any reason for them not to say. But, as far as an audit is concerned, until monies that would be owed to the province were involved, what would be our right to go in and do an audit? I do not believe we would have one.
Mr. Sale: Mr. Chairperson, the reason I ask the question is that it has, again, been alleged, and I have no way of ascertaining it, that the company has different numbers for different folks in regard to employment numbers. So I would think that the government might be well advised to ascertain how their records are kept before money is flowed, to find out whether their record-keeping process is one that would stand the test of an audit down the road.
I also think the minister might want to be informed about turnover rates in this company, because the company has gone from well under 200 people working at any one time this year to over 900 people at some points. Obviously, the larger number is impressive, but the rapid layoffs and the rapid shifts of workforce do not constitute much in the way of real work for people when you have work today and no work tomorrow because the workforce is fluctuating from that level within a few months, from 900 down to 200 and back up to 600 and down to 400. It is all over the place. People do not have any security whatsoever, and it is unclear to me why we would want to support a company that has as uncertain working conditions as this company appears to have.
I wonder whether the minister is aware of any sexual harassment claims or human rights violation claims that have been made by employees.
Mr. Downey: Mr. Chairman, I will try to keep this brief. I would be very concerned if that in fact were the case, and there would be every effort that I would have to be able to put forward to make sure that they are dealt with, that the most appropriate way possible would, in fact, be carried out. However, there is something that has been very obvious in this debate by the member for Crescentwood (Mr. Sale) which does not need a lot more explanation, particularly to the business community in Manitoba, that an NDP philosophy--if a business has nothing to do with government, they would have to be out there with an inspector doing all those kinds of things almost to the point of harassment. That is what I am hearing from the member for Crescentwood, that you could not carry out your business.
As long as you are living up to the labour standards and the codes and the system is available for those people, then we have to make sure that that is available to them, but all the questions that he is asking clearly takes them into the category of snooping.
As a New Democratic Party, they want to have a snooper in everything that is going on out there just for the sake of being there. I think businesses, quite frankly, that is one of the reasons that they cannot see their way to support a New Democratic Party in a lot of cases. They just cannot keep from harassing what is going on in business.
Again I will emphasize that the people who are in any way harassed or have got working conditions that are not acceptable have to have the ability to be dealt with. I will say that over and over again. I will make sure those laws are fully enforced, because I do not want anybody in a workplace that is not being dealt with fairly and honestly in the manner in which they should be, and I will not stand for it. This government will not stand for it, but if we have no money invested in it, and they are carrying out the work which they intended to carry out, I cannot see why he would want me to have somebody visiting them every day just for the sake of visiting them.
Mr. Sale: Mr. Chairperson, this is the minister of a government that has so cut back Workplace Safety and Health inspections that inspectors can at best visit a tiny fraction of the companies in this province. This is a minister of a department that knows full well there have been allegations of unsanitary conditions, lack of headsets, basically working conditions which are not acceptable to any modern employer, especially a modern employer in the telemarketing industry who knows that they cannot in the long run survive with these kind of conditions, who knows there have been allegations of unfair labour practices, who knows the people making them are vulnerable people who do not have the power always to advance their own interests. He knows these have been public concerns. He knows that quite apart from any activity of the NDP, quite apart from that, these concerns have been registered, but the conditions are continuing. The washrooms are filthy, lack of equipment and headsets. There are allegations of harassment. These are serious allegations.
They are not asking the minister to go and snoop at random around Manitoba. That would be stupid. It would be stupid of anybody to ask that. It is not something that the NDP or any reasonable government, including his own, would advocate. These people are not covered by Workers Compensation. Nobody in the call centre industry is; yet they work in conditions that produce a lot of repetitive strain, whether it is keyboards, whether it is holding a telephone at your ear all day, or whether it is other forms of workplace hazards that are common in office environments. They are not covered.
So let the minister not suggest that he has the deep interests of these workers at heart when as far as I am aware there have been no Workplace Safety and Health inspections. If there have been, it is not clear what they achieved. We know there are Labour Board concerns. We have Employment Insurance people saying they have a special file for this operation, because as soon as people are eligible for a raise they somehow mysteriously are not required anymore. They have their own special file over at Employment Insurance.
So let us not suggest that we are somehow asking the minister to go wander around the province and stick his nose in everywhere. We are suggesting that this company has serious problems. It has fired its manager, it has fired its bookkeeper, it has fired a number of its senior people. It has episodic people in from the United States. It has changed its name. It has closed 11 centres. We are pleased to learn that we are not at risk for a $1.375-million loan. We are pleased to learn that that has not been flowed, but we just learned it today. The government led Manitobans to believe that that loan was in place with their press announcements and their glad-handing at the opening of this operation, which certainly led everyone present to believe that Manitoba taxpayers had money invested in this operation. I am pleased to learn they do not.
I will continue to hope that the government will work with the industry, so that weak operators will not be supported, and that strong operators will be supported where there are good jobs and good potential. I also accept the reality that in any industry there are entry level jobs. There are going to be jobs that pay $8 or $9 an hour, maybe even less initially for a short period of time, but in this industry there are potentials in some areas to do very good long-term work that is enough to feed a family and be a contributing member of the community.
I hope the minister accepts that we are not raising the concerns of dozens of former and current employees of this company because we somehow want companies to fail in Manitoba. In fact, the 50-odd people that are attending my business dinner shortly in my constituency do not seem to have any confusion about our concern for business. The minister may have, but major companies attending this function in future do not apparently share that kind of concern. So I am sorry for the minister having that. I do not accept that we have anything but the long-term interests of Manitobans in quality employment and stable employment at heart and the safe employment of Manitobans.
So I am concerned that the government use all of the capability that it has to ascertain what the situation in this company is, not simply at an ownership level, but on behalf of workers who have not enjoyed a good working relationship in many cases and who have come to us with their concerns, have gone public with their concerns.
I am also concerned about whether the government is considering advising the Workers Compensation Board that employees in this type of operation should be eligible for workers compensation and should be covered, because of, particularly, the repetitive-strain injury potential--a very serious issue, as the minister knows. We used to pooh-pooh that kind of injury till we realized that many of the new jobs are very subject to that because essentially they are no different than old assembly-line jobs where people have to repeat the same motion hour after hour, minute after minute, day after day, and the human body is not built to sustain that kind of operation without some very careful ergonomic design.
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I think it is critical that we move to covering these people with Workplace Safety and Health more aggressively and Workers Compensation as matter of right and a matter of a duty of that industry to cover its employees.
Mr. Downey: A brief response, Mr. Chairman. I would ask the member if he knows of any individuals who are being either harassed or unfairly treated to be identified so that in fact somebody can follow it up with Workplace Safety and Health. I also take under advisement, and I have no difficulty in looking at it, as to whether or not it would be appropriate and proper, consider to have Workers Compensation review as to whether or not it could, in fact, be an area which they should cover. That, I am sure, will take some debate, some consideration, but again it has been raised, and I am open enough to discuss it further with my colleague who is responsible for Workers Compensation.
Mr. Sale: Mr. Chairperson, the minister has much more access than I to the workings of government. He is certainly at liberty to contact the Manitoba Labour Board, find out who all has been to the Labour Board, and he will find that there are people there. He will also find that there are people gone to Human Rights Commission in regard to harassment. As I told him last year, I am not going to put any names on any records, and I am not going to expose them to the kind of job risk and security that they already are plenty exposed to in this particular company. I think the minister can do the same thing I can do, which is to talk to the people who are responsible for handling these complaints, and he will find that there are a fair number of them there. He will also find very easily, if he wishes to, individual people who will be very glad to talk to him about the issues at stake, both former and current employees.
One of the issues raised by a number of different call centres with me in discussion had to do with the disaster recovery provisions for major call centres. Is the government discussing anything in regard to this with any of the major call centres?
Mr. Downey: Mr. Chairman, if I understand it, it is basically a power backup that he is referring to to make sure the plant has power in case--[interjection] I am not clear of the question then.
Mr. Sale: I will give him an example, Mr. Chairperson. In the case of the ice storm in Montreal, large parts of the downtown were knocked out for a period of days. Companies like CN cannot afford to be down even for hours, let alone days. CN currently rents disaster recovery facilities in the United States.
Have there been any discussions about the need for these kinds of facilities in Canada?
Mr. Downey: Mr. Chairman, I understand there have not been any discussions. I am informed by the department there have not been any discussions on that particular matter.
Mr. Sale: Mr. Chairperson, one of the issues that arises with not just TeleSpectrum but I think actually all telemarketing companies comes out of the question of who is the regulatory authority, who is the competent authority. Last year, we were told that it was unclear whether Manitoba or Canada was the competent authority for, for example, Labour Board issues.
It was unclear to employees, and, in fact, the Labour Board was unclear because they did not know whether these complaints should be taken to the Canada Labour Board or the Manitoba Labour Board because it was not clear whether these organizations were federally or provincially regulated. In some ways they are hybrid creatures, and I am wondering whether that issue has been sorted out.
Mr. Downey: Mr. Chairman, he referred to issues that have gone to the Manitoba Labour Board. It is my understanding that the labour issues would be dealt with by the Manitoba Department of Labour. That falls within our jurisdiction. Other areas, I am not so sure what he is referring to as it relates to other regulatory--the telephone rate system, of course, he knows is handled by the CRTC. I am not clear as to what other areas of regulatory control he is referring to.
Mr. Sale: Mr. Chairperson, in regard to a group of employees who wish to complain in regard to unfair labour practices, specifically nonpayment of overtime and bonus money, they were told that it was not clear to Manitoba whether they ought to apply to the Canada Labour Board or the Manitoba Labour Board, and this was some months ago now. I am wondering whether that question is really clear yet.
The reason, of course, is that telecommunications companies are traditionally federal in terms of their regulation, because they are operating transborder, outside the country, across the country, and they are operating essentially under CRTC approved rates. They are operating under a federal act in terms of whether they are operating within the law. For example, sales practices and the request of a consumer, for example, to be taken off a list is an issue that is federally regulated. It is not provincially regulated.
If I say to the supervisor or someone who calls me at suppertime for the 11th time, I do not want my name on your list, please take it off, and I get another call from them, they are technically breaking the Telecommunications Act or whatever the federal statute is. So the issue of regulation, I think is a very important one, given that we now have 7,000 employees; we may have more The government is aiming for 10. I hope they are all jobs of the quality of the Royal Bank Direct Call Centre, and I will not argue the question of location. I am happy to have them downtown, in fact, because I think we need to keep our downtown vibrant, so that I do not think is an issue one way or the other.
But the issue of jurisdiction is, and I am wondering whether the government even sees this as a concern. I was reading body language which said, well, it does not really matter. Perhaps that is the case, and if so, maybe we just need to tell people exactly who does regulate them, so that they know when they have a concern whether they are going to a federal authority or a provincial authority.
Mr. Downey: Mr. Chairman, I do not know how he read the body language which he read. I have read his body language too, and I would not be able to put on the record what I am getting from the reading.
I would make sure that people coming forward get directed to the proper regulatory authority if that is a question that is raised with the department. To my knowledge, it has not been. I would think the labour issues fall within provincial jurisdiction, the rates that we deal with fall within federal jurisdictions. If there are some gray areas, we will attempt to try and make sure there is clarification in that area.
Mr. Sale: Mr. Chairperson, I just trust that he was spelling "body" in the same way that I was. [interjection] Yes, there are two ways to spell it.
The specific question was: would the minister give us, and we can give to others, and they can give to others, specific direction about the coverage for employees, under labour issues, under human rights issues, as to whether the competent authority is Manitoba or Canada, so that we can be clear on that?
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Mr. Downey: The answer would be positive.
Mr. Sale: Will the answer be quick? Mr. Chairperson, will that answer be reasonably speedy? Because we have people who are concerned about whether they ought to go to federal or provincial human rights.
Mr. Downey: We will attempt to make it available as quickly as possible.
The Acting Chairperson (Mr. Dyck): Item 10.2. Business Services (d) Telecommunications Marketing (1) Salaries and Employee Benefits $308,600--pass; (2) Other Expenditures $458,800--pass; (3) Less: Recoverable from Rural Economic Development Initiatives ($182,300).
Mr. Sale: Mr. Chairman, could the minister indicate what the rationale is for the recovery here?
Mr. Downey: Basically, the initiative is carried out under the direction of I, T and T, and there is a percentage breakdown of which Rural Development is to pay for part of it, and it is recovered from Rural Development.
Mr. Sale: Mr. Chairperson, I apologize to the minister. I did not hear the middle part of his answer.
Mr. Downey: Under this program, Mr. Chairman, I, T and T provides 25 percent of the funding; Rural Development provides approximately 25 percent of the funding; and the other recovery comes from the Manitoba Telephone System, MTS, at 50 percent of the funding for this initiative.
Mr. Sale: Okay. I thank the minister for that. Could he update us on the company called Call Centre Support Associates? We had discussed that under Manitoba Development Corporation Annual Report. Apparently, it had not come into existence or no money had been flowed at that time. Could he update us?
Mr. Downey: I understand that is not proceeding to come to Manitoba.
Mr. Sale: Mr. Chairperson, did I hear him saying it is not proceeding to come to Manitoba?
Mr. Downey: That would be in the affirmative.
Mr. Sale: So, this I think again raises I guess a question of probably my understanding of announcements. Is the minister essentially saying that announcements are provisional for the most part and that when announcements are made, the agreements have not in fact been signed and money has not in fact flowed?
Mr. Downey: It is my understanding that there was not an announcement made that they were coming.
Mr. Sale: It was shown as a liability on the books, or an asset, depending on how you look at it, I guess, on the books of the Manitoba Development Corporation in the amount of $750,000, I think, and it was put on their balance sheet. So one would normally assume that an item on a balance sheet had some reality to it.
Mr. Downey: It was not an announcement. It was an accounting as to what accommodation had been made, but no announcement had been made as to whether or not it would in fact take place.
Mr. Sale: Well, then let me rephrase my question. Is it practice that the Manitoba Development Corporation will show provisions for projects which are not in fact underway or have not in fact been moved forward but they are potential projects for which provision has been made in advance but they may not take place?
Mr. Downey: I guess the member understands a little bit about business or government, that if there is a potential of something happening and there is a potential of that being carried out, there has to be an accommodation made for that. In this particular case there was an accommodation made for it in the Manitoba Development Corporation report. For whatever reasons, the project did not proceed, and the accommodation was made, did not proceed, no announcement was made, and so that is a wrap. That is what you call full disclosure, Mr. Chairman.
The Acting Chairperson (Mr. Dyck): 10.2.(d)(3) Less: Recoverable from Rural Economic Development Initiatives ($182,300)--pass;
10.2.(e) Industrial Technology Centre $886,800.
Mr. Sale: Mr. Chairperson, the centre has continued to be a home for some quite specific operations that are not really central to the industrial technology development board, the board that Bob Silver, EITC, has chaired for some time, but they in effect operate out of and with the centre itself. The board seems to me to be more of a community-business-labour, well, hopefully labour, I suppose think-tank, steering body, resource to government to try and ascertain good economic development directions for the future, to be on top of trends and opportunities, but it is much more in the nature of an advisory board or a secretariat that would help government link to the business community and see opportunities, act as a bridge and I think a very valuable--I am not being critical of it, but it is not clear to me why it still relates to the centre that has some direct service operations which are very niche orientated, very specific.
The function that makes sense to me out there is the library and the business linking systems that I think are very valuable to government and to industry, particularly the library function. I am wondering whether the government has a plan to evolve this physical plant, which comes from another era. It is not that that is a bad thing or a good thing; it is just a reality. But we have a board that is trying to do a broad advisory strategic job operating an agency which has some elements of extremely narrow direct service functions. In some ways they earn money, a bit; in other ways they are really just holdovers from another time. Is there any plan to change this operation?
Mr. Downey: Mr. Chairman, I guess the first answer to the comment is that the board that is in place is advisory and advisory only, that it is an organization that is operating as a special operating agency that is putting it on a basis of presenting itself more in a business capacity than a totally government funded agency, and we are pleased with that. We are pleased with the performance of it and see it having some growth opportunities because of new developments and new things that are taking place.
In the future changing its role, I would certainly be open to any discussion that the advisory board may have or anybody else in the industry or society that see that it may play a greater role in the overall economic development that is to be carried out in our province. I do not have any question that every instrument of government or everything within government, although there are some pretty basic things that will remain without a lot of changes, there are always things that are on the horizon that would cause you to consider change.
If the case were to be made that it could carry out a greater capacity in the overall support of industry and development of new product or areas that it is now not covering, I would entertain that kind of discussion. I think we want to maximize and utilize the facility that is there and to expose it to the greatest amount of activity possible, so that it can not only generate revenue but lead to the creation of jobs for the work that is there and carry out a meaningful role. So I am not at such a solid fixation that it cannot change, but certainly open to positive recommendations. Further, there is a review that is mandated to take place after three years, and we are now entering the third year at this particular time.
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Mr. Sale: I think right at the end of his answer, the minister gave me some information that they are in fact looking at the mandate and the operation. The minister indicated that the board is purely advisory. Then is the SOA operated by the employed staff and they are the accountable group? The board is not in fact operating? Because I believe Mr. Silver signs the annual report of the centre.
Mr. Downey: The reporting mechanism is that the CEO reports to the deputy minister through to the minister.
Mr. Sale: The annual report includes the operations of the centre itself, I believe, and I believe Mr. Silver signs that annual report. I thought he reported as the chairperson of that committee.
Mr. Downey: It was removed from EITC, Mr. Chairman, and it is now directly to the deputy to the minister.
Mr. Sale: Pass.
The Acting Chairperson (Mr. Dyck): Item 10.2. Business Services (e) Industrial Technology Centre $886,800--pass.
10.2.(f) Health Research Initiative $2,000,000.
Mr. Sale: Mr. Chairperson, of this funding that was flowed last year, $500,000, was that in fact spent, or was it committed and lapsed?
Mr. Downey: Mr. Chairman, spent.
Mr. Sale: Mr. Chairperson, does this go primarily to St. Boniface research? Where do these funds go?
Mr. Downey: The answer would be yes, and the funding for this year will go to the Manitoba Cancer Treatment and Research Foundation, Children's Hospital Research Foundation, St. Boniface Research Centre, Health Sciences Centre Research Foundation, and the University of Manitoba, to assist each facility in meeting their operational expenses related to health research activities.
Mr. Sale: Mr. Chairperson, could the minister table the amounts to each just as information?
Mr. Downey: When available, Mr. Chairman. It is still under consideration as to the amounts to each one.
Mr. Sale: Pass.
The Acting Chairperson (Mr. Dyck): 10.2.(f) Health Research Initiative $2,000,000--pass.
10.2.(g) Manitoba Centres of Excellence Fund.
Mr. Sale: Could the minister review the centres of excellence that are funded under this? I presume it is the Centre on Aging and several others, if he could review those?
Mr. Downey: Yes, I could. The Canadian Genetic Diseases Network, MICRONET, Inspiraplex, the NeuroScience Network, Canadian Bacterial Diseases Network, Institute for Robotics and Intelligent Systems, Canadian Institute for Telecommunications Research, Isis Canada, and HealNet.
Mr. Sale: Mr. Chairperson, these must be all very small individual grants. Could the minister do the same in regard to my previous question?
Mr. Downey: The answer would be affirmative.
Mr. Sale: Pass.
The Acting Chairperson (Mr. Dyck): 10.2.(g) Manitoba Centres of Excellence Fund $450,000--pass.
Resolution 10.2: RESOLVED that there be granted to Her Majesty a sum not exceeding $23,429,800 for Industry, Trade and Tourism, Business Services, for the fiscal year ending the 31st day of March, 1999.
Moving on to Tourism, 10.3. Tourism and Small Business (a) Tourism Services and Special Projects (1) Salaries and Employee Benefits $619,200.
Mr. Sale: Mr. Chairperson, I gather the minister has a new staffperson at the table whom I know, but he may want to put her name on the record.
Mr. Downey: Yes, Mr. Chairperson, we are joined by the head of our Tourism Division, ADM Loretta Clarke.
Mr. Sale: Mr. Chairperson, I want to just start by complimenting the department in regard to a difficult year last year, which I had the opportunity to hear Ms. Clarke a couple of times on radio, and when we were wondering whether we would all float away or whether we would have access to Manitoba from the south by August, so I thought that the department responded credibly to the flood opportunity. I suppose, in many ways, if we could have accommodated tourists during the flood, it probably would have been quite a draw to have seen the Red Sea south of Winnipeg, so I wanted to compliment the assistant deputy on the work that she did through her department during that time.
I know everybody in the civil service had an exciting time. Those of us who were just elected opposition officials, all we did was discover muscles we did not know we had or we had forgotten about, but government had a difficult management time, as well as probably some of them discovering muscles they were not sure that they had, so I just want to put on the record our appreciation for that.
Last year, Mr. Chairperson, we discussed in Estimates the repositioning, retendering of our major marketing activities. I think there were some new people hired or contracted with to undertake different kinds of marketing. I wonder if the minister could review what has been done to change our marketing approach. What initiatives have been taken during the past year that have changed how Manitoba shows itself to the world?
Mr. Downey: I thank the member, first of all, for his comments to staff. Of course, the one sitting at the table is fully aware of his comments, but we will make sure that all of the staff within the Tourism department are cognizant of his compliments, and I thank him for that.
Basically, there is a new program that has been developed as it relates to the promotion of the province that is being carried out with in mind, basically, building on the province's tourism strengths, our events, our family activities. I am pleased that the work has been done by carrying out some focus group activities, all of those things that ask the users of the product what they best would like to do.
I want to put on the record at this particular time that some of the things that we are seeing is in fact bearing some results. First of all, our first quarter results from the U.S. were up by 7 percent for the first quarter. What is considered foreign, which would not be U.S., is coming from the airport system in other countries other than the U.S. I guess, the U.S. could be considered foreign as well, but it is really in the tourism market that we consider it pretty much one of our main areas outside of Canada, but what is considered other than U.S., foreign is just about 34 percent for the first quarter. Inquiries at our visitor centres, up 16 percent; our Internet inquiries, up 66.6 percent; and, overall expenditures for the same first quarter, up 5.7 percent. That is basically it.
I say, Mr. Acting Chairperson, there is a whole new program that is being introduced by the department which I will just give a quick outline, and I do not want to take up the member's time. Outdoor adventure, cultural, rural-urban tourism packages, ecotourism, agriculture tourism, winter tourism and festival and events tourism activities.
Mr. Sale: How is the government focusing its advertising of these various opportunities on appropriate markets, the niche markets?
Mr. Downey: I can give them the geographic market areas which we are targeting. Is that what he is asking, or, just maybe I need a little more clarification?
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Mr. Sale: The criticism that was levelled by industry sources and observers about the previous approaches to marketing were that they were broad-brush marketing which might be summed up as "we are beautiful, come and see us." That works in the Yukon and British Columbia where it is manifestly true that there are some spectacular things to see.
Most tourism industry conferences in the last few years have been saying that the products that are marketed have to be marketed to audiences that have some interest in them. We can use the example of the family that wants to go on a family vacation and learn something on the vacation, have a good time, be safe. So they want some very specific information, and they are a very specific market. It seems that is what the industry is telling us we need to do. So how is it that our new campaign responds to those changes?
Mr. Downey: I appreciate that. The manner in which we identify those particular products of which customers are interested is some of the work that has been done by the department to ask questions, to have them fill out forms, border surveys, when they are leaving the province of Manitoba on their last visit and other focus group activities. Quite frankly, what we have been able to boil it down to are the areas which I put on the record.
The outdoor adventure, whether it is the fishing activity, whether it is the camping in some of our provincial parks, family events, pretty much of the outdoor adventure and, of course, the traditional fishing and lodge activity.
Cultural, which we would bring into the same category as festivals and events with the cultural activities, such as Folklorama and those kinds of special events, Festival du Voyageur, rural and urban tourism package. Again, there is quite a genuine move out there by the rural communities to bring agriculture tourism, which, again, is another one, and I put that in the same category with ecotourism, agriculture tourism. It is, again, outdoor adventure activity of which it has a special element to it.
Winter, again, is something where you see--and it has been unfortunate with the loss of a lot of people--the snowmobiling, but snowmobiling, cross-country skiing and use of the winter wonderland that we would refer to as part of an overall adventure that a lot of areas throughout the world would never have the opportunity to experience.
Festivals and events, whether it be the Morris Stampede, the Austin summer event, and, again, another tremendous asset we have, of course, is the Festival du Voyageur and Folklorama, which are special events, which we are focusing on. We do not have the Rocky Mountains, but we have these kinds of events which people would enjoy.
Mr. Sale: Mr. Chairperson, I understand what we have. My question was: how are we marketing to those who might want to enjoy those things? I know what we have got. The problem has been how to reach the potential audiences who would respond positively to what we have got.
Mr. Downey: Mr. Chairman, again, we try to find out what the traditional customers want that we have, as we have talked about, and then we use a certain medium like the Travel Values program, television, which is not as extensively used in the international market as what we now probably use domestically through the information.
Again, I made reference to some of the Internet and all of these new modern technologies that relate to people wanting to get information about the province, guidebooks, newspaper ads, all the kinds of mediums that are available. Again, it is fine-tuned by the department to say here is the best impact that we got by using this kind of medium for this type of product, and this is where our best results are coming from, so that is basically it.
I can just give a little bit more of an idea here on specific amounts of money, like the Explorer's Guide, $180,000 spent; Accommodation Guide, $150,000 spent; Fishing and Hunting Adventures, $125,000; Convention Facility Guide, $25,000; Winnipeg map sheet, $50,000; Tour Shells, $200,000; Explore Manitoba in different languages; Travel Values Guide, $180,000; Master Angler certificates--all of those kinds of promotional materials are broken down in the budget.
The system is to further identify with people who have been here what they get their best--we find where our best market demands are coming from and then feed into that with the best medium that is available to get to that marketplace.
Mr. Sale: Mr. Chairperson, it is not clear to me how we are to learn the effectiveness of this. Maybe it is too new to be assessed at this point, but just to give a very concrete example, let us talk about snowmobiling. That is a sport that the hotel owner down in what I think is St. Pierre is appreciative of, but he does not feel that the marketing that has come from Manitoba is what is specifically helping because he does not see how it is reaching into those clubs and associations. There are trail riding associations, snowmobile associations, snowmobile clubs, snowmobile publications. I am not telling minister anything he does not know.
There is a whole industry here. Are we taking our message into that industry in a very specific and targeted way, or are we still doing a fairly broad approach with ads in various places? It seems to me what we are being told is we should be inside those associations, marketing directly to them in a very focused way. That was my question.
Mr. Downey: The answer is yes, we are very targeted and focused because quite frankly we are using less what you would consider broad-brush, feel-good, kind of advertising. It is now more focused into specific areas that have demonstrated and yielded results by the tracking that we have available to us.
Mr. Sale: I know we are running out of time, but perhaps if I could ask for our next meeting, which will probably be Monday, if the minister could provide some examples of targeted campaigns and how those have taken place. That would help me understand the changes that have taken place.
The other question I would like to ask, and perhaps again we could discuss this on Monday. There are very different statistics used by the department from Statistics Canada's Tourist Scope statistics. There seems to be a continuing divergence between those two sources. They are both StatsCan in origin, I believe, but Tourist Scope does not sustain the notion that our tourism is growing. It in fact is the opposite. The numbers the minister put on the record show, he talked about growth, year over year that may just be an anomaly because of the flood in the previous year, I do not know. But there is a very great difference between Tourist Scope numbers and the numbers of entry and exit numbers that the deputy minister and the minister use. Perhaps at our next meeting we could have an understanding of why one set of numbers is going in one direction, and the other set appears to be going in the other direction. I would suggest that we leave it at this point and have those questions as something we could start on at our next meeting.
Mr. Downey: I would appreciate that. The first quarter numbers I put on were for 1997 last year which were prior to the flood. The numbers I put on the record are 1998 over '97 of which the 1997 would be prior to the flood. That was right. I will try and provide that information plus get some tourism packages for the member so he clearly can see what we are targeting and how the strategy is in fact working.
The Acting Chairperson (Mr. Dyck): The time being 12 noon, I am interrupting proceedings. The Committee of Supply will resume sitting this afternoon following conclusion of Routine Proceedings.