Does the honourable Minister of Industry, Trade and Tourism have an opening statement?
Hon. James Downey (Minister of Industry, Trade and Tourism): Yes, I do, Mr. Chairman. I, first of all, want to acknowledge and thank the member opposite, the chief critic, for accommodating me yesterday in being able to allow me to go to a family funeral. I thank him for that as well as my colleagues in government for assisting in allowing me to do that. It was much appreciated by myself and family members, so I want that on the record.
I am pleased as well to again present the Estimates of the Department of Industry, Trade and Tourism for the 1998-99 Estimates and look forward to discussion, questions and comments from the members opposite.
Before I go into details of the department's programs, I have the very pleasant task of providing an overview of Manitoba's economic performance. In short, 1997 was a banner year for our province. As a writer in the Winnipeg Free Press put it in December: you do not need a Ph.D. in economics to understand that 1997 was about as close to a boom as it ever gets around here.
The conditions for this boom were created in the early to mid-1990s as Manitoba's exports expanded dramatically, especially to the United States. Our growth in exports was soon echoed in overall manufacturing shipments, increased capital investment, job creation and finally, low unemployment.
The most dramatic and concrete reflections of these developments were a series of major new ventures, announcements, relocations or expansions that have taken place in the last year. These include Maple Leaf Foods announcement of its plans to build $112-million hog processing plant near Brandon, announcements of a new call centre operations by MCI corporation, the Royal Bank, Air Canada and Gage Marketing group; significant expansion plans by several of Manitoba's large manufacturers, including Winpak Limited, Bristol Aerospace Limited and Vansco Electronics Ltd.
Overall, Manitoba's economy grew by nearly double the national average rate in 1996, at 2.9 percent, the second highest growth rate. In 1997, its growth rate has been estimated at 3.6 percent, the third best amongst the provinces. The province's unemployment rate in April of 1998 was the second lowest in Canada at 5.5 percent and continued at 6 percent or less for the fifth month in a row. We have not seen such rates, incidentally, since 1981.
In 1997, the number of Manitobans with jobs rose 2.4 percent, which was the third largest increase among the provinces and above the national growth rate of 1.9 percent. The private sector led the way as employment in that sector increased 4 percent last year.
The province's exports continued their increase in 1997, the eighth consecutive year of growth. Last year, exports to all countries climbed 13.6 percent, ahead of Canada's average for the fourth year in a row. Exports to our leading trade partner, the United States, increased 19.3 percent. Export growth is reflected in the number of manufacturing shipments which rose 11.6 percent in 1997 compared with 6.9 percent for Canada. Predictably, transportation equipment was the fastest growing sector, at 30 percent, in 1997. I should note that Manitoba now produces more buses than any other jurisdiction on the continent.
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Equally important to maintaining our economic momentum is the fact investment spending in the province jumped by nearly 15 percent ahead of the national rate for the third straight year.
Perhaps most significant is that private sector investment increased for the sixth straight year--15.5 percent in 1997. Since 1991, private investment has grown in the province by 56.9 percent compared with the national average of 30.2 percent.
Manitoba continued to see large increases in manufacturing investment, which rose 26.4 percentage points in 1997 versus the national rate of 4.9 percent.
Finally, as usual in recent years, Manitoba's share of farm cash receipts reached a record level in 1997 as they climbed by just another 10 percent. It is noteworthy that crops and livestock contributed almost evenly to the strong results, with crop receipts up 6.9 percent, and livestock, 8.2 percent.
Overall, in view of these indicators and our government's fiscal performance, I am extremely optimistic about the prospects for 1998. A summary of forecasts by seven major economic forecasters, including the five major Canadian banks, shows that Manitoba's strong growth is expected to continue. Real GDP is forecast to grow by three percentage points in 1998. Employment will grow a further 1.9 percent, or over 10,000 jobs; and Manitoba's unemployment rate is forecast for the year at 6 percent.
The role of Manitoba Industry, Trade and Tourism is to use its policies and programs to help maintain the momentum of economic growth, working for the most part with individual companies or within specific individual sectors.
I should remind members that, as of fiscal year 1997-98, the Department of Industry, Trade and Tourism has been divided into four main program areas: industry development, which focuses on key industries across the province; Manitoba trade, which promotes trade and inward investment in the province; business development, which provides information and advice and other support to small business; and tourism, or Travel Manitoba, which oversees and co-ordinates campaigns to attract visitors to all areas of the province.
The department also includes the Economic Development Board of Cabinet, which is chaired by the Premier (Mr. Filmon), and the Manitoba Call Centre Team, which is a partnership of Industry, Trade and Tourism, Rural Development, Manitoba Telecom Services and Winnipeg 2000. In 1997-98, Industry Development staff continued to provide consulting service and sector expertise to Manitoba businesses, and to promote and facilitate investment, infrastructure development, R & D and technology transfer, and skills development across the province. Let me mention some activities in a few economic sectors.
In food and beverage processing, our largest manufacturing sector, the Department of Industry, Trade and Tourism is working closely with Manitoba Agriculture and Manitoba Rural Development, as well as the Manitoba Food Processors Association. A good portion of the government's activities in this area has centred on promoting the hog and pork industry abroad, especially in Asia Pacific, mainly by working with industry to encourage more companies to export and expand value-added production.
Our staff have been working with several manufacturers, including McCain Foods, which, in September of 1997, officially opened an $80-million expansion to its potato processing plant in Portage la Prairie. This expansion doubled McCain's production capacity in the province, increased its workforce by 170 people to 450, and raised Manitoba's profile as a challenger to Prince Edward Island's crown as potato capital of Canada.
Simplot Canada moved an abandoned ammonia plant in Sicily to its Brandon fertilizer complex, completing a two-year, $225-million upgrade. This is the second recent expansion for Simplot as they moved ammonia nitrate production facilities to Brandon from Minnesota in 1996. Both will greatly increase Simplot's role in a driving force in the province's economy.
Vansco Electronics of Winnipeg is undertaking an $11.3-million expansion that is expected to create 456 new jobs in Manitoba, assisted by a $1.4-million repayable loan from the Department of Industry, Trade and Tourism for the first phase.
Bristol Aerospace, which, since June of 1997, has been 100 percent Canadian owned, announced a $10-million expansion, including 200 workers after it won a contract from Boeing Canada Technology worth nearly $100 million. This is Bristol's largest contract ever.
In Manitoba's dynamic health industry, several companies, including National Healthcare Manufacturing, Biovail Corporation, Novopharm Biotechnology and Franklin Enterprises made significant strides in 1997, bringing new production to market with consulting and other assistance from our department.
In 1996-97, the Health Research Infrastructure Initiative was launched within Industry, Trade and Tourism. The initiative is designed to attract more health research to Manitoba by providing an incentive to research institutions to seek outside research grants by helping them cover additional or added operational expenses.
Many research grants do not pay for additional operational expenses which can drain the institution's overall budget. In 1996-97 and '97-98, the St. Boniface Research Centre received funding to pilot the program. In 1998-99, funding has been expanded by $1.5 million, and their program will be available to the Manitoba Cancer Treatment and Research Foundation, Children's Hospital Research Foundation, St. Boniface Research Centre, Health Sciences Centre Research Foundation, as well as the University of Manitoba.
Another contributing initiative of note is the Manitoba Centres of Excellence Fund, which seeks to attract and maintain world-class research and development activity to produce economic spin-offs for local companies and nonprofit agencies. The fund provides grants to research projects at the University of Manitoba, contingent upon support under the federal government's network of Centres of Excellence Initiative. Manitoba's contribution then amounts to 20 percent of the federal total.
Meanwhile, I note that an increasing access to risk capital for small- and mid-size Manitoba companies continues to be a major priority for the Department of Industry, Trade and Tourism. We have been working hard in partnership with industry and the financial community to address these difficulties. A recent study by the Business Development Bank found companies backed by Venture Capital were creating jobs at a 32 percent annual growth rate compared to a 4 percent yearly growth rate for the economy in general.
The Manitoba government worked with private sector partners, helped boost the annual supply of Venture Capital in Manitoba from less than $4 million in 1993 to about $30 million in each of 1996 and '97. The goal is to double this commitment to $60 million a year by the year 2000. To do this, the government has sponsored several significant Venture Capital funds for loans in the $100,000 to the $3.5-million range, and these include the Vision Capital Fund, the Manitoba Capital Fund, the labour-sponsored Crocus Investment Fund and the ENSIS Growth Fund and the Manitoba Business Expansion Fund in co-operation with the CIBC and Toronto-Dominion banks.
Our department, through our Financial Services branch and Economic Innovation and Technology Council, has also been working to match potential investors with promising young companies seeking financing. This year, 20 companies made presentations to the investors at Invest Manitoba 98, the third investment forum of its kind in Manitoba.
Finally, to attract much needed capital to the science and technology sector, the Manitoba government committed $5 million in its February 1998 budget to create the Manitoba Science and Technology Fund. This fund aims to attract $15 million to $25 million of private Venture Capital which will be used to assist high technology companies.
The Manitoba Trade and Investment Corporation, or Manitoba Trade, for short, is the focal point of Manitoba's efforts in promoting more exports to an ever-widening range of world markets and at the same time encouraging inward investment in this province. A large part of its work is to help exporters and export-ready companies enter new markets by leading strategic trade missions, hosting delegations from our major trading partners and helping companies attend trade shows in various industrial sectors and regions.
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Specifically, Manitoba Trade's objectives are to increase exports of value-added goods and services by 60 percent between 1995 and 2000, to increase the number of actively exporting companies by 300 between 1995 and 2000 or 10 percent per year, and, as I suggested, to increase investment in Manitoba.
Several business missions took place during 1997-98, including the Team Canada 1998 Trade Mission, which visited Mexico, Brazil, Argentina and Chile. This was the largest Team Canada mission to date with 23 representatives from Manitoba companies and organizations. Team Canada 98 also showcased the Pan American Games through the mission, and on several occasions integrated the games into the Team Canada events.
In 1997-98, Manitoba Trade supported 47 new exporters and 27 companies undertaking market diversification in the U.S. Our trade specialists continue to work closely with Manitoba companies to help them qualify as new exporters and also assist businesses in their efforts to diversify markets, especially to the United States.
Priority sectors included health industries, food and beverage processing, apparel, building products, original equipment manufacturing and subcomponents/agricultural equipment. In 1997-98, Manitoba Trade organized and managed eight group trade show events in the United States with 48 Manitoba companies taking part. The companies reported a total of $17 million in projected sales as a result of these shows. Meanwhile, South America has become a priority export market for Manitoba companies with specific focus on Brazil, Argentina and Chile. Within these countries, Manitoba Trade has centred its efforts on regions that are compatible with Manitoba's capabilities.
Besides Team Canada, Manitoba Trade sponsored three other missions to South America in 1997-98 involving education, agribusiness and construction. Mexico is already a priority market for Manitoba and is our sixth largest export destination. Japan continued to be Manitoba's second largest trading partner for 1997 with exports totalling $411 million, which is a 15 percent increase over 1996. Agriculture commodities make up a large portion of these exports.
In recent years, Manitoba building product companies have seen a dramatic increase in sales to Japan, notably in prefabricated houses. However, 1997 was a difficult year for various products in Japan due to wider economic instability in the region. We are confident, however, that like the peso, prices in Mexico, conditions in Asia Pacific will soon stabilize enhancing, once again, our prospects for trade.
Manitoba's ties with Japan are certainly growing, as during Premier Filmon's visit to Osaka in October of 1997 the province was selected to host the third annual meeting of the Kansai-Canada West Business Forum. In fact, this event is one of two initiatives related to Japan that Manitoba Trade will support in 1998-99. The Kansai-Canada West Business Forum to be held September 16 to 18, 1998, in Winnipeg is expected to attract 200 to 250 delegates from western Canada and Japan. Manitoba Trade will also sponsor industry participation in the Tokyo Home Show in November of 1998.
Regional conditions also affected our trade with China, and we are targeting certain areas--notably agriculture and hydroelectricity--as having room for growth. The Middle East also emerged as a potential market worth developing after I led the first official Manitoba Trade Mission in February and March, 1997, to the United Arab Emirates and to Egypt. I was joined by five Manitoba business representatives interested in exporting products to this region. Manitoba exports to the Middle East and Africa in 1997 were $241 million. Iran is Manitoba's fifth largest export market as it attracted $96 million of exports in 1997, which is a 55.6 percent increase over 1996.
Other markets that Manitoba Trade has begun work in with great hopes for success are the Ukraine and Poland, the United Kingdom, Germany and South Africa, which reflects our ongoing concern to diversify the foreign markets that we are pursuing.
Here in North America, Manitoba Trade encourages initiatives that promote the province as the northern hub for the trade and distribution of NAFTA goods and services. Manitoba Trade is an active participant on the Manitoba-Winnipeg Corridor Partners Committee and supports the activities of the Red River Trade Corridor and the Central North American Trade Corridor.
The recent awarding of landing rights in China to Winnport by the federal government will certainly hasten growth in this area. Manitoba Trade is also providing support to the third summit of mayors and is one of two provincial delegates representing the province in the North America's Superhighway Coalition, or NASCO, as it is known, and has been successful in having I-29 added to the U.S. highways designated for superhighways' funding.
This spring, Manitoba Trade participated in the Northern Great Plains Visioning Conference; five U.S. Midwest states and two Canadian provinces are working towards developing a regional trade and transportation strategy.
Finally, making use of foreign trade agents continues to be a highly successful strategy for Manitoba Trade to assist companies planning to move into certain regional markets. Manitoba Trade has agents in Hong Kong, Japan, the United Kingdom, Mexico, The Netherlands, Italy and Chile.
The word from our department's special operating agency, the Industrial Technology Centre, ITC provides a wide range of technical services to clients which vary from start-up entrepreneurs and mid-sized companies to large firms seeking specialized technical assistance. The centre's expert capabilities and forensic document services are unique in Canada, and it actually provides services to clients across the continent. It is proving to be yet another example of the SOA model, the special operating agency model, for delivering public services. It has already reduced its reliance on government funding by enhancing its own resources of revenue.
Meanwhile, the Manitoba Call Centre Team, a joint venture led by the Department of Industry, Trade and Tourism, continues to market this province as a premier location for call centres. Despite some keen competition, the team has done an admirable job in expanding the industry so that it now includes some 20 major call centres and a workforce of more than 7,000 people. Last year has seen several high-profile call centres join our ranks, including the Royal Bank, Air Canada, Gage Marketing, and MCI Communications. The team is also working closely with the Manitoba Call Centre Association to enhance training opportunities for call centre staff, including establishing a certification program. The Call Centre Team has been one focal point of special strategic initiatives by Manitoba's Economic Development Board.
The Economic Development Board helped attract several of the call centres I mentioned as well as other major economic projects such as Maple Leaf Foods in Brandon and Isobord strawboard plant near Elie, Manitoba.
Now, small and medium-sized business have long been of vital importance not only to the economy of this province but also to the strategy of this department. The department's Business Development Division is a high priority as it expands its role in assisting small business start-ups and providing services to help existing firms grow. It also aims to make sure small business owners and managers have easy access to training, information resources, and other services aimed at small business.
The division is doing this in part with a wide variety of government and nongovernment agencies and associations. To narrow the number of contacts entrepreneurs need to find the information they are seeking, this spring the governments of Canada and Manitoba will officially open the Canada-Manitoba Business Service Centre in Winnipeg. This centre will provide one-stop shopping for information about federal and provincial programs related to small business as well as access to business advisors.
Tourism was a major contributor to Manitoba's economy in 1997, with revenues once again over $1 billion. Overall arrivals were up from 1996 while visitors from the United States, the province's largest travel market, rose to over 600,000, with an increase rate of 2.3 percent, almost double the average Canadian increase. Other measures of performance, such as accommodation occupancy rates, airport traffic and restaurant receipts, were also up.
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To thrive in competitive national and international markets, Manitoba's tourism products must be of the highest quality. This is why the Department of Industry, Trade and Tourism last year launched a program to provide cost-shared assistance for developing new tourism products. The objective is to ensure that Manitoba capitalizes on viable product development opportunities that will generate new tourism revenues, lever private sector investments, and create long-term jobs. The program targets opportunities in ecotourism, outdoor adventure, aboriginal tourism, cultural heritage tourism and regional community tourism development. The product development program is also focused on small business and communities. Funding is available to support regional tourism forums and community and regional tourism planning and implementation. Some of the major events in Manitoba in the next two years include the 1998 Grey Cup Championship, the 1999 World Junior Hockey Championships, the Royal Canadian Mounted Police 125th Anniversary and the Dakota Ojibway Tribal Days 1999.
Manitoba's tourism industry is also looking forward, of course, to the Pan American Games in 1999, the largest-ever sporting event to be held in Canada. Planning is proceeding at a brisk pace for this third-largest sporting event in North America after the Summer Olympics in Atlanta and Los Angeles. In terms of direct expenditures and indirect spin-offs, the games themselves are expected to pump some $225 million into our provincial economy. The hundred thousand plus visitors are predicted to spend $28.5 million and spin off another $14 million here, and some 2,500 person-years of employment are also expected.
Clearly, this is a huge opportunity for Manitoba's tourism industry and economic development in general. This is why my department is working actively with the Pan American Games Society and other partners to make the best of this opening to Latin America. An integrated tourism campaign developed with Tourism Winnipeg and the Pan American Games Society will ensure our many visitors in 1999 will experience a wide variety of Manitoba tourist attractions as well as the games themselves.
As well, the Business Hosting program, recently launched in conjunction with the Friends of the Games program, will help companies host clients by providing access to accommodations and customized business services. The Winnipeg games will attract the largest television coverage in Pan American history, and more than 2,000 media people, my department and the Pan American Games Society are striving to make sure our province capitalizes on this unprecedented exposure.
Finally, the Pan American Games economic development initiative is developing a program to showcase the best of Manitoba's products, services and other talents during the games through advertising, special events and other promotions. It certainly promises to be an exciting and fruitful year for Manitoba.
Mr. Chairman, on this note, I conclude my overview of the main initiatives and activities of Industry, Trade and Tourism in my introduction to the department's Estimates for 1998-99. I look forward to my colleagues and members opposite in their questions and also to say that I look forward with my colleagues, staff and outside partners to another year of challenge and growth for Manitoba's economy.
I am pleased to continue to be the minister and present these Estimates to the Manitoba Legislative Assembly committee. Thank you, Mr. Chairman.
Mr. Chairperson: We thank the Minister of Industry, Trade and Tourism for his comments. Does the official opposition critic, the honourable member for Crescentwood (Mr. Sale), have an opening statement?
Mr. Tim Sale (Crescentwood): Yes, Mr. Chairperson.
First of all, we extend to the minister and his family our condolences on their loss. We will always attempt to accommodate those kinds of situations which affect us all. As the minister knows, we have had somewhat similar circumstances on our side of the House, so I think all members attempt to be accommodating, and we are sorry that there was a need to be accommodating in this particular case.
Mr. Chairperson, I want to make a few opening remarks that are not specific to any particular companies or circumstances but are of a more general nature.
First of all, I want to start by acknowledging the innovation and the competitiveness that is evident in the Manitoba companies that I have visited over the past year, which I have enjoyed greatly. I have always learned a great deal in the process of doing so. I reflect on visits to Pauwels, for example, a major transformer exporter, a Belgian-owned company, which has excellent industrial relations and which markets products, particularly in the developing world but also in the developed world, that are virtually all value-added in Manitoba from raw materials through to the finished product with a great deal of engineering content.
I want to use that company, not to reflect specifically on the company, but to reflect on what tensions face Manitoba's economy as we strive to move forward in economic terms, but also in human terms. For example, we face in the world the increasing challenges of what is loosely called globalization. No one will argue that there are great pressures coming from other economies in other parts of the world. There obviously are.
Historically, though, we have always lived in an international and, to some extent, a global economy in this country. When Manitoba was opened by the fur traders, by the Metis people, the destination of their products was a global destination. The furs were shipped for processing and then had value added to them and were distributed all over the then developed world.
We have never been a nation that existed within our own economic framework independent of the economic framework of the rest of the world, so it is a bit misleading for all of us. I am sure we are all guilty of this, but it is a bit misleading to characterize the situation we face as unprecedented or radically different than it was. The Hudson's Bay Company, the North West Company, the Revellons Frères all faced difficulties of logistics of the collection and distribution of their product. They certainly were engaged in the realpolitic of their day of attempting to influence governments to provide them with certain benefits. Of course in the case of the honourable company of gentlemen adventurers, they were spectacularly successful. They got half a continent for their lobbying trouble and received great fortunes as a result.
So in many ways the pressures we face, the pressures that a company like Pauwels faces may be different in their scale, but they are not different in their fundamental nature, at least not in the ways that we often think of them as different.
I think it is important that as we struggle with the question of how our economy is to develop that we identify certain principles that will guide that development, and I want to reflect on a couple of those.
First of all, there are two ways of being competitive in economic terms. One can be competitive on price and can beat the best price by driving down costs, by increasing productivity, by driving down wages, by sometimes externalizing costs. I suppose another name for externalized costs is pollution. There are other externalized costs, of course. You can externalize costs onto government for the case of the forest industry, for example. One way the forest industry in Manitoba has been very good at externalizing costs is to lobby and pressure the provincial government into stumpage fees so they are the lowest in the country, magnitudes lower than in Ontario, for example. So there are a whole variety of ways, from pollution to pressure, to reduce input costs to pressure to give special privilege, that one can externalize costs.
There are, then, many different elements of price competitiveness, but basically the attempt is to deliver the product at the cheapest price, whether that is by wage or cost of inputs or externalizing of cost. The other, more important kind of competitiveness in many ways in underlying, or what might be called fundamental competitiveness. That is competitiveness that retains its advantage over time, because it is based on human capital, on the fundamental competitiveness of an economy which has two main roots--that is, roots in the r-o-o-t-s notion, for Hansard.
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One is in the human capital, in which we train our workers through post-secondary education, through skills training, to become a source in itself of value, as opposed to simply seeking price competitiveness where volume and low wages are an advantage. Underlying fundamental competitiveness is based on high human capital values and, very frequently, high wages because the human capital itself is the value, and it is, in itself, adding value. It is not simply producing volume, but the human capital itself is producing added value.
The other root of fundamental competitiveness is research, research and development. Because companies, as I am sure the minister would agree, companies like Pauwels, for example, that engage in some fundamental research with the university community or with other research projects, develop the capacity to have unique products which no other company is able to offer, at least not in the short run. Around those unique products develop a community of support and almost a kind of symbiotic, I guess, community that provides services to and feeds off of the core industry; in the case of my example, the high-tech transformer industry.
So countries and provinces have to make a choice, or at least they have to be conscious of which of these strategies they think is more important--a price competitiveness strategy which would push towards low wages, low input costs, high volume, and not necessarily high value added, but certainly high volume, or a fundamentally competitive economy, an underlying competitiveness in our economy, which is based on human capital, on research and development, and a very high value-added direction. Now, it may be possible to simultaneously pursue both, but it is at least really important that jurisdictions be clear about where they are pursuing one and where they are pursuing the other, and what it is they are actually doing in that process.
I think a second area of economic strategy that is needed is a forthright and honest appraisal of the weaknesses and strengths of an economy. Here I refer particularly to a debate, which I know we will have again this year and I am sure that it will continue in the press and in the Legislature, a debate about the nature of our labour force. The province is rightly pleased that we have a reported unemployment rate of 5.5 percent in the most recent report. The minister may find it difficult to believe, but we take pleasure in the low unemployment rate just as he does and just as his government does, but we also recognize, and we will debate this I am sure, that our unemployment and employment and labour force statistics are hopelessly skewed in this province and in Saskatchewan--to a lesser extent in Alberta and B.C. but primarily in Saskatchewan and Manitoba--by the noncounting of a very significant portion of our labour force, namely, our aboriginal community.
We had in the House today another example of that in which the poverty statistics were being discussed. I am sure the minister knows, and probably all the staff know, that aboriginal people on reserve are not counted in those poverty statistics. So, when we talk about having the highest child poverty rate in the nation, we are not even counting the poorest of the poor. As I have said in other debates, were aboriginal people evenly distributed across the country, at least we would be distorting all of our statistics in a reasonably evenhanded manner, but aboriginal people are not. They are concentrated on reserves in Manitoba and Saskatchewan.
So, when we fail to count aboriginal poverty or aboriginal employment or any conditions on First Nations reserves anywhere in Canada, we dishonour those citizens because we fail to report the real circumstances of their lives. In Manitoba and Saskatchewan, we deceive ourselves, we do not just dishonour those people, because we fail to count, in the case of workers, a number of people who would like to be employed, who are at least as numerous as the total number of unemployed that we now report on a monthly basis.
So our true unemployment rate is significantly higher and, I would argue, is at least double the reported rate, not because Statistics Canada is wrong in its methodology, but simply by convention we do not count aboriginal people. Now if we are serious about offering opportunity and about recognizing that aboriginal First Nations workers comprise close to 20 percent of our labour market entrance and maybe higher, certainly in the North far higher, then I think we have to, from an Industry, Trade and Tourism perspective, get serious about counting the impact that they have on our future in a real way, and not just paying lip service to inviting them to ribbon cuttings and prestigious announcements but taking seriously with them, working with them in partnership to report the true circumstances of labour force, poverty, housing conditions.
Whether or not Statistics Canada likes it, the convention of ignoring the conditions is an incredibly paternalistic, terribly outdated, very colonial mentality that our nation's statistics which we report to the world are not worthy of the inclusion of the realities of life of First Nations people. I know that is not the minister's policy. I know it is not Manitoba's policy. It is Statistics Canada's policy, but it has a particular impact on our province, and I know we will discuss that.
The second really major strategic issue that I think we have to begin to talk about is what we mean when we are talking about our labour force, our human capital. What route are we choosing? Are we steadfastly going down the route of high volume, low value-added, low wage, or are we steadfastly setting our face in the direction of a high value-added, high wage, high skill, high human capital economy? If we are trying to do both, how are we clear about that? What are we doing to work at both of those strategies, and how do we understand the distinction?
The third major route of our economic strategy, I think, has to be a clearer policy about international trade and the pressures, the real politic of the American pressures, for example, to move in the direction of such treaties as the Multilateral Agreement on Investment.
I say sincerely to the minister that I was extremely pleased that his government moved amendments, some of which I thought were appropriate, a couple of which we decided we could not support, but, nevertheless, the motion, as amended, which I had put forward passed unanimously. I was very pleased with that because it represented a huge change in direction on the part of the government that had steadfastly insisted for a year that the MAI was not a problem and I think came to the conclusion, after a great deal of work on the part of other governments and the voluntary sector around the world, the union sector in the United States and Canada, in particular, the environmental movements of all nations, that indeed this treaty was not just marginally bad but fatally flawed and needed to be shelved. I am going to be interested to find out what the government's view of the future of that treaty is, particularly as its proponents try to move in other venues to achieve the same goals that they had under MAI.
So that I think is a very difficult area for a small province, as Manitoba is. Although internally we have an economy of some $29 billion--and that is not small change--in the world context, we are a relatively modest player. So how do we walk that line between protecting and nurturing our own capacity to be an actor on the stage of world trade and North American and hemispheric trade and at the same time be open to the development and potential that trade offers? It is a difficult line to walk. I acknowledge that but I think, though, it requires a very clear strategy about trade.
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Simply trade for trade's sake may not be a very good strategy if the process of that leads to such headlines as we saw just this week, where Manitoba firms may be eaten by U.S. giants. We see the stock market and the private-industry market, the nonpublicly traded companies, absolutely besieged by takeover-merger mania in the last little while. It is certainly not self-evident that more and bigger and remotely managed companies are better for their employees or for the communities in which they do business because they tend, as they get bigger, to have less interest in sourcing support services, products, et cetera, locally and much more interested in tendering or sourcing those from other places.
So I think the challenge facing the province is to be really clear about its broad strategy and its broad direction to certainly take some pleasure in some of the things the minister has identified, and we share in that. When there is a Manitoba success story, we all share in that. But it is not clear to many of the public, and it is not clear to us in opposition, just where the government sits on some of those very big issues that ought to underlie the overall strategy the government is following in Industry, Trade and Tourism.
I guess my final comments are in the area of tourism. Here we had an acknowledgement a year ago that the tourism strategy was in disarray, that it needed to be rethought, that our major advertising marketing approach needed to be changed, and I am looking forward to having the minister and his staff share with us what has happened in regard to that kind of underlying change. Here, too, we have a problem of reporting and information because the numbers that the minister puts on the record, which, I am sure, are from reputable sources, are not consistent with the numbers that StatsCan puts on the record through its monthly tourist information. It will be a source of some discussion, I am sure, to try and sort out why the minister's picture of what is happening in tourism and Stats Canada's picture are somewhat at odds, particularly in terms of simply the numbers of tourists who are arriving at our doors. I will be interested to hear why the Statistics Canada version does not seem to accord with the numbers that the minister is using.
I hope that we will have a useful discussion, and that we will get through our Estimates in an orderly fashion. I look forward to further exchange during the next few days as we consider these Estimates, Mr. Chairman, and I thank you for the opportunity to put a few opening broad remarks on the record.
Mr. Chairperson: I thank the official opposition critic for those comments. Under Manitoba practice, debate of Minister's Salary is traditionally the last item considered for the Estimates of a department. Accordingly, we shall defer consideration of this item and now proceed with consideration of the next line.
Before we do that, we invite the minister's staff to join us at the table, and we ask that the minister introduce his staff.
Mr. Downey: I thank the opposition critic for his comments at the beginning of his comments on the record, and also will try to deal with some of the issues that he has raised in his opening comments as we go through the Estimates.
Mr. Murray Cormack is the deputy minister of Industry, Trade and Tourism. Mr. Jack Dalgliesh is the director of Finance within the Department of Industry, Trade and Tourism. We will, as we get to the different parts, have other individuals, if necessary, to help support the questioning that will come forward.
Mr. Chairperson: We thank the minister. We will now proceed to item 10.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $498,000, on page 89 of the main Estimates book. Shall the item pass?
Mr. Sale: I would like to have the minister indicate what the total costs of travel were for this area. I presume it includes his travel as well as the deputy and the senior administration travel. Perhaps he could provide a breakdown indicating the travel, where this travel took place, and what the total costs were of that travel over the previous year '97-98 just ended.
Mr. Downey: I think I made reference basically to the places that we travelled in my Estimates. I will have to break down the overall costs for that activity, Mr. Chairman, but we should be able to do that.
Mr. Sale: Were there any changes in the senior personnel of the department in the past year, personnel covered on this page?
Mr. Downey: For that particular period of time for last year, no, Mr. Chairman, but we have currently added Mr. Ian Robertson as our assistant deputy minister responsible for Industrial Development. Basically, it is the only change in our senior staff for the last year.
Mr. Sale: I am sorry, I did not get the name.
Mr. Downey: Ian Robertson.
Mr. Sale: Pass.
Mr. Chairperson: Item 10.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $498,000--pass; (2) Other Expenditures $71,300--pass.
Item 10.1.(c) Financial and Administrative Services (1) Salaries and Employee Benefits $678,800.
Mr. Sale: I have a number of questions in this area and the minister may need to just undertake to provide information if he does not have it. First of all, this is Mr. Dalgliesh's area, I believe.
Mr. Downey: That is correct.
Mr. Sale: Could the minister indicate what untendered contracts were processed through the department in the period up to the present time, from the beginning of 1997-98 fiscal year current to date, the total number of untendered contracts? Could he provide us with copies of those contracts? Mr. Chairperson, I know he is not going to provide me with copies of the actual contract. Would he provide me with copies of the contracts that are reported to the untendered contract system?
Mr. Downey: We do not have any problem with that, but I think it is already available to the member because any of those, I am currently told by the department, that are untendered are currently reported. There is a process. It is a matter of who you are reporting it to. I will have to let the member know. If it is not available, we will make it available.
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Mr. Sale: The minister may or may not be aware that this system has been under some revision--the computer system has been under some revision and, when I last checked, it was quite out of date in terms of the listings. At several times during the year when I attempted to access them, the system simply could not respond. There was no response from the system, and, as far as I know, there is no manual backup that is in the library.
So, if the minister can indicate that these are all now up to date, the filings are all up to date and the system is working, I will attempt to get those contracts myself. But I am not blaming the department, the system itself was down for some time. I believe the actual operating system was changed during the past year away from the old Wang system and to a different operating system, so that is why I was making the request.
Mr. Downey: If they are not available through what we would consider to be the normal process, we will provide them to the member.
Mr. Sale: I will indicate to the minister that I do have a number of them from some time ago and I want to ask some questions about some of them, but I would like to have the complete list to make sure that I have not missed any of the more current ones. I want to ask about a contract entered into in 1997--I believe on the 15th of February to Donald Orchard--not to exceed $5,000 to assist Canadian Agra Corp in the Province of Manitoba to finalize certain follow-up agreements related to a memorandum of understanding signed August 16, 1995, and then the Treasury Board preclearance number is given. Can the minister tell us the purpose of that contract?
Mr. Downey: Yes, I can, Mr. Chairman. First of all, the individual was selected because of his knowledge in the agricultural industry and in how some of the processes work, in order to help conclude the development of the infrastructure at the Canadian Agra plant at Ste. Agathe, with the municipal corporation, and to work to try and complete the natural gas hookup with Canadian Agra.
Mr. Sale: Were there any further contracts entered into with Mr. Orchard to conclude this work? Has he been assigned other work under this?
Mr. Downey: I am told that the answer is no; that this is the only contract with that individual.
Mr. Sale: I am going to ask questions about the mill under a different heading, but it seems that the untendered contracts are probably processed through Mr. Dalgliesh's area, I would think for the most part, so that is why I thought we might ask that question here.
Were there any other contracts entered into by the department in regard to the Canadian Agra project to assist in whatever matters by the department?
Mr. Downey: I do not believe so, but we will further check. I think this was the only contract that was entered into as it relates to trying to get the infrastructure piece of that completed.
Mr. Sale: Have there been any advances of any funding under any programs to Can Agra to assist in the development of the industrial park site or the crushing mill itself?
Mr. Downey: Not from our department that I am aware of, Mr. Chairman. There may have been some for infrastructure for water and sewer under Rural Development but not direct funding from our department.
Mr. Sale: There is a contract with Sunvalley Software. The purpose of this contract, it appears, is to update and maintain an Internet site, which I have visited. I must say I did not find it particularly revealing as an Internet site. Is that contract continuing with Sunvalley because it was an untendered monthly fee?
Mr. Downey: We will check the details of it. I do not believe it is a continuing contract, but we will check the details for the member and bring them back.
Mr. Sale: Can the minister explain why this company was chosen, on an untendered basis, to do this work?
Mr. Downey: Again, Mr. Chairman, we will get the details. I consider, and am told by the department that basically it was because of the expertise that they had in this area.
Mr. Sale: Mr. Chairperson, there are many, many Internet site builders and support services in Manitoba and elsewhere. I find it difficult to believe that Sunvalley had any expertise that is not held by many different companies that are involved in Internet site development and maintenance, so I would appreciate knowing what it was that they had that was different.
We have dealt with a number of different Internet service providers. Members of my family, in fact, are in that business in some ways, and I know how many competitors there are. This is hardly an area in which there is huge expertise required or specialized expertise required to do what is done fairly routinely by government's own staff. Perhaps, there are some other reasons.
Mr. Downey: As I indicated, Mr. Chairman, I will have to check with the individuals in their area of responsibility.
Mr. Sale: Mr. Chairperson, a contract with Ronald Johnson, who was involved in the horse racing industry report, the report we discussed last year in Estimates, it is not clear whether this contract is continuing. Is this untendered contract continuing at $3,750 a month or some other figure?
Mr. Downey: Mr. Chairman, the contract the member refers to, I believe, is completed. I do not want to mislead the member. I know that Mr. Johnson is now working with the livestock waste unit in the Sustainable Development group, but the contract he refers to has ended.
The reason for the continued work by Mr. Johnson is the harness race industry really, quite frankly, felt that they needed some additional support. They had confidence in Mr. Johnson. We believed, as a government, it was an important industry to continue to work with. With that in mind, the decision was made to continue the contract until we believe there was pretty much an ability for them to carry on.
Although the work is still not done with the harness race industry, we are still doing some lesser contractual work with them, but it is not Mr. Johnson that is doing it.
Mr. Sale: Mr. Chairperson, I may just not have understood the response. What I think the minister said was that Mr. Johnson is continuing on contract through another department or through the same department, but for another purpose.
Mr. Downey: Through the Sustainable Development department. He is not with us any longer as it relates to the horse race industry.
Mr. Sale: Mr. Chairperson, Industry, Trade and Tourism entered into a contract with SHL Systemhouse for the purpose of facilitating the establishment of a drug use management centre in Manitoba. Is this in the nature of a feasibility study? Why was this an untendered contract?
Mr. Downey: Again, Mr. Chairman, we will get back to these the next chance we meet with the details of the information. Again, the decision was made in areas where the department needed qualified support, and they proceeded to hire this particular company. I will get the details of it for the member.
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Mr. Sale: SHL Systemhouse has done extremely well out of this government. They have a huge contract for desktop management. I am very puzzled why the Department of Industry, Trade and Tourism would have anything to do with a drug use management centre. Surely this is a health issue, if it is anything. Is Systemhouse in this contract acting on behalf of a client that is unnamed and is talking about establishing an industry here?
This contract makes very little sense on the face of this. Why is it untendered? Why does Systemhouse get a special deal here? They do not have to apply; they do not have to tender for anything. They just get handouts. They got a huge handout for the desktop management system--millions and millions of dollars over many years. Here is another $24,000 to facilitate the establishment of a drug use management centre. Has the centre been established? Has anything come of this contract?
Mr. Downey: I do not accept the preamble of the member about what has been given. There have been services contracted for, and it is a legitimate, appropriate expenditure of money. As far as the contract, and we are working in partnership in co-operation with the Department of Health in the drug development industry, of which there are services that are needed, the specifics of which this company was hired for, I would have to--as I said, put on the record, previously, we will find out, but it is our responsibility as well to encourage the development of job creation, research and development in the whole area of medicines and legal drug development in the province of Manitoba.
So we work in close collaboration with the Department of Health, and the decision was needed to proceed to hire this company. It was for a specific service as it relates to the development of the industry, and I will get the further details for the member for the next meeting.
Mr. Sale: In this area of the department, as in many areas throughout the Estimates, there is a reference to the government-wide initiative on desktop management, which is also, I believe, with SHL Systemhouse. Could the minister indicate the total--I have not been able to have the time, I guess, to go through and find all the notes and add it all up. What is the total for the department for this contract?
Mr. Downey: I am informed by the department that the cost to the department is $403,333.33.
Mr. Sale: One is drawn to the conclusion that something got divided by three, and I am not quite sure what it is, except that if we multiply this by three and added a penny we might find out what it was.
Could the minister tell us whether this is an annual, recurring cost, a base that will grow in the normal way? Does this include one-time costs? Does this include hardware costs, et cetera?
Mr. Downey: Mr. Chairman, that figure was for 10 months. The recurring charge for a full year will be $515,940.
Mr. Sale: I knew there was a division in there somewhere, Mr. Chairperson. Somebody added that penny back. Must have been Mr. Dalgliesh.
Mr. Chairperson, could the minister tell us whether this is now in the nature of an annual cost that will continue to affect the base costs of the department, or is there some portion of this that is a one-time cost?
Mr. Downey: It will continue as a base cost to the department.
Mr. Sale: How does the replacement cycle in this contract work?
Mr. Downey: I am told, Mr. Chairman, this is basically a four-year cycle.
Mr. Sale: What is the annual replacement cost on that four-year cycle? How much per work station, or what is the budgeted amount in the department for this on an annual basis?
Mr. Downey: I have already given the figures to the member.
Mr. Sale: I do not believe that my question was clear. My understanding is that there is a per work station charge for support services, network support, consulting support, online support. Basically the per work station annual cost is an ongoing cost. There is also a component of the cost which is for the four-year cycle of replacing the equipment. My understanding is that the government is fronting the costs of the new equipment that will bring everybody up to the minimum specs. I do not know whether it is 133 and 64 meg or whatever it is that are the minimum work station costs. But what I am asking for the minister to separate out are the annual support costs from the four-year capital costs. My understanding is that each work station each year will contribute a certain amount towards the regular replacement and upgrading, and that amount is not the same as the annual support amount, so I am asking for those two amounts to be broken out.
Mr. Downey: The numbers that I gave were the operational costs, Mr. Chairman. The actual equipment costs that will be presented in a four-year cycle have not been finalized as it relates to what our departmental share is, I am told. That is correct. It is being centrally funded by government. As far as we are concerned, we do not have that built in to our costs at this particular time. That is the information I have from the department.
Mr. Sale: The figure that has been mentioned is $800 per unit, starting in the second year of the cycle. In other words, the equipment going in will meet the minimum specs for the desktop system. I am not sure what they are; I have said they may be 133 and 32 megs and a six-gig hard drive. I do not know what the standard desktop configuration is, but that in years two, three, and four, there will be an accumulation of capital in order to allow for the replacement cycle to begin after the fourth year. I am asking for what that amount will be. I am led to believe by some sources that it is in the order of $800 per work station per year.
Mr. Downey: I cannot confirm that, Mr. Chairman. It is being centrally funded by government at this point, and we have not got the charges allocated to our department.
Mr. Sale: Mr. Chairperson, will that charge be allocated out in time, or is the intention that it is to be permanently centrally funded?
Mr. Downey: Mr. Chairman, I do not have the answer to that question.
Mr. Sale: Mr. Chairperson, is the $515,940 full-year cost going to be added to the base of the department, or is it a find-from-within process?
Mr. Downey: It has been added to the base, Mr. Chairman.
Mr. Sale: Mr. Chairperson, did any staff from the department leave to go to SHL? Was the staff of the department reduced at all to provide for the--I am not sure how many, but I think over 100 staff at SHL have been brought on to provide this service to government.
Mr. Downey: I am informed by the department that there have been no staff transferred out of the department or used for any additional activities in this regard.
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Mr. Mervin Tweed, Acting Chairperson, in the Chair
Mr. Sale: So it would be fair to say, then, Mr. Chairperson, that the costs of this system are entirely a new cost to the department and result in, for the operational side, a little over half a million dollars addition to the base costs of the department, with no savings at all.
Mr. Downey: Mr. Chairman, I am informed that that is, in fact, the case, that these costs are additional costs to the department.
Mr. Sale: Mr. Chairperson, how many work stations does the $515,940 cover?
Mr. Downey: I am told by the department, 200.
Mr. Sale: So, Mr. Chairperson, approximately $2,600 per year per station?
Mr. Downey: I will have to check his mathematics. That sounds like it could be close.
Mr. Sale: I am just wondering whether the administration is checking my mathematics or not.
Mr. Downey: You get an F.
Mr. Sale: For fairly good. Mr. Chairperson, what is the department receiving in the way of services for this half a million dollars?
Mr. Downey: Basically, Mr. Chairman, I would consider that we are getting value for our money: basically, with the core services and the management systems that go along with the systems that have been bought, some software support, also communications, training, and e-mail capability. So it is, I think, fair to say that there is value for the money that is being spent.
Mr. Sale: Mr. Chairperson, I would like a little more detail on that. My understanding is that the training costs are additional, that per work-station cost does not include training. Could the minister confirm that?
Mr. Downey: There may be some additional training required. This does include a one-unit of training or a base unit of training, Mr. Chairman. Again I am sure that this whole--any of these programs, if people want additional training, they can always be more highly trained, but I would estimate that there is value for the money that is spent.
Mr. Sale: Mr. Chairperson, does the minister use e-mail?
Mr. Downey: When I get time, Mr. Chairman.
Mr. Sale: Mr. Chairperson, when was the last time that he used e-mail?
Mr. Downey: The last time I had time, Mr. Chairman. If the member is really wanting to know whether I can use it and I have the capability, the answer is yes.
Mr. Sale: Then the minister knows that e-mail is a generic component of any network today. There is no such thing as a software package, Windows 95, Windows 97, Windows NT, and it does not much matter what you have got on your computer, e-mail is part of it, and the capacity to have and use e-mail is a generic capacity for anyone on any network today. So I am not sure that any value has been added in the way of e-mail. Would the minister care to comment?
Mr. Downey: No, Mr. Chairman.
Mr. Sale: Okay, so two of the things that the minister asserted are not value. E-mail adds no value; it is essentially free with any computer you buy today. Secondly, the training is simply in the management of the actual desktop that is presented to everybody. It is not training in the use of software per se, but simply in the operation of the desktop system itself, so not much value there.
Could the minister indicate what software packages are supported by the core payment of roughly $2,600 per machine?
Mr. Downey: I would have to disagree with the member, Mr. Chairman. Every system does not come with e-mail. In fact, that is an unfair blanket statement for him to make. I think, as I said at the outset, the capability of the system as it relates to communications interdepartmentally and for the purposes of the department, that we are getting the value for money. I can say within the software sweep, there is the word processor, spreadsheet, presentations package, web browser, antivirus software. So I think that there is indeed value there, and the member may want to debate it for some time. That is okay, but I am determined and satisfied that we are getting value for the money that has been spent.
Mr. Sale: Mr. Chairperson, is the system that is being made available essentially Windows 95 or is it Windows NT? What is the actual software?
Mr. Downey: I am informed that the base is Windows 95, Mr. Chairman.
Mr. Sale: Mr. Chairperson, what is the software package that is being put in place for a spreadsheet? Is it essentially the Excel, PowerPoint, Word for Windows, MS Word?
Mr. Downey: I am informed it is the Microsoft Suite, Mr. Chairman.
Mr. Sale: Mr. Chairperson, does that include Microsoft Word, Excel and PowerPoint?
Mr. Downey: I am informed that that is positive, Mr. Chairman.
Mr. Sale: Mr. Chairperson, what other software is supported by that core contract, $2,600 a year per machine?
Mr. Downey: Mr. Chairman, I have basically indicated to the member what it is.
Mr. Sale: Mr. Chairperson, could the minister simply read the additional programs over and above Windows 95 and Microsoft Suite?
Mr. Downey: I have indicated, Mr. Chairman, word processor, spreadsheet, presentations package, web browser and antivirus software.
Mr. Sale: In other words, Mr. Chairperson, essentially what the government has bought is the standard Windows 95, which will be outdated soon and be Windows 97 or 98 or Windows NT, along with the standard Microsoft Suite that is widely used and widely accepted in the industry. The Windows 95 comes with a browser, it comes with e-mail capacity, it comes with antiviral software. So essentially what the government has bought is a Microsoft package mounted on an IBM computer, much as I might buy down at CDC Computers. Is that correct?
Mr. Downey: Mr. Chairman, this whole program, as he knows, has been one which has been centrally purchased by government and participated in by all departments. I do not think it matters what program or what system that the governments proceed to purchase or anybody proceeds to purchase. The fact is that the programs--first of all, we want them to be compatible. As far as becoming obsolete, the speed of which any of these systems become obsolete is very rapid.
I would hope, and I am confident that these will provide services to the government to which we will get the services that we are looking for. It has the capability that government needed, and quite frankly I am satisfied that it does not matter what package or what program, what system one would have bought, they are all dated. So there is not any question. It is a matter of judgment as to whether or not government got the best or what system is the best. We are satisfied that this will meet the needs of the department.
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Mr. Sale: Mr. Chairperson, I understand that this was centrally directed. It was directed out of the better services, Better Systems, Better Methods initiative that is housed in the First Minister's (Mr. Filmon) responsibility, that this was a central initiative of government. It affects every department, and those of us who played with computers for some years are wondering what in the world possessed government to be willing to lay out $2,600 per station per year to get support for a program that when you buy a computer it is mounted--for the most part--and there is on-line support, a wealth of technical manuals available.
Quite frankly, in every department there are people as competent as anybody at Systemhouse to tell you how to use Microsoft Word. Microsoft Word has been used for years in government and very large numbers of people are very competent and capable with it. Spreadsheets are spreadsheets. Once you have learned how to use one spreadsheet, there is very little difference between Excel and Quattro Pro and D-base or whatever one you want to look at. They are all spreadsheets. They are all essentially operating in the same way with various little gimmicks that may distinguish one from another, but they are not very different.
As the minister probably knows, you can import one spreadsheet into another database manager and it does not make much difference. Presentation packages, they vary a little bit. PowerPoint is a little different from Harvard Graphics, for example, which is an older program now, but they are not terribly different. Anybody who gets comfortable with one design package can easily adapt to another.
The point, Mr. Chairperson, is that there was probably some value in upgrading hardware to a standard so that everybody had the same machines. There is no question that it was very frustrating when I worked for government, and there is no question that in our caucus it is very frustrating to have a mess of machines ranging from old 386s through to brand-new 433s or 533s which can process anything at the speed of light. So no question that it was a good idea to articulate standards, and since the government has a whole lot of income it does not want to acknowledge coming in, it is probably a good place to spend some of it to bring its systems up to date.
But the expenditure of an ongoing amount of more than $25 million a year to simply maintain what Bill Gates puts on every machine he has control over, which is most of the industry in fact, is a boondoggle, not to put it too faintly. It is a boondoggle. Systemhouse has got themselves one sweet deal. They are providing no support to anything sophisticated except they are an extra cost.
If I have a problem with Microsoft Word, I go to one of the secretaries who have been using it for five years and say, I have a problem, what can I do? And they usually have about 30 seconds' worth of sage advice and most of the time they are right. The new protocol is you cannot ask anybody for help. You cannot say to your neighbour on the machine next to you, I have a problem with my spreadsheet, can you help me? You are supposed to pick up the phone and call Systemhouse and get your help from Systemhouse.
Mr. Chairperson in the Chair
Well, you know, in any workplace there is a kind of culture of staff support and staff friendship. Staff develop different competencies and they get to be seen as: Joe is really good on spreadsheets; Sally is very good on presentation packages; and Frank knows word processing. So there gets to be a kind of lead hand; there gets to be a mentoring process. Some of the building of staff competencies, some of the building of relationships that make teamwork function, that is why people help each other in the workplace, so this new initiative is a very tayloristic--oh, Frederic Taylor was the father of time-motion studies and anybody who has been involved in one of those knows what they are all about. Do not talk to your colleagues, do not talk to your co-workers; phone somebody over at Systemhouse and see if they can help you.
In some departments people have been told they cannot go for help to anybody that knows the system anymore. If it is not one of the standard systems, they phone Systemhouse and Systemhouse charges them for referring them to the help desk they used to call directly. Now this is ludicrous. I want to ask the minister what major software packages--I do not want to know all of them because there are probably 60 or 70 of them in the department that are maintained--does the department use apart from Microsoft Works?
Mr. Downey: I am informed by the department that basically we are still using the WordPerfect system and will be transitioning to the new system in May and June.
Mr. Sale: Mr. Chairperson, I am sure that is only a fraction of what the minister's department uses. For example, they have economic modelling software. What software do they use to support their economic modelling function?
Mr. Downey: For example, in the area of Manitoba Bureau of Statistics, they have their own system, economic modelling, which they use. As we said at the outset, we are in a transition period. I think as the new system gets introduced, what capabilities we have currently for the needs of the department will be worked in with the development of the new system. So it is not a matter of just saying today is this and tomorrow it will be that. I think it is a matter that as we phase in we will be in fact fully utilizing the equipment that is being put in place to carry out the activities of the department.
Mr. Sale: Mr. Chairperson, the minister did not answer my question. What other software is in major use in the department? For example, graphics packages, database management packages, draw packages, economic modelling software. Are they using SPSS? What other software packages are in major use in this department?
Mr. Downey: I will get that detailed information for the member, Mr. Chairman.
Mr. Sale: I thank the minister for that. What is the hourly or minimum rate that SHL charges for support for packages that are not included in the base package?
Mr. Downey: I am informed, Mr. Chairman, by the department, that will be provided in-house by the department.
Mr. Sale: Mr. Chairperson, does SHL Systemhouse charge for referral calls to other software support?
Mr. Downey: To this point, Mr. Chairman, we have not been charged any additional charges by SHL.
Mr. Sale: Mr. Chairperson, I am not surprised by that answer because the initiative just started. There will be a schedule in the hands of the administration of the department that will indicate what the charges are to be for support services not covered under the core agreement. What is the hourly rate for those charges?
Mr. Downey: We do not have that, Mr. Chairman.
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Mr. Sale: Will the minister undertake to inquire as to what rate SHL is charging for additional services over and above the core services?
Mr. Downey: I will make best effort to get that information, Mr. Chairman.
Mr. Sale: I think with the understanding, Mr. Chairperson, that we may need to come back to this for the answers, hopefully the minister will be able to provide then we could pass this section.
Mr. Chairperson: Item 10.1.(c)(1) Salaries and Employee Benefits $678,800--pass; (2) Other Expenditures $309,900--pass; (3) Computer Services $110,000.
Mr. Sale: Mr. Chairperson, the $110,000 for Computer Services, does the Systemhouse SHL contract have anything to do with that amount or is that entirely separate?
Mr. Downey: Mr. Chairman, 25 of that amount is for SHL systems. Well, that was the question; that is the answer.
Mr. Sale: Mr. Chairperson, so SHL is receiving $515,000 on an annual basis for its services under the desktop management and a further $25,000 under Computer Services. Is this correct?
Mr. Downey: I am told, Mr. Chairman, that 515 is after netting off the 25 that I referred to in my answer previously. The amount that is being paid in total to Systemhouse is the 515, of which the 25 has already been accounted for as part of that number.
Mr. Sale: Mr. Chairperson, what is the $25,000 in this line for?
Mr. Downey: As I indicated at the outset, the 25 is part of the 515 which goes against the per-unit services charge, and the 85 which he refers to as the balance goes to in-house costs of the department.
Mr. Sale: So, Mr. Chairperson, is then note one incorrect? Because it identifies the desktop management as only referring to Other Operating and not to the Computer Services line. If the 25 is part of the desktop, then presumably there should have been a note to that regard.
Mr. Downey: Mr. Chairman, there is no change in the line which the member has referred to. The 110 stays consistent with last year, 110--yes, it is other operating which is the Systemhouse costs which we made reference to at the outset. So the 110 stays consistent, and 25 of that, as I said, is part of the 515 that goes to Systemhouse as part of the government-wide desktop initiative, of which our share is that amount of money, and 85 is retained within this line for other internal activities in the whole area of Computer Services.
Mr. Sale: Mr. Chairperson, I am having a great deal of difficulty following that kind of line of argument, because the minister has indicated that the Desktop Management Initiatives is new. Now he is also indicating that $25,000 of the $515,000 is old, because it was here last year too. So is the department receiving other services from Systemhouse that it has been receiving in previous years, and so is the minister's first answer perhaps not complete?
Mr. Downey: Mr. Chairman, the 515--I apologize for confusion. It is my understanding that this allocation of the $25,000 referred to is money that would have been used. We would have had to, in fact, have $540,000 of new money for Systemhouse. We have used $25,000 out of our original budget, which was budgeted for the Computer Services, which brings a net of $515,000 new money, $25,000 is being allocated as part of that expenditure.
Mr. Sale: So, Mr. Chairperson, then the total on Systemhouse is $540,000 not $515,000.
Mr. Downey: Mr. Chairman, I think we have to take a minute in caucus here to get this thing sorted out.
Mr. Sale: Mr. Chairperson, if I could suggest, why does the minister not bring that answer back tomorrow.
Mr. Downey: We will get that spelled out clearly. I apologize.
Mr. Sale: Mr. Chairperson, could he also then, in that process, indicate whether any of the balance of $85,000 is contracted services or whether this is all spent internally in the department in some form? It is difficult for me to understand how that might be. I would think some of it must be contracted, but anyway, if he could undertake to do that as well, and maybe we might just agree that we could pass to the bottom of the Subtotal (c) line and then call it five o'clock.
Mr. Chairperson: Item 10.1. Administration and Finance (c) Financial and Administrative Services (3) Computer Services $110,000--pass.
The time being five o'clock, time for private members' hour. Committee rise.