Mr. Gary Doer (Leader of the Opposition): Madam Speaker, my question is to the Premier.

We have asked in the past for information that the government has available to it dealing with their analysis of the impact of privatization on rates, on investment, on jobs, on debt and other tax considerations, and the government has kept that information, unfortunately, secret from the people of this province. In the latest issue of CA Magazine, apparently a financial group has been established made up of Mr. Stefanson, Mr. Fraser, and Ms. Barker that has prepared a number of financial bits of information and analysis of information on the privatization of the telephone system. The CA Magazine goes on to say that this group has prepared earnings forecasts for the new private company.

I would like to ask the Premier, in light of the fact that it is the shareholders and the public of Manitoba who now currently own this telephone system, will the Premier make public today the earnings forecasts for the Manitoba Telephone System?

Hon. Gary Filmon (Premier): Madam Speaker, I have indicated to the member opposite on numerous occasions that the government of Manitoba, in reviewing the report and the analysis that was done for us by the Crown Corporations Council, was faced with an analysis that said that the Manitoba Telephone System was the highest-risk Crown corporation that we had of all the Crown corporations in public ownership. They said that based on a number of factors, one being that the field of telecommunications is the field of the most rapidly changing technology of any sector of our economy and that, as well as that, this particular telephone company had the highest debt-equity ratio of any telephone company in Canada, that in addition to that, the Manitoba Telephone System was going to be faced in the near term with decisions that might involve the investment of some half billion dollars with respect to their continued need to compete with the private sector because now, as compared to when they were operating for many, many decades as a monopoly, they are today a Crown corporation in which over 70 percent of their revenues are in competition with the private sector. That puts them in a position where they will be very much in jeopardy in their efforts to try and keep up with technology, to try and keep up with changes.

Madam Speaker, in order for us to make analyses as to what might happen to the rates, what we have to do is compare, as I have indicated before, to the rates that are charged by other telephone companies in Canada, either in public or private ownership. I indicated, for instance, in Rate Group 2--

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Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Filmon: I am sure that the members opposite do not want to hear the answer. They just want to go on with their rhetoric. The fact of the matter is they can act like a rabble as much as they like. I have a right and a responsibility to answer questions and to put information on the record.

Mr. Steve Ashton (Opposition House Leader): Madam Speaker, Beauchesne Citation 417 is very clear that "Answers to questions should be as brief as possible, deal with the matter raised and should not provoke debate." The Premier was asked a very specific question about financial projections that have been made. His answer bears no resemblance to that.

I would like to ask you to call him to order and answer a very serious question asked by the Leader of the Opposition.

Madam Speaker: The honourable member for Thompson does not have a point of order.

Mr. Doer: Madam Speaker, I asked the Premier to produce the earning forecasts that were produced for the private investment. Surely the public shareholders of Manitoba Telephone System, contrary to the Premier, the 57 members in this Legislative Chamber that deal with the Manitoba Telephone System and the one million Manitobans have a right to those forecasts, not just the brokers and investors. I would like this Premier to start acting on behalf of all Manitobans and not just the investors and the brokers in this province, so I would like the Premier to table the information as we have asked him. What is he hiding? What is he keeping secret? Why can he not share this information with all 57 members of this Legislature? What has he got to hide?

Further, the CA Magazine goes on to say that tax issues must be dealt with in the privatization of the Manitoba Telephone System. The financial group has been preparing work because investors will be insistent on accurate forecasts dealing with the tax changes of the federal government. Now we should be insistent as well as the investors of what the tax implications are. The Premier has refused to make that information public in the past. Will the Premier now today table that information that has already been prepared by senior officials of the Manitoba Telephone System? Release it for all of us rather than just a select few that may buy the shares of the telephone system.

Mr. Filmon: As I have indicated before, the Manitoba Telephone System has been informed that the assets of the Manitoba Telephone System can only be carried out on the books for purposes of depreciation at maximum, at fair market value. Since in the privatization process people will be paying for those assets and will be establishing the fair market value, that will be the value that will be utilized for depreciation purposes, and it will be the value that is placed upon the share offerings.

The second aspect to it, which I have also indicated previously, is that an advance ruling has been made in favour of the ability of the telephone company to transfer in as an asset at full value the pension funds that will be transferred in with the company, so a favourable tax ruling has been received there. Both of those matters of course would be matters that would need to be disclosed and will be fully disclosed in any prospectus that might be issued.

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Some Honourable Members: Oh, oh.

Mr. Doer: Members opposite clapping for a Premier that said that this information will be disclosed to the private future investors rather than to the present owners of the telephone system, the one million Manitobans.

We all know that the telephone system is worth well over the debt, Madam Speaker. That is why the Minister of Finance (Mr. Stefanson) is licking his lips with the $400 million or $500 million he is going to put in his Fiscal Stabilization Fund. We know that it is worth a lot more than what the government is telling the people of this province. They are trying to have it both ways: Use the debt as a reason to sell it but use the assets before the next election. I think it is a disgrace in terms of what is happening.

I would like to ask the Premier a further question. The CA Magazine also goes on to say, and quotes senior partners across Canada, that tax treatment can put privatization in doubt. It is one of the reasons Ontario Hydro has stalled the privatization efforts of the Ontario Hydro, because Ottawa has cancelled a section of the tax act.

I would like the Premier finally to table the forecasts of revenue, to table the analysis that he has. Make it public. Let us have the debate out in the open, not in the backrooms of the Conservative Party. And will he table the analysis dealing with the tax rulings as indicated by the accountants must be before the public before decisions are made?

Mr. Filmon: It is because, of course, the member opposite and his colleagues, the New Democrats, are so brilliant in their knowledge of values and investments that Manitoba Telephone System under their stewardship lost $30 million in Saudi Arabia--because they are so brilliant, Madam Speaker. That is why of course no Manitoban would ever trust them to value a corporation or to put any sound financial advice on the record with respect to any issue.

As I indicated prior, the tax information that the member opposite is putting on the table is information that is readily available, and the fact is that it is not possible under current tax legislation and regulations in Ottawa to value a corporation at greater than its fair market value. So we are not in the situation that Ontario Hydro attempted to be in of trying to value its assets at their purchase value as opposed to their fair market value.

We have received what we believe is sound advice on that, and that is how the corporation is operating, based on sound and solid advice, not on the musings of the Leader of the Opposition.

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Mr. Steve Ashton (Thompson): The Premier mentioned the word "trust" and the people of Manitoba trusted this Premier in the provincial election not to sell off MTS, Madam Speaker.

Given that the Union of Manitoba Municipalities, the Manitoba Association of Urban Municipalities, the Manitoba Society of Seniors, the Manitoba Pool, 67 per cent of Manitobans province-wide and 78 percent of rural Manitobans do not want MTS sold off, I would like to ask the Premier a very simple question. It is based on trust here. Will he trust the judgment of the people of Manitoba and refer the issue of MTS to a vote of the people, a shareholders' vote, a referendum on the issue of the sale of MTS?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, it is with interest that we listen to what Manitobans say. The member focuses on certain individuals. I focus on the kind of editorials that come out in various papers right across Manitoba. The most recent one--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Findlay: Madam Speaker, those editorials focus on the realities, the issues that are in front of us. They focus on competition; they focus on technology that is changing; they focus on the need for MTS to respond quickly, to be competitive, to be able to supply the best service in the future; they focus on the debt that government currently guarantees; they focus on the new capital that is going to be needed and they understand things have changed.

As Bob Rae mentioned when he was in Winnipeg last week, the NDP now has to embrace the concept of what debts and deficits mean to governments in terms of their ability to serve the basic needs of society. Supporting a Crown corporation that is in a competitive field is clearly not one of them and is identified in many editorials, also in rural Manitoba, Madam Speaker.

Madam Speaker: The honourable member for Thompson, with a supplementary question.

Mr. Ashton: My supplementary is to the Premier (Mr. Filmon). I want to ask when the Premier is going to stop listening to investment bankers based on Bay Street, editorial writers, and listen to the people of Manitoba by doing one of two things, either stopping the sale of MTS or, at the very least, put it to a vote of the people of Manitoba. Let the people decide, Madam Speaker.

Mr. Findlay: Madam Speaker, we were elected to govern in the province of Manitoba. We were elected to be fiscally responsible to look after the affairs of the province of Manitoba, to reduce the level of risk that we put the taxpayer to, and that issue was identified time and again by Manitobans as they speak to us, as they write editorials. The risk is high; the time has come to do what we are doing. It is right, to be sure, that we protect the government in terms of being able to be sure we deliver the health care, the education, the family services, to build the highways that are needed without unduly taxing the taxpayers. We are supported strongly and widely in Manitoba in that concept.

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Mr. Steve Ashton (Thompson): Madam Speaker, on a final supplementary and once again to the Premier. I want to ask the Premier if he will now state very clearly to the people of Manitoba, since we have seen in this Chamber that there are about 30 people in Manitoba left who do not believe this government broke its election promise, that in fact, in 1995, he said he was not going to sell MTS and that he will now be breaking that campaign promise if he goes and rams through a sale that is not supported by two-thirds of Manitobans and 78 percent of rural Manitobans.

Hon. Gary Filmon (Premier): Madam Speaker, above all, whenever I have run for office in this province I have promised to exercise my best judgment to do the very best that I can to ensure that the people of Manitoba are protected. I can understand why members opposite get very agitated and upset, why they want to shout us down when we talk about responsibility. They do not understand that term. Members opposite can go and they can spread misinformation. They can go and they can stir up their own political pot. They can go and be as irresponsible as they want. They can be on all sides of issues. They do not have to look at the long-term interests of the people of this province. They do not have to look at the long-term effects on the economy of this province. They can shout all they want, but the fact of the matter is, this is a government that is responsible. This is a--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Filmon: Madam Speaker, the members opposite can be as childish as they want. The fact of the matter is that we take responsibility to be in government seriously. We take our responsibilities to the long term--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Filmon: Madam Speaker, we take responsibilities for the long-term interests of the people of this province and the economy of this province. Based on that, we believe that we are making the right judgment for the future of Manitoba.

Mr. Doug Martindale (Burrows): The Edmonton Social Planning Council have interviewed 40,000 people in the city of Edmonton, and the results of their research shows that the ability to pay for a telephone is affecting all low-income people, including people who are unemployed, people who are working but low-income and people on social assistance, so that fewer of them own a telephone.

I would like to ask the Minister responsible for the Manitoba Telephone System if he can guarantee that rates will not increase in Manitoba as a result of privatization, and if he cannot guarantee that, then why are you selling the Manitoba Telephone System?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, we have a very competent regulator in Canada called the CRTC that takes into account all the factors that the member opposite has mentioned. I also want to remind the member opposite that we have a penetration rate in the telephone system in excess of 98 percent. I cannot give him the exact figure, but it is in excess of 98 percent, a very high penetration rate.

The CRTC considers all those factors in the many, many rulings that they are involved in to be sure that we have the best telecommunication service for all Canadians across this country.

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Mr. Martindale: I would like to ask the Minister responsible for the Manitoba Telephone System if he has talked to his colleague the Minister of Family Services (Mrs. Mitchelson) or whether they are working at cross-purposes, since we know that privatization is going to make a telephone unaffordable and many people will not have a telephone.

Presenters on Bill 36 said over and over again that they need a telephone to find a job. It is absolutely essential to have a phone to find a job. Why is this minister working at cross-purposes with the ability of people to find a job in Manitoba?

Mr. Findlay: Madam Speaker, CRTC's major mandate is affordable universal telephone service to all Canadians. The other thing the member must realize is the telephone bill is made up of local, interprovincial charges, and because of competition over the last five or six years, long distance rates, which benefit every telephone user, have gone down in the vicinity of 50 percent.

Mr. Martindale: Can the Minister responsible for the Manitoba Telephone System assure low-income people in Manitoba, including the unemployed, people who are working but low income, and especially the people who are on social assistance, that rates will not increase, given that he knows that the CRTC always gives the increases they are asked for, including in Alberta of $6 a month increase in rental, so that people can afford a phone, so that the same number of people will continue to have a phone so they can get a job and get off social assistance?

Mr. Findlay: Madam Speaker, as telephone companies put forward rate applications to CRTC, CRTC holds hearings where every interested individual group of citizens across the country can make representation to present their case. At the end of the day, CRTC makes those fair and reasonable decisions to be sure that the majority of people, the vast, vast majority of people have access to a telephone at a reasonable rate as is the case in Canada. There is no indication that that will change, and ownership of the telephone company is not relevant in the process of making that decision.

Mr. Tim Sale (Crescentwood): Madam Speaker, one of the most deceitful elements in the undemocratic plan to privatize MTS is the pretense that the company's board will be made up of Manitobans and that the real head office will be here in Manitoba.

Will the Minister responsible for MTS now acknowledge in this House, as he had to in committee, that the so-called protections are just shams which evaporate the moment that the debt is paid off to the Manitoba government?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, the member was present in committee. Within the bill it is very clearly stated that the majority of directors must be Manitobans and the head office must stay in the province of Manitoba. I would request him to read the bill and pay attention to that.

Madam Speaker: The honourable member for Crescentwood, with a supplementary question.

Mr. Sale: Madam Speaker, is the minister then saying that Mr. Yaffe, the corporate counsel, and Mr. Benson, who answered questions at committee, were wrong and that the certificate of continuance which will be issued with these conditions in it cannot simply be amended at any meeting of the board of directors or any properly called shareholders' meeting, that all these protections evaporate, all that is left is a set of letters patent that can be amended at any time? These protections are shams. Is he now saying his own counsel was lying, or is he not telling the truth?

Mr. Findlay: When the debt is defeased, there is continuance under The Corporations Act. We have made it very clear in open presentation to Manitobans to give them the offer to purchase. Manitobans will be making the decisions of the Manitoba Telephone System in the future, assessing the risk and supplying the level of services necessary. I cannot imagine Manitobans wanting to move the telephone system out of Manitoba.

Madam Speaker: The honourable member for Crescentwood, with a final supplementary question.

Mr. Tim Sale (Crescentwood): Will the minister, who has just now confirmed that his first answer was incorrect and Mr. Yaffe was correct that these protections are shams, will he now explain how Manitobans are supposed to believe that there will be nobody owning more than 10 percent of the shares, that there will be no accumulation of shares on the part of multinational or other Canadian telecommunication corporations, that that promise is also a sham, as confirmed by Mr. Yaffe?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): To increase the level of Manitoba participation, we removed the 25 percent available to a strategic partner. We have lowered the maximum that any one individual or group of individuals can own from 15 to 10 percent. [interjection]

Madam Speaker: Order, please.

Mr. Findlay: As the Premier (Mr. Filmon) pointed out earlier in Question Period, we have a responsibility to protect the taxpayers of Manitoba, to reduce the level of risk that they are going to face in the future if it remains a Crown corporation. Members opposite refuse to ever address the issues in front of this government, in front of all--[interjection]

Madam Speaker: Order, please. The honourable Minister responsible for the Manitoba Telephone System, to complete his response.

Mr. Findlay: Around the world, government ownership was the order of the day in the past. The lists that have been privatized to this point and the list that we have privatized in the next year or two is rather phenomenally long as every government assesses the level of risk that they face in the telecommunication industry that has high competition, further need for capital and under a high level of risk. Those are the issues that we face, and those are the issues on the basis of which we make the decision that we protect the taxpayers best by the process we are involved in.

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Mr. Kevin Lamoureux (Inkster): The Liberal Party is greatly concerned in terms of how this government is going to be using the revenue generated by the sale of MTS to manipulate the voters in the next provincial election.

Madam Speaker: Order, please. The honourable member for Inkster, to pose his question.

Mr. Lamoureux: Madam Speaker, on March 16, 1995, the Premier made a commitment that projects totalling $191 million will be approved for health care capital construction. My question to the Premier is, given that he has broken the promise on the sale of MTS, will he fulfill his other promise of the capital infrastructure and make that commitment today that that money is going to be reinstated with the proceeds from the sale of MTS?

Hon. Gary Filmon (Premier): Madam Speaker, I would think that a Liberal whose government is cutting back on transfers to the province for health and post-secondary education amounting to some $220 million per year would hardly have the nerve to stand up and ask about expenditures on health care from a government who spends more as a percentage of its budget on health care than any other province in Canada.

The fact of the matter is, we are spending over one-third of our entire expenditures on health care in this province, no thanks to the Liberals who have cut us back by $220 million in annual transfers.

Madam Speaker: Order, please.

Mr. Gary Kowalski (The Maples): I have been listening very carefully to the Premier's answer, and I am still looking for an answer to the question. I am familiar with Beauchesne's section 417, I have heard it often enough here, that the answer shall be as brief as possible and answer the question or he does not have to answer it.

The member for Inkster asked a question about whether or not he will put money into the capital projects in health care. Is there an answer? If not, I believe the Premier is out of order talking about many other issues.

Madam Speaker: Order, please. On the point of order raised by the honourable member for The Maples, I would remind the honourable First Minister that his answer should be as brief as possible and should pertain to the question asked.

Mr. Filmon: Madam Speaker, despite this reduction in transfers from Ottawa of some $220 million annually, we are proceeding to keep our commitments with respect to health care. The members opposite may know that, in evaluating the priorities under our Health capital program, we have renewed our commitment to the Manitoba Cancer Treatment and Research Foundation and that we have indicated publicly that, in accordance with the new regional health authorities, we will be again reviewing the priorities and that capital commitments will continue to be made in the priority in which they are required to ensure that the people of this province continue to get the highest standards of health care that we can possibly deliver and, as I have indicated before, to the funding that is the highest percentage of funding given to health care of any province in Canada.

Mr. Lamoureux: Will the Premier today make good the word that he said back in March 1995 that $191 million was going to be vested in capital infrastructure for health care? We do not have to wait to two months prior to the next provincial election. Will the Premier make the commitment today so that he is not--

Madam Speaker: Order, please.

Mr. Filmon: Madam Speaker, I know that the member opposite is having difficulty because he is getting signals on the one hand from a Leader who says she is swinging left, on the other hand is trying to say that they approve of privatization of Crown corporations but they just do not like the way this is being done. They are all over the map on it. I am trying to figure out what he really has in mind here. He says on the one hand that he is against the Manitoba Telephone System privatization, but he wants us to use the money from the privatization. You cannot have it both ways. I know that the member opposite is confused, but I think that he is adding to the confusion.

Mr. Lamoureux: Madam Speaker, my question to the Premier is, how does the Premier of this province justify to Manitobans that he is using the proceeds that are going to be generated from the revenue of the sale of MTS for nothing more than a cash cow that is going to be put into a slush fund for his personal re-election as Premier of the province? That is an absolute disgrace and the Premier should apologize--

Madam Speaker: Order, please.

Mr. Filmon: Madam Speaker, I totally reject all of the information that the member opposite put on the record. It is absolutely false. The only money that will accrue from the proceeds of this sale will be to the interests of all the people of Manitoba.

Ms. Jean Friesen (Wolseley): Madam Speaker, the Minister of Education was recently sent over 140 letters by Steinbach parents asking simply that the cuts to education stop now. We know that the minister refuses to meet with representatives of over 2,000 north end parents until she is publicly embarrassed. We know that the minister is frequently and openly contemptuous of legislative debate.

I would like to ask the minister today what her response will be to those parents from Steinbach.

Hon. Linda McIntosh (Minister of Education and Training): Madam Speaker, I see that the members opposite have run out of questions on the MTS. Having extended the session to deal specifically with the Manitoba Telephone System, I see the members opposite have now run out of questions on the Manitoba Telephone System and I hope that then--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please. The honourable member for Thompson, on a point of order.

Mr. Steve Ashton (Opposition House Leader): Madam Speaker, Beauchesne does not have any specific reference to ministers being able to give editorial comment in answer to questions, particularly in Beauchesne Citation 417.

I also want to add that we have plenty of questions from MTS. We are just pacing ourselves for the next little while. I do not think the minister will have to worry; we will have lots of questions on MTS before the session is over.

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please. On the point of order raised by the honourable member for Thompson, actually I was going to rule in his favour but have some difficulty doing so given the debate he entered into while raising his point of order.

Madam Speaker: The honourable Minister of Education, to respond to the question asked.

Mrs. McIntosh: I am presuming then that they will give leave today to finally debate the Manitoba Telephone System bill.

The member for Wolseley, having now as part of their broken agreement on the House rules extended Question Periods, knows that I meet regularly with parents and her comments about me not meeting with parents and so on are out of order in terms of accuracy. I also say that she knows perfectly well that in terms of funding for Manitoba schools, why just this day in the paper we have people indicating the results of the education system as being extremely satisfactory, clearly pleased with what is happening in education with the dollars they have been given.

The people from Steinbach I have communicated with regularly, people from the Steinbach area. I have met with the board there on many occasions. I have met with teachers from the Steinbach area. I have met with parent council from the Steinbach area, and I have indicated to them what everybody knows to be true, we have increased funding to education by over $113 million since we took office in 1988.

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Ms. Jean Friesen (Wolseley): Madam Speaker, would the minister confirm that the poll conducted by Winnipeg School Division No. 1, which she just quoted from, where 4,000 parents, 4,000, expressed serious concerns about her education cuts, reflects exactly what she has been told in recent weeks in letters from the Transcona-Springfield trustees, Brandon trustees, Brandon teachers and hundreds of presenters at the committee hearings, that her education cuts have hurt a generation of children?

Hon. Linda McIntosh (Minister of Education and Training): I point out to the member what I have tried to point out to her on numerous occasions. We have been throwing money at education in Canada for 25 years, throwing money I say across the country, huge, huge, huge amounts of money being designated to education across Canada in the last 25 years. The results that have been obtained until ministers of education across this nation started looking at measurable standards, improved curricula, the results were not giving us what we should have been expecting for the money given across this nation in the last two decades until the recent few years when we hear parents saying these things: that 79 percent are pleased with the quality of education, 81 percent are tremendously satisfied with the teaching, 77 percent are satisfied with the performance of the school administration, 67 percent believe in provincial examinations. Madam Speaker, the people are clearly satisfied with the results of the education that they are getting for the money that we are giving them.

Madam Speaker: Time for Oral Questions has expired.