Mr. Gary Doer (Leader of the Opposition): My question is to the First Minister.

The legitimacy of this government to proceed with the sale of Manitoba Telephone System is in great debate. This government did not promise to sell the telephone system during the election campaign, in fact, made the opposite promises in town hall debates, in all-party debates in many communities across Manitoba. Further to that, the government has hired brokers to do the independent evaluation and now we are in possession of letters from the same brokerage firm--Wood Gundy being one in particular--that did the independent evaluation that is now out soliciting Manitoba investors to buy the shares in the Manitoba Telephone System.

I would like to ask the Premier, does he feel it is appropriate that Wood Gundy would be the lead brokerage firm for the sale of the Manitoba Telephone System shares and also was in a capacity of providing a so-called independent review of the sale of the Manitoba Telephone System, and would the Premier look at prohibiting the Wood Gundy corporation from selling shares and being the lead brokerage firm in terms of the integrity of this decision?

Hon. Gary Filmon (Premier): Madam Speaker, I am in possession of a copy of a letter from the member for Thompson (Mr. Ashton) to the Manitoba Securities Commission referring the letters that have been referred to by the Leader of the Opposition to that commission. Obviously, this is a quasi-judicial body and they are the ones who ought to review the conduct of the brokerage firms and those involved in the letters of solicitation or the letters of promotion that were involved, and these are matters that should be in their jurisdiction and should not require or mandate interference from the government on those issues.

Mr. Doer: Madam Speaker, Wood Gundy, a company well known to this government, a major contributor to the party opposite, is a company that this government hired to do the so-called independent evaluation. The Premier has the authority to prohibit a company that did the so-called evaluation from being a company that is the lead brokerage firm in terms of selling shares to the investors in Manitoba. He has the authority to do so because, according to the Financial Post, this company will be the major link between the seller, the government, and the investors. So it did the evaluation and now it is the lead brokerage firm that stands to make millions of dollars from its decision to recommend to the government that it sell the Manitoba Telephone System.

In order that this decision can be made in the most ethical way possible, will the Premier do the ethical thing and prohibit this company from both being the evaluator and the seller of shares, an authority that he has the power to proceed with?

Mr. Filmon: Madam Speaker, Wood Gundy have been lead brokers for the province since the 1960s. They were lead brokers for the province in the Schreyer years. They were lead brokers for the province in the Pawley years. They were lead brokers in terms of the funding for Limestone, establishing the funding for Limestone, and they made significant contributions to the New Democratic Party in those years. Wood Gundy's record in leadership as the lead underwriter for the province is one that has resulted in it continuing to be in that role for many, many decades over many different administrations in the province. It is for that continuity that they continue to be in that role. This is not something that has been picked out of the blue or a special commitment to this government or a special commitment to Wood Gundy. They have been the lead brokers for three decades, and that is why the member opposite, choosing to make politics over this or trying to create a phoney issue, makes absolutely no sense.

Mr. Doer: Madam Speaker, indeed, I think the Premier did pick this company out of the blue because it was one of the companies chosen by the Premier--and disclosed by the opposition last December 16--to effectively break the election promise of the Premier and the members opposite, to provide for an evaluation of the sale of the Manitoba Telephone System which is, of course, very unlike any other decision that the Premier had cited because this is a broken election promise.

I would like to ask the Premier: How much money will Wood Gundy make from the evaluation of the sale of the Manitoba Telephone System, and what is the projection of how much Wood Gundy will make from the sale of shares to the investors? Does he not see the conflict between Wood Gundy's role to evaluate and Wood Gundy's role in terms of getting commissions from the people of Manitoba and the investors of this province?

Mr. Filmon: The matter of what fees they get is dependent on the proportion of shares that they sell. Commissions are paid based on the selling of shares, so I cannot predict that at this time.

Mr. Steve Ashton (Thompson): I asked the Premier on Thursday in regard to the obvious difficulty where you have Wood Gundy on the one hand being the broker that recommended the sale now being the lead broker on the sale itself, and prior to the issuance of the prospectus, putting out letters encouraging people to invest in that based on information that they probably are one of the few, supposedly, that would have access to it.

I want to ask the Premier, first of all, whether there has been any investigation of the clear potential conflict here when you have this web of different roles. Now I am not talking about the Securities Commission. I have filed that letter. I am asking, has the Premier ensured that Wood Gundy is dealing up front with this, Madam Speaker, with what is obviously a multimillion-dollar share issue in terms of their dividends alone?

Hon. Gary Filmon (Premier): Madam Speaker, I indicated on Thursday that it was appropriate for that matter to be referred to the Securities Commission, so we take it out of the realm of being a political football or a political issue and put it where it belongs as an appeal to the quasi-judicial body, the Manitoba Securities Commission.

But, you know, this matter keeps getting raised over and over again as members opposite one by one lose the legitimacy of their arguments that they put forward in opposing the sale of the Manitoba Telephone System. One has to wonder why now they attack Wood Gundy, a brokerage firm that has had a relationship, as I said earlier, that dates back to the 1960s and a firm that was so trusted by the New Democrats when the Pawley administration approached Wood Gundy in those days to undertake an assessment of project financing for Limestone. They provided that assessment and were paid to do that and then afterwards were asked to be the lead broker at a heavy commission to raise the money. They saw no difficulty with that. They felt that the relationship was a good relationship, and they had trust and confidence in Wood Gundy.

Now a similar process is gone through and all of a sudden it is illegitimate, Madam Speaker. It does not make sense, but then again neither do most of the arguments that are put forward by the member for Thompson.

Mr. Ashton: Madam Speaker, the NDP government of the day did not ask Wood Gundy to recommend--

Madam Speaker: Order, please.

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

Mr. Ashton: Madam Speaker, I want to ask the Premier as a supplementary, what commission agreement has been reached--and if the Premier cannot answer that, perhaps the Minister responsible for MTS--with Wood Gundy, and in fact with the two brokers who will be the two lead brokers on this? What is the commission rate?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, as I referred earlier and to earlier questions from the member opposite, we have indicated that some $300,000 was paid for the services so far, but the actual end result of what the commissions will be, there are industry norms and those fees are being negotiated at this moment, but there are industry norms that are in place.

Mr. Ashton: Madam Speaker, I want to ask a final supplementary. Is the minister then saying that they have appointed these two brokers as the lead brokers, but they are still negotiating the commission rate that they are going to receive?

Madam Speaker, can we please finally get some real information on how much these brokers are going to be paid, the commission rate, the exact commission rate?

Mr. Findlay: Madam Speaker, there are industry norms. The idea is to negotiate them down at this point.

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Mr. Tim Sale (Crescentwood): Madam Speaker, just so that we can finally get this information, would the Minister responsible for the Telephones please tell us what those industry norms are? What is the bracket, 3 percent to 5 percent, 2 percent to 3 percent? What is the bracket? What are the negotiations? Finally give us some truthful answers.

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I have a schedule of what those range of rates are based on other offerings and dispositions that have taken place within Canada. I do not have that here with me. I will undertake to provide that information to be absolutely certain that we give the members of the opposition and the public the exact information on what those ranges are.

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

Mr. Sale: Madam Speaker, the question of the identity of the lead brokers and the commission rates is surely a question that has already been decided. If a draft prospectus was ready to be put before the commission more than a week--more than two weeks ago, surely the Minister of Finance knows the answer to the question. Will he get up and answer the question in the House? What is the commission rate for the lead brokers and who are they now that two of them have amalgamated? Is it the same group? How much are they going to make?

Mr. Stefanson: Madam Speaker, I indicated in response to the first question that we do have that information. I do not have it here at my fingertips here in Question Period, and I will undertake to provide that information to members of the opposition. It is that simple. The information on the range of commission rates is available and I will provide that to the members of the opposition.

Mr. Tim Sale (Crescentwood): On a new question, I want to ask the minister responsible for the prospectus, which appears to be, although we are not quite certain about this, the Finance minister, why in the draft prospectus that was leaked to the media were two current members of the telephone board apparently going to be appointed to the new board as well, Mr. Thiessen and Mr. Spletzer, identified as having received $146,000, equivalent to the salaries of assistant deputy ministers working for a full year, to look at from a position of no particular expertise the Faneuil deal which was not even a deal the telephone system wanted but was being forced on them by Mr. Bessey, Mr. Benson and the Premier (Mr. Filmon)?

Why do they have to pay these two people $146,000 of ratepayers' money to do something they are not particularly qualified to do?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, when the issue of the Faneuil opportunity came to Manitoba Telephone System, the executive at the time requested that a committee of six people, three board people, three executive people, be assigned to do the due diligence on the process of analyzing the Faneuil deal. The board and the executive decided on that committee of six. These two members that the member opposite mentions were on that particular committee, and it was felt that they should be there because of their business experience in the process of doing the due diligence. This process actually took 15 months, a long period of time, much longer than anybody anticipated at the beginning, but they did an extensive, very good due diligence. I would recommend to the members opposite that had they done that on MTX, they would not have got into the mess they got into.

Mr. Sale: Madam Speaker, could the Minister responsible for Telephones tell us why the draft prospectus does not reveal that the Faneuil deal is not a seven-year deal but a nine-year deal, not a $47-million telemarketing deal but a $67-million deal?--because the cancellation provisions of the deal require essentially five years notice to cancel--nine years not seven, $67 million not $47 million. Will the draft prospectus be corrected to reveal the true information about the cost to us as ratepayers and to the Manitoba Telephone System of this Faneuil deal?

Mr. Findlay: Madam Speaker, Faneuil is certainly one of the key individuals involved in the telemarketing industry in Manitoba which has brought over 80 companies to Manitoba which involved over 5,000 jobs in the province of Manitoba, many millions of dollars of activity on the telephone network in and out of the province of Manitoba. It is a growth industry in Manitoba. Faneuil brings a certain level of expertise to the province of Manitoba. The MTS agreement is one major part of their business, but at this stage it is only about 25 percent of their business activity and 75 percent of its business activity with other companies, most notably companies outside of Canada, outside of Manitoba, which bring foreign business to Manitoba to be done in Manitoba and significant stimulation to the Manitoba Telephone System long distance network.

Mr. Neil Gaudry (St. Boniface): Ma question est pour le ministre de la Voirie et du Transport. Ayant appris hier que la nouvelle plaque d'immatriculation des automobiles ne sera pas sous forme bilingue, le ministre peut-il confirmer aujourd'hui cette décision et en donner les raisons?

[Translation]

My question is for the Minister of Highways and Transportation. Having learned yesterday that the new automobile licence plate will not be in bilingual form, can the minister today confirm this decision and provide the reasons for it?

Hon. Glen Findlay (Minister of Highways and Transportation): Madam Speaker, we introduced the licence plates about two months ago. Certainly there were requests on the part of SFM to consider adding another word to the licence plate, Bienvenue. We have certainly considered that. Over the course of time we have met twice with SFM, once on November 12 and once this morning. We have received a lot of input from Manitobans and made the decision that the plate should stay as initially announced because we are not a bilingual province. We are a province that has a French language services policy and the legal interpretation is that the plate, as initially released, was legally correct and served the needs of Manitobans. All MLAs on this side have received a lot of input on the plate and it is not an easy decision; it is a tough decision, and we think it respects the will of the majority of Manitobans.

Mr. Gaudry: Ma deuxième question est pour le ministre responsable des Services en langue française. Je demande au ministre d'expliquer à cette chambre, de quelle manière la décision du ministre de la Voirie et du Transport est-elle conforme avec les politiques des services en langue française actuellement en vigueur?

[Translation]

My second question is for the Minister responsible for French Language Services (Mr. Praznik). I request that the minister explain to this House how the decision of the Minister of Highways and Transportation is in accordance with the French language services policies currently in place.

Mr. Findlay: Madam Speaker, the French language services policy relates to activities in the Legislature, activities in the courts, and this is not deemed to be a legislative action.

Mr. Gaudry: Ma question est pour le Premier ministre (M. Filmon). J'ai l'honneur de déposer ici dans cette chambre un grand nombre de pétitions, au-delà de 1700 signatures en faveur d'une version bilingue de la nouvelle plaque d'immatriculation manitobaine. Le Premier ministre accepte-t-il de réétudier ce dossier personnellement en considérant ces pétitions afin d'être fidèle à la reconnaissance du fait français au Manitoba à laquelle le Premier ministre s'est identifié depuis 1988?

[Translation]

My question is for the First Minister. I have the honour of tabling here in this House a large number of petitions, over 1,700 signatures, supporting a bilingual version of the new Manitoba licence plate. Will the First Minister agree to re-examine this matter personally, taking these petitions into consideration so as to be faithful to the recognition of the French fact in Manitoba with which the Premier has identified himself since 1988?

Hon. Gary Filmon (Premier): Madam Speaker, indeed, the member is right. I did function as the Minister responsible for French Language Services during the early part of our mandate in government and indeed I have been very proud to work with the SFM and our Francophone community to bring in a series of changes that I think have been very positive for Manitobans and particularly with respect to the French language services that we enjoy in Manitoba.

As the member knows, all laws and regulations are now enacted in both French and English. French and English, as a result of the Supreme Court ruling that we had in the '80s, have equal access in the Legislature and before the courts, and capacity exists to ensure that this is the case. As well, virtually all government publications are available in French and English, often in bilingual single publication. All forms required by legislation regulations are available in a bilingual format. The province enacted legislation that created the Division Scolaire Franco-Manitobaine to enable Francophone school governance consistant with Section 23 of the Charter.

In co-operation with our Francophone community, health care institutions including hospitals and nursing homes have been identified as candidates for the provision of French language service, particularly within the designated French language service area. Approximately 20 such institutions provide French language service for patients. The government has not only improved the provision of French language services but has implemented an active-offer policy whereby designated offices in the designated areas actively offer service in French. Francophone civil servants and French-speaking civil servants have been able to avail themselves of special improvement courses to ensure the improvement of the French language capability among French-speaking civil servants, and the government has actively supported the establishment of the Association of Bilingual Municipalities. As well, the government has actively co-operated with the Francophone Chambers of Commerce in Manitoba. We have done--

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

Mr. Steve Ashton (Thompson): On a point of order, Madam Speaker.

The Premier is very clearly just reading from his briefing book, and if he would have cared to perhaps listen to the question from the member for St. Boniface, the question was very specific, the series of questions was very specific, related to the licence plate.

I do not know, perhaps the Premier misunderstood, but I would ask that you call the Premier to order and ask him to answer the very serious question put forward by the member for St. Boniface.

Madam Speaker: On the point of order raised by the honourable member for Thompson, I will take the matter under advisement so I can review Hansard and report back to the Chamber.

Madam Speaker: The honourable First Minister, to complete his response.

Mr. Filmon: In conclusion, Madam Speaker, it is very clear that this government has acted on a wide range of policy decisions with respect to French language services. As has been said by the Minister responsible for Transportation (Mr. Findlay), Manitoba is not an officially bilingual province. The only officially bilingual province is New Brunswick. Our requirements are the mere opposite of those of the government of Quebec and on their licence plate it says Quebec, Je me souviens. It is in French only and reflective of the fact that they have exactly the same constitutional requirements as we do.

Mr. Dave Chomiak (Kildonan): Madam Speaker, one of the other areas for which the government does not have legitimacy on its agenda is the moving towards privatization of home care. One of the areas of home care privatization that the minister has refused to answer in this House is whether or not the nursing portion of Home Care, that is, the portion provided by the nurses from Continuing Care--R.N.s and LPNs but specifically R.N.s--to Home Care are going to be privatized.

Can the minister confirm that the 71 remaining R.N.s at Home Care, Continuing Care, have been told that their jobs will no longer be with the government after April 1 of next year and that the jobs will be privatized and apportioned out to the private sector?

Hon. James McCrae (Minister of Health): Madam Speaker, with the agreement of the Manitoba Government Employees' Union as a result of last spring's labour dispute, we have agreed that 20 percent only of home care services in the city of Winnipeg would be subject to competition. There are activities underway now to ensure that requests for proposals and tender calls are being done in an appropriate and proper fashion.

Mr. Chomiak: Madam Speaker, is the minister today saying that only 20 percent of the nursing component of Home Care provided by Continuing Care--approximately 71 nurses, R.N.s, and about 70 to 80 LPNs--only 20 percent of that is going to be privatized and not 100 percent?

Mr. McCrae: Madam Speaker, you will recall that last spring we were responding to complaints over many years going all the way back to the report commissioned by the New Democratic Party, the Price Waterhouse report, with respect to standards, with respect to consistency of service, with respect to quality of service, with respect to efficiency and it is toward that end that we are embarking on the changes that we are embarking on.

We have, unlike the New Democrats, always put the needs and concerns of the clients of the program first. The honourable members opposite get all hung up over their philosophical New Democratic 50-year-old issues. The world is changing. It would be good if New Democrats would too.

Mr. Dave Chomiak (Kildonan): Madam Speaker, will the minister who refused to answer the first two questions I asked, perhaps attempt to answer a third question and be straight with the people of Manitoba?

Will the minister explain who the chief executive officer for Winnipeg Home Care was advertised for in Saturday's Free Press, but if they are not going to a nongovernment organization, a government private agency that is going to be looking after all home care since this CEO that has been advertised for is going to look after $60 million of home care and 16,000 clients, who and what that position is?

Hon. James McCrae (Minister of Health): Madam Speaker, I am glad the honourable member called attention to the rather large number of clients we serve in the city of Winnipeg, the rather large amount of money that is being expended on the Home Care program, because it serves to demonstrate once again that expenditures in Home Care have been rising very, very significantly and we expect will continue to do so because Home Care is the cornerstone of that shift that we keep talking about away from total reliance on acute care services and in favour of services in the community.

So the honourable member raises the question respecting an advertisement for an executive director of Home Care services. He knows that in future the regional health authority for Winnipeg will be responsible for Home Care and other health services, and this executive director of Home Care will in the interim report to the government and in the future will report to the regional health association which will govern health care services in the city of Winnipeg. It is in response to reports going all the way back to the New Democratic-commissioned report from Price Waterhouse which, while it called for user fees and cuts in services, we have not responded to that part.

Mr. Leonard Evans (Brandon East): Madam Speaker, in the last annual report of the Manitoba Telephone System, a statement is made by the CEO which reads: In 1995, MTS successfully met the challenges of the evolving telecommunications marketplace. The corporation maintained its customer base in an increasingly competitive marketplace, expanded and upgraded its networks, and added new services while continuing with its efforts to cut costs, streamline operations and position itself for the future.

He said further, briefly: In regard to 1996, we are optimistic that we will deliver a year of solid performance while contending with evolving developments in competition, regulation, markets and technology.

My question to the Minister of MTS: How can he in all conscience maintain that a publicly owned MTS cannot meet the challenges in the future in the telecommunications industry?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, there is no question that the Manitoba Telephone System has done an excellent job of meeting the needs of Manitobans since 1988. They have made, as the members opposite recognize, $160 million, an average of $20 million a year, as opposed to '86 and '87--and the member for Concordia (Mr. Doer) smiles--when they lost $48 million. That is quite a turnaround and that turnaround--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Findlay: Madam Speaker, the member for Thompson (Mr. Ashton) from his seat clearly identifies again--he refuses, as the member for Brandon East, to identify the issues that have changed regarding the telecommunications industry in Canada, the degree of competition that is out there--

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

Mr. Steve Ashton (Thompson): Madam Speaker, from my seat I said, MTS is doing a good job. Let us keep it.

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

Mr. Findlay: Madam Speaker, again, he does not identify that things have changed, the degree of competition that is out there. The degree of debt that they carry is still very high according to industry norms. The corporation needs to adapt to the changing needs, needs to be more aggressive, more quickly responding to the niche market opportunities that are out there, and the degree of competition gives a better service to all Manitobans.

Mr. Leonard Evans (Brandon East): Madam Speaker, will the minister not recognize that the telecommunications industry is still not a perfectly competitive industry, far from it, and in fact it has many elements of monopoly? This is why the CRTC, the Canadian regulatory agency, is still there regulating that industry, so it is a monopolistic type of industry still.

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, the CRTC is the regulator, has been the regulator as a Crown corporation, will continue to be the regulator of MTS in the future, as it is with the telephone companies across Canada and all the other companies that are in the private sector. They have a mandate of affordable service to all constituents within the areas in which those telephone companies serve. As I said the other day, CRTC has just reconfirmed their intent to be sure that rates are kept affordable and that service is extended to all Canadians.

Mr. Leonard Evans (Brandon East): So is a regulated industry, Madam Speaker. Will the minister acknowledge that regardless of whether MTS is privately owned and financed by share capital or whether it is publicly owned and financed by bond capital, that the cost of finance will be borne by the customers or the consumers of MTS services and not the taxpayers as has been implied previously by members of this government?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): As a Crown, the government guarantees the debt of MTS, and in the future government will not have that guarantee to deal with. As the member opposite may wish to identify, the actual borrowing rate of MTS in the future will be lower than it is today, contrary to what all those members opposite have been saying. All across Manitoba, the cost of borrowing to MTS will be lower in the future.

* (1520)

Mr. Doug Martindale (Burrows): Madam Speaker, I have obtained the prospectus from Tellus, the Alberta company, formerly the Alberta Government Telephone system--

Hon. Gary Filmon (Premier): Are you going to buy shares?

Mr. Martindale: No, Mr. Premier, I am not buying shares.

It is very interesting but disturbing reading to see the kinds of revenue that they get, 11.25 to 12.25 percent return on investment, and the kinds of increases that have been authorized, for example, $32 million in 1993, $65 million in '94; $2 rate increases for January '96 and '97, unspecified increase for the next year; and $4 to $4.48 per month on residential rates approved in 1996 and $2 to $9 per month on business rates.

I would like to ask the Minister responsible for the Manitoba Telephone System if these are the kinds of rate increases that Manitobans can expect after MTS is privatized.

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, the answer is no. The CEO of the Manitoba Telephone System has very clearly put on the record that the applications for rate changes are already in place, the $2 rebalancing of January 1, '96, '97 and about $2 in '98. Those are already on record as part of CRTC's decision in rate rebalancing for all telcos under their jurisdiction. The answer is no.

Mr. Martindale: I would like to ask the minister then what the difference is between a privatized Manitoba Telephone and a privatized Alberta Government Telephone system especially in relation to the return on investment, and why we cannot expect similar increases. In fact, some of the services that MTS provides now are free. Can we expect that there is going to be a charge of $3.65 or $4 a month for services now provided free because it is going to be privatized?

Mr. Findlay: The member refers to Alberta. Clearly, the issue is they made a mistake in the original determination of--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Findlay: They clearly made a mistake on issues relating to what future tax deductions would be. When an auditor came in and did the assessment, the change in rates happened. We did not make that mistake whatsoever. We already have the tax ruling, and it is favourable to the assumptions established by MTS and the Province of Manitoba.

Mr. Doug Martindale (Burrows): I would like to ask the Minister responsible for the Manitoba Telephone System if he can assure Manitobans that one of the services that is provided free now, call tracing, will not have an increase, such as happened in Alberta where the residential rate is $3 a month for call trace or 35 cents per use, a very valuable service especially used by women who feel that their lives are in danger. Can the minister assure Manitobans that this charge will not come into effect when the company is privatized? If he cannot give us that assurance, why are they privatizing the Manitoba Telephone System?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, tariffs on all services that MTS, in the past and in the future, what the set rates are, is something that is negotiated between them and the CRTC. The CRTC ultimately makes those decisions.

Ms. Diane McGifford (Osborne): Madam Speaker, CanTalk, a Winnipeg-based, Canadian-owned company, offers a broad range of language services using fax, telephone, E-mail and the Internet. Furthermore, it is allied with not-for-profit translation and interpretation services like the International Centre and with Manitoba businesses.

I want to ask the Minister responsible for MTS to explain whether MTS is working, has worked or plans to work with CanTalk.

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, I do not have that information. I will inquire and get back to the member.

Mr. Steve Ashton (Thompson): Madam Speaker, just a few minutes ago the Minister responsible for MTS, in response to a question from the member for Burrows (Mr. Martindale), stated that it would be no increase as a result of the privatization.

I would like to ask if that means that MTS has withdrawn its application to CRTC for this exogenous factor which has been subject, of course, to much discussion about Mr. Nugent and others. Have they now done that, given the fact that last Friday, it is our understanding, is the date on which they had to make revisions or either withdraw that application?

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, it is my understanding that they have sent further information to CRTC to correct the record in terms of the misinterpretations, to identify that the cost of interest will be lower and that a tax ruling had been obtained.

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

Mr. Ashton: Madam Speaker, I did not ask whether any political damage control was done. I asked the minister, was the CRTC application put in by MTS dating back to June and resubmitted in November, is that application still before the CRTC which would allow rate increases because of the exogenous variables?

Mr. Findlay: Madam Speaker, the application was with regard to rate capping. That is in a policy of CRTC starting January 1, 1998. MTS continues to supply information as it is available to them, and the exogenous factor may be up or down depending on factors that may unfold, and with a lower interest rate, I call that down.

Mr. Ashton: Madam Speaker, the final supplementary on this question. Can the minister then make it very clear that he has not withdrawn the CRTC application, the exogenous factor is still there and that in fact he cannot, as he did in Question Period earlier on today, say that there will not be rate increases when the CRTC application is still there from MTS which allows for those kinds of rate increases?

Mr. Findlay: Madam Speaker, I have already indicated to the member, CRTC has a rate cap hearing underway. MTS continues to file information as it becomes available to them to allow CRTC to make decisions on the basis of the most current possible information that they can supply to them.

Mr. Clif Evans (Interlake): Madam Speaker, I would like to ask the Minister of Natural Resources, in conjunction with the Minister of Highways (Mr. Findlay), with respect to a situation that I have been notified of this morning and this afternoon, that there has been heavy not only flooding but heavy freeze-up on the Dauphin River.

I am just wondering whether either minister's office has responded to this very serious situation and how.

Hon. Albert Driedger (Minister of Natural Resources): Madam Speaker, in fact, after I entered the House, I got a fax and information that we had an ice blockage on the Dauphin River, and there is the community of Dauphin River Indian Reserve that has been isolated. Staff are on the site and on the job and looking to see whether blasting would resolve the issue. It is very unusual to have an ice jam this time of year, but with the heavy water situation that is out there, we are on top of it, and we will try and keep updated with whatever activities take place.

Madam Speaker: Time for Oral Questions has expired.