ENERGY AND MINES

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Mr. Assistant Deputy Chairperson (Gerry McAlpine): Order, please. Will this section of the Committee of Supply sitting in Room 255 please come to order.

When the committee last sat considering the Estimates of the Department of Energy and Mines, the committee was discussing item 2. Energy and Mineral Resources (a) Energy Management (1) Salary Employee Benefits $845,500.

Ms. MaryAnn Mihychuk (St. James): In terms of the Energy Management section, I have some questions. It was difficult for me to go through the annual reports and get a handle of what current projects are underway. The last annual report that I have is from 1993-94. Can the minister share, is that the most recent annual report?

Hon. Darren Praznik (Minister of Energy and Mines): Mr. Chair, that is the most recent annual report. This year's or this past year's report will be tabled in the House shortly. I think we are just getting it. We should have it back from the printers within the next few days.

Ms. Mihychuk: It would be very useful in terms of the Estimates process to actually have the '94-95 report as it would give us an indication of what projects are ongoing, what expenditures were the actual expenditures. Hopefully, in the future we could look forward to perhaps an earlier release of the annual report since I understand that the year-end is March 31, and it must be released by the end of June. However, given that we are so close to it, it would have facilitated the process had it been released somewhat earlier.

In terms of questions, I would like to ask the Energy Management section if they could articulate what changes there have been in terms of the overall department, in terms of staffing, and, then, perhaps we could go into initiatives that the Energy department is taking on.

Mr. Praznik: First of all, I wanted to just say to the member that I do not believe there was a significant change between the two fiscal years in the work that department has taken on, but myself and my new deputy, with the manager of that department are undergoing a process now to review its operation.

One reality of this type of branch is that you cannot do everything, and, so, quite frankly, over the summer we hope to be able--and I know staff have been working on it diligently over the last number of months, I have been advised, in order to ascertain where they can be effective and where they have not been and what are the types of issues that this branch should be involved in and can effectively be involved in. Although there has been little change over last year, it is one of the projects we will be taking on over the next while to review the operations of this branch and to target where we want to be.

Ms. Mihychuk: Could the minister update us on the wind turbine operating project that was described in a short section in the annual report?

Mr. Praznik: I have been advised that that particular project which is the wind generation device you may see on Highway 59 near Birds Hill Park, was installed some time ago, and there were some mechanical difficulties with it that are part of any pilot project, one would expect, and those are being worked through.

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Again, I say to the member, one of the projects that I now have to undertake as a new minister is with this branch to decide where we are best able to be involved, because one difficulty, quite frankly, is the branch has had its fingers in a lot of different issues or a lot of different pies, in essence, and is it a good use of our resources? That is one of the questions we have to ask, and I do not have a preconceived answer for the member. I would suspect over the next number of months, with the staff in the branch, we will be prioritizing where our efforts should go as to where we think we can obtain some results and have some influence within the mandate of this branch.

Ms. Mihychuk: That is interesting, and I hope to see what areas we are going to focus on.

The Energy department was quite a vibrant section and had a considerable number of employees, so I know that they were looking at a wide variety of projects. I do know that the department has downsized, and there may have to be a re-evaluation. I do hope the minister keeps in mind the overall objective and we still try to make this an important sector. Energy management is a very important thing to continue to work on, and it does require a certain amount of creativity and leadership.

The department has always been able to take that role and these types of project, such as the wind-generating project and some of the other experimental projects they tried. I do hope that these types of programs can continue.

I do want an update on the ethanol projects that were going on, if the minister could.

Mr. Praznik: Mr. Chair, an excellent question and an excellent area. Just to put in context, I think the changes in the Western Grain Transportation Act that have been the subject of much discussion in the House and Question Period recently and certainly in the farm community, the effects of those changes are likely to revolutionize our agricultural industry, certainly the grain sector. Given the changes that are happening, the ability or the opportunities in ethanol production for Manitoba grain crops I suspect are greater in the next few years than they have even been before because of those changes. So it is potentially a very exciting area.

I share with the member that an interdepartmental Provincial Ethanol Committee has been established. Its mission is to develop a competitive business framework for sustainable ethanol industry in Manitoba. This committee recently prepared and published a brochure called Establishing an Ethanol Business in Manitoba: What You Need to Know. We have copies available. We have one now, and if the member would like a copy, we can certainly provide it to her today.

Work is continuing on a marketing study to determine potential for expanded new markets for ethanol. Work is also underway to review competitiveness of Manitoba's taxation system on motive fuels. This becomes a very critical factor, no doubt, because as the member recalls from our discussion with the railroads, our motive fuel tax which we reduced a budget or two ago is a factor in the cost of railroads purchasing fuel and operating parts of their operation in Manitoba. So that is currently an important part.

I am also pleased to indicate that I understand that Mohawk at their Minnedosa plant, in producing ethanol, is planning or is beginning an expansion estimated to be in the neighbourhood of about $1.5 million. They have announced this expansion to their Minnedosa facility, and this expansion will include, we are told, the production of a new patented food co-product, Fibrotein, as well as an increase in ethanol production of approximately 2 million litres. The province supported this development of the Fibrotein co-product with $28,000 from the Rural Economic Development Initiative Fund, and as the member can appreciate, not just producing the alcohol but finding economic opportunities for the by-products, et cetera, just means a better operation, a more sustainable one.

Mohawk obviously leads the way, and the changes in the WGTA, Western Grain Transportation Act, are likely to create other opportunities here. We certainly want to see those proceed. This is also a significant priority for the Economic Development Board of Cabinet.

Ms. Mihychuk: I have a further question in terms of the ethanol. Are there other producers looking at establishing facilities in Manitoba?

Mr. Praznik: Mr. Chair, I have been advised that, and as the member can appreciate, I have only been in this portfolio a few weeks, so I have not been part, yet, of any of those types of discussions, but we have had interested parties from time to time. We have had Manitobans often in the agricultural sector, who are coming to grips with WGTA, exploring this possibility.

We do not have anyone who I would consider to be on the hook yet, to use a fishing expression, but I would expect with the WGTA changes that we will hopefully see some movement in this area shortly.

Ms. Mihychuk: Is this energy source one that could become a more significant contributor in terms of fuel consumption for automobiles and farm equipment? To what degree can we look forward to this fuel being developed?

Mr. Praznik: Mr. Chair, in answer to the member for St. James' question, currently in Manitoba, as the member is probably aware, ethanol is blended with gasoline in the proportion of one to 10, and that blend seems to be, under current technology, the right blend for efficiency.

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There are vehicles that can use up to 100 percent ethanol. The fuel value of ethanol is less than gasoline so the volume, of course, increases.

What we do not know today, and we have all been operating under the current regime, as the regime in agriculture changes with the loss of WGTA and the economics of grain farming change significantly, I would not be surprised to see some additional opportunities for ethanol and ethanol blends, and, of course, technology continues to advance, so this could potentially be a very significant product for Manitoba's grain industry.

The other exciting part of it, and where Mohawk has fit in, is the production of this by-product which I understand is used for animal feed. As we see a growth in our red meat industry in the province, again it is the sustainable option, the ability to produce alcohol from grain for fuel and feed the mash.

So this is an area that has, I hate to say it, we politicians say it too much, great potential, but truly it does have potential, and one of the things we will be assessing in the operation of this branch is where we have to be in ethanol.

I can tell the member that ethanol will be one of those priorities we take on. We just want to get a handle on where the world is in ethanol and hopefully continue to attract some advance opportunities for development in Manitoba of that product.

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

Ms. Mihychuk: I want to move now a little bit in terms of to the energy conservation side of it. Can the minister give us some indication of what the status is of the Sustainable Development Innovations Fund program?

Mr. Praznik: Mr. Chair, as the member, I am sure, is aware, the Sustainable Development Fund is not housed in this department, although we have a piece for which we are an agency that makes recommendations.

The branch does provide support to the Sustainable Development Co-ordination Unit through technical reviews of applications, as well as monitoring administration of the fund for energy-related projects.

Current projects provided for funding under the Sustainable Development Innovations Fund program have included the Manitoba Advanced House Project, which is being provided to implement a technology transfer plan submitted by the Manitoba Home Builders Association. This project explores new methods of designing and building energy efficient and environmentally responsible homes. I think this is an excellent area as we move into the future.

We also I believe have made, through this fund as a government, a contribution to the feasibility assessment of wide-scale use of geothermal technology. I guess in the vernacular the heat pump system. There have been some problems with heat pumps. I know for some who have not been exposed to them before that is a system of pumping water from the ground, taking out a certain amount of temperature and returning the water to the ground somewhat cooler. It also has the option for air conditioning putting heat into the water. There have been some problems in this area. It is a very expensive system, but we have been committed to obviously working with that industry to see if the technology, et cetera, can be proven. There is some very potential savings to Manitoba homeowners and industries. Going to geothermal and ground water is something we are very fortunate to have.

Another project was the electricity-generating wind turbine that we spoke about near Birds Hill Park.

That would be the three main projects that we have been involved in.

Ms. Mihychuk: Can the minister update us on the Manitoba R-2000 program?

Mr. Praznik: Mr. Chair, the Manitoba R-2000 home program, as the member may be aware, was a partnership involving this department, Natural Resources Canada the federal ministry, Manitoba Hydro, Centra Gas, and the construction association of rural Manitoba. The Manitoba Home Builders Association has made the decision to no longer participate or be identified as part of the R-2000 home program. I believe the reason stemmed from the warranty issue where the Home Builders Association wished a warranty to be included and the other partners were not willing or did not feel that was necessary and there was some disagreement.

I must tell the member that is an area I certainly want to explore as I take over this portfolio, because the involvement of that association--it is very significant. They are a major player, and it troubles me somewhat that they are not part of the program.

The department is administering, managing and leading the revitalization of the initiative in Manitoba. A contribution agreement between Natural Resources Canada and Manitoba Energy and Mines has been signed, I am advised. A trust account has been set up with the Ministry of Finance to handle disbursements of funds. A business plan, marketing plan, a builder research report and a consumer research report have been completed. Marketing and communications support services are being undertaken.

In co-operation with Workforce 2000, technical update sessions are being held throughout Manitoba for the certification of R-2000 builders and 87 R-2000 builders attended the sessions, I believe six sessions in total.

In 1994-95, R-2000 home enrollments totalled 42 compared to 22 in '93-94, and zero in '92-93. So we are making some progress.

Ms. Mihychuk: In terms of another home renovation program the government has provided a renovation program which works on a $5,000 investment to get $1,000 back. Has there been given any consideration to including some energy conservation measures that these projects I believe are somewhat wide open and it may have been a vehicle to encourage energy conservation?

Mr. Praznik: Mr. Chair, if I remember correctly that $1,000 of assistance for $5,000 of expenditure program was developed a year or so ago in the budget, one of the purposes of which was to stimulate a host of home repair activity primarily for job creation in the province as we were in the difficult period of the recession. It has been a very successful program.

Home improvements to homes for energy efficiency, by and large, were not excluded from that program. I am sure many of the applicants did undertake or use that program to improve the efficiency of windows and doors and the like. Because of the nature of the program at that time, which was to be a broad-based stimulant requiring that an energy efficiency component be part of it, it was felt to be somewhat restrictive for the purposes of the program, but it did not preclude the use of energy efficiency. So I think, by and large, it has allowed people who are intending to make renovations for that purpose to do it and has accomplished that goal, generally speaking, although it was not intended for that purpose.

Ms. Mihychuk: One of the unfortunate parts of that is that many homeowners, particularly in the older parts of Winnipeg, simply cannot afford the $5,000 investment and, in fact, many of those homes are energy wasters.

Can the minister provide us any plans or commitment to perhaps changing the grant program for renovations to have a lower maximum and to encourage energy conservation in the projects?

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(Mr. Assistant Deputy Chairperson in the Chair)

Mr. Praznik: Mr. Chair, I understand some years ago we had in Manitoba the CHEC Loan Program that the member may be familiar with. I remember as a newly elected MLA dealing with some of the particular cases, there were some definite problems and people were being taken advantage of. Over the years in reviewing the effectiveness of the program, I am advised by those who were involved with it that it was found not to be a very effective program.

If I remember the scheme correctly, it was one where one could borrow money from the program for the purposes of upgrading the energy efficiency of a home and paying it back over a period of time as part, I believe, of the hydro bill. What I have been advised was it was found that there were a significant number of delinquent loans under that program. People were not undertaking to pay back, using the savings, et cetera, to pay it back, and it was found not to be a very efficient program for the purposes intended.

So before one would embark on that type of renovation program or energy efficient program, we would have to determine what realistic goal--was there a need for it. We all can point to examples one way or another, I guess. Is it appropriate for us to be in that business or is there another agency or another means of doing it? Obviously, there are other programs available or other dollars available to renovate homes if they are going to produce a saving that can be used to recover or repay the cost of that capital investment. So we would have to analyze, is that something we want to be in, is that an efficient way of doing it and do we have the resources to get into that kind of program? The experience with CHEC was it turned out to be extremely costly because people did not repay their loans.

Ms. Mihychuk: I guess in some cases it worked, and in some cases it did not.

I am familiar with a school program actually that was retrofitted in terms of energy efficiency a few months ago, a fairly new structure. I do not know if the department was involved but probably--in hydro. I think it was Tyndall Park, or was it Garden Grove? I cannot quite remember. But there we saw Manitoba Hydro provide the vehicle for the capital investment, and then the school division was to pay back the capital on that. That program, from the school division's perspective that I was familiar with, was very much appreciated. The capital expenditures or the money available to do retrofitting through the Public Schools Finance Board has been extremely limited, and although schools would see that type of savings--and I believe that the payback was three to five years in that case--they were not able to do it out of their own financial vehicles since, as you know, school divisions are not able to borrow for the capital investments.

Has the department looked at such a program for local governments, for example, school divisions or any other public institutions that may not have the ability to put out the capital in terms of retrofitting?

Mr. Praznik: Mr. Chair, I think what the member is referring to, to put a name to it, is the energy performance contracting principle. Hydro is in the process of seeing how this works. There have been a number of tests. Obviously she has alluded to one from her experience on a school board.

I understand, as well, that the University of Winnipeg and the City of Winnipeg are now dealing with Hydro on moving it, performing similar kinds of tests to see how this program works.

I am advised that today in our capital city about 130 builders tended a forum hosted by the federal government and co-sponsored by Manitoba Hydro and the provincial government on exactly this type of issue to encourage where they are.

As I pointed out, the issue is recovery. If you create a saving and use the saving to pay the capital cost it works great. CHEC had a significant amount of just bad loans that people were not doing that. I know from my own experience, and the member is perfectly right, there are some cases it works and there are some that do not. I guess whenever you are doing a program and you get a significant number of cases where it does not work, then you have to question the whole program, and it varies significantly program to program.

I can tell her in my own constituency some of the experiences that I saw firsthand of that program. Some of the homes that were being outfitted in one particular area, quite frankly, the house did not have much of a future ahead of it. You had to really question whether the people were making a wise investment or not.

We also saw a host of scam artists. Not all, but we saw some people who would roll in and say, we will change your windows. We had a case that I remember dealing with the department actually when I was an MLA where a company came in and said, we will change your windows to a very elderly couple in a very poor community. They removed the fairly rotting old glass windows and put up two sheets of plexiglass, and this was energy efficiency.

When one went through the contract and how it was done--I know we had the RCMP involved, and there was not sufficient evidence to lay criminal charges, but it outlined again under that program where we had some really difficult practices. So that was another reason behind the CHEC program.

But the principle is a good one. It works far better with institutions because you are dealing with fairly sophisticated players that are going to be able to repay and that kind of basis. So somewhere out of this we may be able to develop something that works effectively. I would never preclude it.

Ms. Mihychuk: I am glad to hear the minister be open to perhaps reviewing it even though that program may have had some bad repayment portions of it. I suppose we could have looked at perhaps modifying the way that we administered it as well. So those are various decisions I guess governments will make.

I wanted to just put on the record that in my riding, for example, which is in the centre of Winnipeg, it is very difficult for families to invest $5,000 for a Home Renovation Program. Hopefully, this minister and the government will look at making something more available for lower income families.

I do not have any further questions in terms of Energy Management.

Mr. Assistant Deputy Chairperson: Item 2.(a) Energy Management (1) Salaries and Employee Benefits $845,500--pass; (2) Other Expenditures $225,200--pass.

(b) Marketing (1) Salaries and Employee Benefits.

Ms. Mihychuk: This is an interesting area. From Friday's discussion, the minister talked about this being an exciting new venture, many new options, a new thrust. I would ask the minister what his plans are. What is the vision for the marketing of Energy and Mines?

Mr. Praznik: Thank you very much, Mr. Chair, for what is becoming, I guess for me, a passion in this department. I am very excited by the work that was done by my predecessor, the honourable Don Orchard and also the honourable Jim Downey. It is our mandate to make Manitoba the place to be in the mining industry in Canada, if not the world, if one can be so bold.

What my predecessors have done, and I am now taking over the mantle, is we want to analyze very thoroughly, and we have been working on that, as to what makes a good place to be in mining. What do we do well? What do our competitors do well? What do we do poorly? What do our competitors do poorly, et cetera?

There is a host of issues. Many of them government have no control over, geology being one. Some of them we do have control over, levels of taxation, regulation, and that does not mean one abandons regulation, but, obviously, the ability to streamline the administration of regulation becomes very important.

So we are continually working in this area. Now, having said that, one has to target who you are going after and where your shortfall is. Obviously, we have some major players in the mining industry operating in Manitoba, Hudson Bay Mining and Smelting, International Nickel Company, Sherritt Gordon. These companies have continued and will continue to do exploration programs. It is in their interests, obviously, to secure their future operations, their future sources of material, which they need to support the very heavy investment they have in smelting operations in this province, particularly HBM&S and Inco.

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What we found, of course, is their exploration programs tend to be very much on the western central side of the province. We have some very significant greenstone belts in the far northeastern side of the province where have had little work done on the ground. So when we look at what we have to be doing, obviously one key component is to be encouraging significant exploration work today and next year and the year after and so forth in those particular areas.

Who is likely to go into those areas? Likely junior companies, high-risk venture capital companies in exploration who are there to look for the next Voisey Bay.

So our efforts in marketing on that side of the coin have to be to target the 200 or so potential companies that exist in Canada, who are our likely customers, to get into the business of exploration in those areas. So our intention in the short term, at least, is to concentrate on our potential customers, our potential clients, those exploration companies, for the purpose of getting them into the areas where we need to do exploration.

What we need through this branch, and we discussed the director's position and what we are looking for, the kind of skill set, is to be able to target that specific group of people we need to attract. That is not to preclude anyone else, of course, who is interested, but like all marketing, one has to know what you are looking for, know the potential customer and devise a strategy to deal and go after that potential customer. That is what we are going to be in the process of doing over the next while.

It is very exciting. I should tell the member, as well, that in the world mining community, what I am learning, and it is very significant, is that Canadians and Canadian companies tend to dominate the world mining industry. It is one area where Canadians have a great wealth of experience and ability.

I know my deputy minister attended a meeting or a conference on mining in the Americas. It was a promotion held for mining in Central and South America. His brief estimate was that some 80 percent of the participants in this conference were Canadians.

What we have seen is Canadians and Canadian companies going all over the world. We have a chart in Energy and Mines, and I should share it with the member. I do not think I have a copy now. It is one of the slides we use in our presentations that shows where Canadian companies are in business outside of Canada. The number of locations all over the world is absolutely phenomenal.

So we have to ask ourselves--we have not had the exploration in Manitoba and most of Canada over the last decade or so for a host of some very solid reasons. We are now building the climate to encourage that. Who are the customers we want to get back?--they are Canadians and Canadian companies. We have to target them. We have to find out what their needs are. We have to bring them back into the marketplace.

Ms. Mihychuk: Does the plan include a significant amount of outreach, of travelling around the world to promote Manitoba's mineral resources that we already have, for example, or are we looking at bringing in further exploration?

Mr. Praznik: Mr. Chair, a very good question. Again, part of developing the strategy is when you know whom you want to go after. The question is, where are they and where is the best place to first meet them?

In Canada today there are two significant meetings which we are exploring now--and I am sharing with the member a lot of information that is not settled as we sort of develop our program--but the lead event every year is the mining and prospectors convention held in Toronto each spring. This is the prime conference of those who are in the prospecting and exploration business. Manitoba has traditionally had a presence at this convention in a variety of ways to let people know about what we are doing. We are looking at refining how we deal with this conference currently.

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

The second event is in Vancouver where I believe--and we are just getting information on that--there is an event annually in Vancouver which attracts the West Coast prospectors or a significant number there.

The kind of companies that we are looking at bringing in have a very significant presence in Canada in the two main financial centres for raising the capital to support exploration work. Of course, what we want here is a significant investment of private capital. How we reach out to those people yet, we are developing that strategy now.

Ms. Mihychuk: Can the minister outline the personnel changes that have occurred in the Marketing section? I see that we have one additional staff year in this section.

Mr. Praznik: Mr. Chair, that is a business development officer position which was I believe originally transferred over to the mineral development agreement side when we had one with the federal government, and that staff year position was charged to that appropriation. Since that mineral development agreement has ended and it certainly looks like the federal government will not be in the business of investing very much money in development agreements over the next number of years as they struggle with their own and our, as a nation, fiscal problems, that position has been returned to the appropriation of the department. So that is why we show the increase in that particular area.

Ms. Mihychuk: Moving along, specifically the line, I see that there has been a fairly significant increase under the section, Communication. Can the minister share with us what the plans are in terms of communication that have resulted in the increase?

Mr. Praznik: Mr. Chair, I am advised that has been the general increase in the type of material and printing that we are putting out on what we are doing in Manitoba. Obviously, as I know the member will appreciate, if you are going to be selling what you want or selling to your customers, you have to have packaging and material to reach them and so that is where the increase, I am advised, comes from.

Ms. Mihychuk: If there is going to be increased Manitoba presence at national and perhaps international events, is there a line item under this section that includes that increased travel allowance for members of the department?

Mr. Praznik: Mr. Chair, that is part. It will always show up. It is just part of the general administrative costs of that particular branch. Obviously, too, because money is an important resource for us and we as a government are trying to manage well, some of those decisions will have to be priorities we set as to where we go and where we spend dollars and in what do we invest time and the money that is attached to it, so whether we need additional dollars to do that, something we are in the process of determining, whether or not we can reprioritize, et cetera, but that item for travel will always appear on that administrative line.

Ms. Mihychuk: Moving down, we see also an increase in Supplies and Services. Can the minister share with us what that is related to?

Mr. Praznik: Mr. Chairman, I advise that again that is monies that were spent and assigned to the mineral development agreement as the province's share coming back over to the branch. I take it, not having been involved with this before, that obviously there were resources from the department assigned as part of the mineral development agreement, and when that agreement ended, some of those resources will come back into the line of the department.

Ms. Mihychuk: Can the minister share, are the staff years all filled or are there any vacant positions in this section?

Mr. Praznik: Mr. Chair, there is one vacancy, that is of the director, Mr. Lyle Skinner, who has joined me here who I believe is in an analyst position. A business development officer is currently filling on an acting basis the director's position and so his position would be vacant pending decisions as to where we go on the director's position.

Ms. Mihychuk: With some leave I suppose from the minister, could you share with us, does the department have a number of vacant positions as a whole? I should have actually asked this question under the administrative section.

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Mr. Praznik: Mr. Chair, I understand that as of May 25 we had six vacant positions. I understand one may have been filled in the deputy minister's office. We have six vacancies. The administrative secretary, the additional one we discussed in the deputy's office, as I understand it, is being charged to Northern Affairs to carry that work. So we have six.

Ms. Mihychuk: Can the minister share with us in what departments or in what sections those vacancies are in?

Mr. Praznik: Mr. Chair, there is one in the executive offices. I believe that is an administrative secretary for the deputy. In Energy Management there is an administrative secretary, in Marketing one part-time position. It is an administrative secretary, as well as the director of Marketing, which is filled on an acting basis.

The Petroleum branch, there is a petroleum registrar and a petroleum engineer position that are vacant currently.

Ms. Mihychuk: Can the minister tell us if the intent is to post those positions and fill them in the near future?

Mr. Praznik: Mr. Chair, I cannot give assurances one way or another on that matter.

As the member can appreciate, both myself and my deputy have been in the department, I guess, the deputy for about two and a half months and myself for a little over a month. At the current time, we are both assessing the needs and those staff years, whether or not they need to be filled or they can remain vacant somewhat longer, and do in fact we need those positions.

I am not in a position today to indicate one way or another because in my own mind, and that of the deputy, we have not made those decisions yet.

Ms. Mihychuk: What mineral commodities or resources are we presently marketing per se?

Mr. Praznik: Mr. Chair, one area, of course, is the Pipestone Lake titanium vanadium deposit. We are attempting to market that. A private sector joint venture conducted an 80-hole diamond drill program to outline the grade in the tonnage, so we are obviously working to see that development.

A private sector company was formed to explore the Arborg kaolin occurrence. I must admit, I am not sure at this stage of my career as minister what a kaolin occurrence is, but I will learn. The pilot plant study for the production of paper grade kaolin was completed in 1994.

A private sector company is also investigating the potential of a stainless steel master alloy facility in Manitoba.

A very interesting project, I am sure, for an urban member is the granite curbing project. The use of granite as a curbing stone in our urban areas is being explored. I understand that it will be installed or is being installed in the Graham Avenue transit mall this year as a pilot. Of course, if that particular project is accepted as being cost-efficient, then we could see quite a use by our urban communities each and every year in replacement for granite curbing. As someone who represents a constituency with a great deal of granite, I am looking forward to that happening.

Ms. Mihychuk: Manitoba actually has a wide diversity of products that we go out and market, and it is exciting to look at our resources. The granite project has been ongoing for several years in fact.

Recently, I had the opportunity to go down to Mexico and visited a glass plant, and the individuals there were saying they imported silica sand from New Jersey. I found that quite astonishing, that the resource was travelling such a distance to north-central Mexico.

Are our silica sand deposits of the high quality needed? Have we explored international markets in terms of silica sand?

Mr. Praznik: Mr. Chair, a very interesting opportunity to be pursued. Obviously, the NAFTA with Mexico and the development of various trucking routes through the mid-central corridor, et cetera, start to build some potential opportunities.

I am advised that we currently have a float glass study underway in the province as to the quality of those sands for glass.

I can tell the member representing Beausejour that the silica deposit at Beausejour, which is now not available for commercial development, at the turn of the century hosted the first glassworks in western Canada. So I would suspect that there is a fairly high-grade silica available in certain deposits. Some of this is already in private hands, et cetera, and I am sure it is a matter of time providing the opportunity in terms of freighting costs and connections.

With the results of this study, another area to pursue.

Ms. Mihychuk: I do not have any more questions in Marketing.

The Acting Chairperson (Mr. Newman): Item 2. Energy and Mineral Resources (b) Marketing (1) Salaries and Employee Benefits $856,800--pass; (2) Other Expenditures $412,200--pass.

2.(c) Petroleum (1) Salaries and Employee Benefits $856,500.

Ms. Mihychuk: Can the minister share with us what is new in terms of the petroleum industry and let us know in terms of exploration and taxation? I understand it is a very good year for the petroleum industry for Manitoba, so I am looking forward to hearing the good news.

Mr. Praznik: Mr. Chair, yes, it is good news. As I outlined in my opening remarks, there is quite a bit of interest in the Williston basin, and we have seen a fair bit of expansion and activity in Saskatchewan. We have seen it in Manitoba, to a greater degree in Saskatchewan across the border. It may have something to do, of course, that the geological resources are currently better there, and so we have greater drilling activity and bid price on loans. One of the steps we are in the process of taking is to improve and update the way that we make our data available so that we can take advantage of that same interest.

In the petroleum industry generally, we have seen signs of continued growth. Total industry expenditures in 1994 were estimated at $75 million, up from an estimated $73 million in 1993. Increased geophysical exploration and the expanded use of horizontal drilling technology made 1994 a very good year. Last year 10 geophysical programs representing expenditures of approximately $830,000 were conducted. That is up from nine programs and an expenditure of $226,000 in 1993.

Sixty-seven wells were drilled in Manitoba last year compared to 87 in 1993. While the number of wells drilled was down, the increased number of exploratory wells and the aggressive application of horizontal drilling has meant, generally speaking, a more productive year.

* (1540)

After declining since 1990, total oil production was up 4 percent to 657,870 cubic metres last year. This is due in large part to the successful application of horizontal drilling, notably in the Williston and Pierson fields.

Our first Crown oil and gas lease sale of 1995 held May 3 was indeed remarkable. Total revenues from the sale were almost $1.6 million, making it the third largest sale in the history of Manitoba Crown lease sales and the largest in a decade. The revenue collected at the sale exceeds the combined revenue collected at the last two Crown oil and gas lease sales by over $300,000. The average bonus per hectare paid by industry at the sale was $125.41, an increase of 65 percent over the last sale in November of 1994.

As a result of requests from industry, Mr. Chairperson, the department has added a third lease sale to be held August 23. This is in addition to the spring and fall sales. The significant increase and interest in Crown land is an indication that industry plans to increase its level of exploration and development in the province.

The positive signs listed above are due in no small measure, I believe, to the fact that crude oil prices have been quite robust in recent months. However, I also believe that the number of initiatives that the department has undertaken to make this an attractive place to be has also been responsible for that.

Work is also continuing on the Manitoba Oil and Gas Well Information System. This system is designed to increase the amount of data and the availability of that data to those people in drilling companies who are accessing it and making their drilling decisions, and, as I outlined earlier, that is one of the reasons. Although we have done well, our sister province in Saskatchewan, on the other side of the Williston basin, has done somewhat better, and that has to do with the information that is available.

So this department has been reacting by putting in place or is in the process of putting together a plan to upgrade the accessibility, in essence, of our geological information. One comment that was made to me was that the bright, young minds at work in many of these small oil companies which are in the drilling business, they need easy access to data, and they draw it off of a computer system. They buy it from you via the network, the internets that are developing, and are able to make their recommendations to their boards of directors based on that data.

Manitoba has not traditionally been on that system, and we are seeing now we have to be, so we are trying to put together a means of getting on, so that those people have access to our information. We think that will increase the bid price of the leases when they do come up and ultimately increase the activity even further in our province--very exciting.

Ms. Mihychuk: Can the minister outline what steps are taking place to get us online? Do we have additional resources in place for the programming or whatever may be necessary to provide us with a modern setting?

Mr. Praznik: Yes, we are in the process of dealing internally. As the member can appreciate, this area has brought in some significant dollars to the Treasury, more than was budgeted for or expected, and we are in the process now of dealing to see what additional--first of all, determining the additional resources we will need in order to get that online, a plan to put it into effect, and we are speaking to Treasury Board now about how we will finance that.

There is fully a recognition that this additional information will likely more than pay for itself, and so I am not at liberty to go into great detail at this time, as the member can appreciate, but the point of taking advantage of the opportunity is not lost on us, and we are moving in that direction.

Ms. Mihychuk: It is true. It is a wise investment to sometimes put money back in when we see the payoff increase so much, so I am sure the branch will put it to good use.

It is in this section that we see two vacancies. Is that not the case, and those two vacancies are in what sector?

Mr. Praznik: Obviously, these two positions are vacant, but given the fact that we are moving in to take advantage of some new opportunities, that is one of the things we are quickly sorting out, is how these positions could be used within that framework. In fact, we have gotten along for some time, I am advised. We may not need necessarily in that capacity, and that we are still sorting out.

So we are cognizant of that. What I would hate to do is when you are in a period of change and you have a vacancy is to fill it necessarily to meet the old criteria of when it became vacant, when you may find, as you are putting together your plan, that this is not what you need, and that is a shame to the person who gets the job, if it is not what you actually need at the end of the day.

So it is better to take a little time, and as a new minister with a new deputy, that is what we are doing with our staff, to assess exactly what we need, and I would suspect these positions will be filled at some point in the Petroleum branch, but we want to make sure the skill sets we are putting together match what we need, given the new direction we are taking or the opportunities we are pursuing.

Ms. Mihychuk: Can the minister enlighten me actually as to the functioning of the petroleum industry? Is Manitoba at its capacity? Is there a certain maximum that we can draw down in terms of our oil fields? How does the petroleum business actually work?

Mr. Praznik: I do not for one moment pretend to be an expert. In some ways, I know the member's background is not petroleum, nor is mine. So perhaps this is the blind discussing with the blind on the issue, but my understanding from discussions and briefings that I have had to date, I guess, the question, because I have asked those same questions about what our capacity is, it is really dependent on technology ultimately.

We have probably only drawn down a relatively small percentage of the oil reserves that are there, but we have drawn them down to the limit or close to our capacity of technology. Horizontal drilling, for example, has increased the volume at the wellhead very significantly. Now whether that is drawing new oil or whether that is drawing the existing available supply at a faster rate, we are not quite sure yet, I am advised, so what our long-term capacity is, it depends very much on technology. It is in our interest, obviously, to be continuing to support the industry as it develops new methods of extraction and exploration.

One of the questions I put when I became minister to those in the industry: is there such a thing as truly a dry well? They said, well, sometimes, but a change in technology can make a dry well a highly productive one. Of course, a lot of this is driven by international prices. We now produce about--what we do produce accounts for about 25 percent of what we consume in the province.

We are not a huge producer. We are not even meeting what we consume, but it is still a significant industry in the province and certainly in the southwest corner of the province. It is our view that we have to continue to work with the industry to take advantage of new technology and what is there in order to maintain that industry and hopefully expand it. How much oil is there? How much can we extract? Those are questions only time will ultimately tell.

Ms. Mihychuk: I believe it was in the annual report '93-94 that an estimate was given that Manitoba supplies 30 percent of our fossil fuels. Are we saying that the proportion is actually decreasing?

Mr. Praznik: Mr. Chair, I may be wrong in recollecting my briefings; I was told approximately 25 percent. I imagine that goes up or down depending on a host of factors. What we produce can vary from year to year somewhat. Our consumption can vary somewhat depending on such things as a cold, cold winter, which can increase our consumption considerably, so 25 percent, 30 percent, I imagine, though both numbers are accurate depending on a given year, and that can probably be up or down within a range.

* (1550)

The Acting Chairperson (Mr. Newman): Item 2. Energy and Mineral Resources (c) Petroleum (1) Salaries and Employee Benefits $856,500--pass; (2) Other Expenditures $194,700--pass.

2.(d) Mines (1) Salaries and Employee Benefits $1,874,900.

Ms. Mihychuk: I have some interest in this section. I would like to get an update on the mineral projects that are undergoing. We have seen some exciting times in terms of diamond exploration, so I look forward to some information in that sector. I am going to be asking some questions in terms of our aggregate industry.

Overall, we see a slight increase. Actually we see three positions, that there are three additional positions. For the record these additional positions I understand come from the mineral development agreement, is that correct?

Mr. Praznik: Yes.

Ms. Mihychuk: Can the minister share with us the overall situation of the Mines branch in terms of leases and activity at the Mines branch?

Mr. Praznik: If the member wishes I could provide her with an exact copy of '91, '92, '93, '94 of that particular information. It might be just as expedient to do that as opposed to go through.

The Acting Chairperson (Mr. Newman): The honourable minister is then tabling that and that is acceptable to you?

Ms. Mihychuk: Yes. Can the minister tell us, is the branch going to be putting its information, its leases and other information it may have on this information system that the industry is interested in getting?

Mr. Praznik: Mr. Chair, absolutely. I think it is critical in meeting the needs of our clients. As I talked about the strategy of attracting the people we want, we have to meet their needs, and one of the areas we have been rather short in is the area of data and the ability to access data, two different issues. We do have some very good data, and we are in the process now of developing a plan in doing work--we have done some already--on digitalizing this information and making it available through--I do not know if it is the Internet--whatever the system is, so that by and large those people who are sitting in offices maybe thousands of miles away, developing their plans for the next year or looking at where they are going to do an exploration plan, will be able to very quickly transfer that data. They are going to pay for it of course but access it very quickly via the modern communication systems so that they can make their decisions.

I think the days of paper maps and paper information are long gone in this industry, and we have recognized that that information and information exchange is absolutely critical to serving our clients. We are now developing the kind of work, and we have started already. We have some digitalized and ready to go in certain areas to be able to meet that very critical need of our clients.

(Mr. Assistant Deputy Chairperson in the Chair)

Ms. Mihychuk: I would like to just follow up. I know that there has been interest from the private sector, and I am interested in getting some time frame. When could we expect the department to be online?

Mr. Praznik: Mr. Chair, as I am advised, as we get into this, most of our claim maps are already available via modem. We have a host of other bits of data we have either had or are in the process of getting on. Part of our difficulty today is to refine this and work the difficulties out of the system, and that is going to involve obviously a further investment in resources as we do that. But, as I am learning, we are a fair ways into the system process already as part of our general improvements, but there is still a ways to go, considerable ways.

Ms. Mihychuk: How long has the department been working on this effort, this initiative to get online?

Mr. Praznik: Mr. Chair, I am advised that the process began in about 1985, but there was different information, were different systems, I understand. The push really has been in the last couple of years, as I think that all of us have seen the explosion in information technology, and it is moving at such a fast pace. The incentive, the demand is absolutely there now to bring it all together. We are still working out those kinds of kinks, but, it started, I guess, a long time ago, but the urgency was not there because not everybody was doing it. Now it is absolutely critical.

Ms. Mihychuk: It is my understanding that certain other jurisdictions are online, as the minister has indicated. Can he share with us in terms of Canada, are we perhaps the last province to get online? How far behind are we in terms of this process?

Mr. Praznik: Mr. Chair, for those who work in this area, they tell me, I think, that it would be inaccurate to say that we are far behind. We are probably in the middle to upper-middle of the pack of Canadian provinces. We do not have the exact list of where everyone is, and I imagine it depends on what you are providing, your geology, the type of information that you are providing and how much of your province you are providing information for, but our people are comfortable. We are not the leaders yet in this field, but we are certainly not at the end of the pack and probably somewhere between the middle to the high end of accomplishment.

Ms. Mihychuk: Given the minister's and the government's interest in marketing and becoming as friendly as possible in terms of industry and users, are we going to look at additional resources to get the department modernized or current, or are we going to look at redeployment of existing resources?

Mr. Praznik: Mr. Chair, the answer to the first part of the question is yes, and I guess to the second, yes, as well. One always has to look at redeploying resources, whether or not one is getting value, or it is a high enough priority as time made something redundant. Obviously, when you are using technology, sometimes you can free up hands that were doing other things that you do not need to do now, and it only makes sense to put them in the new area.

I gather from the member's question, the gist of it is that--it is a question of whether we are prepared, as a government, to put additional resources in. I think the answer is yes. My job as minister is to make sure that in times, in very difficult times, those resources are fully justified and take those proposals forward to Treasury Board as we go and to justify them to some very tough colleagues. I am confident we will be able to do that as we advance.

* (1600)

As the member and I agree, sometimes it is worth investing some dollars. The return, certainly in this sector, can be very significant. But it is absolutely critical that we get value for what we are doing. We have not always done that.

Ms. Mihychuk: I commend the minister, and I hope him well in his presentation to his colleagues in Treasury Board.

The issue is really that to do something like this, this initiative, may mean that you have to pull people away from projects they are already undertaking, to get caught up. So I think in terms of the department that has seen a downsizing, and given that it brings in significant revenues, it would be, indeed, to our advantage to bring on some people so that we are at the forefront and can market and promote our province to create more jobs and economic security. So I commend the minister, and I wish him well, that we can go ahead with this.

In terms of the aggregate section, I am somewhat familiar; I did work in this section. There is a great deal of resource in this component. It is quite distant, actually, from Northern Affairs. Most of our reserves are utilized in the south. One of the major initiatives is the rehab program. Can the minister share with us what types of revenues we are seeing in that program? I believe there is a rehabilitation fund that is established by a certain levy on the extraction of aggregates.

Mr. Praznik: I think this is an excellent program. For those who have worked in this sector or industry or represent rural constituencies--I do not think there are many unrehabilitated pits in St. James--but for those of us who have some in our riding, they present a bit of an eyesore and a bit of a problem from time to time. As the member knows, this program levies a 10-cent-per-tonne charge on aggregate production, and I understand that we have, since the program's inception, collected approximately $3.7 million in the Quarry Rehabilitation Reserve Account. To date, approval has been given, by way of Order-in-Council, to undertake 232 rehabilitation projects at a total estimated cost of approximately $1.86 million, almost $1.87 million. Other projects are pending and will commence this year.

Two major projects representing individual expenditures in the order of about $200,000 are expected to be undertaken this year, and, as the member knows, many of these projects tend to be very small expenditures of money to clean up the pits. So it has been a very successful project. We are taking in more than we are currently spending, but that means nothing. As one knows in government, the demand for those dollars is certainly likely to be there in the years ahead. So we are very happy with the project. I think the industry is happy with it, and those who live near those abandoned pits and quarries, I think, appreciate the work that is being done in rehabilitating them. It is certainly part of a sustainable industry.

Ms. Mihychuk: In terms of the fund itself, is that kept in a separate revenue envelope?

Mr. Praznik: That, like the fire fund, is kept in a separate trust and does not, I believe, appear as revenue, general revenue to government, and it requires approval of Order-in-Council to expend dollars out of that account.

Ms. Mihychuk: Can the minister share, over the years that it has been in existence, what the revenues were in terms of the levy versus the amount of money expended?

Mr. Praznik: Mr. Chair, I will undertake to have staff, perhaps, prepare that in detail, if the member would accept that, as opposed to go through those numbers. I think, from the totals, we have taken in more than we have expended, but in any given year there are a lot of factors--which pits are closing. Some years we may take in very little revenue and yet have great expenditure or vice versa. A lot might depend on the construction program. I would suspect in 1993, although this is strictly off the top of my head, that because of the very significant rain and the delay in so many construction projects, it may have had an effect on what was drawn out. So we will provide that to the member.

Ms. Mihychuk: Can the minister share with us how many depleted gravel pits and quarries we have in Manitoba?

Mr. Praznik: I am tempted from the member's question to suggest maybe--my director of Mines, the member suggested we go and count them all, something like 6,000, approximately, pits in the province. We do not have an accurate description of how many would be depleted. I do not think that would be a high priority in our staff time. I jest a little bit.

As we get a sense that they are depleted or they are found or people come to us with the project, then we proceed to deal with them. Some that may look depleted still may have significant reserves in them. Many of them are on private property, et cetera, and people are not ready to abandon them and rehabilitate them yet. They feel there is still material there.

So there are quite a few, and I am sure there are many that are old and in certain parts of the countryside long abandoned and unknown to anyone. Those who left it may long be dead and gone, and there may have been no activity there for a number of years. So bit by bit, we clean it up, and that is our long-term intention.

Ms. Mihychuk: Well, I can attest that actually the department would know where, I would say, the majority, maybe 90 to 95 percent of those pits are located, does have a fairly accurate record, or did, of the reserves available.

Can the minister share with us what the aggregate industry is worth in terms of Manitoba's economy?

Mr. Praznik: Mr. Chair, I am advised by my staff that they would not be able to provide an accurate number to the member under the old act. We only really kept track on the ability of those that were government leases. Anything on private property would not be included in that number, and there are a significant number of private operations.

Under the new act, I am advised we require registration, so we should be able to, over the next short years, determine an annual amount more accurately than we could in the past.

* (1610)

Ms. Mihychuk: One of the issues that Winnipeg, for example, faces and communities such as Morden, Winkler, Emerson even, is the access to quality aggregate, quality. They have some fairly poor material in those areas, and in some other areas, trucking is a significant issue so that the cost of a tonne of aggregate is fairly high in those areas. Manitoba has a challenge because our resources are buried by a blanket of clay, and certain exploration activities have been done in other jurisdictions.

Can the minister share with us what type of exploration activities are occurring to find new aggregate deposits, particularly in the Winnipeg region?

Mr. Praznik: Mr. Chair, over the last number of years, I am advised by the department that there has not been an active campaign on the part of the department to identify alternative sources.

However, one should not forget that there is still a fair bit of nondepartmental activity out there. Certainly, municipalities which are a big user of aggregate are always on the lookout for sources of material that are inexpensive and close to where they want to use them. I know the municipalities in my constituency, we tend to be blessed with a fair bit of aggregate in my area, but most municipalities do that on a regular basis. I would expect the City of Winnipeg, also, it is in their interest to be pursuing that because they pay the bills ultimately.

I know that many of the private construction companies also regularly scout for good sources of aggregate material, because it becomes critical to them in bidding on projects, both for the province, for municipal governments or for private people.

Although the member raises a question, should the department--there is an issue here of good-quality aggregate material close to where it is needed to reduce the trucking costs which is the major expense in material--one has to look at whether or not it is the Department of Energy and Mines role to be finding that. Is there a need that we would be looking for it? I would suggest that, by and large, those who are paying the bills have a very direct interest in finding the least cost sources and are out there actively looking for them.

I can just share with the member, I know in my neck of the woods, there are a number of contractors who from time to time find some pretty good resources on private property and that there are options purchased. We may never know about until that individual is ready to bid on a project. They keep that fairly confidential, quite frankly, because that is the card up the sleeve for them on being the most economical bidder on a project. You learn about the source as they find a need to develop it.

I would not for one moment want to suggest that because the department is not actively pursuing this, that there is not a cadre of people across the province, whether it be work superintendents for municipalities or people working in construction, who are not out regularly looking for deposits of that material to reduce their own costs. So I think the work is going on, just not by the department necessarily.

Ms. Mihychuk: Well, in this case, I am going to have to disagree with the minister. There are not actually very many aggregate geologists in Manitoba. Most were housed in Energy and Mines, and they do have a different focus. Exploration is also important in this sector, I would argue, and it would seem unlikely, for example, that the City of Winnipeg would hire an exploration geologist to look for this type of resource.

In fact, Manitoba has had a long history of doing exploration and having an inventory of what aggregate reserves we have had in Manitoba. Similarly, we have a group of geologists that go out and give us information in terms of hard rock and base metals in Manitoba, so, actually, the Manitoba government has always played a role in terms of exploration.

Then we look at other sections, the Marketing branch, for example, or the Mines branch to provide information to the public sector in the form of maps, which the industry will come in and access. I would suggest that it is indeed unfortunate that in this area in which we have seen significant usage and cost to the construction industry and the increased burden in terms of municipalities, not only the consumers but in terms of road haulage and the wear and tear of our roadways as we see longer and longer distances of hauling, that it may be somewhat shortsighted on behalf of the government to actually shut down exploration in this area.

To the minister, are there any plans to perhaps review this focus?

Mr. Praznik: Mr. Chair, the advice I have received from people in my department is although we had the program, the feeling was that the vast majority of exploration work and the type of geophysical work that I guess has to be done to identify those locations in southern Manitoba has, in fact, been done.

So to maintain staff for limited work just for the sake of saying we are doing it is, I am sure, the reason behind the fact that those geologists are no longer with the branch. I am sure the member would agree that at some point you have a fairly significant database. That is not to say there are not pockets that are there, that every absolute corner of the province has been canvassed. So to reinstate that program with perhaps limited ability to find anything becomes a question of use of resources.

I would say, though, that an organization as large as the City of Winnipeg who is a major user of aggregate has some responsibility to be ensuring that it can keep its own costs down in making the arrangements that it has to make, and I am sure that if they believe there is a significant savings to be had, they do not necessarily have to hire a staff person. There are many consultants in the business who do that work on a regular basis, and a contractor, too. To look at a potential area or to review the data that is available to see if there is a potential area is not an onerous or ongoing bill.

Regularly, we get comments from members of the opposition and from others, and we are asked to do things that are in the best interest of the city of Winnipeg or any other municipality. I would make the argument that if it is in their interest, they have some obligation to pursue that.

I appreciate the member's point. I never want to preclude the need to reinstate or look at a position or put someone on contract to re-examine that information if it becomes, of course, a pressing need, but at the current time, relying on the advice of staff, it would not be a high priority, given the work that is already done.

The need may be a priority. The work that a geologist would do, from what I am advised, may have been significantly done. I also would not remove the City of Winnipeg or any private companies or any municipalities from the obligation to be looking at the most economical way to meet their needs.

By the way, I can tell the member I have not had communication that I am aware of from either the Union of Manitoba Municipalities or the Manitoba Association of Urban Municipalities requesting assistance in this area. I may be wrong but it is not an issue that has been brought to my attention by those organizations.

I appreciate the member's point. I guess there may be some disagreement between her and staff in my department as to priorities, but the point is noted and appreciated. I do not think we are arguing over the need for aggregate, perhaps the best way to find it or even if there is the ability to find any. I will leave that to the experts to argue with the member. I must admit I am not cognizant enough as a new minister to engage with great conviction in this debate one way or another.

Ms. Mihychuk: The department also undertakes the review through the land-use policies of development in areas that could potentially be of conflict. The area that we see the greatest amount of conflict is actually with housing developments that are encroaching on mineral deposits. These mineral deposits, because they are in the south, are aggregate deposits. Can the minister share with us the number of applicants that the department has reviewed and the number of conflicts or hearings that the branch has processed?

Mr. Praznik: Mr. Chair, my staff advise me that information they do not have here, but we will endeavour to provide that to her in writing.

Ms. Mihychuk: It is always when you have a mining industry, no matter whether they are pulling out tyndall stone, limestone, kaolin or hard rock, you have the encroachment of development onto the mining and you end up with land-use conflicts. I would be interested to see if the process has changed and the number of conflicts. I appreciate the minister's co-operation.

There are other encroachments in terms of mineral deposits. I would like an update in terms of--there was a showing I believe in the Seal River area and then I understand that there were several talks about park development. I am not quite sure, my memory does not serve me, but do we have situations where we have parks and mineral resources perhaps in conflict?

* (1620)

Mr. Praznik: The members asks one of the great significant policy considerations as this government deals with the set-aside and the Brundtland Commission Report and our parks policy which is part of that. One of the things we try to do--and I speak as a cabinet minister not just Minister of Energy and Mines--is as we identify land for set-aside that we want to absolutely reduce to the lowest possible degree the potential for conflict.

One of the things that we do when we are looking at the case of the parks the member references in the North is a very thorough examination of that territory for the kind of rock that would be mineral bearing or have potential land-use conflicts. That, by the way, also includes Treaty Land Entitlements and other things. So it is a long process, but a worthwhile one.

What potentially of course can hamper that is, you know you are only as good in that process as the information available to you. I would be somewhat remiss if I stood here today and said we know absolutely everything about the geology of the province that we can say with 100 percent certainty that in any given area we do not have potential mineral development. There may be minerals there for a use for which we do not know.

To the degree to which it is possible--and that is one of the reasons our Exploration Incentive Program is there--obviously we have targeted areas, and we want to go in and do more work in those areas. This is a critical part of the land set-aside process that we are involved in including settling treaty land claims.

The member has hit upon, I think, a very significant issue, and to the best of our ability we are trying to minimize if not eliminate those conflicts, but I would not want to be held to the point that in an area where our maps show no potential for mineralization, et cetera, metallic minerals, some day 20 or 30 or five years or 100 years from now somebody does not find something that presents a conflict or thinks there may be something there that presents a conflict because they would not be able to do exploration. But as much as possible we are trying to do that.

Ms. Mihychuk: In terms of the four or five parks that are on the table for establishment, has the minister been I suppose assured that there has been a recent survey by the geological crews of the mineral resources in those areas?

Mr. Praznik: The parks which the member refers to which are also set-asides under the Endangered Spaces Program were thoroughly reviewed by the Department of Energy and Mines in making the recommendation that there was not to the best of their knowledge a conflict.

The type of geology situate in those areas--I think there was some concern with one particular park. It was identified and resulted in a change in boundaries, et cetera. So to the best knowledge that we have and from the general type of geology of those areas, there was a very significant comfort level with the creation of these parks.

Ms. Mihychuk: There has been over the past few years the development of several new mines. Can the minister share with us what projects are coming online? What is the timetable? When can we send out job applications?

Mr. Praznik: The member and I have had a very, I think, good exchange in this debate. There is one difference of opinion that I think we share that I have not had a chance to comment on, but I know her references to Manitoba Mineral Resources and the need for government involvement in exploration. As well I think at one point in the interruptions we have had, there was a question about are we hiring more geologists to go and do exploration work.

I have a constituent who served on Manitoba Mineral Resources for quite a number of years. My staff, my assistant, before coming to work for government, was very much involved in exploration work. Interesting enough, I think Manitoba Mineral Resources had very limited success. They backed into one particular development that they did not find--and I look for confirmation--and basically use their back in expropriation of that resource to fund a relatively small exploration program over a number of years, and a host of other factors including government, climate, taxation and back-in provisions, kept most private exploration out of the province.

So we are now recovering from, I could say, a drought in discovery in the province. By the way, not all of it is internal to Manitoba. Some other provinces had very attractive programs that drew investment dollars away. So there are two sides to the coin.

Having said that, I know the argument has been made from time to time that since my party came to power we have less mining jobs today and that may or may not be true. If it is true, the fact of the matter is it really has to be blamed on lack of exploration over a long period of time. So we have a lot of improvement to do and the benefits of that improvement we are starting to see now and we will see over the next number of years.

So to answer specifically, I know one in my own neck of the woods, Rea Gold at Bissett, which obtained a new mine status which allowed it to take advantage of our incentive programs, they have done a great deal of exploratory work and they will be making a decision at some point in the near future as to whether to proceed or not. I am hopeful that it will be a positive decision, but that is yet to be made.

We are looking at opening two new shafts this year in Manitoba. I think in the fall we will be opening the Photo Lake Mine and the second one is the New Britannia Mine owned by TVX at Snow Lake which, obviously, gives that community a new lease on life. Generally speaking, I know the discovery by INCO of a very major deposit within sight of the headframe in Thompson bodes well because it means there will be a supply of material for that particular smelter operation for many decades to come.

So we are starting to see the results of some changes in policy. It starts slow, obviously, the first ones are always most difficult, but there is potential. The other one that comes to mind of course is Cross Lake where the First Nations is a significant shareholder in that development. It is felt that the reserves are sufficient to warrant a very significant operation. There are some internal issues now between the band or its development company and its partner Gossin Resources, which I hope are settled in the near future, and will lead that to another very significant project.

Again, I cannot underline enough that it takes 10--as my assistant keeps reminding me--five, 10, 20 years of work to actually see a project come to fruition. Manitoba and Canada, to some degree, has been remiss over the last two or three decades. We have always taken it for granted, and the consequence has been we had a very long period where we did not have the kind of intense work that was needed. Manitoba Mineral Resources did not at the end of the day lead us to another operating mine anywhere, nor even to the kind of deposits that we could foresee an operating mine.

So there were, in my opinion at least, very good reasons to get out of that and the kind of programs and exploration work we have seen recently and what we intend to see happen in Manitoba, hopefully, will lead to a bright future and more proven reserves and development in the years ahead. So it is a long process. We are starting. We have a lot of ground to make up. The country has a lot of ground to make up, but I hope at the end of the day it proves to be very fruitful.

Ms. Mihychuk: What is the status of the potash project in the Russell area?

Mr. Praznik: Mr. Chair, as the member may be aware, we are, I believe, a 49-percent partner with a French company, which owns 51 percent of that deposit. That particular French company traditionally--Canamax, I believe, is the name of the company. The French company is named EMC, which is a company owned by the government of France, and I understand that they operate some significant potash mines in the north of France, which they will have to close in the very near future. So their mandate has been to look around the world to find other sources of potash to replace those mines and, of course, bought into Canamax, who is our partner in the Russell operation, and now are 51-percent owners.

* (1630)

The fundamental question, I guess, for EMC, our partner, is if and when they will develop the Russell deposit. Obviously, they have a fair bit invested in it, to secure that particular reserve. I am not sure what they own elsewhere in the world. They do have, as a Crown corporation, I suspect, a political problem in what was an election year in France in closing some very significant mines. That can be pretty tough when you close those operations in your country, laying off potentially thousands of people, I would imagine, and open up a new mine halfway around the world. So, inevitably, they will have to do it, and I am talking relatively short-term future. We want to make sure that Manitoba is their operation of choice, their option of choice, and we are getting a handle on that as best we can.

Obviously, Manitobans will have to face a very significant decision when the day of development arrives because as a 49-percent owner, the question for us will be: Are we prepared to invest public dollars as a 49-percent owner in the very expensive investment of opening a mine and developing that resource? Given the current fiscal situation of the province, that is going to be, I foresee, a very tough--well, it might be a very simple question to answer because we may just not have the resources, in which case we will have to make a determination how best to see that mine developed.

What that will be, I do not know; if that involves finding another equity partner--but I can tell you this: however it is done, it will be done in such a manner that we will want to see a development of that operation that maximizes the revenue and opportunities for Manitobans. Exactly what that will be, I am not sure yet. I do not even want to speculate on it because I do not have, as a new minister--I am not comfortable enough yet with my handle on this issue. I intend to become so over the next number of months, but that is my best lay of the land to the member now, and I guess what we wait for, ultimately, or what we will be preparing for is the decision that our partner will have to make very shortly about developing a new source of potash as they close their existing source in their home country. They have a tough decision to make.

Ms. Mihychuk: That concludes my questions in this area.

Mr. Assistant Deputy Chairperson: Item 23.2 Energy and Mineral Resources (d) Mines (1) Salaries and Employee Benefits $1,874,900--pass; (2) Other Expenditures $596,100--pass.

2. Energy and Mineral Resources (e) Geological Services (1) Salaries and Employee Benefits.

Ms. Mihychuk: In terms of this section, this section has a number of geologists involved that are out there, I know, looking at the mineral resources of Manitoba in terms of the hard rock sector and in fact the surficial geology.

Can the minister tell us how many crews we have out this year and are those crews actually in the area that the minister has indicated as a priority, and that would be the northeast corner of the province? What are the projects that are going on for this year?

Mr. Praznik: Mr. Chair, we currently, I am told, have 16 field projects underway for the season through the department, about two-thirds of those are in the Flin Flon-Snow Lake area. We recognize that we need to be moving that work over to the northeastern side, but obviously we have a commitment to HBM&S in that area too as they wish to augment their copper and zinc reserves which are very critical and it is an immediate need.

I do not know if the member is aware, but I understand Flin Flon smelter has been importing concentrate from as far away as Australia to be processed in that particular smelter. That is good for the province in terms of additional work, but we would be more comfortable obviously if they had greater reserves. So as that initiative finishes off, we will be moving over to the high priority areas where we have done little work over the past. We are finishing off one set of issues and planning to move in the years ahead.

Ms. Mihychuk: Sixteen field parties--if I understand correctly there are close to 30 geologists in that section, and I could be wrong, but I am just looking under the Professional/Technical component, what are the number of other crews or geologists and what are they doing this summer?

Mr. Praznik: I understand, as we are in the final parts of the Canada-Manitoba Mineral Development Agreement, that a big thrust, obviously as we complete our work, is the putting to mapping or mapping the results that we have obtained over the last five years. So a fair bit of the staff I understand are dedicated to that function as we complete our requirements. Obviously we need the data too, so that would probably explain the difference.

Ms. Mihychuk: Can the minister assure us that the staff that have been working over actually what I think is about ten years that we have had mineral development agreements are going to be maintained after the Manitoba Mineral Development Agreement is concluded and that they will be actively out there looking to ensure the mineral resources for Manitobans?

Mr. Praznik: Mr. Chair, I learned a long time ago, in my short political life, never to give absolute assurances or strong assurances. One never knows what happens out of Treasury Board, but it would be our intent, obviously, as a department and which I share as minister--these are very valuable staff and a key to what we want to achieve--to maintain those people and continue to move them into the priorities that we take on once the development agreement is done. So I recognize her point and am very supportive of it.

Ms. Mihychuk: Can the minister share with us: these civil servants that are out in the field now and have been in the past years, what types of resources or showings have they discovered? Can you give us a handle on the value of those geologists? Are they worthwhile? The team that we have out there have, I am sure, discovered mineral resources in Manitoba, and I would just like the minister to share with us some of those showings.

Mr. Praznik: Mr. Chair, as I come to appreciate and understand the work of this particular branch and our geologists, our people, by and large, are out there doing the kind of background or base data that we obviously need to entice those who go in and do the further work in actually finding the claims. So, as I am advised, how does one put a dollar to that? A mineral undiscovered is worth nothing; a mineral discovered has potential. It is not until it is out of the ground, I guess, that one has a dollar value. How does one put that onto it? It is, I think, too difficult.

* (1640)

The point to be made, and I am sure the member would support this, is that the work of our geologists, in firming up a lot of that important data we need to attract exploration companies and further exploration work to lead to active mine sites, is critical. As was pointed out to me, the titanium-vanadium deposits, the interest that led to where we are today, came because of work that was done on our summer projects, that it was enough to attract others to come in and do the work. The granite issue is the same thing. So if one looks at the role of the department, I would say our role is not to go out and be doing exploration for the purposes of finding the specific mineral spots.

Goodness knows, if one of our staff found a Voisey Bay and the province owned it, I would be absolutely delighted and probably a hero by those who sit on Treasury Board, but the reality of it, of course, is they are building year by year, square kilometre by square kilometre, the kind of geological information that I know the member is familiar with, far more than I, that attracts those who come in and do the more intense work and ultimately the diamond drilling and those things that lead to the deposit.

How does one put a dollar value to it? I do not think you can. I would not want to begin, but it is absolutely critical to our program. Again, when we look at what our customers want to be here, good geological information that allows them to pinpoint where they want to invest their dollars and spend their time, it is critical, and that is what our staff ultimately do.

Ultimately I think it is probably dollars well spent in the end, and with the resources we have I think bit by bit we are building that base up to where we become, as some have said to me, probably currently one of the best places to be, and that is part of it. We have a lot of work yet to do.

Ms. Mihychuk: Well, the minister raises an interesting scenario. Let us say that we have one of our crews out doing some exploration in an area that we--I mean, I understand that we are trying to secure--there is a deal in the Flin Flon area.

(Mr. Peter Dyck, Acting Chairperson, in the Chair)

Let us say there is a crew out that discovers a deposit like Cross Lake. Is the minister then in favour of that geologist and the department claiming that for the citizens of Manitoba?

Mr. Praznik: Mr. Chair, I am advised that we have never had that happen with our geological crews, but if we were to find that Voisey Bay somewhere, and it can happen--one also learns in politics never to say never--then of course it would be staked in the name of the Crown, and we as a government, as the holder of that particular property, would then have a very significant decision to make as to what we did with it, but to date we have not had that happen. I do wish that I will have that decision to make or issue to deal with as a minister during my tenure.

Ms. Mihychuk: Well, it is a difficult subject, how many deposits civil servants have actually discovered and then others have worked up. Had we taken those steps I guess we would have a better knowledge as to the mineral potential of those properties, but normally it is my understanding that the work is done, exploration occurs, the information is released and then industry gets the benefit of that and follows up, so it is indeed very difficult to pinpoint the value of what I think is a valuable team of civil servants providing good to Manitobans. I just, for the record, wish that we did have a more solid basis of the mineral exploration that that crew has provided to Manitobans.

I am familiar that Newfoundland, and I had the opportunity to work there for two years, does take a more active role in terms of securing mineral assets for the province. Geologists are encouraged to stake claims for the Crown, and then those holdings are sold off, or at least that was the situation back in the early '80s.

Would the minister consider that for the province? Have there been such discussions here in Manitoba?

Mr. Praznik: Mr. Chair, the member raises an interesting set of questions and, I think, dilemma for government. Barring discovering on the surface of Voisey Bay, that is once in probably a century occurrence, the problem you get in if you do it actively, if you regularly stake ground, or you find some potential, and the Crown stakes it, and we put it out for sale and in essence get into the exploration business. I would worry, and I think it is a fair question, about the potential of conflict and liability for the Crown, obviously, because if others are buying from us on the fact that we think there is some potential and nothing turns out, did we have, as a government, a higher liability or duty because we are viewed as the providers of solid information, et cetera, and the like? I do not know. I would have to give that a great deal of thought. It does strike me as a potential for some difficulty and perhaps some liability.

You also get into the question of, should the province be in the business of furthering exploration? Because, needless to say, if you discover a deposit and want to prove reserves, do you go and find a private sector partner, or do you do it yourself? My friends in the mining business and my assistant, who was in it for many years, always points out to me the great risk involved.

The investment of taxpayers' dollars in getting into where we are doing more than determining basic geology, from which others go in and invest and often, more often than not, lose their dollars, I think, would be a very difficult issue for government. I would suspect there would also be a point where if you had some claims that your own geologists said looked good and you did not have the money to develop them, you might end up sitting on them for long periods of time and prevent them from being explored and developed.

If you ask for where I come from on this philosophically, I think we have an obligation as taxpayers to provide, if we want to encourage the industry, some basic geological information that leads others to invest, risk and, more often than not, lose their money in trying to explore for minerals.

If others are able to find a claim, prove resources and lead to the next stage of development and, ultimately, see that deposit commercialized, then we as a government have the full right and ability to take our share out of taxes. As long as we are not so heavily taxing that we lose the development altogether, and that has to be a happy balance compared to what others are doing, we as provincial citizens benefit from the profits, from the employment income, the taxes we receive, from sales taxes and all of those things.

I think the history of mining is such that wherever government has tried to get into the business of, whether it be exploration or mining, the result has always been unfavourable 99 out of a hundred times to the taxpayers in the end. So I think it is much better for government to define its role and its opportunities as one to provide the basic geological information, encourage the industry, perhaps invest some through incentives to get the work going that one wants and ultimately reap its benefit out of taxation at the end as opposed to being partners and active partners in mineral exploration.

Government should stick to what it knows best which I think is governing and basic public service. It should not get into the mining industry.

If we have learned one thing from Manitoba Mineral Resources from the days of Sid Green and the buy out, we have learned how to kill a mineral industry in the province, not to encourage one or not to benefit the taxpayers of Manitoba.

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Ms. Mihychuk: Can the minister share with us what the impact of the closure of the Geological Engineering department at the University of Manitoba will have on the geological community in Manitoba?

Mr. Praznik: Mr. Chair, for fear of diminishing the education of my assistant somewhat, he is, I understand, a graduate of that particular faculty, and the day the announcement was made, he and I had a very long talk about that. The advice I have received from him, and by the way I have had no comment yet, and I look to my staff, our offices had no comment or complaint yet from any in the industry about the loss of this faculty. From the comments that were made to me by my assistant, who was a graduate of that faculty, the sense was that it was really kind of a lost sheep to some degree between the skill sets that were really needed.

It kind of fit in but did not really offer what was needed and so, quite frankly, for an engineering faculty of the U of M, who has to make some tough decisions about where it wants to be and what it can do and what is effective, when I speak to someone who has gone through it and he says to me this is probably a very wise decision by that faculty, I have to accept that. That is confirmed to me by the fact that within the industry we have not had any hue and cry or anything anywhere near it. In fact I do not think we have had one call or comment from the industry saying this is something that is critical to us and we need it. In fact the silence from the industry on this announcement has been deafening, and that says to me that it confirms the comments that were made to me by a former graduate that this was probably not the most ideal of programs. So its effect on the industry will be--its loss will be nil.

(Mr. Assistant Deputy Chairperson in the Chair)

Ms. Mihychuk: Just one final area and this is in terms of employment opportunities. The department does send out crews, I am familiar with, into the North and all over Manitoba. What projects does the department have in terms of employing people from those regions, natives from the North, in particular? I mean we do tend to go up North, exploit those resources. It always seems to me that it would be beneficial to those people as well as something that the department could actually do in terms of the geological crews that are out there.

Mr. Praznik: Mr. Chair, the member for St. James gets me into an area that is perhaps one of my pet hobby horses within the Department of Northern Affairs. One of the observations that I make, having served as minister for almost two years, is every time we talk economic development in the North, the people we often talk with who represent economic development organizations who are not necessarily looking for work or projects themselves but are doing a lot of discussion about it, I have yet to take on as a project a determination of what opportunities are there from whether it be exploration, the advance exploration where they are proving drills, mine development, et cetera.

One of the things that I wish to take on over the next winter, and this is one of these back-of-mind projects that one in the spring is starting to look at when we get out of this place in a week or so and get down to a little bit of a vacation and clearing the mind and then planning where we are going to go in the following year.

I certainly want to make the effort, and we may involve this in the mines and minerals and petroleum conference. We may do this as a separate activity in the North next year, but find a way of dealing and making people aware of potential opportunities, matching opportunities with people who want to take advantage of them for the whole mining area in the North. There are lots of people who earn their living providing services to the mining industry currently. There may be, and I have no reason to believe one way or another that this is the situation, more opportunities that can be taken advantage of by northerners, and yet I have not yet seen economic development people in the North take this on as a practical project. So, having both portfolios, it is an area that I want to pursue. How we are going to do it yet, ask me in August after I have had a time to think about it and talk to some people who have expertise in this area.

Ms. Mihychuk: Then I take from those comments that we do not have initiatives specifically to provide perhaps field experience or exploration programs hosted by the department. Is the minister prepared to perhaps use that as a vehicle to provide some training and opportunities for people of the North?

Mr. Praznik: First of all, it has just been pointed out to me, that in co-operation with the Cross Lake Band and Gossin Resources, their partner, the department this year will be supervising two aboriginal geological student assistants over the summer. The department will also be working with the band, the Cross Lake high school, and universities in reviewing options that will encourage aboriginal enrollment in the university's geology program.

What is fundamental here is you need people who have the educational background to do the work, and the member well knows this and I do not question that for one moment. It is, how do you do the linkage, how do you encourage the interest? On the First Nations side, the fact that Cross Lake is a partner in this so-far deposit, that is all we have--hopefully, it will be more--is very encouraging, so we want to see where this goes. How we are going to take it forward, I am not sure yet. I think the critical part, though, is awareness.

You do not necessarily need programs if people are aware of opportunities. Sometimes you need a little help; sometimes you need a little guidance in education. I just share with the member at Bissett the work Rea Gold did, virtually all the timber that they purchased was from the sawmill in Manigotagan, the Kennedy sawmill; again, it is making sure that, if Rea Gold goes ahead, people who had the potential to supply locally are aware that this is happening and aware there are opportunities and are able to bid on that work.

What I found to date is sometimes the awareness level is not as high as it should be, and that is part of northern Manitoba because it is a vast area and not everyone knows what is happening everywhere else. I recognize your point, but how we are going to handle it, I am not sure yet. It is an area that I want to address.

Ms. Mihychuk: That is very positive and I look forward to those initiatives. I have cut out actually fairly recently an ad in the Free Press by Placer Dome Canada Ltd., and they are developing a gold property in Ontario. They are doing a community project with the native community there, and they are hiring a native employment co-ordinator. So, as these opportunities perhaps open, we can look at other jurisdictions and models. I think that this one, for example, deserves some exploration in terms of their initiatives in working with the aboriginal community in the North, and I look forward to similar projects in Manitoba.

Mr. Praznik: I wish to just say to the member that the reference she makes is an interesting one, because there you have a private sector company working with aboriginal people, and government is not a partner, or maybe it is not appropriate it be a partner. And I have to say to her that I know the Pine Falls Paper Company in my constituency--I attended a dinner just the other night with their shareholders from the Sagkeeng First Nation, which was a very significant dinner. Their relationship is building with southeast tribal resource development corporation where they have common interests.

I am not at liberty to get into detail, but some of the projects that are potential happenings in Manitoba are looking at the same kind of thing. So I would think that the business community, the corporate community in mining is certainly very cognizant of the need to involve aboriginal people in their operations and that there are far more good things happening out there than the public is aware of, and by and large because the media rarely cover it.

The member's point is well taken. I think a lot of that is happening, and I am certainly very encouraging of it.

* (1700)

Ms. Mihychuk: That is it for this section.

Mr. Assistant Deputy Chairperson: Item 2. Energy and Mineral Resources (e) Geological Services (1) Salaries and Employee Benefits $1,927,700--pass; (2) Other Expenditures $539,300--pass.

2.(f) Canada-Manitoba Mineral Development Agreement (1) Salaries and Employee Benefits $53,900--pass; (2) Other Expenditures $31,100--pass.

Resolution 23.2: RESOLVED that there be granted to Her Majesty a sum not exceeding $8,413,900 for Energy and Mines, Energy and Mineral Resources, for the fiscal year ending the 31st day of March, 1996.

Item 23.3 Mineral Industry Support Programs (a) Mineral Exploration Incentive Program (1) Salaries and Employee Benefits $72,700--

Ms. Mihychuk: Mr. Chairman, I have a question in terms of the Acid Rain Abatement Program in Flin Flon. We have invested a considerable amount of money in that program. Can the minister share with us how effective that investment has been?

Mr. Praznik: Yes, an excellent question, and for the good of our environment and the people of that district, I think, a good answer. HBM&S, or I should say the Department of Environment, as of last Friday have informed us that HBM&S are in compliance with all terms of their operating licence and have in fact bettered the requirements of their SO2 licence by reducing sulphur dioxide emissions by 30 percent since 1994 with the completion of the new bag-house filter system. The order under which they were living called for 25 percent reduction. So although it is never perfect, it is ahead of where they were supposed to be, and I would hope as technology develops it will even get better.

Ms. Mihychuk: Can the minister tell us how many days the air quality level in Flin Flon exceeded what is considered the base line last year?

Mr. Praznik: Mr. Chair, I do not have that information for the member.

Ms. Mihychuk: Well, I had the opportunity to go through a book produced by the Department of Environment, and it is indeed interesting. We have made significant improvements to the air quality because of the initiatives that we have taken in the Flin Flon area. However, it is still an ongoing issue, as the community does face numerous days per year where emissions are above what we would consider the base line. So as we look at technology, and hopefully we can do this with a joint program--and as we are doing, we can see the air quality in Flin Flon improved even more. In addition, I would inquire, has the department conducted or are they aware of studies conducted in the Flin Flon area in regard to the acidification of the lakes?

Mr. Praznik: Mr. Chair, I do not have that information. My staff does not have it on the acidification of the lakes. I would suggest to the member that information is probably best obtained from the Department of Environment or the Department of Natural Resources. What I would ask of my staff to do for the benefit of the member is to make that inquiry and either advise her where we can get it or if it is easily available provide it to her.

Ms. Mihychuk: One further question on this line item and that would be in regard to the potash program. This year we are including $220,000 in this program, can the minister tell us what that line item is for?

Mr. Praznik: I am advised that when the province bought into this particular project, the money for it, of course, was borrowed and this would be the annual interest allotment on that part of the debt. I would suspect the fluctuation will have to do with fluctuating interest rates or estimates of those rates.

Ms. Mihychuk: Thank you very much, I am finished with this line item.

Mr. Assistant Deputy Chairperson: Item 3.(a) Mineral Exploration Incentive Program (1) Salaries and Employee Benefits $72,700--pass; (2) Other Expenditures $45,000--pass; (3) Grants $2,000,000--pass.

(b) Acid Rain Abatement Program - Flin Flon $3,841,000--pass.

(c) Manitoba Potash Project $220,300--pass.

Resolution 23.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $6,179,000 for Energy and Mines, Mineral Industry Support Programs, for the fiscal year ending the 31st day of March, 1996.

The last item to be considered for the Estimates of the Department of Energy and Mines is item 1.(a) Minister's Salary on page 50 of the main Estimates book. At this point we request the minister's staff leave the table for the consideration of this item.

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

Resolution 23.1: RESOLVED that there be granted to Her Majesty a sum not exceeding $1,214,900 for Energy and Mines, Administration and Finance, for the fiscal year ending the 31st day of March, 1996.