The Acting Chairperson (Mr. Gerry McAlpine): Order, please. Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Government Services. Does the honourable Minister of Government Services have an opening statement?
Hon. Frank Pitura (Minister of Government Services): Mr. Chairman, I am pleased to present the 1997-98 fiscal year spending Estimates for the Department of Government Services and for Vote 27, Emergency Expenditures.
My honourable colleagues are well aware that I was appointed as Minister of Government Services four months ago. I have spent that time absorbing and analyzing my department's financial position and program information. I can more fully appreciate the scope and complexity of the programs and services that the Department of Government Services provides.
I would like to thank my honourable colleague Brian Pallister for his efforts in leaving this department in good stead. Also, as every new and seasoned minister knows, he or she relies on, and is grateful for, the staff who carry out their direction in a dedicated and professional manner. I would like to thank each and every staff member for the work they do to help achieve the goals and objectives of this department.
Mr. Chairman, I would like to pay special tribute to the staff of the Department of Government Services and the Emergency Management Organization. I have had the opportunity to travel around the province and have met a lot of the staff, and, indeed, Mr. Chairman, I am privileged to be associated with these fine people who are dedicated to their work and who have unbridled enthusiasm to take on the challenges that confront them from time to time in this great department and Emergency Management Organization.
Mr. Chairman, for many years I have been in the employ of the provincial government, and now that I am in this position, I hope that my experience will help me in working with my staff. Too often we overlook the roles our staff play, and too often we do not pay tribute where tribute is due. My hope, along with my senior managers, is to recognize their achievements and provide proper recognition for work well done.
As Minister of Government Services, it will be my task to lead the department through continuous improvement in its program delivery. It is a reality of this day and age that technology touches and affects every aspect of our business and personal lives. Government Services has been building and strengthening the province's main technology infrastructure and communications network. Through the enhanced capabilities of the provincial backbone data network, the province will be able to improve services and implement the initiatives associated with better systems, better methods, and desktop management.
Manitoba businesses are benefiting from technology. The open bidding service and electronic tendering system introduced two years ago in Manitoba gives Manitobans access to tender opportunities across Canada. The purchasing activity shows that rural Manitoba suppliers in particular are using the open bidding service to their advantage. The value of orders by rural suppliers rose from $4.8 million to $5.4 million in the last year.
(Mr. Jack Penner, Acting Chairperson, in the Chair)
In recent years, there has been a large growth in desktop technology, i.e., the personal computers, throughout government. My department will undertake the development of functional guidelines and policy to manage desktop technology on a government-wide basis, desktop activities include software licensing, user training, site preparation and user ergonomics.
The government and my department are evolving in their approach of operating in a businesslike manner. We conduct ourselves in a business manner, not in competition but rather in co-operation with private companies. Government is operating with a fiscal responsibility that demands cost consciousness. We owe this to the taxpayers of Manitoba, for it is their money we are spending in carrying out programs. We are following and adopting business models in delivering government programs.
As Minister of Government Services, I have, reporting to me, four special operating agencies. The special operating agency model gives managers additional decision-making flexibility while holding them fully accountable for the financial performance of their organization. Special operating agencies operate as businesses. These agencies have proven the success of the SOA operating business model. The first SOA to be created, Fleet Vehicles Agency, has paid its share of the long-term debt of $8.2 million established when Fleet was made an SOA and 15 years ahead of their required payback deadline.
Materials Distribution Agency, the second special operating agency created in this department, is also paying off its long-term debt six years ahead of their required payback date. Recognized for the efficiency of their operations, as of April 1 of this year, Materials Distribution assumed responsibility for the Home Care Equipment and Supplies program. Materials Distribution has the expertise, the warehouse distribution facilities, and the systems to support the Home Care Program more economically. This move will eliminate the duplication in distribution centres and, more importantly, allow the Home Care program to focus its resources to providing care to its increasing number of clients.
The third special operating agency to be created from this department, Land Management Agency, through the efficiency of their operations, is in the exemplary position of paying a dividend of $400,000 back to the provincial coffers, another contribution to reducing the provincial debt and reducing the burden to the taxpayers of Manitoba.
My honourable colleagues may not be aware of the size of the Accommodations portfolio that Government Services manages. The Accommodation group manages a total portfolio in excess of 9-million square feet of facilities at 354 locations throughout Manitoba and one location outside the boundaries of the province, the Manitoba office in Ottawa. The portfolio is comprised of 1.4-million square feet in leased properties and 7.7-million square feet in owned facilities. By any standard, this is a very large and diverse portfolio.
My department is responsible for the planning and property management for this portfolio on behalf of every government program resident in those facilities. Using its knowledge of the province's space holdings and matching program needs has allowed the Accommodation group to dispose of its own facilities and utilize vacant space.
The benefits of increased cost accountability through the accommodation cost recovery system are being realized on a daily basis, with program managers now being very cognizant of the accommodations cost of their programs within their respective operating budgets. The Department of Government Services has done its part to bring about a balanced budget through continued good management of expenditures. For the fifth consecutive year, Government Services has reduced the leasing budget. Another $400,000 will be saved in this fiscal year, bringing our five-year lease savings to approximately $4.5 million. The department will continue to implement alternative ways to provide services where it is more efficient and cost effective to do so.
As Manitobans recover from flood waters, I am pleased that Government Services had the insight to change the delivery of emergency preparedness and disaster assistance programs. Two organizations, the Manitoba Emergency Measures Organization and the Manitoba Disaster Assistance Board were reshaped to better assist Manitobans during and following emergencies.
In the coming fiscal year my department will be spending dollars on much needed construction projects. Government Services will begin upgrading The Pas Correctional Institution. The renovations estimated at over $1 million will be carried out over the next two years. Work will continue at Headingley Correctional Institution. Further improvements include new intermittent housing and maximum security units. By the time we are finished, $10 million will be expended to improve the Headingley facility. Government Services, in consultation with the Department of Justice, will be developing long-term upgrade proposals for eight of the other correctional institutions in the province.
We are involved in a project to preserve more of the history of our province. The Hudson's Bay Archives which is housed in the Provincial Archives building on Memorial Boulevard will be expanded. To prepare for expansion of the Hudson's Bay Archives, the Archives Building will receive over $2 million in upgrading to create a state-of-the-art archival vault in the former concert hall space.
In bringing my introductory remarks to a close, Mr. Chairman, I would like to say that the Department of Government Services Estimates are reflective of this government's commitment to hold the line on spending and free taxpayers' dollars for social programs and job creation.
The Acting Chairperson (Mr. Penner): Thank you very much, Mr. Minister, for those comments. Does the official opposition critic, the member for Elmwood, have any comments at this time?
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Mr. Jim Maloway (Elmwood): I would like to congratulate the minister on his appointment. I would like to, I think at this point, get right into the questions, and I would suggest as a matter of procedure that we simply allow flexibility to move throughout the Estimates back and forth, and then at the end of our allotted time, that we pass everything at the end. That is how we have dealt with a number of other departments this session.
The Acting Chairperson (Mr. Penner): Under the Manitoba practice, the Minister's Salary is traditionally the last item considered in the Estimates, and accordingly we shall defer consideration of this item and now proceed with the consideration of the next line. We would ask the minister's staff, at this time, to join us. They already have done so, which is great. That is efficiency; I appreciate that.
I would ask at this time that we will proceed on line 8.1.(b) Executive Support (1) Salaries and Employee Benefits. Shall the item pass?
Mr. Maloway: Mr. Chairman, I wanted to begin the questioning by asking the minister a few questions concerning a review that is being done called the Facility Management Review. The minister is no doubt aware of it. It is the government civil service Property Management's commission department that are working on this, and I would like an update as to just what is going on with the government and the management of the buildings.
Mr. Pitura: Mr. Chairman, before I respond to the honourable member's question, I would like to introduce my staff at the table here: Hugh Eliasson, the deputy minister, sitting next to me, and Bryan McTaggart, who is the director of our Administration branch with the department.
In response to the member's question with the Facility Management Review, the department has selected five buildings, government buildings, and what we are doing there is doing an in-depth study, and we are comparing the cost of the operations of these buildings versus that in the private sector. At this point, I am advised that it is a study that is being conducted.
Mr. Maloway: So at this point in time then, no buildings have been contracted out to private management companies?
Mr. Pitura: No.
Mr. Maloway: Can the minister tell us then when the supposed business plan will be available?
Mr. Pitura: I am advised, Mr. Chairman, that it will be several months yet before anything is forthcoming from the study.
Mr. Maloway: Can the minister tell us what companies are being looked at to manage the facilities?
Mr. Pitura: There are none, as this is only an internal study at this time.
Mr. Maloway: Evidently the government has been looking at this for a while now, and there is some indication that some fairly quick action was going to be taken on this and that there was a plan to have the thing in place within a very short time frame. What is the time frame for having this management company take over the buildings?
Mr. Pitura: As indicated to the honourable member, at this point in time it is basically a study that is taking place to compare the costs between the private-run buildings versus government-run buildings. So there is nothing at this point in time that is anticipated coming forth, and for some time to come.
Mr. Maloway: What sort of background information has the group been considering to try to determine what their final resolution and solution will be?
Mr. Pitura: I am advised that what the study is looking at is the definition or defining of all of the services that are now presently provided within the government buildings and taking a look at comparing those with the private sector. The whole crux of the study is to determine if there are indeed better methods or ways by which the government may be able to operate its buildings in the future.
Mr. Maloway: Has the committee looked at any other provinces to see how their operation is run?
Mr. Pitura: Yes, we have.
Mr. Maloway: Can the minister tell us which provinces, and what are the circumstances that he finds in these other provinces?
Mr. Pitura: I am advised that there is a federal-provincial committee that has representatives from all the provinces looking at this whole area, and they are presently doing some benchmarking. I am advised that the studies are taking place, and the information that is being collated together is coming from all 10 provinces.
Mr. Maloway: I realize the minister might be at a bit of a disadvantage because I have all of these documents from an April--I guess it is April 10 or April 4--meeting. It clearly indicates who/what they have been looking at in this area, and what I would like to know is what has been driving the move for this type of approach to the management of the buildings?
Mr. Pitura: The province has gone into this process, I think, from the standpoint that if you are operating government buildings you always have to be cognizant of the fact that maybe there are better ways of managing your resources that you have, and I think the essence of the whole study is to take a look at what the private sector is doing, what is happening in other provinces, to take some of the better ideas, the better methods that are employed in other provinces that we can see will benefit us in being able to manage government resources here.
Mr. Maloway: Can the minister tell us what business organizations or interest groups have lobbied him or members of his department on this matter?
Mr. Pitura: To my knowledge there have been no businesses lobbying us in this regard.
Mr. Maloway: I wanted to ask a couple of questions about the current disposition of the SOAs, the special operating agencies. I would like to ask him, maybe we could take them as a group. In some of the other SOAs we were taking a look at the user fees that are being charged and how they have gone up since the SOA was formed. What is the situation regarding the user fees with the current SOAs?
Mr. Pitura: Mr. Chairman, before I answer the question I would like to call my assistant deputy minister, Mr. Gerry Berezuk of Supply & Services, to the table. The SOAs are under his purview.
Mr. Chairman, I am advised from the staff that the prices, or the user fees as my honourable critic points out, these prices have remained fairly constant, and in fact with the Fleet Vehicles SOA the prices this year have decreased to the customer. Agencies such as Mail Management and Materials Distribution have held their prices constant, and Land Management.
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Mr. Maloway: Would the minister endeavour to provide us with a list of the user fees immediately before they became SOAs and what they are currently?
Mr. Chairman, the reason for that of course is that we have become accustomed to this government developing little pools of money here and there, little rainy day funds all over the place, so that when election time comes they can reduce the costs of the services to the public, whether it be Autopac rates or whether it be any other service. So that is what the motivation is behind the questioning. We want to get into how much of a surplus is being developed by the SOAs and how the surpluses are being dealt with.
For example, in the Workers Compensation situation we have a projection that by 1999 there will be an enormous amount of money sitting in the pot at Workers Compensation. So I would like to know what the long range projections are for each of the SOAs in terms of the monies or profits that they have at the end of the year, as to what the disposition of them is going to be and where they will be at within two years.
Mr. Pitura: With the SOAs, they are all independent operating agencies, and as such at the end of each fiscal year they do produce a financial statement. They also produce projections as well as part of their financial statements. The retained earnings that are left at the end of the year for each SOA is tabulated at the bottom of each financial statement, and that information is readily available. I will be glad to supply my honourable friend with that information.
Mr. Maloway: With regard to Fleet Vehicles, I believe it was last year Fleet Vehicles opened itself up to competition in the leased car field. Now this was I believe last April 1, so there has been a year of competition. Can the minister tell us how well the SOA has done in terms of retention of its existing business?
Mr. Pitura: I am pleased to say that since Fleet Vehicles has opened itself up to being competitive so that various departmental agencies and departments could take a look at the private sector for supplying of leased vehicles, I am pleased to report that the Fleet Vehicles Agency has remained very competitive and has in fact retained all of its customers.
Mr. Maloway: My recollection though is that there was really very little in terms of vehicles coming due, at least in the first 12 month period. How many competitions has Fleet Vehicles been successful in up against private companies for the leased vehicles at this point, and when do the majority of the leases come due? When are we going to see increased activity in that field?
Mr. Pitura: I am advised that, you know, every department every year has a number of leases that come due, and as a result of this year I am advised that two departments within government, Industry, Trade and Tourism and Natural Resources both chose the option of seeking competitive bids besides Fleet Vehicles, and again very pleased that Fleet Vehicles was able to remain competitive and retain those two departments as their customers.
Mr. Maloway: How many private sector companies bid on these contracts, and how big were they?
Mr. Pitura: I am advised that, in the competitive process, four companies were involved in the competitive bidding for the business of both I, T and T and Natural Resources. I am also advised that I, T and T had two vehicles which were up for lease and that Natural Resources had 68 vehicles that were up for lease renewal.
Mr. Maloway: Can the minister give us the names of the four unsuccessful bidders?
Mr. Pitura: I am advised that we do not have the complete list at our disposal right here today, but I can certainly supply that list to my honourable friend.
Mr. Maloway: That would be fine; we could look at it tomorrow. I would also ask the minister if it would be possible to, in terms of the SOAs, if we could get a chart together showing just what the retained earnings position would be for each of them on a year-by-year basis since their inception. That would give us a bit of an idea of where things are going with them. You know, I recognize that they may not have that information available right now, but certainly tomorrow if we have it available.
In the other departments we had the heads of the SOAs. There were individual heads of Vital Statistics, that we had the individual heads available for questioning on a couple of instances. I do not know whether they are available. I am sure they can be obtained, but we may not need to go that far. I do not think that we had somebody in the other departments who was centrally in charge of the SOAs like we do in this situation.
The Acting Chairperson (Mr. Penner): The hour being 6 p.m., committee rise.