FINANCE

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Mr. Assistant Deputy Chairperson (Gerry McAlpine): Good evening. Will the Committee of Supply please come to order. The committee will resume consideration of the Estimates of the Department of Finance. When the committee last sat, it had been considering item 7.(a) on page 66. Shall the item pass?

Mr. Leonard Evans (Brandon East): Mr. Chairman, I just have one area that I would like to pursue in this and that is the ITRO, and it relates to the services supplied by the successor to the Manitoba Data Services Corporation which was a Crown corporation. It served the public well. At any rate, it was sold. I believe the ownership has changed hands a number of times. I am not sure what the latest name is. I think it is ISM, Information Systems Management Corporation. Yes, the minister indicates that is the case.

What I would like to know is the status of the contract or the deal between that corporation and the government of Manitoba. Originally, I believe, there was to be a five-year contract which, in effect, gave that company a virtual monopoly on providing these main frame statistical data processing services for the government of Manitoba. We had some concerns at that time, and I was wondering whether the minister could just give us an update. What is the status of the arrangement at the present time?

Hon. Eric Stefanson (Minister of Finance): Mr. Chairman, as the honourable member knows, the divestiture took place back in August of 1990, and at that time it was the result of an extensive tendering process involving several major firms.

There was a series of terms under the agreement that had to be lived up to by ISM, and I am pleased to say that they have lived up to all of them. Some examples of some of the terms of the agreement were maintaining the 200 existing jobs and creating an additional 220 jobs. In fact, on the job-creation side, they have not only maintained the 200, but they have created more than 260 additional jobs in Manitoba through various developments and investments.

They were to construct a new business and computing centre in Manitoba. That has been done. ISM moved into their new $20-million, state-of-the-art facility in December 1992.

They were to invest $1.8 million in Manitoba high-technology companies, and again, that commitment has been fulfilled or basically fulfilled. I believe they are at $1.75 million in various Manitoba companies.

They were to foster post-secondary educational development through a $2-million education program, and that again is a commitment that has basically been fulfilled. They have made contributions to technology education including participation in TR Labs, the co-operative study employment program scholarships, and the development of various computing facilities in Manitoba's universities.

They have also invested more than $23 million in new technology as part of their transformation, and what is interesting is they have expanded their client base from back in 1990 only being 1 percent with private sector to today being 33 percent of revenue being generated by the private sector. In fact, national and international clients now account for 22 percent of revenue.

ISM has reduced its service rates for provincial customers over the duration of the agreement an average of 5 percent reduction each and every year.

That is some information on the agreement with ISM.

Mr. Leonard Evans: Mr. Chairman, is the minister talking about ISM, Information Systems Management Corporation, as an entity which exists and goes beyond the province of Manitoba?

These numbers that he relates to, like 22 percent, I think he said the international business relating to this company which has that amount. Is that in the province of Manitoba? These statistics, do they relate to the activity of this company, which really goes--I believe it goes beyond Manitoba? We are talking about a national company that happens to provide some services in Manitoba.

Mr. Stefanson: This is ISM Manitoba, and everything that I have outlined is what has happened in Manitoba.

Mr. Leonard Evans: Mr. Chairman, one of the terms of the agreement included maintaining the head office in Manitoba. As a matter of fact, I believe the previous minister made quite ado about that and he said, well, we hold the golden share. In other words, if the terms of the agreement were not lived up to, including the head office, the government could exercise its rights to more or less reacquire the company.

My information is that the de facto head office is no longer in Winnipeg, we lost it. I thought at one point we lost it to Regina. As a matter of fact, the press referred to Regina-based ISM, so I am a little confused here. It seems to me that we have got a company that provides data services, but the head office has indeed gone away from, slipped out of the province.

Mr. Stefanson: Mr. Chairman, my understanding is ISM Manitoba has always had its head office here in Manitoba, and I did outline the more substantive commitments under the terms of the agreement. The maintaining 200 jobs and creating at least 220--as I have indicated, they have not only maintained the 200, they have created an additional 260 jobs. The commitment to construct a new business and computing centre--that new building is open. It has been moved into and was completed in December of '92, a $20-million, state-of-the-art facility. So in terms of the objectives of job maintenance, job creation, physical presence in our province and investment in education and research and development, the company has done a very good job of fulfilling all the commitments in all of those areas and are a very good corporate citizen of our province and providing a service to us on a more cost-effective basis.

Mr. Leonard Evans: This is a question about cost effectiveness, and I would like to pursue that in a minute, but the reference is made in the press to Regina-based ISM, Canada's largest information systems management outsourcing company. They are talking about the same company that I describe, ISM Information Systems Management Corporation. So The Globe and Mail, in an article in January of this year, referred to them as being based in Regina.

Mr. Stefanson: I am told that ISM Manitoba is a wholly-owned subsidiary of ISM Corporation, which is what you are referring to. So you are referring to the parent company, I believe. ISM Information Systems Management Manitoba is a wholly-owned subsidiary of that company.

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Mr. Leonard Evans: Well, that could be. There could be a legal entity set up for Manitoba per se, but I believe not long after the buyout, I understood that people negotiating for the unionized sector had to go to Toronto very soon after the takeover to negotiate. In effect, the word was out then that the real head office had gone. It was not really in Winnipeg. All the decisions were being made outside of the province.

When the minister talks about a state-of-the-art building, MDS was planning to put up a building. It had to have another building to house the equipment, so that is no big deal, as far as I am concerned.

If you have given a private company a monopoly, which the government of Manitoba has, you have given the company a monopoly and you have given them a monopoly of guaranteed revenues. There are a lot of things you can do when you are paying the shot ultimately as being the mainstay customer.

So what I would like to know, Mr. Chairman, is, how does this minister know that he is getting a good deal? How do you know that you are getting value for the money that we are paying? Also, I would like to know, what are you paying? How much money is being paid for these services?

Mr. Stefanson: The purchasing commitment was based on the historical average prior to the disposition of MDS, and it represented a commitment of $32 million per year. As I say, this commitment represented the level of service previously provided by MDS. As I mentioned in my opening comments on this issue, ISM has reduced its service rates for provincial customers over the duration of the agreement, an average of 5 percent reduction in each of '91 and '92, so we are actually getting the same level of services at less cost today than we were back in 1990.

Mr. Leonard Evans: But what does the minister have to compare? I mean, the costs could be coming down because of technological improvements. How do you know you are not getting ripped off? Because it is a private monopoly, how do you compare it?

Mr. Stefanson: There are two things, Mr. Chairman. What we have to compare to is first and foremost what we were paying prior to entering into this agreement. As I have already indicated, the starting point was the same cost with the cost going down over the period of time. But we have also just recently retained a company called Compass Analysis Canada Limited. The purpose of the contract is really to define and measure the costs within the data processing environment. So not only have we had the historical information that we can utilize as a benchmark, we are now retaining professional assistance to again help us continue to define and measure costs.

Mr. Leonard Evans: I understand that productivity in the computer field is going up enormously. Your figure is as high as fivefold a year more than that, tenfold a year, depending on which area you are in, but there is huge productivity gains. If they are only reducing your costs 5 percent a year, I do not think you are getting all of the advantages of the gains of upgraded computer technology, modernized computer technology.

I do not know what Compass Analysis will do for you. I do not know whether the minister would be prepared to make that report public, but the fact is whenever you are dealing with a private monopoly I think you are at a disadvantage. Unless you have some clear benchmark--and I submit the historical benchmarks are not good enough. I am glad you have hired this company, Compass Analysis, whatever it is, to do some sort of a study, but I am afraid that we may be paying far too much for the services we are getting.

Can the minister tell me, of the total revenue received by this company, what percentage is obtained from the province's contract?

Mr. Stefanson: I guess without being overly repetitive, I just want to remind the member that, as I indicated, not only were 200 jobs maintained, an additional 260 jobs have been created in Manitoba; an additional 1.75 million has been invested in various Manitoba companies; $23 million has been invested in new technology as part of the transformation strategy; and a $20-million, state-of-the-art facility has been built and is in place and functioning here in Manitoba. So all of those combined have a very significant impact on Manitoba's economy that were not there under the arrangements with MDS. In terms of the revenue base of ISM, today 67 percent of the revenue comes from the government, whereas back in 1990, 99 percent did.

Mr. Leonard Evans: Well, I submit that this company is still very dependent on the Province of Manitoba, and I continue to be concerned that we are paying too much for this service. It is fine to have additional jobs. God knows we need the jobs. It is fine to have a new building, but as I said, MDS itself would have had to put up a new building and that was being planned. So I still am a Doubting Thomas in this area and I just want to urge the minister to be as careful as possible. I wonder whether it would be suitable for the government, because the five-year contract I believe is up, is the minister going to put this out for bids again, open it up for all companies to make another set of bids for this business in the future?

Mr. Stefanson: The member is right. The contract has expired and we are in the midst of finalizing an information technology strategy for government departments which could result in a migration of many applications from the mainframe processing to client server technology. We at this stage are continuing to operate under the terms of the existing agreement, but once the technology strategy has been finalized, which should be fairly shortly, and the appropriate process and platforms identified for each application, the government will request tenders from qualified suppliers for client service support.

I referred earlier to the Compass Analysis Canada Limited process that is ongoing right now, but this is part of the broader initiative that is in the process and will hopefully be concluded fairly soon.

Mr. Leonard Evans: It has been open to bid. I presume this is totally public. It would be well advertised, and at that point the government will decide whether to carry on with ISM Manitoba or go to another company.

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Mr. Stefanson: As I indicated, prior to that step we are finalizing our entire information technology requirements and strategy for government. That analysis is ongoing right now. Subject to the findings of that analysis we will move forward along the lines that I have already outlined.

Mr. Leonard Evans: I have one last point on this and I will let others have the floor.

The government continually maintains that it is concerned about being cost efficient. We all want to be cost efficient. We want to get as many services as we can for the dollars spent. The government has bragged about saving money here and cutting spending there. I say here is one major area, Mr. Minister, you may find that there should be considerable cost saving if you do your homework and really do the job on behalf of the taxpayers of Manitoba.

Mr. Stefanson: I guess I would just conclude that the province has benefited from this development and the province has received high-quality data processing services at reduced cost, so I think it has been a success story.

Mr. Leonard Evans: Well, we will watch these developments. I hope it is made public and we get to find out what the conclusion is. I am just saying that the minister can do the taxpayers of Manitoba a service. It is one thing to be able to tout these various accomplishments of a company, but it is another matter--our concern has to be also whether we are getting value for the money, and I think it requires a serious effort.

Having said that I would like to turn the questions over to my colleagues.

Mr. Assistant Deputy Chairperson: Item 7. Treasury Board Secretariat (a) Salaries and Employee Benefits $2,551,700--pass; (b) Other Expenditures $530,000--pass.

Resolution 7.7: RESOLVED that there be granted to Her Majesty a sum not exceeding $3,081,700 for Finance, Treasury Board Secretariat, for the fiscal year ending the 31st day of March, 1996.

Resolution 7.8, item 8. Tax Credit Payments $187,900,000.

Mr. Leonard Evans: I am quite prepared to see this pass, but I just want to point out that I regret very much that the government saw fit to reduce these credits for a lot of deserving Manitobans that needed the assistance.

Mr. Assistant Deputy Chairperson: Item 8. Tax Credit Payments $187,900,000--pass.

Resolution 7.8: RESOLVED that there be granted to Her Majesty a sum not exceeding $187,900,000 for Finance, Tax Credit Payments, for the fiscal year ending the 31st day of March, 1996.

The last item to be considered for the Estimates of the Department of Finance is item 1.(a) Minister's Salary.

Mr. Leonard Evans: On a point of procedure order, it is here. I am surprised that you do not at least have to call it. How do you get to 10 if you do not do 9?

Mr. Assistant Deputy Chairperson: It is there for the committee's information. If the committee wishes to have it read into the public record, that is the will of the committee.

Mr. Leonard Evans: What the opposition on this committee would like is to be able to ask one or two questions.

Mr. Assistant Deputy Chairperson: Is there leave to be discussion on the Public Debt? [agreed]

Mr. Tim Sale (Crescentwood): I thank the minister for granting leave on this. Could the minister tell us what now--and I am not being critical of your previous Estimates--in the light of what seems to be happening with interest rates, what impact do you foresee on our interest costs this year given that it looks like we are down between 100 and 200, maybe 150 basis points from the levels at which you were making your Estimates at the beginning of this year in the cold of the winter?

Mr. Stefanson: While it is encouraging to see interest rates moving in the right direction, as far as our bottom line is impacted, as I think the member knows, when we prepare our Estimates we use weighted averages for our interest costs and our assumptions on our exchange rates and so on.

Really, from my point of view it is still a little too early to tell. We are in our first quarter at the end of June. We will probably have that report done by, traditionally I think around September we will have a better sense. But at this stage it is certainly encouraging that they are heading in the right direction. In terms of anticipating a significant benefit to the bottom line, I think it is just a little too early at this stage.

Mr. Sale: As they say in the legal profession, without prejudice, if the current rate continued throughout the year, what would be the benefit to the bottom line at the current levels that are now prevailing? I think we are 150 basis points down now if I am not mistaken.

Mr. Stefanson: Based on the information we had from our investment dealers, our lead agents and so on, most, in fact, I believe all economists were projecting some improvement in interest rates over the course of the year and some improvement certainly in our dollar, particularly once the Quebec Referendum gets out of the way. I think most would agree that the real purchasing power of our dollar is somewhat higher than where our dollar sits today, but the impact of each percentage point is about $10 million to $12 million on our bottom line. The impact of each cent on our dollar in relationship to the United States dollar is about $10 million on our bottom line. So I hope that gives the member a sense of what kind of improvements we can see if interest rates and our dollar strengthen.

Mr. Sale: Mr. Chairperson, can I ask the minister--it has been awhile since I went through the budget in detail--is that sensitivity analysis in your budget? I know the federal government puts a sensitivity analysis in their budget.

Mr. Stefanson: No, it is not.

Mr. Sale: Mr. Chairperson, would the minister consider a suggestion of including that information in future budgets so that we are more able to track that kind of impact and have a sense of how important interest rate and exchange rates are for our projections?

Mr. Stefanson: Certainly, I will consider it.

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Mr. Jim Maloway (Elmwood): Mr. Chairperson, I would like to ask the minister whether he could give us information as to the total number of civil servants at this point for this year. Does he have any idea what the size of the civil service is?

Mr. Stefanson: What are called the equivalent full-time positions, there are approximately 14,300 but that translates into about approximately 16,000 jobs because of the part-time element.

Mr. Maloway: Mr. Chairperson, I would like to ask the minister what it was when the Conservatives took office in '88.

Mr. Sale: I want to ask a number of questions about the Jets. The minister and I had a brief conversation earlier. I want to try and do this in an orderly way, if I can. I would like to go back to the beginning of the current chapter which is the interim operating agreement.

First of all, Mr. Chairperson, can I ask the minister, has the full legal text of the interim operating agreement been made public?

Mr. Stefanson: I do not believe so, but I would have to confirm that.

Mr. Sale: Could I ask the minister, if it has not been made public, which I do not believe it has--I certainly have never seen it and we have attempted, I think, to see a full copy of it--will he make the interim operating agreement public immediately so that Manitobans may know exactly the starting point of the current negotiations and discussions?

Mr. Stefanson: Mr. Chairman, I know when we had Public Accounts committee we have had several discussions on this issue with the Leader of the Opposition (Mr. Doer) and the Leader of the then-second opposition party. If the agreement has not been made public, which I agree I do not think it has, that issue was discussed at that time,and I know there are good and valid reasons why that is not the case, but I will undertake to check and reconfirm exactly what they are.

Mr. Sale: Would the minister give us a time by which he would make that determination and make the information available to us?

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Mr. Stefanson: I am not overly optimistic that information will be able to be made available. I will undertake to indicate to the member one way or another whether it can or whether it cannot and if it cannot why it cannot, as soon as possible.

Mr. Sale: Mr. Chairperson, I am frankly puzzled, and I think if the members opposite were in our shoes they might be as equally puzzled, why an agreement that involves public ownership of 36 percent of a private corporation and required public payment of certain losses that that corporation incurred over a period of years and I believe, although I am not certain on this point, involved representation of the public interest through a person being present or persons being present at board meetings of the private corporation, why, when the public interest is clearly at stake here, would not the legal text of the agreement be a matter for the public record?

Mr. Stefanson: I think because the aspects that affect private investment have precluded in making the agreement public but I believe, going from memory, the Provincial Auditor has reviewed that agreement, made comments on that agreement. I will certainly undertake to provide that information to the honourable member.

Mr. Sale: I know the Provincial Auditor has done that. That is the only documentation that we have seen on it. I thank the minister for that but we have that document. That is really not the point. I still do not hear any explanation that is convincing as to why the legal text binding Manitoba to the Winnipeg Jets, whatever the proper name of the corporation is, why that legal text ought not to be made public. We are not talking here about proprietorial interest. We are not talking about financial information that would in some sense damage a private corporation. We are talking about the covenant between the public sector and a private group in terms of the payment of losses and the certain rights in terms of shareholding.

I would ask the minister to think back to his chartered accountancy days. When securities are offered by prospectus that prospectus has to be filed. It is full of covenants and agreements which simply set out the nature of the legal agreement between the parties. I simply do not understand why this agreement is going to somehow prejudice somebody's interests. I think the failure to make it public is what is prejudicing our interest, not the fact of doing so.

Mr. Stefanson: As I indicated to the honourable member, I will outline for him very clearly, if it cannot be made public, why it cannot, but I think he has touched on part of it, that there was concern about prejudicing private interests. In light of some of those concerns, the Provincial Auditor did review the agreement, offered comment on the agreement, which was made public and was a matter of lengthy discussion at our public affairs committee of the Legislature.

Mr. Sale: I think we would understand if there were certain clauses the nature of which could be generally described, but the substance needed to be kept confidential. I think we would accept that if we were given that explanation, but the basic nature of the agreement and the wording thereof, I think, is a fundamental matter for the public to know about.

I do not want to know about Mr. Shenkarow's private financial circumstances, but I do want to know quite specifically, what are the clauses surrounding the value of the publicly held shares, for example? How is value assigned to them? Are there any caveats or any qualifications on the nature of those shares, their entitlement in terms of the capital value of the team, the asset? I simply do not understand how that fundamental information can be deemed to be not in the public interest.

I do understand not revealing individual shareholders circumstances if that is part of the agreement, or if the team were in some kind of competitive business that had some proprietorial patents or something. I would understand that, but this is a hockey team. This is not a high-tech operation. I cannot conceive of what is in there that needs to be kept secret.

Mr. Stefanson: As the member I am sure knows, there are all kinds of agreements that governments enter into with different entities that are not made public for various reasons. In terms of his specific question about the value of the public ownership in the Winnipeg Jets Hockey Club, it is treated the same as the private ownership. In fact, there is a provision that on any disposition it is treated in exactly the same way and ultimately receives the same value as the current private ownership.

Mr. Sale: That is certainly one of the avenues that I want to explore, but before we leave the question of the actual agreement, would the minister at least commit to a date by which he will give us his answer as opposed to tabling the document?

Mr. Stefanson: I will undertake to do that as soon as possible. I cannot give a definitive date, but I will do it very soon. How is that?

Mr. Sale: I would like to take the minister at his word. I would feel much better if there were a date placed on it. We have been subject to absolute chicanery around the question of lottery revenues from this government, in which hotels have paid their share of their VLT proceeds.

They clearly have had their share of the profits. They have remitted the profits hotel by hotel, machine by machine, so for the government to say that it cannot come up with this information this afternoon as opposed to next week is absolute nonsense. They have the data machine by machine, hotel by hotel, month by month, because that is how the profits are remitted.

I would feel much more comfortable if the minister would say a week or three days or seven working days or something; it would give us some comfort.

Mr. Stefanson: Mr. Chairman, I do undertake to get back to the member very soon, because I know this matter has been discussed before and, rather than sitting here tonight and speculating on what all of the reasons were as to why the agreement could not be made public, if that is going to be the answer he receives from me, I want to be sure that it is clearly outlined to him as to why that is the case. So I just reiterate. I will follow up on this matter as soon as possible.

Mr. Maloway: Mr. Chairman, I would like to ask the minister what the status is of any provincial loans to the Blue Bombers organization.

Mr. Assistant Deputy Chairperson: Could the member please repeat the question for the minister?

Mr. Maloway: Certainly, Mr. Chairman. I would like to know the status of any provincial loans to the Blue Bombers organization.

Mr. Stefanson: I would have to confer, Mr. Chairman, but I do not believe there is any loans outstanding with the Winnipeg Football Club at this particular point in time.

Mr. Maloway: I would like to ask the minister, since he has approved the $37 million to the arena at The Forks, has he done any analysis on the effects of this move on the Bombers franchise?

Mr. Stefanson: Mr. Chairman, there are several parties to any potential agreement, none the least of which are the Winnipeg Enterprises Corporation who are the landlords for the current arena and the Winnipeg football stadium, the City of Winnipeg who also have an involvement. They appoint representation on the Winnipeg Enterprises Corporation, and members of that board are well aware that if a new facility is built there will be an impact on their operations. That is all being taken into consideration through positions that they are adopting throughout this process.

Mr. Maloway: Mr. Chairman, is he aware of any projections of Bomber losses this year, financial losses that is?

Mr. Stefanson: I have not been provided with any such information at this time.

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Mr. Maloway: Mr. Chairman, I would like to ask the minister a couple of questions about government leases that the government has with the private sector. I would like to know whether the minister can tell us the number of leases that the government has with private companies.

Mr. Stefanson: Is the member referring to leases of any type as it relates to equipment, buildings, or what precisely is the member referring to?

Mr. Maloway: I am asking specifically about leases for office space.

Mr. Stefanson: Mr. Chairman, those leases are entered into under the direction of Government Services, and those questions would be more appropriately asked to the Minister of Government Services (Mr. Pallister).

Mr. Maloway: I wonder if the minister could provide us with an inventory of government leased space.

Mr. Stefanson: I will pass that request on to the Minister of Government Services.

Mr. Maloway: Mr. Chairman, is the minister telling us that he does not have a record of the number of leases that the government has entered into with private individuals and companies?

Mr. Stefanson: I am sure that information is available within our system, but as I have already indicated, that responsibility falls under the Minister of Government Services.

Ms. Jean Friesen (Wolseley): I wanted to ask the minister about the municipal tax relief for veterans. It was discussed earlier. I wondered how this applied to aboriginal veterans of the First, Second and Korean wars.

Mr. Stefanson: Mr. Chairman, I should take the particulars of that question as notice and get back to the honourable member. I am assuming that they would be treated the same as anybody else in terms of meeting the qualifications. I did provide some information to this committee a couple of days ago, but the specifics of that question I will get back to the member.

Ms. Friesen: In discussing the ISM contract the minister indicated that they had fulfilled their requirements for education. I wonder if he could be a bit more specific on that?

Mr. Stefanson: Part of ISM's commitment is to foster post-secondary educational development through their $2-million education program. What that involves is major contributions to technology education in Manitoba, including participation in TR Labs, the co-operative study employment program, scholarships and the development of various computing facilities at Manitoba's universities. In terms of any further detailed breakdowns within those elements, if the member wants them I would have to get that information for her.

Ms. Friesen: Can I just clarify that? It was a $2,000 contribution to TR Labs? It was involvement in a co-op study program or laboratory--I assume that is as a placement--computer contributions to institutions and a scholarship program? Was there something else there that I missed?

Mr. Stefanson: It is a $2 million commitment. I believe the member had all elements--participation in TR Labs, the co-operative study employment program, scholarships and the development of various computing facilities at Manitoba's universities.

Ms. Friesen: In the contract, which of these is to be conducted on an annual basis? Are there annual donations to a scholarship program? Is there an annual $2 million, or is that a one-time only deal? Is it annual co-operation and co-op study and annual donations to computer systems?

Mr. Stefanson: I believe that it is a one-time commitment, and if that information is not correct I will get back to the member very quickly.

Ms. Friesen: I look forward to the information that the minister brings, and I understand that it will indicate quite specifically where these scholarships are, what the level of the co-op study programs have been and what computer materials have been donated.

The other question I wanted to ask was about Workforce 2000, to ask the minister how many applications has he received this year and for what amounts for forgiveness of the health and education levy for the purposes of Workforce 2000? I am speaking first of all about the past year.

Mr. Stefanson: I wish the member had asked that when I had the Taxation Division here. What I will do is undertake to provide that information.

Mr. Sale: Could we go back to the question of the Jets and some time questions?

First of all, can the minister indicate who represents the government in regard to the day-to-day liaison between the government and its business partners in the Jets?

Mr. Stefanson: Primarily two individuals: Mr. Mike Bessey, the secretary to the Economic Development Board and Mr. Julian Benson, the secretary to the Treasury Board.

Mr. Sale: Mr. Chairperson, to the minister, when did these individuals begin to carry out these duties on behalf of the government?

Mr. Stefanson: Mr. Benson has been involved in the process for many months and Mr. Bessey more recently. [interjection]

Mr. Sale: Mr. Chairperson, I believe on a matter of procedure we had suggested 9:30 might be a target time, but I do not know. It depends how the answers go.

The interim operating agreement was 1991, if I am correct. That is four years ago. Has Mr. Bessey been the province's liaison for that period of time, Mr. Benson for that period of time? Can we be a little more specific than many months?

Mr. Stefanson: Mr. Bessey was involved in the negotiations around the 1991 interim agreement and obviously has been involved in that issue since that point in time and more recently actively involved in the current state of discussions and negotiations. Mr. Benson, through his role as secretary to the Treasury Board, again, has had some involvement on this issue throughout the period of time since he has been here but more directly in the recent discussions with MEC and other principals since the private sector group came forward last summer with the proposal to put in place an option to be exercised this year and so on.

Mr. Sale: Mr. Chairperson, Mr. Bessey then began to meet with MEC in the summer of 1994. Would Mr. Benson also have been involved in those meetings from that period forward?

Mr. Stefanson: I would say basically, yes. Over that period of time, in many respects, Mr. Benson was more involved since 1994, but they have both been involved in this issue.

In terms of who attended more meetings, those kinds of things, I would not want to sit here and give an indication one way or the other. I would have to go back into everybody's diaries to confirm--the point being that they have both been involved in these issues over a long period of time and then more recently since the private sector group came forward last summer with this proposal to put in place an option.

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Mr. Sale: Mr. Chairperson, could the minister give--I do not expect him to have his diary here--but could the minister give a rough estimation of the frequency of the briefings that he and the Premier (Mr. Filmon) received from the two senior staff since last summer?

Mr. Stefanson: Again that is very difficult to do in terms of recalling when we received briefings. It is safe to say, going back to last summer, once the private sector came forward we did receive periodic briefings. I also met occasionally with representatives from the MEC group to be kept informed of their progress. That is really how the issue has been dealt with over the course of the last eight or nine months.

Mr. Sale: Mr. Chairperson, to the minister, I would expect that you might have been briefed at least monthly, probably more frequently, as issues emerged. There might have been some time went by when you were not briefed for more than six weeks, but I expect that you were often briefed more than monthly on this issue as it has unfolded. Would that be a fair estimate?

Mr. Stefanson: Not necessarily. The member is right. It would go for several weeks when I would receive no briefing because the direction the discussions we had with the MEC group at that time were perfectly clear in terms of what commitment we had made, what we were prepared to do, what expectations we had from them, and really the issue was very much in their court, so to speak, in terms of moving forward and putting all of the pieces to the puzzle together to ultimately conclude an agreement and, hopefully, be in a position to exercise the option that they had put in place with the current owners of the Winnipeg Jets hockey team.

Mr. Sale: Mr. Chairperson, to the minister, did the minister receive a briefing in November of last year during the sale of the luxury boxes and the club seats, the initial attempt to market these seats in the fall of last year? Was the minister informed of the level of the sales and commitments made by the private sector at that time?

Mr. Stefanson: Mr. Chairman, I was certainly informed of the progress that the MEC group was making on the sale of luxury boxes, club seats. Whether or not that information was provided to me in November, again, I would have to go back and check my diary as to what points in time I had briefings and/or meetings.

Mr. Sale: I wonder if the minister would be able to supply the committee with dates from his diary as to the dates at which he was briefed and the dates at which he met with MEC during the last 10 months or so.

Mr. Stefanson: Mr. Chairman, I am not sure what relevance that would be. As I indicate, my methods of being kept informed were not always directly with MEC. They could be through one of our senior officials. My diary might not even necessarily show that was a briefing on MEC, or if I have a meeting with the senior officials we sometimes will touch on many issues, and my diary just shows a meeting with one of the officials. So I think what he is requesting is virtually impossible.

Mr. Sale: Mr. Chairperson, to the minister, my recollections of when I served ministers and when I worked for government was that diaries were pretty explicit and a time allocation between staff and ministers' day books was pretty clear and pretty detailed. I would certainly accept a record that omitted casual briefings which were not planned in a particular way to take up a particular block of time, but I think the minister is a very organized and competent minister and I suspect that his day books are very well organized.

I would ask again, could we have a list of the dates at which you met with either your senior staff or MEC members to discuss this project?

Mr. Stefanson: I accept the compliment that I am an organized and competent individual, but I am, first of all, wondering the relevance of this questioning and the purpose, and secondly, I am serious that particularly when it comes to senior officials who report to me, we will have an agenda that can have several items on it, as I am sure the member can identify with, and my diary will not show a breakdown necessarily of all of the agenda items that we discussed. So what he is requesting of me is basically impossible.

Mr. Sale: Again, Mr. Chairperson, to the minister, I think it is pretty obvious the concerns that we have and I will simply for the record state them. We think these negotiations have been detailed and extensive and difficult, and all parties have been trying to find a way to make this thing work. The minister has been involved deeply, the Premier (Mr. Filmon) has been involved deeply, and we have a great deal of difficulty believing that no one knew until April 25, or more precisely April 26, that the public sector requirement to make this thing fly was five times at minimum what the previous estimates had been.

We know that Mr. Bessey and Mr. Benson are competent individuals. They have a track record in government at the senior levels. They are not shrinking violets when it comes to meeting with people, and I find it very difficult to believe that senior staff occupying important, privileged positions did not keep their ministers informed throughout this entire process as to the shape of what was unfolding. I think we will continue to ask this question, fairly confident that were those day books and records of meetings made public, the record would show that there was detailed involvement with the best interests of the government at heart. To say otherwise, Mr. Minister, is to indicate that two senior civil servants are unaccountable for a great deal of time, which I do not think you would indicate.

Mr. Stefanson: As I have indicated to the member, if he is suggesting during the election period I received some information about the state of the agreement or discussions, he is absolutely wrong.

I had a meeting on the day after the election, on April 26, and that is when the MEC group outlined their current state of their business plan, and it was significantly changed from the basis of our discussions going back to January-February in terms what we had outlined to them as being the commitment from the provincial government, what they showed as their requirement.

If you do not want to take my word for it, take the word of many Manitobans, the Manitobans that were a part of that process who have outlined very clearly when they received the revised information, the way they describe it, a matter of days before the election. They made the decision not to come and see government until the day after the election, and that is when they came to see me and shared the information and showed the revised business plan. There is not an iota of doubt that is how it happened, that is how it unfolded and they made that decision to wait until April 26, having just received the revised information a matter of days before the election.

I would hope that the honourable member listens to what some of those people say, those people who are on MEC, who are reputable citizens, who have no interest one way or another in terms of the politics. Their objective has been to find a long-term solution to keep the Winnipeg Jets hockey team here in Winnipeg.

Mr. Sale: Mr. Chairperson, I certainly accept the minister's word, and I will not challenge the minister's integrity on the question of the information that he is telling us at this point, that he did not receive a briefing during the election. I think short of a public inquiry that is all we can do on this.

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Let me go back a little further. I think it was abundantly clear in November and December that MEC was not a little bit short, but was millions and millions short of their target, that the private sector had not rallied to the cause, that in fact they had raised something less than $5 million, I believe, at that point. There was no sign of the kind of dollars required to fulfill the commitments of which at least any of us involved were aware.

Was the minister at that point in November and December of the belief that MEC was on target and that the private sector was raising all that was required?

Mr. Stefanson: Basically, yes, you had people, representatives of MEC when asked what they thought the likelihood was of their being able to raise the kind of capital they felt they required saying they recall interviews with various members of the MEC group saying they thought it was a two-third's chance, a 75 percent chance of proceeding based on the information, the plan I had seen back in late '94 or early '95. I shared that view. It also showed carrying some debt. They showed carrying some debt of up to as much as $40 million, and it was really that debt that evaporated when they came back to see me on April 26.

They then indicated they had no ability to service the debt and that is when their whole plan changed dramatically. I think, as the honourable member knows, that was based on revised information they received doing an extensive analysis of where player salaries could head over the next several years in the NHL.

Mr. Sale: Mr. Chairperson, could the minister give us an approximate date at which time it became clear that MEC was simply way off its target and that the project as they had conceived of it and promoted it was totally infeasible?

Mr. Stefanson: Basically, April 26.

Mr. Chairman, I have already outlined that the day after the election I had an extensive meeting with MEC and others on this issue, a four-and-a-half-hour meeting where they shared their most current information with me. That is where they showed their outline, their analysis of player salaries going from $26 million to $30 million annually to as much as $35 million to $40 million. That is when they came to the decision that they did not feel they could sustain any debt, maybe a small amount of debt, nowhere near $40-million debt. Their requests of government then changed significantly at that point in time.

Mr. Sale: Mr. Chairperson, to the minister, I am trying to pursue this in good faith and I am not trying to impugn anybody's honour here.

I ask the minister: You had access to far more resources than the little group called Thin Ice did. You had inside information about the nature of MEC's plans. You had information about the NHL, access to that information. You had access to technical experts in terms of cash flow projections, impacts of what was happening with salaries which were fairly clear after the players' strike was concluded and, certainly, by January and February it was pretty clear what was happening.

Thin Ice seemed to be able in the fall and the winter, in March and now in May to be spot on in their estimates. They had been saying for more than a year that there was no way that this was feasible without the public sector putting up at least $80 million to $100 million. That was the original estimate based on the original data.

As it became clearer to us in the outside group, as we began to look at the Black and Dolecki Report and began to look at the Burns and Mauro reports and crunch the numbers, it was clear a long time ago, Mr. Minister, that this level of public requirement of $30 million or $40 million at most was totally out to lunch. Burns made it clear that it was $111 million. Your Premier said, no way, we are not in for that.

So this is not new information April 26. The shape of this thing has been clear for a long time. Whether or not you were briefed during the election, I find it difficult to believe that with the resources of government, with the Mauro and Burns reports, with the report of Coopers and Lybrand, which has not unfortunately been made public I do not believe--I think there have been reports on it, but the Coopers and Lybrand report itself I do not think has been made public--I ask the minister again, can you say that you had no inkling that the level of public requirement here was going to be far in excess of what you were publicly talking about?

Mr. Stefanson: The short answer is no. The kind of scenario that the member has just outlined, we have to go back to how this whole issue unfolded, that a group of private citizens came forward back in the summer of 1994, put in place an option to purchase this team by May 1st of 1995, looked to governments for what kind of commitment they could get from the provincial government, from the federal government, from the City of Winnipeg, received various commitments, went forward on the basis of putting together their business plans raising the kind of capital and the kind of equity that they felt that they would require.

As I have indicated to the member, the last information I saw back in roughly January, February, was on the basis of factoring in a $10 million contribution from the provincial government. A different contribution from the federal government showed in the $40-million to $50-million range. Private sector investment showed debt being serviced of some $40 million.

The private sector continued to do their work, continued to do their due diligence. They retained consultants. They retained professional assistance. They, because they were raising a lot of money from Manitobans, were doing a lot of the due diligence to determine whether or not to be exercising that option, retained the kind of expertise and review and advice that the member is referring to.

It was not until April 26 that they came forward to me and outlined their grave concerns around what was happening to salary levels in the NHL and the revised information they had as a basis of an analysis that had been done on their behalf and growing concerns.

At the end of the day at that particular point in time in terms of this whole issue, there was nobody who was prepared to backstop the risk of any potential losses as a result of going forward at that stage. That then evolved into this idea of establishing some kind of an endowment fund, and that is now why we are at where we are today.

Mr. Sale: To the minister, in your budget preparation process the provision for losses for the Winnipeg Jets was presumably an item of discussion. When did you have that discussion in terms of the preparation of your budget, and what level of loss was projected at that time?

Mr. Stefanson: I would have to go back to when those discussions took place. Obviously our budget was tabled on I believe March 9, 1995. Our budget had been prepared on the basis of expecting approximately one quarter, three months of losses under our fiscal year, subject to the option being exercised and a condition being put in place that we were--we being the provincial government--no longer going to fund losses. The option date was May 1. We realized that it might be May 1 or there might be a month or two variation, so we budgeted on the basis of including roughly three months losses.

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Mr. Sale: The minister I believe knows the letter which we tabled in the House the other day indicated that as of last September, not this last February but last September, a closing date of August 15th was suggested as an end point. Would the assumption be that the losses would be to the closing date of the agreement of August 15? Would that be the calculation?

Mr. Stefanson: That might end up being what the date might finally be. I would have to go back as to when August 15 was first put forward as a date. There has always been the suggestion from MEC that May 1 was their option date to exercise and that sometime thereafter there would be a closing date, and it would be a closing date that effectively the funding of losses by the province would terminate. That closing date was often talked about as any time from sometime in June till sometime in August.

Mr. Sale: I believe what the minister is saying is that on a basis of a prudent estimate you provided for a quarter on the basis that it might be up to the end of--what would that be, April, May, June, to the end of June? Of course, it might be a little longer than that now.

Could the minister then tell the committee what the estimated losses for that quarter were? How big was that loss?

Mr. Stefanson: Mr. Chairman, I believe in the $1.5-million to $2-million range, but I would have to go back and get a more precise number.

Mr. Sale: If there are staff in the room that the minister could ask, I would not object to a brief delay to get that data.

Mr. Stefanson: Unfortunately, I do not see any staff here that could provide that information.

Mr. Sale: Could the minister tell us when we might expect that information?

Mr. Stefanson: Mr. Chairman, I would expect within the next few days.

Mr. Sale: I thank the minister for that answer.

I am surprised at the rough estimate that you are giving us. I believe you said $1.5 million to $2 million for a quarter. So that would be the province's share of the loss, the city is picking up the other half. So that would be a maximum of $16 million for this year.

Mr. Stefanson: I believe the amount is somewhat less than $2 million. That is why I want to confirm the number, whether it is $1.7 million or $1.8 million. It is in that range, the $1.5 million to $2 million.

Mr. Sale: Mr. Chairperson, that seems low in light of the minister's statements of a few minutes ago of losses running in the $20 million, $25 million, $30 million or higher range. We are in the era when the salaries have already escalated very sharply, and of course that is one of the reasons why we have problems with the agreement. I believe the newest MEC proposal has salary estimates of $30 million in it, if I am not mistaken, and the original proposal was based on salary estimates of $19 million.

In the period of time from April 13 when the last business plan was published--not the last business plan--when the business plan that MEC tabled with you, you say on April 26, I believe it was actually printed April 13. I believe that it initially referenced a salary level of $19 million in its earlier stages and it is now up to $30 million in its prognostication, so how could losses be as low as you are projecting, given that we are not in a new arena, et cetera?

Mr. Stefanson: Mr. Chairman, when they refer to salaries there are the gross salaries, then there are the costs of funding any farm teams and so on. The all-in salary costs I believe went from $26 million to $30 million. Those are the numbers that should be directly compared. So an increase of $4 million which eliminated the ability to then service roughly $40 million of debt that at one point in time was being projected to be carried.

Mr. Sale: Thank you to the minister. I understand the clarification with some apples and oranges going there for a moment.

We are up to $30 million all in for this year, estimated for this year. Am I correct?

Mr. Stefanson: No, the numbers we were just discussing were the numbers that MEC were putting in their business plan in terms of projecting what was going to happen to all in salary costs.

In terms of losses over the two years, I believe the range of losses that were being projected were in the vicinity of all in $24 million to $30 million over a two-year period, so the kind of funding level that I have outlined to you in terms of what we put in our budget is consistent with all of that information.

Mr. Sale: I thank the minister for that clarification.

The minister indicated earlier in his remarks that there was no distinction between the classification of shares, that the proportion of shares which the public sector held would be the proportion of shares that would be redeemed by the public sector should the team be sold.

Could the minister then clarify the Premier's (Mr. Filmon) remarks in which he indicated that the value of those shares from the province's perspective has been fixed at $9 million, which I would understand to represent the acquisition value when the team was valued at $50 million, and public sector shares were valued at 36 percent, the province at 18 percent? The arithmetic works out then to be the province's shares were worth at that point, notionally, $9 million.

I believe the Premier indicated in the House the other day that that would be the value of the shares regardless of the disposition of the asset at any time in the future. Can the minister comment?

Mr. Stefanson: I think we are confusing two issues here, the value of the shares under any arrangement, as I have said earlier. The value of the public shares will be treated the same as the value of the current private shares. If the team had been sold outside of Winnipeg, obviously the two levels of government would get 36 percent of those proceeds, but under the discussions that are taking place now, the value being given to the public shares is the same value as is being given to the private shares currently in private hands. That is an estimated fair market value, which is at today's estimated fair market value, so the public shares today are being treated on the basis of approximately $30 million, the shares owned by the two levels of government.

I think what you are referring to in terms of the Premier's comments--what has always been the case with the City of Winnipeg--when the province entered into supporting them with the funding of losses for the Winnipeg Jets Hockey Club to keep them here for a period of time and allow the community to make a long-term decision one way or another, was that it was never the intention of the province to make money, if there was an opportunity to make money, on the fact that we were not putting up any money. We were going to fund losses. We said so long as we get all of our costs all in back, we are satisfied with that. Basically that is why the reference to the $9 million would be the reference to the approximate level of funding of losses that the provincial government has incurred up to about June of this year.

I think that is the confusion, that under a sales arrangement any management fees, any losses funded by us and so on would be returned to us.

Mr. Sale: Mr. Chairperson, I hope the minister will continue to clarify this issue, because I am not sure that I understand it yet. Let me try and see if I do understand what he said. I think what you have said is that our shares never in your view had a market value. They would only return to the public sector whatever direct monies had been paid by the public sector in terms of losses or management fees or carrying costs or whatever could be identified as hard-dollar expenditures on behalf of the Winnipeg Jets. Is that your understanding of the agreement from Day One?

Mr. Stefanson: Mr. Chairman, the shares have always had a market value. That is one of the fundamental objectives of the '91 agreement, that if there is any disposition the public shares get treated exactly the same as the private shares. So they have always had a fair market value in terms of what would be received on any disposition or what is going to be received as value on any adjustments in terms of a change of ownership.

But the provincial position has been that from that disposition we would be repaid all of our costs in terms of funding any management fees, in terms of funding for the interim steering committee and in terms of funding any losses, our share of losses, for the Winnipeg Jets hockey club, that basically that would be our first draw against those proceeds.

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Mr. Sale: I am sorry, I still see mud here. Let me ask again, Mr. Chairperson, following the minister's explanation, he says that the shares had the same dignity as the private sector shares. If the team was sold for $100 million Canadian, $70 million U.S., would the province receive with the city in total $36 million?

Mr. Stefanson: Yes. Governments would receive $36 million.

Mr. Sale: Thank you, Mr. Minister. Would they keep it or do they have to give some of it back?

Mr. Stefanson: They would keep it.

Mr. Sale: Again then, Mr. Chairperson, to the minister, I think that is not what the Premier said. If you could explain to us then the difference between what you just said, which is what I thought the interim agreement had in it, which is that our shares at a notional value of 100 cents on the dollar would be worth 36 cents, and the First Minister said they would be worth 18 cents.

The First Minister in the House the other day said that the public shares owned by the province--he did not speak about the city shares--would be limited to a value of $9 million. It was very clear. There were repeated questions on it. In fact, there was a long article on it in the Free Press which was not responded to by the government, so I am confused.

Mr. Stefanson: Mr. Chairman, that has probably done it. The article that appeared in the Free Press was absolutely incorrect. The reporter that wrote that article made no attempt to contact myself or I believe the Premier, to the best of my knowledge, or anybody who could explain the situation. You and I were both on CJOB on Friday, and I said exactly what I have just said to you here now on CJOB, so the article in the Free Press on Saturday is absolutely incorrect.

The reference to the $18-million value could be reference going back to--without muddying the waters any further, there has been an option in place based on a $50-million price. That was the option that the private owners had up until May 1 of 1995. Based on a $50-million price, then on the same principle of our shares always having the same value, that is how you get the $18 million, based on if that had been the price of the transaction in the disposition, that ours were always piggybacked and treated equally.

Private shares and the public shares were to be treated equally whether the team was sold outside of Manitoba or whether a new reorganization can be done and today with new private sector money. So I think that is where the $18-million figure comes in, and then the relationship back to $9 million for the province.

Mr. Sale: I would hope the minister would discuss this with the Premier, because it was long after May 1 when the Premier made his comment in the House. He knew very well that the option had long since expired, that the team was now--in fact, as the minister knows, this is one of the reasons why we are in this long dance, because the option did expire and suddenly the current owners had an asset on their hands which was not worth $50 million at an option but was worth the market value of whatever they could get for it. They have used that market value to bid up both the public and private sector. It is one of the reasons why we are still going around the mulberry bush.

The Premier (Mr. Filmon) knew this. The Premier in I thought very clear response to the Leader of the Opposition's (Mr. Doer) questions asserted that the public sector shares held by the province would have a value of a fixed amount of $9 million. I believe Hansard will show that. Perhaps the minister would like to rise and clarify.

Mr. Stefanson: Mr. Chairman, out of the proceeds that would be derived from any sale of the public shares in the Winnipeg Jets, what the province is entitled to is the share of losses that the province has funded and any costs as a result of the entire transaction, the interim steering committee or any costs that the province has incurred. We are entitled to all of those back.

Our best estimate as of basically today is approximately $9 million. If the transaction were to come together and effectively close, that would be what the province would receive back, so it is not inconsistent with what the Premier was saying.

Mr. Sale: I think we will look carefully at the record and see if we can understand the Premier's answer in light of the minister's comments.

The issue of course is, if what we thought was being said was in fact what was said then the private sector shares suddenly gain in value by virtue of, in effect, a reverse dilution of the value. That would allow MEC to refinance the whole operation for tax purposes and gain some significant additional tax benefits from that process.

Can the minister assure us that is not what is happening?

Mr. Stefanson: Just to restate for the record and make it perfectly clear--to quote a colleague--the public sector will receive the same proportionate value as the private sector. Based on discussions that are taking place today it is based on an estimated current fair market value. The approximate value being attached to the public sector interest in the hockey team today is approximately $30 million.

Mr. Sale: I would like to ask a couple of questions about the fixed price contract.

Mr. Chairperson, to the minister, Dominion Hunt has a fixed price contract of $70-something million to build the building as drawn by Smith Carter and its American partner. Is that understanding correct?

Mr. Stefanson: My understanding, Mr. Chairman, is there is an agreement. An official contract has not been entered into at this time, pending the completion of all aspects of negotiations whether or not this entire initiative is going to move forward or not.

Mr. Sale: To the minister, have you seen the agreement between Dominion Hunt and MEC?

Mr. Stefanson: At this time, no, I have not seen the agreement between Dominion Hunt and MEC. As I have indicated, there is no legal agreement entered into between those entities, because sequentially if again this entire initiative is going to move forward, what will have to happen is the government would have to enter into an agreement with the private sector group, MEC; MEC would have to enter into an agreement with Dominion Hunt. As part of all of those processes obviously we will be involved in terms of concluding any kind of an agreement we enter into with the private sector, and part of that will be a thorough review of any agreements that MEC is entering into with Dominion Hunt.

Mr. Sale: Have either Mr. Bessey or Mr. Benson seen this agreement?

Mr. Stefanson: Mr. Chairman, I could not say one way or the other. I would have to check on that.

Mr. Sale: Has the minister been briefed in detail by either Mr. Bessey or Mr. Benson or both in regard to the details of this draft contract or Memorandum of Understanding or whatever form it currently takes?

Mr. Stefanson: I have been provided some information from both MEC and Mr. Bessey and/or Mr. Benson around the quantity, around the components of it and the level of satisfaction that the MEC have from the due diligence that they did through the whole process to arrive at awarding an RFP potentially to Dominion Hunt, the process that they went through and so on.

In terms of any detailed agreement, any detailed contract, as I say I have not seen any such document. I am not sure what stage that is at. They have an agreement with Dominion Hunt around the makings of a fixed-price contract, but again nothing is going to be entered into until all aspects of this initiative either move forward or do not move forward.

Mr. Sale: I understand how difficult this is for the minister. I think it is important that we pursue this because I think it is a vital issue for Manitobans. I am not trying to impugn the minister in any sense. I am trying to get on the record where we are at in it, because we have not been successful in getting on the record in any other way.

Can I, through you, Mr. Chairperson, ask the minister, if you have not seen the agreement, if you do not know that Mr. Bessey or Mr. Benson have seen the agreement, if MEC has not shown you the agreement, how can you be certain that the agreement says any of the things you have said in the House, that it is fixed price, that it is complete, that provision for cost overruns are dealt with in a way that is ironclad?

You have used, I believe, some very strong language, and the Premier has also used some very strong language in assuring the House and assuring Manitobans that the public interest was fully protected. Yet you have told this committee you have not seen it, you do not know if your officials have seen it, and you obviously

are not in a position to table it. I see some inconsistency here.

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Mr. Stefanson: There is absolutely no inconsistency, Mr. Chairman. MEC has shared with us the components of the building of a facility, the elements that would be in any fixed-price contract that they may enter into with Dominion Hunt. We have also had discussions with the private sector that if a facility was going to be built it would be built for an all-inclusive price of no more than $111 million, that the private sector would be responsible for any cost overruns. The extensive work that has been done by the current private sector and the due diligence they have done in going through the requests for proposals and receiving submissions from Dominion Hunt and basically being in a position of being prepared to award a contract to Dominion Hunt for $75 million, approximately, fixed-price contract is all subject to all elements coming together. They have no authority to be entering into the building of a facility until they have an agreement with the levels of government to build a facility on behalf of the government. All of those pieces, if and when they come together, will come together at the same time.

I assure the honourable member, as I have in the House on many occasions, as much information as can be made available on this issue will be made available, because I think it will be in the best interests of all Manitobans, not only people in this Legislature, to understand the nature of the entire transaction and the various agreements that are being entered into by parties.

I assure the member that MEC went through an RFP proposal. They sent out four requests, received three back, went through a review process, ended up selecting Dominion Hunt consortium that have built or are building a facility in British Columbia. Dominion Construction have 35 years experience here in Manitoba, have built facilities like the TD Centre. From everything I have heard they are an extremely reputable construction company, do fine work and so on here in our province. That has been the process that has gone on to date, but no legal binding agreements will be entered into until everybody knows that this entire initiative is moving forward.

Mr. Sale: Mr. Chairperson, can the minister tell us whether the Premier was present at briefings with Mr. Bessey and Mr. Benson and MEC in regard to the fixed-price contract, the building of the building?

Mr. Stefanson: Again, Mr. Chairman, I cannot sit here today and recall who was at each and every briefing. Elements of briefings were provided by senior officials separately to the Premier and myself on occasion. That is all I can say. I cannot recall who was at each and every briefing session that I had on this issue over the course of the last eight or nine or 10 months.

Mr. Sale: Would it be fair for the minister to estimate that the Premier has been kept as abreast of the issue as the minister has?

Mr. Stefanson: Mr. Chairman, I cannot comment on that. I am not a part of every briefing session that the Premier has. I do not sit in on all the briefings with him. I think the member has been around government long enough. He knows the process. I cannot comment on that one way or the other.

Mr. Sale: The fixed-price contract that you have discussed with MEC but have not seen, was it your understanding that this included completion of the building ready to play hockey in, $75 million more or less?

Mr. Stefanson: Mr. Chairman, I am not sure what the member is after here. Basically yes, but obviously if the price is at $111 million there are other components that go into a facility. The additional expenditures were in areas like a value for land, the entire insulation of all of the concessions, all of the ammenities inside of an arena, a clock, many of those kinds of elements. But if the question is, would you have a raw structure that you could play hockey in? Sure. Would you have any amenities or any other support services for the public to go and enjoy the facility and the entertainment? No, you would not. Hopefully, that answers the question.

Mr. Sale: Would the completed facility mean that there were seats and washrooms and the areas that were supposed to be painted and carpeted were painted and carpeted, those kinds of details? Are we talking about a finished structure, or is the difference between the $75 million and $111 million all of the interior work that would be done to put in the concessions and the clock and all those other things?

Mr. Stefanson: Basically yes, but in terms of drawing that line as to which components were in the $75 million versus which are the additional amenities, I would have to go back and get the details. Certainly issues like concessions, issues like having a clock in the arena, many of those elements are over and above the $75 million. At the $111 million, yes, you would have that kind of a facility that you could not only play hockey in; you would have seats in the arena, you would have concessions, you would have washrooms, you would have a clock and everything that I think most people expect to be in a first-class entertainment facility.

Mr. Sale: Would the $75 million include the seating?

Mr. Stefanson: Mr. Chairman, I would have to go back and confirm which elements were in the $75 million and which elements were in the residual bringing it to the $111 million, but let me assure the member that for the total price of $111 million there would be seating in the new entertainment complex.

Mr. Sale: We are $17 million short of the $111 million right now. Can the minister indicate what is being done to either scale the project back or find $17 million or some combination thereof?

Mr. Stefanson: Mr. Chairman, there will be various avenues to be pursued. One is to continue to have discussions with the federal government about additional support from the federal government. I think there is no need to remind the honourable member of the economics, but as he probably knows, if a new facility is built in Winnipeg, the federal government will receive $20 million in basically direct taxes as a result of the facility being built, let alone the fact that they receive approximately $12 million a year each and every year from taxes as a result of the Winnipeg Jets being in Manitoba and Canada. So I think there is a compelling economic argument with the federal government that if that team is relocated to the United States or outside of Canada, obviously the United States being outside of Canada, that the federal government would lose that $20 million and they would lose the $12 million annually and so. So that is certainly one avenue to pursue.

As we get into more clearly defining the building, if a building is going to be built, obviously one approach will be to continue to try and control costs as best as possible. That will obviously be in the private sector's interest as well because they will be responsible for any cost overruns. We will continue to have discussions whether or not there is anything that can generate some additional revenue for the facility and any other ways of establishing any additional capital to be applied against the building.

Mr. Sale: Mr. Chairperson, the minister seems to have a great deal of detail about the construction and it seems that the discussions, if they were verbal, have had a fair impact because the minister has a lot of detail there for something that has not ever been committed to paper, so I hope that his recall is accurate.

I wonder if the minister could tell the committee whether the construction cost of $75 million includes finishing the luxury boxes.

Mr. Stefanson: For fear of making a mistake here I had better obtain those details for the member as to whether again--they are certainly in the $111 million price. I believe there is approximately 40 luxury boxes being put in place, but as to which element they fall under, I would have to confirm.

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Mr. Sale: For the record, Mr. Chairperson, I would just simply say that we believe that it is quite obscene that the public sector is going to build luxury boxes for private corporations to entertain their customers and clients against which they will take tax losses, and we will pay the whole cost apparently. The monies that were raised for those public sector, private sector boxes may have disappeared into the losses fund or may have disappeared into the purchase fund, but they do not appear to have appeared in the $111 million that the public sector is going to pay to complete those boxes.

Mr. Stefanson: I may not have been entirely clear in terms of the elements of the luxury boxes. If I were to make an assumption I would say the basic parameters of them are certainly in the $75 million, and the traditional approach of all of the amenities inside are then done by the individuals who basically have the rights to those boxes. That is the approach that has been followed in most facilities that have been developed and would be the approach followed here.

So if somebody wants to put in a certain quality of carpeting or a certain quality of wood panelling or whatever, those are all decisions that the individual box holders will make and will pay for themselves.

Mr. Sale: I appreciate that is the case, and it is almost always the case when the arena is built privately of course. I do not know of any case, though the minister may cite some, where the public sector is building the entire structure and turning over to corporations the semifinished luxury box space for them to finish. Perhaps the minister can cite some cases where that has taken place?

The new arena in Montreal is a private sector arena. The arena in Vancouver is certainly not all being built by the public sector in terms of total cost. So I take the minister's comments that there may be some finishing costs involved, but we are still providing the structure.

Mr. Stefanson: I know some of the studies that have been done have outlined other examples of where governments have contributed to arenas, entertainment complexes, and I will undertake to provide the member with as much information as I can on that.

I know he refers to the facility in British Columbia. I know the facility in Ottawa received government support. It certainly has not been uncommon for facilities of this nature or facilities of a nature like a convention centre. We know there are convention centres right across Canada. Many of them have been built with mostly public money. In fact, most of them received significant federal money, unlike the Convention Centre here in Winnipeg that received no federal money when it was built. So in terms of those kinds of facilities it is certainly not uncommon for governments to make a significant contribution.

Mr. Sale: I do not believe there is another example where the public is the entire funder of the project. If the minister can provide examples we would certainly be glad to receive them and review them, and I thank him for doing that.

In terms of the future projections, it seems entirely possible that we are going to be covering the losses for a further period of time. Negotiations are dragging on. Can the minister indicate what his current understanding is of the likely level of losses in 1998-99? That is, I believe we have estimates from him of approximately $30 million for the next two seasons while any new facility might be constructed. Can the minister tell us what the current estimates of future losses might be?

Mr. Stefanson: As the member knows, if an agreement is concluded the private sector becomes responsible for the losses effective the closing date. Everybody is continuing to work towards that kind of a timetable. I think everybody recognizes the urgency of coming to a decision one way or the other.

The new private sector investors, the current owners, all three levels of government, everybody is working towards making a definitive decision one way or another as soon as possible. So that is the kind of approach that is being taken right now. We have to wait to see how discussions conclude between the new investors and the current owners.

Mr. Sale: I would ask the minister to reflect on the difficulty that I think we are launched upon here. You are telling us that you have a fixed-price contract in principle. That is--I do not mean to put words in your mouth--you have an in-principle agreement should other pieces fall into place, should the whole deal become in some sense viable. Dominion Hunt has agreed to undertake construction for a fixed price. In verbal discussions with MEC they have assured you that the private sector will absorb any costs above $111 million.

We have acknowledged that there is a $17 million problem right now that you are attempting to address with your federal counterparts, trying to shave the project perhaps, but basically to deal with that $17 million loss. You are saying to us they will come in and pick up any overruns. You are then saying to us that future team losses are the private sector's problem under your understanding of the current structuring of the deal. And that is why we are talking about a $60-million endowment fund or sinking fund or whatever.

I ask you to put yourself in the position of future provincial governments and city councils and see the sinking hole that is here. We run out of the sinking fund in five years. We are talking about a $60-million fund. I have not heard a bigger number; $30 million of it goes in the next two years. Maybe it earns 8 percent, maybe it earns $9 million or $10 million against which $30-million losses are taken. It is down to $40 million before we start, before the team starts to operate.

You were talking about in your earlier comments the escalating losses in the order of $20 million, $25 million, $30 million because of salary escalations. There is no revenue sharing; there is no salary cap. In effect, the Burns Commission said a year ago, under the assumptions of the Burns Commission a year ago before the escalation, before the strike, before all the stuff that has happened since then, that this was a razor-thin deal at $111 million. We are now up to $111 million, plus infrastructure, plus tax forgiveness in total, and salaries have escalated some 40 percent in that period of time. You are suggesting to us that we can backstop this project and believe that the private sector is somehow going to find money for cost overruns when in a year of frantic fundraising they have not been able to find money to purchase the team in the first place.

I understand the virtue of trying to say, well, the private sector is doing this and the public sector is doing this and never the twain shall meet. The bottom line is we will be left holding a large bag. We will have a big building, and we will either have no tenant or we will have a tenant that under every assumption that Marcelle Aubut and others have come to when they have tried to figure out how to make hockey viable in small markets that we will be losing money in a steady stream. I do not understand how you can say, well, the private sector will pick up the losses, the private sector will pick up the cost overruns. The private sector has not been able to pick up the puck so far. How can we have any assurances that they are going to be able to do that?

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Mr. Stefanson: Mr. Chairman, I guess I have more confidence in the people of Manitoba and the private sector and citizens that have been involved in this initiative than the member for Crescentwood. To date they have commitments and have raised approximately $64 million. The scenario the member outlines is the private sector will raise $111 million, they will end up with an endowment fund, he is close to correct, I believe, of $60 million to $70 million. Obviously they will be trying to keep losses down to a minimum during the two-year period that they are responsible for. Some would suggest there is a capability of maybe doing that so even accept the member's comment, he says that ultimately a net endowment fund of $40 million might end up being a little bit higher.

I outlined to him earlier the shortfall that MEC found themselves with back in late April after the revised information they had on players' salaries and so on, that basically the ability to service $40 million of debt had vanished in the interim so they have now replaced it with an endowment fund. That is under a scenario that allows for a reasonable adjustment to player salaries and can allow the team to obviously break even.

There are over 100 other events to take place in that facility. The arguments that have been made in this community for years are that a new entertainment complex will generate significant additional revenue sources for the combined operations.

I think many of us are more confident in Manitobans and confident in the business plan, in their ability to pay losses going into this arrangement, if one is ever entered into, that that will be the responsibility of the private sector. If, as the member describes that all of those things happen, that the endowment fund is utilized and there is a lot of bleeding taking place from losses, then at that point in time somewhere years down the road, the collective community, the private investors and so on will be faced with a decision at that time of maybe having to dispose of the team. But I think the endowment fund, the plan they are putting in place and with the additional revenue sources that can be derived over a period of time that they can sustain this and keep professional hockey and the Winnipeg Jets here for many decades.

Mr. Sale: Mr. Chairperson, I thank the minister for his answer. Am I to understand, as I think has been the case even from MEC's business plan, that all of the revenue from every event in this new entertainment complex will go to subsidize the Jets? All of the net revenue?

Mr. Stefanson: All of the net revenue from the facility will go to the combined operation of the hockey club and the facility.

Mr. Sale: That is what I was afraid of, that every single thing that happens in that arena is being put on the altar of professional hockey, and I think that is an obscene offering to be offering up to the gods of the NHL. We seem to be willing to bring in virtually anything into the city that might be of value and take the net proceeds from that and hand it over to the professional hockey franchise. I just want to ask again, is that what we are saying? The net revenue, the profit from anything that happens in the entertainment complex, will go to the MEC or its Spirit of Manitoba successor, whatever it is called?

Mr. Stefanson: Mr. Chairman, I think the other point to make is that a high-quality entertainment facility will allow Winnipeg and Manitoba to host a whole series of other events. This facility will be used for hockey 40 to 50 times a year. It will be used for other events well in excess of another 100 to 150 times a year, events of all natures, so it will be something that will be utilized by not only hockey fans but by people who enjoy arts, culture, other forms of entertainment and so on. If the combined operation generates a profit, that profit is then to be shared with the public, but if the requirement is that those operations, that that revenue is required for the combined operation to sustain itself, that is the basis of the discussions.

Mr. Sale: The minister has talked about the fundraising effort that took place, and I certainly would not ever disparage the citizens of Manitoba who came forward to try and save something which seemed very important to them at the time.

Can the minister confirm that on May 1 the acquisition cost of the Winnipeg Jets suddenly changed from $50 million--or $32 million, in fact, was the option price--to some significantly larger amount of money, unknown but significantly larger?

Mr. Stefanson: May 1 was the deadline for MEC to exercise their option. As the honourable member knows, they did not exercise their option on May 1.

Mr. Sale: I believe the minister knows that the current proposal is to buy out Mr. Shenkarow's shares from 64 percent--Mr. Shenkarow and his partners--from 64 percent down to, I believe, 22 percent for $32 million. Am I correct, Mr. Chairperson?

Mr. Stefanson: I am not sure the percentages are entirely precise, but the principal is correct. The current owners are prepared to dispose of a portion of what they own and to potentially contribute the residual value to a new entity, to a new arrangement.

Mr. Sale: Mr. Chairperson, then I think what happened in that outpouring of public sentiment was that essentially the citizens of Manitoba came up with $13 million, which really in effect simply became part of the new equity of the team because the May 1st deadline was missed.

Instead of being able to acquire the asset for the price, we now have to acquire it for a higher price. If you do the arithmetic, I think you will find that the higher price is about $13 million--$12 million or $13 million.

So the public of Manitoba simply dumped $13 million into Mr. Shenkarow's and his partners' pockets in that week.

Mr. Stefanson: No, the member is incorrect. The cash that is being talked about being exchanged with the current owners is the same level of cash that has been talked about consistently over the course of the last year, $32 million.

All that is being talked about is, there is a higher value, higher fair market value, and that the existing owners would get some credit for the residuals. So the capital that has been raised from Manitobans would go as part of the $111 million into the acquisition based on the same price that was in place over the course of the last year, and the residual would then spill over into the endowment fund, which is clearly the understanding of Manitobans.

I think the objective of Manitobans who contributed were doing it on the basis of wanting to find a long-term solution to preserve professional hockey here in Manitoba and obviously see a new high- quality entertainment facility built in our province.

Mr. Sale: My last point, I believe then, Mr. Chairperson, that Mr. Shenkarow and his partners are left with an asset worth--at $50 million they are left with an asset worth $11 million; at $100 million they are left with an asset worth $22 million, if my percentages are approximately correct. Is that your understanding?

Mr. Stefanson: Basically, I think your percentages are a little high but, yes, and of course they will only realize on that asset if and when it is ever sold and relocated outside of Winnipeg, something that everybody has worked toward not seeing happen. So that is the only time that they would ever benefit from that residual value.

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Mr. Maloway: I would like to ask the minister if he could provide us with a copy of the Coopers & Lybrand report.

Mr. Stefanson: Mr. Chairman, I will take that as notice and determine if that could be done.

Mr. Maloway: I would ask the minister if he could also provide us with a list of the luxury box owners.

Mr. Stefanson: Mr. Chairman, that entire side of this whole transaction has been performed by the MEC group. That information has remained with them up until this point in time.

Mr. Maloway: Could the minister endeavour to obtain a copy of this list of luxury box owners and provide it to us?

Mr. Stefanson: Mr. Chairperson, I am wondering if the member is wanting everybody who has applied to have a season ticket with the Winnipeg Jets, but I will look into that matter.

Mr. Maloway: Mr. Chairperson, well, I have no further questions at this time.

Mr. Assistant Deputy Chairperson: 1. Administration and Finance (1) Minister's Salary $22,800--pass.

Resolution 7.1: RESOLVED that there be granted to Her Majesty a sum not exceeding $990,700 for Finance for the fiscal year ending the 31st day of March, 1996.

The next set of Estimates that we will be considering by this section of the Committee of Supply are the Estimates of the Department of Education. This completes the Estimates of the Department of Finance.

Shall we briefly recess to allow the minister and the critics the opportunity to prepare for the commencement for the next set of Estimates?

Mr. Sale: Mr. Chairperson, I would like to thank the minister for responding as graciously and as frankly as he could to my questions. I appreciate his attempt to answer them as best he could.

Mr. Assistant Deputy Chairperson: I wish to thank the member for those comments.

The hour being now 10:11 p.m., the committee will recess from 10:15 p.m. Committee is recessed.

The committee recessed at 10:12 p.m.

________

After Recess

The committee resumed at 10:20 p.m.

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EDUCATION

Mr. Assistant Deputy Chairperson (Gerry McAlpine): Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Education and Training.

Does the honourable Minister of Education and Training have an opening statement?

Hon. Linda McIntosh (Minister of Education and Training): Mr. Chairman, I am pleased to assume responsibilities as Minister of Education and Training and really feel that the path ahead is both exciting and challenging as this government continues to renew the education and training system in Manitoba.

I look forward to being able to build upon this strong foundation of renewal activities established by this government under the previous minister, and am most excited by the changes and the direction in which we are heading.

Despite the difficult economic times and coupled with the reduced federal support, Manitoba has maintained a strong commitment to education and training. The '95-96 operating support for public schools will remain at the '94-95 level. Provincial grants to community colleges will increase and college tuition fees still remain among the lowest in Canada. University funding remains at '94-95 levels and an additional $1 million incentive fund has been established to support innovation and to stimulate change in university education.

The '95-96 Estimates further the course of action this government has taken towards education renewal, both at the K to Senior 4 and post-secondary levels. We want the best system possible for our students.

As we proceed with the '95-96 departmental Estimates, I would like to highlight several initiatives. Proceeding with the implementation of the actions and time frames detailed in renewing education New Directions, including such actions as the release of the policy document A Foundation for Excellence, this will communicate the new requirements and expectations for kindergarten to the Senior 4 programs, begin standards testing in Grade 3 mathematics, develop revised curriculum for the compulsory core subject areas, continue the development of curriculum outcomes and standards in collaboration with the western consortium and the Pan Canadian Protocol, work with our partners to establish advisory councils for schools, offer school leadership and strengthen parental and community involvement, release guidelines for school plans, make legislative provision for parental choice of schools within the division.

These and other specific actions are directed at the six priority areas for education renewal: essential learning, standards and evaluation, school effectiveness, parent and community involvement, Distance Education and Technology, and teacher education.

Government has taken a comprehensive approach to education renewal. Only through concerted actions across these critical areas will the positive results be realized. The six new directions have been identified through discussions with our partners in education with input through public consultation and are based upon the education literature.

Post-secondary form will continue. The government has responded to the recommendations of the Roblin report and has identified a number of key tasks to be completed by the universities, the community colleges and the department. The University Review Commission emphasized the importance of the future development of the post-secondary education system to a rapidly changing society and economy.

The government shares the commission's vision of a system for Manitoba that is strong, healthy and dynamic, thus ensuring the long-term social, cultural and economic growth of the province and committed to the career aspirations of our citizens; fully integrated and well articulated, linked to the social, cultural and economic developments of the community through the functions of teaching, training, research and service; broadly accessible to all who wish to obtain a post-secondary education; transparent and accountable to the public and committed to the broad application of communications technology to the learning process.

Working with our education partners in renewing teacher education. Teachers are fundamental to ensuring effective change in kindergarten to Senior 4 education. Our New Directions for Education will call for some new skills and knowledge on the part of teachers and principals. The need for review of teacher education and certification was expressed in public consultations and is clearly supported by education stakeholders. The board of teacher education and certification has met several times to discuss teacher education reform and to develop a set of recommendations for the minister's consideration. These recommendations will address the following: the expected learning outcomes of teacher education, the screening process for entry to teacher education programs, curriculum design, practicum experiences, length of program, certification requirements and roles and responsibilities of all education partners.

We want teachers who have the necessary skills and knowledge to ensure the best education possible for Manitoba students. We want teachers who know the discipline they teach, are skilled in teaching methodologies, can communicate clearly, can utilize educational technologies, are able to measure student performance and can function effectively in a system that is committed to partnership.

We continue to revitalize the apprenticeship program. This will increase program options for adults and high school students across the province. Revitalizing of apprenticeship will involve renewing and updating course content in existing trades, establishing a framework for the development of new apprenticeship trades, implementing the aboriginal apprenticeship training, implementing high school apprenticeship program.

We will complete the development of the education information system, a database which will provide useful information about students and how well they are doing in the system. The blueprint emphasises the need for clearly defined learning outcomes, measurement of these outcomes, accountability and the use of information for planning. The education information system will help us achieve these goals. Key benefits of the EIS project are a more efficient co-ordinated data collection process, ability to more accurately identify student results and trends to allow for appropriate policy development curriculum and administrative planning, the ability to track student flows through the system and provide longitudinal data on student development and progress through the education system, increased validation and consistency of information, increased ability to assess the education system as a whole by evaluating inputs, processes and outputs.

We will continue to improve the quality of education in Manitoba through reviewing the Boundaries Review Commission report and working with school divisions on those recommendations. The government is most interested in our partners' views of these recommendations and has asked the commission to solicit feedback.

While the department supports, in principle, the thrust and the intent of Boundaries Review recommendations it was felt that some of the specific recommendations would benefit from further public and stakeholder feedback. Therefore the government has asked Mr. Norrie and the commission to conduct further consultations in regard to specific recommendations.

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We intend to implement the new federal-provincial strategic initiative, Taking Charge!. This will co-ordinate programs and services involving government, community groups in the private sector, benefiting more than 4,000 sole-support parents.

The intent of the project is to test and demonstrate over a five-year period an integrated accountable model for delivering services to single parents who are social allowance recipients. In addition to close federal-provincial collaboration, this new approach will require active partnerships with employers, service providers and the community at large.

We will develop articulation policy with respect to education credit transfer. This will provide common standards of progress for students throughout the province. The government has made a commitment to strengthen articulation across educational institutions.

A number of initiatives are underway or planned for 1995-96 to increase the level of systemic articulation in credit transfer in Manitoba. These include: establishing a process for credit transfer and program recognition between colleges and universities to facilitate movement of students as indicated in the government's response to the Roblin report; developing articulation between secondary schools and apprenticeship, for example, high school apprenticeship option; strengthening articulation between high schools, colleges and universities; and exploring articulation between the secondary school system and the literacy/adult basic education; continue working with the federal government in carrying out the social security reform initiative.

This will involve unemployment insurance reform, the creation of the Canada Health and Social Transfer, the creation of the Human Resources Investment Fund and reform of the Canada Pension Plan and the old age supplement, all federal initiatives that have significance for us in Manitoba.

Furthering the implementation of the Distance Education and Technology initiative will involve development of telecommunications networks, for example, interactive television network; utilization of the community-based advisory structure, for example, Distance Education and Technology Council, regional consortia post-secondary subcommittee; establishment of an agency for community-based operations, MERLIN, Manitoba Educational Research and Learning Information Networks; implementation of significant initiatives such as library linkages, pilot projects grants, technology integration in curriculum, curriculum/new media, middle years multimedia software, technology and science resource centres.

Literacy training will be increased by $500,000 over the next five years. Providing opportunities for Manitobans who do not have the basic skills of literacy is an important component of strengthening our education training system. This initiative is also in keeping with an emphasis on a community-based approach to education.

Strengthening the ACCESS program. The ACCESS program objective is to provide post-secondary educational opportunity to residents of Manitoba who have limited educational opportunities in the past due to geographic, financial and academic barriers. A comprehensive review of the ACCESS program was conducted in 1994. Adjustments are being made to the program based upon this evaluation.

The special education review will commence. In 1989, the Minister of Education released the Special Education in Manitoba, which provided policy and procedural guidelines for students with special needs in the public school system. Since 1989, policies and procedures have continued to be clarified and strengthened. As education renewal is implemented, there is a need to review long-standing policies, programs, services and procedures, to ensure that they are operating effectively and efficiently.

We must ensure that students who need special help are afforded that help, so that they can achieve their potential. Services should be delivered through a partnership approach that involves the child's family. There must also be a co-ordination of services to ensure children are getting appropriate assistance, and that is why we have embarked upon this review of special education to ensure that the resources we put into special education are being used in the best possible way.

In closing, I am looking forward to the Estimates process, and I look forward to discussing these and other initiatives in more detail as we begin our discussions here. Thank you, Mr. Chairperson.

Mr. Assistant Deputy Chairperson: We thank the honourable Minister of Education and Training for those comments. Does the official opposition critic, the honourable member for Wolseley, have opening comments?

Ms. Jean Friesen (Wolseley): Mr. Chairman, I would to thank the minister for her introductory remarks and look forward too to the kind of discussion that is possible in Education.

When we look at education from the perspective of the people whom I speak to, the students, the teachers, the parents, many of the same people who speak to the minister as well, that there are, I think from their perspective, many exciting times in education, many exciting things going on in the classroom.

Occasionally, and perhaps even with increasing frequency, these are being noted in the local press. The recent article, for example, on the awards to students in architecture, I thought was unusual for the press as indeed has been the more recent article on the students in Austin. All of us, I think, are aware from our own constituency areas of the awards to teachers, whether it is for library work, or whether it is for innovative new programs over the development of multimedia. All of those, I think, have had awards to Manitoba teachers. Everyone of us, I think, can speak of perhaps miracles that are happening to students who are in mainstreamed classes, both those students with disabilities and those without.

We know teachers who are heroes and heroines in the issues which they have to face every day, whether it is the increasing poverty of their students, the increasing difficulties, whether it is violence or whether it is hunger that students are facing, yet teachers are dealing with those at increasing numbers and under increasingly difficult conditions, whether we look at physical education and we look at some of the individual stars that we have in Manitoba or whether it is some of the teams that each of us could recognize in our own constituencies where there have been very good physical education programs and athletic programs put into place, or if we look at the universities and colleges and we look at the numerous awards which have been won by all universities in Manitoba, or the Red River College graphic arts program, for example, which is increasingly winning kudos across the country.

As we go to graduations in our ridings, as all of us will be over the next month, we will see, as I see, for example, at Gordon Bell, individual students who against all odds, many of them living alone, many of them beginning from a basis where English two years ago was not their first language and yet are now graduating not only in maths and science but in other programs as well with very high graduation numbers.

There are very good things going on in our schools, and all of us know that. I think many of us would welcome a Minister of Education who spoke of those successes and those victories on a daily basis. If there is one thing, I think, which a new Minister of Education could do and could contribute to the morale across Manitoba of parents, students and teachers and trustees, it is to speak of those successes day after day and to ensure that we have a minister who is visibly and evidently supporting the successes in public education.

I think that is one of the things I heard most frequently on the doorstep is that sense of being let down by previous Ministers of Education, people who believe rightly or wrongly that the interests of this government were not in public education. Well, we have again a fourth Minister of Education in the terms of this Conservative government and that would be, I think, a very welcome change from all of the previous ones.

Perhaps one is tempted to say it is the best of times in the sense that we all know of people who are making enormous strides against the greatest of odds. But it is also the worst of times and I think nobody who knocked on doors across Manitoba over the last month can come away unaware that there is great concern about the future of education and about the future of our students.

We will find, for example, teachers under enormous stress as they look across the province now and they see the loss of 270 teacher positions. Inevitably they know that stress will increase as their class size becomes larger and as the number of students with whom they have to deal, often with special difficulties and now without teacher-aides, those stresses will increase.

We know that the trustees--and I know that the minister has met recently with them, and our caucus met with the Manitoba Association of School Trustees today--we know that they are under enormous stress as they try to deal with the consequences of the funding that has been allocated to them by this government over the last two years. The zero percent this year, which has meant for many school divisions, not just zero, but cuts of much greater magnitude, and of the decreases that the public school trustees have found over the last two years.

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I know that we will be discussing some of that and the consequences of that during this session.

These are school divisions and school trustees who have been pressured by this government, rightly or wrongly, to spend their reserves. Prudent financial management was not rewarded by this government in the past. There are great anxieties amongst trustees about the kinds of situations which they have been forced to leave themselves open to. I expect that we will have the opportunity to look at that.

We have seen over the last six years, four Ministers of Education, each of whom has had their own agenda for the school system of Manitoba. Some of those ideas have been reasonable; some of them, in my view, were not. Most of them came at a pace so rapidly and with an authoritarian structure, particularly under the last minister, which I think left many parents, students, teachers and trustees simply gasping for breath.

The education system is a very large one. It moves slowly, and it needs to move with consensus. The last Minister of Education, and I would say certainly elements of the two previous Ministers of Education, sought to do that in a very different manner. I think some of that speed, some of that haste, some of that centralization, was done very deliberately. It is my view--and I have expressed this before about the previous Minister of Education, and we are, of course, living with the consequences of what he did--what he chose to do was to deal on a number of fronts, whether it was with school boundaries, whether it was with two consequential cuts to school funding, or whether it was in the so-called reform package.

I noticed the minister is using the term "renewal" today. I do not believe that the entire package was one of reform; it was certainly one of change. I believe that language is important, and I think it is interesting perhaps to limit the use of that word "reform" when dealing with that last package.

But what the last minister chose to do was to deal on a very large front with a number of very rapid and dramatic changes to the educational system. I personally believe that it was politically motivated with both the small p and a capital P. Its intention was to ensure that the partners in education were facing dramatic change on all fronts. It was done very quickly, and I will say that there are other jurisdictions which did exactly the same thing, whether it was Vander Zalm or whether it was Margaret Thatcher. The political goal is to have everybody fighting in different directions and to have things happening very quickly so that there can be no one focus.

For a time, the minister was successful, but I noticed that during the election, much of which was predicated on ensuring that all Manitoba households had three and four doses of literature from this government on educational reform, but they must also have been doing some polling at the same time, because there were a number of elements to that education package which were quickly dumped during the election. It would be interesting to ensure in discussions with the minister whether those electoral changes remain because I think there is still some confusion out there as to what is yet to be reinstated, what is yet to be perhaps brought in on a slower basis. So there are some concerns there, and it is interesting, I think, to see that some of those things changed quite dramatically and in exactly the ways that we had recommended to the minister in the months leading up to the election.

Now all of this is to speak of the last Minister of Education, and I wish the new minister well. I am concerned that she have an understanding of the fears and anxieties and concerns of people in the field in education. I think one of the things that people want to know is: How different is she going to be from the last minister? So those are some of the questions that we will be putting.

Students, I believe, are feeling enormously under pressure, not just in colleges and universities and post-secondary areas, but also in high schools and, to perhaps a lesser extent, in the junior high schools, because they do begin to see, even at that level, the prospect of a job slipping away from them. The opportunities, those for the most of us who are represented at this table and in this room, do not seem to be there for that younger generation, and they are becoming increasingly aware of it. This has great implications for the discipline that is possible in the classroom, for the work of teachers as well as for the overall work and goals of this department.

Parents too, I think, begin to see those concerns, and I think much of the anxiety about education is in fact driven by that anxiety about jobs and future. The government has been able to, I would say, exploit those anxieties to put in place a particular aspect of change which they believe to be reform, but it is only one element. I think we do need to take account of the deeper concerns that are there amongst both parents and students.

I am interested in post-secondary education as well and, as the minister will know, interested in discussing issues of Workforce 2000, of the labour force development programs of the labour force strategy, as well as of some of the apprenticeship changes which she has mentioned and some of the prospects for employment that might be coming out of that. We are, as the minister has mentioned, in a period of dwindling resources, and that too adds to the problems which all the partners in education are facing. It is one that is in part a result of unheralded and unpredicted changes in federal policies, ones on which they did not campaign and on which I think they have betrayed the trust that was enlisted upon them by thousands of thousands of people across this country. The withdrawal of the federal government from post-secondary education is going to have very dramatic impacts for Manitobans and for all small provinces with very limited resources for finding alternatives.

We should be aware that the federal reductions are coming, not just in the 27 percent reduction we have seen in community colleges in this fiscal year but, by the year 2001, I believe, or 2003, the total withdrawal of federal redistributive grants for post-secondary education. At the same time, the federal government is also withdrawing from areas of research, and those, again, for small provinces and particularly for a province like Manitoba which has, for the last 15, 20 years, had a strategic area of development in medical research. These are reductions and withdrawals which are not to be taken lightly. They have enormous impact for the future, and we are beginning to see the consequences of them even now.

I am also concerned about the community colleges. We did raise some questions in the House today. I am sure the minister has been informed about them, about the cuts to community colleges that have occurred. The long-term role of the community colleges in Manitoba, I believe, has to be dealt with very seriously by this government. The government, as the minister has said, has added two-point-something million dollars to the colleges this year, but I do not believe that yet we are even up to the level of community college funding that we were when this government took office. There were some serious reductions a number of years ago, and although in the last two years the government has returned monies to the community colleges, they are returning them to colleges which are now seriously being undermined by some of the federal withdrawals in this fiscal year.

We look also at the changes to the Student Loan Program across the country, and we see not only has this government withdrawn from most bursary programs, but it has also withdrawn from other funding of post-secondary students, whether it is to some of the ACCESS students or whether it is in the loss of the student appeal board and the loss of some of the student funding that was there three years ago. The government did, in its election platform, make a proposal for an $8-million credit to students and their families for relief for fees. I will be interested in discussing that further with the minister during this particular session of Estimates.

Student loans, of course, and the whole change in job prospects and student financial abilities are having a serious impact, it is believed, this year on enrollments in universities across Manitoba. It appears evident that the reduction in enrollments in universities, the drop, the decline, is considerably greater in Manitoba than it is in other provinces. I think this is a matter for serious concern for the future of the province, not just for those students who no longer see a post-secondary university education as within their reach. Of course, the next step from that is, where do these students go? Well, they will not be going to community colleges, because we know that the number of students in community colleges in the diploma programs and the number of diploma programs have not kept pace with any prospect of that increased demand.

My emphasis in Question Period recently upon planning, upon a minister who looks at the prospects for those students and those families and for the long-term economic prospects of Manitoba, something that I want to draw to the minister's attention, I hope to have the opportunity to discuss that in a broader sense under the Estimates here this year.

With that, Mr. Chairman, I will turn to the first section.

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Mr. Assistant Deputy Chairperson: I thank the critic of the official opposition for those comments.

Under the Manitoba practice, debate of the Minister's Salary is traditionally the last item considered for the Estimates of the department. Accordingly, we shall defer consideration of the item and now proceed with the consideration of the next line.

Before we do that, we invite the minister's staff to join us at the table, and we ask the minister to introduce her staff present.

Mrs. McIntosh: I am pleased to introduce to the committee John Carlyle, who is Deputy Minister of Education for Kindergarten to Senior 4; Jim Glen, the Assistant Deputy Minister of Administration & Finance; John Didyk, the Executive Director of Planning & Policy Co-ordination; and Tom Thompson, who is the Director of Finance and Administration; and also Jean Britton, the Assistant Director of Planning and Policy.

The staff members are here with me this evening, Mr. Chairman, and I appreciate very much the help and support they have given me as I have come into this new portfolio. In the few weeks I have been here, they have imparted a measure of knowledge to me which I hope I will be able to put forth to the critics in ways that suit them and answer their concerns. I thank the staff for taking the time to join me this evening.

Mr. Assistant Deputy Chairperson: We thank the minister. We will now proceed with line 1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits on page 37 of the Main Estimates book. Shall the item pass?

Ms. Friesen: Mr. Chairman, I wonder if I could ask some questions about different sets of numbers which I seem to have here under Item 16.1(b). It might take me a little while to explain it. I am working from three different books. One is the most recent Annual Report, '93-94, just tabled in the Legislature. One is the Departmental Estimates for '95-96, and the other is Departmental Estimates '94-95. I am just trying to draw some comparisons between the Estimates, and I am just taking this line 1.(b). In the Annual Report for '93-94, it lists the estimate for '93-94--and what I am trying to do is to get a comparison of the numbers, so it is not that I am going to do this for every one. I want to try and figure out why they are different. The '93-94 estimate is listed as 370.5 in the Annual Report, and the actual is listed at 361. In last year's Estimate book, the Estimated Expenditures is listed as 397 not 370. Why would that be? There is not an actual given, obviously, as there is not in--

Mrs. McIntosh: I think the member might be referring to the fact that through adjusted vote, a second deputy minister position was created for Training and Advanced Education in the department's Executive Support Branch, and that, of course, would make a change.

Ms. Friesen: Mr. Chairman, that may indeed indicate why there is a difference in the numbers, but why would you have an Annual Report that estimates 370 and a Supplementary Estimates book which says 397 for the same number? I mean, it is the same issue reportedly differently in two different books.

Mrs. McIntosh: We will come back with that answer tomorrow because we do not have that answer right now, but it is a good question and we will check it out and come back with the answer as soon as we get it for you.

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Ms. Friesen: My sense was, I did check a couple of other ones and similar discrepancies existed. It is unfortunate that I cannot do it for last year, I only have the year before to be able to compare them. I am drawing your attention to this as an example, not as an isolated event. Maybe you would want to check some of the others too.

Mrs. McIntosh: This is all a result, of course, of an adjusted vote so there will be a trail which we just do not happen to have with us in our documentation tonight. As the votes are adjusted it will be possible to trace back, we will get the appropriate papers, trace it back and come back to you with an answer.

Ms. Friesen: Following on from that, as in a number of cases in the Department of Education, there is considerable underspending in some years in certain lines. In the case of '93-94, and I am looking at 16.(1)(b), the Executive Support, the underspending, whether we take that 397 or 370 number, the actual number according to your annual report was 361. Was that in fact the actual for 93-94? Should we accept that or is that likely to be different given the differences in the other two numbers?

Mrs. McIntosh: Again, this will be the result of an adjusted vote and there are a number of factors that it could be, but we need to go and get the proper documentation to ascertain exactly which of several factors it could be that account for that. We will do that and bring it back to you.

Ms. Friesen: What I am looking for is the actual spending for '93-94 on that one.

Can I move to the similar issue for '94-95? The estimated amount for '94-95 was 541.1. I wonder, would the minister's staff have with them what the actual spending amount was?

Mrs. McIntosh: The '94-95 expenditures are being wrapped up right now, so we do not have the actuals here. Those will in all likelihood be brought forward in the fall, in September sometime.

Ms. Friesen: I wonder if we could look generally at the Executive Support here? What I am interested in is the relationship between--and I know I am jumping one page ahead. The Planning and Policy Co-ordination seems to have some overlap with the policy and implementation advice to the minister. Those are two different, 16.1(b) and 16.1(c).

Could the minister describe for us how those two policy areas work in providing advice, or what are the differences between the two? There are four professional staff years, I gather, providing policy and implementation to the minister under 16.1(b), and there are five professionals in the Planning and Policy Co-ordination. How does their work differ?

Mrs. McIntosh: The Executive Support is the minister's office, the deputy minister's office and the support staff that are in those two offices. Those two offices, of course, provide the educational leadership to Manitoba Education and the systems under Manitoba Education, also supply administrative leadership to the department to ensure effective, efficient co-ordination and the use of human, physical and financial resources.

Planning and Policy Co-ordination is a separate branch, separate and apart from the minister's and deputy minister's offices and the staff that are in those offices. Planning and Policy Co-ordination is responsible for ensuring department-wide planning, ensuring that it is corporate in nature. They work closely with the senior staff, both in the department, and within both of the department units. They have to make sure that the department's macro plan is fully implemented. That branch is held accountable for monitoring progress on government initiatives. They are responsible for ensuring a corporate approach to policy development as well. They work directly with senior managers, again, within both units to provide a department-wide perspective and an accountability framework for policy development.

Ms. Friesen: Could the minister give us the names of the people whose salaries we are looking at now in the Professional/Technical categories and the Managerial under 16.(1)(b)?

Mrs. McIntosh: I will start with the two obvious ones, the two deputy ministers--John Carlyle, who is Deputy Minister of Kindergarten to Senior 4; Paul Goyan, who is Deputy Minister for Training in Post-Secondary Advanced Training.

In the minister's office you have Pearl Domienik, who is secretary to the minister; you have Sharon Curtis Leslie, who is secretary to the minister; and Linda Kuhn, who is also is secretary to the minister. Those are the three clerical staff. Cindy Carswell is currently serving as special assistant to the minister. You have the executive assistant, Beverly Harris.

In the deputy minister's office, Nicole La Roche, who is executive assistant to the deputy minister; and Diane Saaid, secretary to the deputy minister. I apologize to any staff if I am mispronouncing the names, because we are new to each other. We all know our first names and I may be getting the pronunciation a bit incorrect on the last ones.

Pat Lavoie is executive assistant to the deputy minister in Paul Goyan's office; and Gail O'Neill, secretary to the deputy minister in Paul Goyan's office. That gives two managerial, four technical and five administrative.

Ms. Friesen: Which are the four technical people?

Mrs. McIntosh: The special assistant to the minister, executive assistant to the minister, executive assistant to the deputy minister and executive assistant to the deputy minister in both of the deputy minister's positions.

Ms. Friesen: Could we look at the proposed increases in these Estimates from the Managerial staff from $161,000 to $200,000? Is that split equally between the two?

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Mrs. McIntosh: This year you will see the full creation of the position of Deputy Minister for Post-Secondary Advanced Training. The primary increase in salaries does relate to that. That position was created in '94-95. It was found from within the division, and the $38,400 increase reflects the reclassification of the original position, which brings that deputy's gross salary to $92,700. The other salary increases relate to merit and pay scale adjustments.

Ms. Friesen: Mr. Chairman, the $92,700 for the second deputy minister in Education, could the minister indicate why that decision was taken and where this ranks in the level of deputy ministers?

Mrs. McIntosh: Yes, I should indicate, and I am not sure if I clarified it in my first response, that this is a reclassification. That position, that deputy minister, came from another department, and it was reclassified to this Level 2. Because it used to be an ADM position, it was reclassified to Level 2. The reason for that was because we wanted to have increased recognition of some of the major changes and so on that will be going at the post-secondary level.

Ms. Friesen: Madam Chair, at a time when the colleges have been given their own governance, and presumably there is less detailed supervision of colleges, activities and finances, what is the justification for a second deputy minister? This is the only department, I assume, with two deputy ministers. Even Health does not have two deputy ministers.

Mrs. McIntosh: I consider, and my government considers, the Department of Education to be one of the most, if not the most, important department because it is from the education environment that you train the medical people, for example, to work in the health field and so on, so a very, very important level. There are massive changes going on in education right across this country, right across North America. We have the Roblin Report. The Roblin Report was put out as a challenge to the universities and colleges. The colleges, the university, post-secondary training, apprenticeships, articulation, all kinds of things going on at the post-secondary and advanced training level, working with industry, preparing for the workforce, innumerable events that we felt and that the students of the university feel warrant attention that can be devoted solely and straight to that area. Everybody in education is happy about this decision. Some would like us to go even further and appoint a separate minister as well.

I am disappointed, gravely disappointed, that you phrased your question in such a negative way, because I would hope that you would support this thrust since you do seem to have an interest in post-secondary education. So I hope that you will support this positive initiative done in recognition of all the things we are doing to help prepare our country, our province for a new millennium which is coming up within five years, supported by and at the request of the students to whom we are all ultimately accountable. In your wish to see me do well, as you indicated in your opening remarks that you sincerely wish me to do well, which I appreciate and I trust that you are being sincere when you say that, you would support this as well.

Ms. Friesen: Mr. Chairman, the issue is not whether I support it or not; the issue is how the minister explains what is a remarkable change in departmental and government policy. This is, in normal circumstances, under the Civil Service Commission, the classification and appointment of deputy ministers and assistant deputy ministers. In fact, all of senior levels of the bureaucracy relate to the scale of the budget of the department and the number of people who are supervised.

I am curious, at a time when the government has chosen to divest itself of direct responsibility for community colleges and gone to a board governance system, that it would then choose to have two deputy ministers. It is not an issue of whether I support it or not, nor is it indeed an issue of the individual in this particular case at all, or in any case. It is an issue of government policy and how ministers, deputy ministers and assistant deputy ministers are appointed and what scales we are looking at

for each of them.

Mrs. McIntosh: Perhaps we do not have the same understanding. The member indicates that we have divested ourselves of responsibility for colleges and indicates, because of the request, because of that, the need for a deputy minister for post-secondary education, and I still maintain that the question is phrased in the negative. Contrary to all protestations that could be made, I hear a very negative connotation in the way the question is phrased, and that is just what I read. But we have not divested ourselves of responsibility for post-secondary education. We have--

Point of Order

Ms. Friesen: On a point of order, Mr. Chairman, I think that before the minister goes too far along that line, I should perhaps just remind her that I said: divested themselves of direct responsibility for colleges and gone to a governance system, which, I think, describes what happened.

Mr. Assistant Deputy Chairperson: The honourable member for Wolseley does not have a point of order. It is a dispute over the facts. I would ask the honourable Minister of Education and Training to complete her remarks, please.

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rs. McIntosh: I appreciate the clarification, and I indicate that we have not divested ourselves of responsibility for post-secondary education. The deputy minister in charge of post-secondary education has a responsibility to look at all facets of training that occur once a student has left the kindergarten to Senior 4 system.

As well, we are now looking at articulation between colleges and high schools, so there is overlap that can occur. We have a number of initiatives going on at the college and university level that require attention, full-time attention, from a deputy. When we have changes occurring in reform and renewal at the K to Senior 4 level as well as massive changes at the university in terms of credit transfer, in terms of articulation, in terms of apprenticeship training and updating, we felt, as a policy decision, that it would be a good and prudent thing to do to have a deputy minister who could devote full-time attention to this vital area of training, retraining, advanced training, college and university, and apprenticeship programs. The students of Manitoba agree with us and have stated so, and, in fact, this is the first that I have heard a negative hint in a question about this topic.

Ms. Friesen: To repeat again, the issue is neither negative nor positive. The issue is an issue of the civil service. I do not know why the minister wants to or chooses to be so defensive on this. This issue is, this is one of the only departments that I know of which has two deputy ministers, and it is a department which is not the largest in budget or in personnel, so there must be a rationale for that that the government had very carefully considered. I am told now that it is an issue of training and of new initiatives in universities and articulation. So I assume that is the general job description of the new deputy minister.

Mr. Assistant Deputy Chairperson: The honourable member for Wolseley with your question.

Ms. Friesen: My question was implied. Is the minister saying that the job description for this new deputy minister involves training? All of the articulation, I understood that is what she was saying, the overlap in articulation from high school to college or university and the articulation that deals with apprenticeship as well as, I think she also said, new initiatives in colleges and universities. What I am interested in also is knowing whether this deputy minister is also involved with the special operating agency.

Mrs. McIntosh: The member has hit upon some of the key items that would be in the job description of the deputy minister responsible for training and advanced education. There are numerous items. I do not have his specific job description in front of me, but as the member knows, we do have a number of initiatives that are going on, strategic initiatives such as taking charge. We have a whole wide variety of items such as those. The member knows them well, I would think.

Also, the special operating agency, I presume you are referring to MERLIN, reports to the minister, and all MERLIN staff formally report to the CEO of that particular initiative, who, in turn, report to the minister. So the Provincial Council on Distance Education and Technology is MERLIN's advisory body, and the two deputies sit on that.

Ms. Friesen: In terms of financial responsibility and policy direction, the new deputy minister and in fact neither deputy minister has any input into MERLIN other than as one of a larger group.

Mrs. McIntosh: MERLIN reports directly to the minister, the CEO. The deputies sit on the advisory council. The deputies also, of course, advise the minister. So the minister issuing directions to MERLIN does so with advice from many quarters, in particular, advice from the two deputies.

Ms. Friesen: And the financial responsibility remains where in MERLIN?

Mrs. McIntosh: Ultimately, of course, all those responsibilities rest with the minister. It is me who is here tonight doing Estimates, not anybody else. So the minister bears all the accountability but, on a day-to-day basis, the CEO would do the onsite financial work, assume the recommendations, decision making, et cetera, on a daily basis.

Ms. Friesen: We will have the opportunity later to talk in more detail about MERLIN. Still, looking at the second deputy minister, and I wondered, since the minister mentioned the Taking Charge! program, is this second deputy minister responsible generally for federal-provincial programs in the post-secondary area or federal-provincial negotiations?

Mrs. McIntosh: Insofar as they fall under this jurisdiction, yes.

Ms. Friesen: Is it this deputy minister, and then would we be looking at this line and have the opportunity to discuss the project Winntek?

Mrs. McIntosh: Pardon me.

Ms. Friesen: The project Winntek.

Mrs. McIntosh: When we get to item 16.(4)(a), we will find we will come across those types of items under that particular deputy minister's purview, and we can go into some detail with him.

Ms. Friesen: Is it this group here, the Executive Support group, which would conduct liaison with other provinces in education? I do not mean the Council of Ministers of Education, I mean other kinds of liaison generally.

Mrs. McIntosh: The answer is yes, but not exclusively, because we have got many working committee meetings. We have got other people, myself, ADMs, the other deputy, who also will have occasion to be in communications and ongoing discussions with other jurisdictions. We are working with western Canada on the Western Canadian Protocol, for example, and the pan-Canadian and those types--we could go on. In terms of human resources, the Deputy Minister of Advanced Training would have occasion to be in contact with federal authorities on human resources training and those types of things, labour force development, that type of thing.

Ms. Friesen: I understand that there is also liaison, I assume that there is liaison with, I do not know what term to use, a central planning of the Premier's Office, where some issues of education might also develop the government's policy on education. Is that the linkage that would come through here, that would be here rather than 16.(1)(c)?

Mrs. McIntosh: Just for clarification, are you asking if government departments are aware of what each other is doing or work together to harmonize our programs?

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Ms. Friesen: No, I am looking for what appears to be and what is often claimed to be a centralized direction of government policy, particularly in education, where over the last year and a half, there has been a series of proposed changes which have formed the basis of government policy. Is this the area, is it these technical people or professional people here who would be involved in that kind of liaison?

Mrs. McIntosh: Overall direction given to government departments is normally set by cabinet and caucus. I am not sure what you are asking. Government will set the overall direction they wish to see government go. Staff will be brought in. Staff will assist with specific recommendations as to how and how best to implement and then work on the implementation. I do not know if that clarifies how the government, kind of, runs the government.

Ms. MaryAnn Mihychuk (St. James): I am sorry, maybe I missed--

Mr. Assistant Deputy Chairperson: Excuse me, could you pull your mike up closer.

Ms. Mihychuk: Can the minister please reiterate, if you have mentioned it, when the second deputy minister was hired and your intention for the position?

Mrs. McIntosh: He was brought over from the other department about a year ago--I do not have the exact month, but it would be approximately April '94--and brought over to deal specifically full time with post-secondary advanced training, apprenticeship, all those areas of preparation for work force that take place after a student has finished the kindergarten to Senior 4 level, although we are also now trying to get some articulation between high school and colleges that will see some overlapping there.

Ms. Mihychuk: Just to follow up then, is it my understanding that the second deputy was brought on to follow through on the initiatives that the former minister began, or is this a continual position, in your vision? Is this a long-term position or a position that is there to proceed with the initiatives the government has brought forward?

Mrs. McIntosh: This is a long-term position. This is a position that will be there. It is a continuous SY position and it is a recognition of the world we are now entering where training for the workplace has become highly specialized, where we have now, working with industry and business, been able to identify specific areas of training that are required by people who employ people. We are entering into a technological society--we are in it, we are not entering into it, we are in it. This requires a lot of retraining, in some instances, specialized training in technologies that did not even exist when I was in school. Mind you, that was a long time ago but, still, it is so relatively recent.

This is not a temporary position, it is not there simply because we have major reforms going on, although the extra body in terms of dealing with specific reforms is certainly timely and useful for that purpose.

We have had requests from students that we develop a separate ministry for post-secondary. That we feel is not necessary, but we feel having a separate deputy minister goes a long way and indeed seems to satisfy that need as new jobs--when I say new jobs I do not just mean a new job for a person that is a job that people used to fill before. I am talking about brand new work that was never done before that is now having to be done.

We are kind of in an era where as dramatic a switch as switching from candle makers to making electric light bulbs, switching from making buggy whips to making automobile parts. We are in that kind of a dramatic shift in society and in the world and in the things that people will be doing with their lives. So we deemed it appropriate and right that we have a deputy who could concentrate full time on the K to S4 and a deputy that could concentrate full time on the other areas of advanced training. That is not a temporary situation.

Ms. Mihychuk: Can the minister explain to me some of the organizational layout? Do the two deputies have proportionately similar staff reporting to them, staff numbers and staff budgets?

Mrs. McIntosh: We have about 300 staff in the post-secondary and about 425 in the K to S4, and the responsibilities in the costs of those staff would be in the same ratio. About 70 percent of the resources of the department remain with kindergarten to Senior 4 and about 30 percent for the post-secondary. Those are approximate percentages, rounding them off.

Ms. Friesen: Mr. Chairman, I was interested by the minister's suggestions as to why this new position was required. I certainly am aware that students are looking for a separate ministry, but she did give some interesting suggestions about brand new work and dramatic shifts that had occurred in, I assume, not just Manitoba but generally and the new kinds of work that will occur.

I wonder if the minister could give us some indication of what kind of brand new work is occurring in Manitoba that is at this--I assume she is talking about the high-end technical work.

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Mrs. McIntosh: When we get to Training and Advanced Education, under the section called Labour Market Support Services, we should be able at that time, and that is 16(4)(e), to go into a fair amount of detail on this whole aspect of the Estimates of expenditures for education.

Mr. Assistant Deputy Chairperson: Item 1.(b) Executive Support (1) Salaries and Employee Benefits $596,600--pass.

Item (b)(2) Other Expenditures $127,900--pass.

Item 1.(c) Planning and Policy Co-ordination (1) Salaries and Employee Benefits $428,700.

Ms. Friesen: I wanted to ask about one of the items here, where this is the group, I understand, which does deals with the Council of Ministers of Education. I wonder if the minister could give us a summary of what has happened in the last year with the Council of Ministers of Education, who is the current chair, who is the chair for this coming year, does the minister have an agenda for the coming year for her own participation in the council and does the council have an agenda for the coming year?

Mrs. McIntosh: The current chair is the Honourable Jon Gerrand. Monsieur Gerrand is the new chair of CMEC and, as to the number of meetings they have had, the ministers themselves meet a couple of times a year and staff will meet in between times.

We have another meeting coming up in September, I believe. That should be a very interesting meeting taking place in, I believe it is the Yukon, if I am not mistaken, in Whitehorse. A number of things that have been talked about would be, I think, of interest to the group here. One item that is of particular interest to me is this whole dialogue and conversation on Canadian standards in education.

I say of particular interest to me because, as I think you know, I was raised as the child of a career military officer and rooted here in Manitoba. My father joined the armed forces during the war and remained in it as a career military officer and ended up being head of search and rescue here, Air Command in Winnipeg, which the federal Liberals are now taking away from Manitoba, but that is another issue. Having been raised that way, of course, I spent every year of my life, and I mean every year of my life, in a different school, in a different province or in a different country. I never had the privilege of remaining two years in one spot. So I moved from Ontario, which had 13 grades, to Quebec which had 11 to Manitoba which had 12 back to Quebec to finish up my senior matriculation in Grade 11.

So it was chaotic. There was no consistency. There was no ability for children who were mobile, and, certainly, in today's society, there is an ever-increasing number of transient children with high mobility, and there is the need for the whole concept of having some sort of Canadian standard that would, first of all, be recognizable internationally, that would be less stressful on those families who are mobile and that would provide some sort of ability for provinces to communicate with each other about important learning experiences for the students of Canada.

So when we talk about a western protocol, when we talk about a pan-Canadian influence, certainly the Council of Ministers is a good place for those kinds of dialogues to occur.

You were asking specifically about the agenda, and just looking in the latest Council of Ministers of Education Liaison newsletter, we can see the meetings they have had, starting way back to last September, when the Canadian Council of Ministers in September '93 for the first time indicated the values and beliefs they hold in common.

They stopped thinking of themselves as parochial. They started talking about what do we have in common--very important for our students here in Canada--and they did at that time indicate that it was in the best interests of the students in each province to adopt a national approach for dealing with those issues.

You will note that the term pan-Canadian is being used to differentiate between national, which is perceived by the province of Quebec to reflect Quebec, or federal, which is perceived by most observers to represent the federal government. These are not initiatives of the federal government. These are not initiatives of the Quebec government.

These are pan-Canadian issues by the Council of Ministers of Education, who have agreed that it is important and timely that we have to have a national standard, just as we are looking at articulation between the colleges and universities and articulation between the high schools and apprenticeships and colleges, articulation between the provinces, the ability to transfer credits from province to province, to break down not just barriers between institutions within the provinces but to break down those interprovincial barriers, to ensure high quality accessibility, mobility and accountability for the students of Canada.

So they are developing a national education agenda, and I think it is an important thrust, and I am very much looking forward to my first meeting with them when we can start looking at details of the School Achievement Indicators program, talking about assessments in science, in mathematics, in language. I think they set up a national work group to examine curricula, to compare curricula nationally and to put forward possible joint initiatives in curriculum development on a pan-Canadian basis, particularly in the sciences and so on, initially.

Those are very exciting initiatives, long overdue, very much needed in a shrinking world and destined to do great things to elevate the Canadian standard to a reputable point on the world stage and ensure that our students can access universities in other parts of the world and not be at any type of disadvantage.

We have, in terms of the staff--you were asking what the staff does--the staff in the Planning and Policy Co-ordination branch, they act as the prime contact for us for the Council of Ministers of Education and for Statistics Canada. They will do the preparation of the briefing materials, information packages for all of the council of Education ministers meetings. They coordinate all the correspondence from our department and the council of ministers. Staff from there serve as representatives on the interjurisdictional committees, the Program Liaison Committee and they participate on the advisory committee, a number of items such as that that they do to make sure that our provincial commentary is heard and understood and clearly transmitted to those in other jurisdictions, both at the provincial and the federal level.

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Manitoba, by the way, chairs the council of ministers work group, and that is in the process of developing its 1995 publication, the Elementary Secondary Education Profile. Manitoba is the lead province on that. They chair it. They also now co-chair the Canadian Education Statistics Council and John Carlyle, our deputy here for K to S4, assumes that role. Jean Britton also is active, sitting here on the CMEC program liaison committee. We are just really involved. We are taking the lead role in many of the western and pan-Canadian curriculum and development committees, and are seen as the lead role, seen as the lead province, not just with the staff you see here, but also from the Bureau de l'éducation français. We have staff there involved. So exciting things are happening, really challenging, thrilling things happening in that area.

I am very proud of our involvement, proud of the staff and the work they have done and the reputation that Manitoba has garnered in the last couple of years with the other provinces in Canada and the other Ministers of Education.

In fact, we have a brochure we have put forward, a booklet rather, a report of about I do not know how many pages, it is fairly thick, about as thick as your Estimates book, that we have put out, Renewing Education: New Directions, that the Province of Alberta has asked permission to copy exactly as is with our Manitoba logo on it for distribution to every school in that province. We have given permission and we are pleased and proud to have given permission for this Manitoba book to be reprinted, as is, with our Manitoba logo, and the credit to Manitoba in the front pages to be distributed to every school in Alberta.

This is just one sign of the kind of recognition we are receiving across Canada for the work we are doing in preparing our students for a new millennium. I could go on and on, but you may have another question you want to ask.

Ms. Friesen: Mr. Chairman, I was interested by the minister's comments on the application of the Pan-Canadian Protocol to enhance mobility, because I have heard her speak on this issue before and of the difficulties that she encountered and many other people would encounter in the same situation. I was curious, having that in the back of my head and then reading the Pan-Canadian Protocol and the western Canadian protocol and finding out that nowhere does it talk about mobility.

Mrs. McIntosh: Does it need to state in writing every need for those needs to be real and those needs to be met? I was stating from my own personal experience why I and all other military personnel appreciate this, and those may be just secondary, side-effect reasons why it is good. So there may be other reasons, as well, and I am sure there are other reasons that have not been identified as rationale that are nonetheless valid and true and good side effects.

In fact, I am willing to hazard a guess that if we were to go out and start interviewing people as to what they like about these things, we would get not only the answers that are written down, but a whole host of individual reasons, as well. It does indicate, as well, in the newsletter that I just referred to from the Council of Ministers of Education that removing the barriers to post-secondary education, and I will just quote from it directly: That the ministers' first target to eliminating barriers is to eliminate the barrier to student mobility specifically.

Then, again, they are talking at the post-secondary level, transferability of credits, and that same thing, of course, applies. That same target that they have identified as student mobility applies right across the whole spectrum of education. So while it may not be in what you are reading there, it certainly is something that they have identified. Whether anybody has identified it or not, I think it is great.

Ms. Friesen: Mr. Chairman, yes, and it is an obvious consequence, one of the changes that would result from this pan-Canadian protocol, and I just find it really curious as to why it is not stated in the document which Manitoba signed.

I am reading from the Pan-Canadian Protocol for Collaboration on School Curriculum. It does not have a date. I assume the minister's staff would know when we signed this. It is interesting that this is not identified as one of the goals.

The goals are the improvement of the quality of education, the sharing of common educational goals and the harmonization of the methods or the ways we set about achieving them. It talks about sharing resources, human and financial, fair and equitable opportunity and the distinct-character Francophone and Anglophone education, and, yet, to any average Canadian, I would think, they would see that one of the opportunities that was there would be, in fact, in the opportunities for greater mobility.

Mrs. McIntosh: Maybe some things are self-evident, I do not know.

Certainly, in the area in which I live where we have, or had, or have partially left a significant number of military students--in my home division, for example, in an average year, we will have 1,700-and-some-odd military students in our schools.

We have whole schools in our division that are geared specifically to transient children, and we just assume that as a given, that we will have children coming in and out. We have done a lot of work in the division to address the needs of those particular students.

So to many people who have those types of components--now, you may not have them in your constituency, but we do have them in other constituencies around the province, in Shilo and Brandon, in Portage and in St. James-Assinboia and the Kenaston area, highly mobile people, not just military, but those are military stations, where we do receive thousands of highly mobile students.

When we are talking about how the western Canadian and Pan-Canadian Protocols will affect education in Manitoba, we state and have stated in writing that one of the advantages of participating would be to establish a common scope and sequence for learning, for the greater portability for K to S4 students.

Now, it may be just as simple a thing as living on a border town, where you have a situation where you have a town where students go back and forth, you know, in that type of setting.

So it may not be stated. Maybe we should state it. We could probably go back and rewrite it and state a lot of things we have discovered that are benefits that were not put in the initial draft.

Ms. Friesen: There are a number of questions I have arising out of the Council of Ministers of Education. I will probably have time for one of them. The national working group to compare curricula, can the minister tell me when that began, what Manitoba's participation in it is, and what the method is of procedure and what the expected date of report is?

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Mrs. McIntosh: The agreement itself was signed in February 1995. So it was February and rather remarkable because for the first time in Canada, very first time, they had agreement of all ten provinces and both territories. That includes Quebec at this very tenuous time in the history of our country. They managed to come to unanimous agreement, all ten provinces including Quebec and both territories, and they signed that in February '95.

They are currently working on curricula comparability to compare the curricula in each of their own jurisdictions with everybody else's curricula. Currently, right now, they are looking at science, and they hope to come back together in September with some kind of, hopefully, statement they can agree upon to make to each other. That is a tremendous amount of work just even in doing the comparability because with everybody having the sort of higgledy-piggledy across the nation for eons, they have developed differently and so they have to try to find those things that they have that are in common, discover those things that they have wide disparity on, and they may find that there might just be one province that has something completely different.

So it is a tremendous amount of work to do that kind of curricula comparability, very exciting work, very time-consuming, but the fact that they are all able to sit down together unanimous coast to coast to coast, first time in Canada, is one of those thrilling aspects about education as we approach the millennium that excites all ministers in the Council of Ministers, and that is exciting to the staff and the department.

I have been extremely impressed with the excitement they bring to the task in their briefings to me, how they generate enthusiasm for what they are telling me. I very much appreciate it because it goes beyond just sort of by rote doing the work. There is a commitment and enthusiasm there that is taken into these working committees with the other provinces. If they are all as enthusiastic and excited about this type of work as Manitoba is, then those committees would be really worth sitting in on by anybody who is able to do that.

I should just indicate that British Columbia has also agreed--you just might like to know because it is a province that is currently governed by those of your own persuasion. They have agreed to take the lead role in developing a project proposal for a pan-Canadian science project. They currently have a draft in process, and that will be very much welcomed for examination by the other provinces. I just thought you might be interested in knowing that.

Mr. Assistant Deputy Chairperson: The hour being 12:05 a.m., committee rise.