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Mr. Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. This morning we will resume consideration of the Estimates of the Department of Industry, Trade and Tourism. When the committee last sat, it had been considering item 10.1.(d)(1) on page 89.
Hon. James Downey (Minister of Industry, Trade and Tourism): Mr. Chairman, maybe, while the honourable member is getting his material put together, I can give him some of the answers that I took as notice the other day that might be helpful to him.
The member asked some questions about untendered contracts, and I want to bring him up to date on it. The information which he had asked for has been recorded publicly. All untendered contracts in the Department of Industry, Trade and Tourism are forwarded to the ISYS program database maintained under the Legislative Building Information Systems. The department registered its first untendered contract for the fiscal year 1997-98 on April 11, 1997, and registered its last untendered contract on February 23, 1998. Untendered contracts for the current fiscal year have been reported to April 14, 1998, so the information the member is asking for is in fact available and can be obtained in that area.
The member asked what were the travel expenses for the minister and senior officials charged to the executive budget for 1997-98. Travel expenses for the minister and deputy minister charged to executive budget, '97-98, were $21,308.62.
There are some questions as it relates to specific untendered contracts. I will ask the member if he wants me to respond now or in the best interests of time he can refer to the information that is available and probably he could get on with some of his other questions. If not, I can respond to him at this particular time.
Other areas that he referred to in general questions: what are the total incremental costs of the SHL Systemhouse Limited desktop in our department for 1998-99? The total costs in 1998-99 for 10 months and respectively 1999 are $463,283.33 and $555,940. Of these total amounts, $25,000 will be funded from within by Computer Services; $15,000 will be funded from within by the Manitoba Bureau of Statistics; and $19,950 will be funded from within the EITC. These funds are available from within because these areas will realize cost savings from not having to acquire new equipment or not having to maintain existing equipment from their existing budgets. After taking into account the above amounts which will be funded from within, the incremental desktop costs in 1998-99 are $403,333.33. For 1999, they are $492,000. This provides for 200 work stations within the core department and nine work stations at EITC.
The other question is: why does the Computer Services budget not reference any change for desktop, and what is included in this budget? The question was: are these contract expenditures? As noted above, $25,000 of the Computer Services budget will be used to offset desktop costs. However, the budget remains unchanged at $110,000, and consequently there is no reference to any budget change on the Computer Services line.
This budget includes $25,000 for desktop, as well as amounts to upgrade existing software, excluding from desktop, to the current Windows environment, to acquire software, excluding from desktop, to better distribute information to the public or provide the public with access to departmental databases and to cover day-to-day costs of operations, including employee training. There may be the need for some short-time contracts in certain instances, but contracting is not expected to be extensive.
Those, Mr. Chairman, basically cover the areas asked for the other day, excluding the specifics on some of the contracts that the member had asked for. If he wants to proceed on that question, I would leave it in his hands. Thank you.
Mr. Tim Sale (Crescentwood): I thank the minister for that answer. I will update my file of untendered contracts through the ISYS database which, when I last looked at it, was having some difficulty which was not related to the department but which related to ISYS and to the machines in the library. So I will ascertain what is in there now myself, and I appreciate the minister's answers on all of those issues, Mr. Chairperson.
Mr. Chairperson: Item 10.1.(d) Research and Economic Services (1) Salaries and Employee Benefits $544,200--pass. [interjection] I am sorry.
Mr. Sale: Mr. Chairperson, I am not sure whether it is more appropriate to ask these questions--and I ask the minister now whether he has his trade staff here. I am not sure whether under Research and Economic Services it is appropriate to ask those questions. It talks about expected results in the area of trade policy. I think Mr. Barber is here, so I would like to ask some questions in that area here.
Mr. Downey: Yes, Mr. Chairman, we can deal with them now, and I will ask Mr. Alan Barber to join the table with us, please.
Mr. Sale: Mr. Chairperson, could the minister provide the committee with--I hope reasonably brief--but with an overview of the current status of the Agreement on Internal Trade and what has happened specifically in regard to the MASH sector which has been an ongoing issue for several years? I believe it may have been concluded or may still be in progress, but I would appreciate an update on that issue.
Mr. Downey: Mr. Chairman, I will ask my staff to bring the corrections forward, when necessary. I will try to give a quick overview, and then for some of the details per dates and that kind of thing I will ask staff to further give me some information. I can tell the member--
Mr. Sale: Just to clarify, if I may. I am sorry to interrupt the minister. I have no objection to the staff providing information directly if the minister wishes to do that on this issue. I know this is a complex area. That is not to suggest the minister does not have full awareness of it, but if he wishes to have staff answer questions directly, that would be fine with me.
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Mr. Chairperson: I thank the committee for that. The honourable minister.
Mr. Downey: I will deal with it as well as I can, and then I think, basically, I have been as involved as anybody. I do want to acknowledge, though, that Mr. Barber has been a tremendous resource, not only for the Province of Manitoba, but in his assistance working with the internal trade committee nationally, because we have had the co-chair responsibility for some four years. He has contributed significantly to the progress that has been made to date, also working with the Internal Trade Secretariat, which is located in the province of Manitoba.
I can report positive news, Mr. Chairman. As of February 20, when we had our last ministerial meeting of which we had, I would say, some major successes, we, at our meeting, made the decision to--or the ministers agreed to--proceed with the MASH sector, excluding British Columbia. However, British Columbia agreed to have it take place within the agreement; they stepped out, not being part of the agreement, but allowed the consensus of all the other parties to proceed with it, because it took unanimity to have a conclusion to where we got. British Columbia actually accepted that proposal, and we concluded the MASH sector. We anticipate that it will take place, as agreed to, on July 1 of 1999.
There have been several changes that were introduced that brought some comfort to particularly some of the institutions that are affected, the raising of the limits from $25,000 to $100,000 on procurement of services and goods, and that we would go to an electronic tendering system which was not expensive, complicated or anything else because that was a concern with the low level of the amount that had to be tendered for, that it was not only not in the best interests of the overall agreement, could be inefficient, and so electronic tendering will be fully available at that particular time. The amount has been raised, but we have to appreciate that British Columbia has taken and exercised its option to not be part of it.
Mr. Sale: How are the costs of the electronic tendering system being borne?
Mr. Downey: By those jurisdictions that will be offering to buy services.
Mr. Sale: Could the minister clarify whether he means municipalities, hospitals, schools, or whether he means the provinces who are the signatories to the AIT?
Mr. Downey: Mr. Chairman, those individuals who are presenting themselves as suppliers through the MERX system will be paying the cost of the electronic tendering. The subscribers to that system will, in fact, be paying the cost of that service.
Mr. Sale: Mr. Chairperson, just so that I am sure that I am understanding, essentially those who wish to bid are paying the costs of operating the bid system, not those who are placing tenders on the system for response.
Mr. Downey: I am told for the MERX system, that is correct.
Mr. Sale: Mr. Chairperson, is there something I am missing here? You said for the MERX system. Is there some other system or some other component that I am missing?
Mr. Downey: The other alternative would be for a municipality to use a bidding system using the Internet, but it would in fact be tied to the MERX system, of which the feed would feed into that for all people signed on. Keeping the cost or updating the Internet page or supplying the material on that would be the cost of the municipality.
Mr. Sale: Mr. Chairperson, there must be some--let me put it another way. All school divisions, universities, colleges, municipalities in Manitoba presumably are now bound by this decision. This is a binding decision, I presume, since the province is the signatory and the province is the creator of all of those entities. Maybe it would be more helpful to have the minister explain how a school division such as Brandon, for example, will now be required to source services in excess of $100,000. So if he could just walk me through how the division will actually do that without incurring any costs, or perhaps there are some costs that I have not yet been able to be clear about.
Mr. Downey: I will ask Mr. Barber to directly go through the process with the member.
Mr. Chairperson: Is it the will of the committee to allow staff to answer certain questions? [agreed]
Mr. Alan Barber (Director, Research and Economic Services, Department of Industry, Trade and Tourism): To pursue the specific example of Brandon School Division, where if they have a procurement in excess of $100,000 for goods and services or in the case of a construction contract for $250,000, the requirement of the agreement will be to electronically advertise that opportunity.
One avenue, one of the principal avenues is the MERX system, which is offered by a company named CEBRA. Under that system, the school division can contact CEBRA and become an authorized user of that system, at which point all they would require is a computer that has Internet access, which would allow them to take the tender opportunity, post it according to a template that CEBRA has, and then e-mail that to CEBRA, which then supplies that to the potential suppliers. The CEBRA service is offered to the procuring entity at no cost to the procuring entity other than its own computer Internet access. The requirement is electronic advertising, the requirement is not the specific MERX system. Therefore, individual entities have choices of how they wish to choose to electronically advertise. There are other group entities that have looked at joining in and for example having an independent Internet site. In a situation such as that, the group of entities or the entity that would maintain their own Internet site would be responsible for whatever costs are involved on that Internet site.
Mr. Sale: I thank Mr. Barber for that explanation. Could the minister, or Mr. Barber, just indicate what the initials stand for? We all have our acronyms, but I have not a clue what this one means.
Mr. Barber: As I understand it, MERX is not an acronym. It is M-E-R-X, which is the title of the service.
Mr. Downey: Mr. Chairman, it might be helpful to the member as well and to the public, it is our plan to meet with the different jurisdictions who are going to be expected to carry out the responsibilities under the MASH sector to meet with the appropriate associations, whether the union of municipalities, the people representing the school boards, the hospitals, to make sure they are fully up to speed as it relates to what is expected of them. So that exercise will be carried out by the Department of Industry, Trade and Tourism in co-operation with the Internal Trade Secretariat so that, in fact, they are fully informed as to what is expected of them.
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Mr. Sale: Mr. Chairperson, the other acronym that I did not pick up sounded like CEEBRA or CEBRA.
Mr. Barber: Yes, CEBRA is the name of the company offering the MERX service. It is spelled C-E-B-R-A.
Mr. Sale: I think I have a poor layperson's understanding here of the relationships now.
Is there to be a standard protocol on tendering? In other words, are there standard time limits for tenders or standard notice requirements, or is each entity free to use whatever its normal or whatever its desired approaches to tendering for services is?
Mr. Downey: The agreement is pretty much encompassing of leaving it to themselves to make sure that the principles of the agreement are lived up to. As far as dictating to municipalities and other jurisdictions, as long as the basic principles of public tendering on those amounts and making sure that they are fully disclosed nationally to those jurisdictions that are part of the agreement is the main principle. As far as getting into the detail of how it is done, I am sure each one of them will have their own system, but, I think, as we have heard on the overall electronic tendering that the most efficient, in fact, the best will be adopted and probably that will be the majority of them. But as far as dictating to them how they do it, that is not necessarily our--in fact, I would say to the member, if a jurisdiction decided that they could do it better through another system, that would be their choice.
Mr. Sale: Mr. Chairperson, there are lots of situations. I recall one recently in Brandon where the construction company responsible for the initial development of the Maple Leaf site, for whatever reason, did not tender its initial soil removal process, and no Brandon company got any contract as a result of that. That is obviously not a requirement that any particular firms have preference.
Two questions in this area: under the limits, the 250,000 and the 100,000, is it permissible for municipalities, hospitals, schools, et cetera, to include in their tendering process a preference for local sourcing?
Mr. Downey: I would think it is their business, Mr. Chairman. It is nothing to do with the Internal Trade Agreement.
Mr. Sale: Mr. Chairperson, what constraints face a municipality or a tendering entity once they get into the AIT in terms of any kinds of local preference?
Mr. Downey: I am not sure what the question is. AIT, you made reference to AIT. What is the--
Mr. Sale: Agreement on Internal Trade.
Mr. Downey: He put a different acronym for it. He is trying to trick me. That was a trick question. Could he repeat the question, please?
Mr. Sale: Within the detail of the Agreement on Internal Trade, which I have not tried to absorb--I have read the initial agreement, I believe, as entered into a couple of years ago, but there are many more, I am sure, regulatory details that I am not aware of.
Are there any provisions for preference in tendering? For example, it is a common phrase in tenders--lowest or any tender will not necessarily be accepted. Tender criteria can often include a range of criteria which are to be considered as well as price.
Is it possible for a local tendering document to include preference criteria which would have the effect of preferring local suppliers over distant suppliers?
Mr. Barber: There is a provision in both the Agreement on Internal Trade, the procurement chapter, as it applies to federal and provincial governments and similarly in what is proposed for the municipalities and the MASH sector, which speaks to what criteria are permissible in terms of the awarding of a contract, and, essentially, a number of criteria in addition to price are certainly eligible. The key criteria is that the criteria should be not with a view to geographic discrimination.
So if there is a requirement, for example, that service be provided within a certain period of time and the logistics are such that it is likely only going to be provided by a local supplier, then if that is a legitimate criteria for the good or the service, then it is not in violation of the obligation of the agreement. So in that context, as you have put it, there would be the ability to put in criteria that might have the effect of providing preference to local suppliers.
Mr. Sale: I think, Mr. Chairperson, that is a common approach in pretty well all trade agreements, that as long as the criteria are not intended to achieve an end of local preference but are germane to the service that is being issued, then it is permissible.
Could the minister just undertake to supply me with that relevant section of the details, so that I might understand them better?
Mr. Downey: The answer would be affirmative, Mr. Chairman.
Mr. Sale: Mr. Chairperson, could we now move on to the area of the Multilateral Agreement on Investment which was a subject of our discussion last year and a subject of an all-party agreement in the House lately in terms of raising our province's concern from all parties about the directions that the MAI appear to be headed in?
I do not think there is any sense in playing games with this. Those of the governments who were involved in the early negotiations knew the intentions at that point, and I do not believe the intentions--at least my reading of the documentation from its inception to its--well, whatever state it is in now; it is not clear what state it is in now. But those intentions on the part of the negotiators did not change. What changed was, I believe, the public's understanding of them and consequently the public's opposition to them because of the strong, implied threats to sovereignty, the threats to the ability of governments to have any preference requirements, let alone ones that discriminated on the basis of geography.
I certainly commend the minister and the government for changing its views, but I do not think there is much doubt that it was a change of views, given that I know the expertise of staff was available to government from the outset and from the outset the intention of the negotiators and the trans-Atlantic business dialogue and the business councils and the business round tables was to achieve the kind of agreement that was ultimately perhaps deferred, delayed, whatever the status of it is.
So I am glad that the government changed its views and I am glad that the public finally got the chance to become knowledgeable through a variety of activities, sometimes including activities of the federal government, but more often in spite of the activities of the federal government.
Could the minister first of all clarify what is his understanding of the current status of the MAI negotiations at this time?
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Mr. Downey: As the member knows, and I want to put on the record again, this falls within the jurisdiction of the federal government, as he is aware, as far as the negotiating is concerned. It is my understanding that the MAI, as it was discussed, which we had seen draft copies of as a province, we have seen the withdrawal of that from the OECD countries that were the ones that were going to be the signatories to it. It has been withdrawn from the table? It has not been? I stand corrected, Mr. Chairman. I was of the understanding that it had been withdrawn, but it is basically a pause on discussions at that table, not a withdrawal of it. It has been a pause.
We have stated and will continue to state what our position is in writing to the federal government, that we will not agree to any MAI agreements that fall outside of what was agreed to under the NAFTA agreement. Our position is consistent in what we have presented and has not changed. Again, I am not so sure that the discussions, and he has asked me for what my reading of it is, and my reading of it is at this particular juncture that it will have a hard time proceeding as it is currently proposed, and I can also tell the member our position has not changed. It stays the same as it was when we sent the letter to Ottawa, I believe it was in December, and that we continue to maintain that position both in writing and have directly told the minister of what we believe.
I will also be participating, and I thank the member for agreeing to allow me to be part of discussions that will be taking place next week in Geneva as it relates to the World Trade Organization and what connections there may or may not be as it relates to MAI. I think it will give us a first-hand opportunity to be there, to get a reflection as to what in fact the future may or not be as it relates to MAI, whether it is under the OECD country signatories or whether or not it is, in fact, further considered by the World Trade Organization. So that is as close as I can tell the member as to where I think it stands currently.
Mr. Sale: Mr. Chairperson, the minister indicated in the House when this item was under discussion during Question Period that he had spoken personally to the minister and he did not indicate that he had written. I think he subsequently indicated that he had written. Has the minister written to the federal government subsequent to the letter that was tabled, I believe, early in this session? The letter was dated December, I believe.
Mr. Downey: No, Mr. Chairman, I have not written, but we did discuss it on February 19, 1998, at a meeting with the ministers of Trade and with the federal government. That was the last time that communication was taking place between the two jurisdictions. I, again, reiterated what our position was as a province as it related to the MAI. I guess I got some reflection from that meeting that the minister at that particular time did not have the will to proceed to signing of the MAI agreement as it was presented. Then again I was, I guess, somewhat a little bit confused. I was of the impression that probably it would be withdrawn because I think--and I am not wanting to speak for the federal government; my goodness, that would not be my role--but the reflection I got was if any further discussions were to take place, that his preference probably would be to discuss them as part of the World Trade Organization rather than the OECD. That is where I get the impression that there may have been a withdrawal from that table.
Again, as my staff have indicated to me, that is in a pause position, and again I think it is important to be part of the discussions as to what the future of it holds. Again, I will reiterate, and I do not have to but I will for the member, our position has been stated in writing and verbally to the federal government.
Mr. Sale: Mr. Chairperson, if indeed I take the minister's statement that that is the case, then the government of Manitoba must have been misled in the initial going, because obviously it came to the conclusion that this was much more than NAFTA, substantially more than NAFTA, and so was prepared to join an all-party resolution not unlike P.E.I. and the Yukon to make it plain that the government was not in favour of the draft as currently on the table for, presumably, primarily the reasons that the government's perception, advice was that it did go beyond NAFTA and that that was unacceptable. As I have said, I am glad to know that position.
I am concerned, though, about a core constitutional issue, and I am wondering whether the government has sought legal advice on this or not. I want to try and explain it. I am sure Mr. Barber and the minister understand it, but I want to explain my understanding of it, and perhaps they can add to that or correct it.
In a federated nation such as Germany is, Canada, and to other extents, Australia and the United States, there are not, according to most legal opinions that I have read, senior and junior levels of government, but there are two levels of government, both of which have sovereign powers under a constitution. There may be the government that is seen as the government of the nation that represents the nation in certain ways, but equally there are governments of the subnational units, the provinces or the states, cantons in Switzerland, that have sovereign powers under that nation's constitution. Sometimes I think it is difficult for nations like the United Kingdom or Britain and France, Holland that are unitary states to understand the constitutional realities that face federated states.
One of the most disturbing components of the AIT, I presume it was one that disturbed this government, was the proposal to bind subfederal units without their consent. That is, they would be bound without being signatories. They might be graciously allowed to attend cocktail parties or to receive briefings from time to time from the federal level--I am not just talking about Canada here; I am talking about other federated states--but they are not to be signatories. That was one of the key goals of the multinational corporations who were the prime movers behind the pressure to undertake and negotiate an MAI.
Some provinces in Canada have actively sought legal advice as to whether it is constitutionally permissible for the federal government to sign a treaty binding provinces in areas in which the federal government does not have sovereignty or shares sovereignty. I do not think anyone disagrees that the federal government can bind itself to a treaty, but perhaps the most important things that affect Manitobans' lives, our education, our health care, many aspects of our natural resource management rights under the Constitution where we have shared jurisdiction, are areas that the federal government simply does not have the ability to sign away. At least I do not believe it does.
I think there was an interesting constitutional precedent set in 1937 or '38; I think it was '37 that it started. It was not resolved for several years, and the minister, I am sure, knows the precedent I am referring to, and that is the then-called unemployment insurance, where the federal government sought to implement unemployment insurance across the country during the later stages of the Great Depression, and Ontario, I think for bad reasons but, nevertheless, took the federal government to the Privy Council, and the Privy Council found in favour of Ontario, so a constitutional amendment had to be undertaken with provincial consent. So unemployment insurance was not brought in until I think 1941 or '42. I cannot remember exactly which date, but I do know that some legal scholars believe that that was a very key precedent because it said, in effect, if a province dissents in an area in which the province has sovereignty, the federal government may not simply override that but must get consent.
I do not want to go on at length, but I am sure the minister understands the issue. I am sure Mr. Barber understands the issue. Has the province sought legal advice, or does the province have a position already that it cannot be bound in areas in which it is sovereign by the Government of Canada?
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Mr. David Faurschou, Acting Chairperson, in the Chair
Mr. Downey: I understand clearly the point the member is making, and, quite frankly, it would not be in the province's interest to give up what is constitutionally ours to protect and to maintain as it relates to our future and our decision making.
So I can tell him in my capacity as a minister representing this government that I will continue to put that position forward, that we do not believe imposition of policies, treaties or regulatory impacts on our province that are not within the ability of another jurisdiction to do it, we will not stand idly by and let that take place.
He is in an area where, in fact, there would be, I am sure, a lot of legal debate. Lawyers love to get into this whole area of where it is at. We have in fact an opinion from Justice--I am informed by staff that we have--that there may be some question as to whether the federal government could bind provinces, but the general view seemed to be only that that would be a probability. It has not been proven, and it may have to be presented as a case to do that, but I will continue to put forward the position that where it is our jurisdiction, it is our jurisdiction and not able to be overruled or overinfluenced by the federal government.
I think we have one example, particularly, that we refer to. That is the labour and the environmental legislation that we passed within the province of Manitoba to in fact be part of the NAFTA agreement. That was a clear signal that we were onside and prepared to do so. The federal government really accepted that and requested it, I guess, as part of giving support to what they had negotiated. So we have that example before us which I think, quite frankly, would augur well if there were impositions coming at us again in another area that would, in fact, should be held up as an example of their agreeing to our accepting that principle.
So there is not a disagreement between the member and myself as it relates to imposing of jurisdictional questions on our province, when in fact it is not their authority to do so.
Mr. Sale: Mr. Chairperson, I am not sure I understood the first part of the minister's answer. He seemed to be suggesting that there is some legal opinion that suggests the federal government could bind the provinces. Did I understand him correctly?
Mr. Downey: That is correct.
Mr. Sale: Mr. Chairperson, has the government sought senior constitutional advice from an appropriate authority, whether it is someone like Mr. Schwartz or Mr. Appleton or somebody else. I do not know who would be the right person. But has the government sought its own independent legal advice as to this issue?
Mr. Downey: I will ask staff to comment as to what other legal advice or activity they may have worked on.
Mr. Barber: Mr. Chairman, we have sought advice from constitutional lawyers in the Department of Justice, but we have not sought outside legal advice on that issue.
Mr. Sale: Mr. Chairperson, has the provincial government sought assurances from the federal government that in any future negotiations there will be no attempt to bind provinces in areas in which they are sovereign under the Constitution without the province's explicit consent?
Mr. Downey: Mr. Chairman, that has been not a specific direct question in writing, but it was part of the discussion. I think, from my interpretation, that there was certainly some question as to whether or not the federal government would in fact proceed without it. That is still an area that is still not totally clarified, but an area which we believe is where we will continue to push to find out what the federal government's intentions are as it relates to the MAI agreement and enforcing it on provinces. I think it certainly has a tremendous political sensitivity to it and, again, because it has been put in the whole position at this particular time has not been as pressing but, again, it is one of those things that I think will be hard to get the federal government to fully commit to. However, there is not any reason why we cannot proceed to try to get a commitment from them on this particular matter.
Mr. Sale: Mr. Chairperson, the governments of Alberta and Saskatchewan both wrote letters which I believe were tabled in the House and I am sure the minister had in any case, because he was copied on that correspondence. Their letters were dated in early February, just prior to the meeting of the provincial and federal Trade ministers and, in both cases, they were quite detailed. Alberta's was more focused on the question of resource management and the ability of the province to take whatever actions it deemed in the interests of its people to maximize its natural advantages, basically. Saskatchewan, if my recollection serves me, was more explicit in saying that they put the federal government on notice that they were not prepared to be bound without being party to the process.
I am wondering if the minister is prepared to write to his federal counterpart with a similarly unequivocal position that it is the position of the government of Manitoba that it will not be bound by any trade agreements or investment agreements which infringe on provincial constitutional jurisdiction without the province's direct and explicit consent, perhaps referencing the NAFTA side agreements issue, although I know they have limited force, referencing the Privy Council or other legal precedents.
My concern is to put the federal government squarely on notice that we intend to vigorously protect our sovereignty and that we intend to be very blunt about that and very forceful so that we can reassure Manitobans because, frankly, this is in area which the minister I am sure will agree with me.
Federal governments of every stripe have had a nasty habit of committing themselves to certain agreements and arrangements and, then, when it suited them or when the economic conditions changed, walking away from those. So I would be very concerned that we would be induced into signing over some control and, then, just as we were on the Established Programs Financing Act in 1977-78, suddenly finding that all the protestations and promises of one Pierre Elliott Trudeau were not worth diddly-squat when 1982-83 rolled around, because it was then a different set of realities and the federal government was quite prepared to walk away from its responsibilities that it had solemnly told everyone in federal-provincial meetings that it would honour and not breach.
So I am wondering, will the minister undertake to write to his federal counterpart making at least as clear as Saskatchewan did its intentions not to be bound and to vigorously protect its sovereignty?
Mr. Downey: I would consider that, Mr. Chairman. However, if we were to go back to the December letter to the federal government, we basically have stated that we would not accept anything that is outside the NAFTA agreement, which the member does not fully agree with, but the side agreements and legislation to support those in fact would be necessary as it relates to any participation. So I think we have gone on record and done so. There may be a stronger way in which we can do it. I do not have any problem with considering that if in fact it can accomplish the goal in reference to what I have said on the record here this morning.
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The Acting Chairperson (Mr. Faurschou): Item 10.1. Administration and Finance (d) Research and Economic Services (1) Salaries and Employee Benefits $544,200--pass; (2) Other Expenditures $172,100--pass.
Item 10.1.(e) Manitoba Office in Ottawa (1) Salaries and Employee Benefits $209,800.
Mr. Sale: I congratulate the Chair on assuming his new duties, whether this is the first time he has done it or not. I think it is. I have appreciated coming to slightly know the new member for Portage la Prairie (Mr. Faurschou), and I appreciate his assuming a new role. I am sure he will carry it out well.
Could the minister indicate whether there have been any significant changes in the operation of this office during this past year?
Mr. Downey: No change, Mr. Chairman.
The Acting Chairperson (Mr. Faurschou): Item 10.1.(e) Manitoba Office in Ottawa (1) Salaries and Employee Benefits $209,800--pass; (2) Other Expenditures $116,400--pass.
Item 10.1.(f) Manitoba Bureau of Statistics (1) Salaries and Employee Benefits $568,000.
Mr. Sale: I have a number of concerns about MBS, not reflecting on the staff, but just questions in regard to the office. The notes on page 21 of the Supplementary Information indicate the start-up costs of a simulation model, which I have had very brief information about from Mr. Falk when I asked a couple of questions earlier in the year, and I appreciate that very much.
Would the minister be prepared to ask the bureau to provide a briefing and demonstration of this model to members who might be interested?
Mr. Downey: The answer would be yes.
Mr. Sale: Could I request that the minister's office or some staffperson contact us and that we could establish a date to do that?
Mr. Downey: Yes, Mr. Chairman. I would have my office do that and have someone from my office attend as well to be part of that meeting.
Mr. Sale: The other small note is in regard to a thing called the population consultation project. Could the minister describe what that is?
Mr. Downey: This is the area in which the federal government determined the transfer payments to the Province of Manitoba, and it is an attempt by the Manitoba Bureau of Statistics to make sure that there is as complete an accuracy as possible, so that we make sure we maximize the revenue from the federal government. That is basically what this is about.
Mr. Sale: Mr. Chairperson, the two areas where there are frequently problems, I am sure the minister knows, are inner city population counts and aboriginal communities, First Nations communities. Could the minister indicate more clearly what is being done to try and improve the accuracy of those counts?
Mr. Downey: I guess, first of all, Mr. Chairman, is the fact that there is a full awareness of the issue which the member has raised and how best that can be accomplished. I leave it to those people who are professionals in this field because that is what their work is. Again, I, as a minister, and as a government, we want to make sure that we have the accurate information, and they would be and are charged with making sure that that is, in fact, the case.
So I am not arguing the issue. It is just a matter of making sure that, in fact, the best information possible is, in fact, provided. Maybe the member could be more specific so it could be helpful to what he is expecting to accomplish by work that would be done.
Mr. Sale: Mr. Chairperson, I am certainly not arguing the issue either. I am trying to understand what the population consultation project involves. I will expand slightly so the minister may understand my concern a little better.
Our party represents all of the North and all of the inner city. It is frequently our sense that there is undercounting in all kinds of different ways of people who usually, for reasons of economic poverty, are more mobile, tend not to have telephones, are frequently on shift work, are often living in conditions where they are living in a single room or at best two rooms, and so they do not tend to spend a lot of their personal time cooped up in those quarters. They tend to be out in the community somewhere. So it is always difficult in the inner city. It is difficult at election time; it is difficult when you are doing survey research, difficult in all kinds of ways to contact that population.
I can tell the minister that I have occasionally been involved in canvassing at elections--this is from time to time--and I think the minister would be, as a person committed to democratic government, deeply concerned, as we are, at the appalling state of enumeration in the inner city and in the poorer parts of many parts of our province.
In the Chairperson's riding of Portage la Prairie, the enumeration south of No. 1, Saskatchewan Avenue, is infinitely better than the enumeration north. The enumeration in the public housing areas on the west side of the city of Portage la Prairie is appalling. There are often situations where there are eight or 10 units with only two or three accurately recorded. In the inner city, it is not uncommon to go into an apartment building and find that considerably less than half of the suites have even been enumerated. This is not at all unusual.
Mr. Chairperson in the Chair
So that is just for election purposes. When it comes to an accurate count for transfer payment purposes which have very large dollars associated with them, it is our very strong sense that the numbers of people both in rural remote communities and inner city communities are undercounted by Statistics Canada to a very, very sharp extent.
There is a far better count done by Indian Affairs, done by the band councils themselves, for example, every December 31. The Department of Indian and Northern Affairs receives from bands, actual head counts, and those are available from INAC on-line actually. They are available, but I am not sure that StatsCan accepts them and I am not sure whether the federal government accepts them for purpose of transfer payments, so I am trying to understand what is the substance of this population consultation project.
How might, for example, my members represent all of the inner city and all of the North, learn about this project and see whether there is any useful role that they could play to make sure that Manitoba does in fact receive its fair share of payments under CHST? Or to take another example of an issue that is going to be facing all of us, the question of electoral boundaries, the strong sense that we have, is that both the North and the inner city are substantially undercounted for that purpose as well. That may be a more partisan, political concern, but it is also very much an income to Manitoba concern because if we do not have the right count, we lose out to the tune of somewhere in the order of 800 bucks per person under CHST, and as the minister might say, that ain't chicken feed.
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So that is my question here. It is not an antagonistic question. It is how do we learn more about this? Can we have a positive impact on it?
Mr. Downey: Mr. Chairman, I would have no difficulty with adding this to the agenda with discussions with Mr. Falk as it relates to this community discussion how we better identify those people. In fact, this may be extremely helpful, because so far we have been only able to find apparently the New Democrats who are living in those areas, and if there are a lot of people, maybe it is the Conservatives that we have not been able to find. This may be helpful.
Now after hearing the debate from the member for Elmwood (Mr. Maloway) yesterday accusing us of using government money for political purposes and campaigning, I would want to be careful that we were not seen, in fact, if we went through this exercise and the NDP lost all of those seats in the next election, then I really could be in trouble. So I will do it with caution, Mr. Chairman, and it will not be certainly with the full intent of finding Progressive Conservatives in those areas, but he has been able to find the New Democrats apparently and it has been showing up in the polls. So we will do what we will.
Basically, the seriousness of the question is there are people who should be accounted for and fully tracked, and they should be able to be fed into the bank of statistics that is available, whether it is income related, whatever it is, to help and assist in decision making so that we can, in fact, make more informed decisions for whatever purposes. So I would invite the member to discuss that as part of the meeting that will be had with Mr. Falk and his people.
Mr. Sale: I thank the minister for that. I would not ever want to suggest that it is the Conservatives who are all lost up north, but if we succeed in finding a few, then that certainly will not affect Mr. Ashton's plurality, but I have no problem with it.
I have a similar sort of question about employment statistics, Mr. Chairperson. I wish Mr. Falk were here because it would be helpful to have his views, but anyway I am sure they will be conveyed through the minister.
We have raised this in the House, and minister knows our concern here, that two provinces in particular, Saskatchewan and Manitoba, have such a high proportion of First Nations people on reserve, and in turn those people have such a high level of unemployment that failing to count them in our employment numbers seriously distorts Manitoba's performance and, I think, its understanding in comparison with Ontario, Quebec, the Maritimes, where First Nations people constitute a much, much smaller proportion of the labour force. Even though they have disproportionate unemployment, their numbers in total are not anywhere near what Saskatchewan and Manitoba's are.
Mr. Downey: Mr. Chairman, I appreciate the question, the fact that he is making reference to the fact that the aboriginal community has not been included, and I do not know to what extent. There is a total lack of accounting, but I think it is being a little bit overestimated. I think there are considerably more self-employed people in that category. Again, the question is, because we do have a higher population and it is not included, how do we include it. Good question. I think the statisticians should certainly be able to deal with that.
Again, it is not unlike the question previous to some degree: how do you make sure that everybody is accounted for in the counting of activities? If there were a way in which it could be more refined and done so--again, with Stats Canada he fully appreciates the fact that it is a federal government exercise and their responsibility. So are there co-ordinated ways or some way it could be accomplished to get a better reflection?
I can also tell him that, if he is trying to say, well, we have not got quite as many employed people as what the statistics say, I would challenge him, because I can tell you there are not many industries that are coming forward that do not have a shortage of people. There are jobs out there, and it is a matter of trying to co-ordinate the filling of those jobs. Some would say, and I have seen it come from some of his learned colleagues from the university, that, in fact, at the numbers we are at we are basically at full employment.
Again, making sure we are statistically correct is a good objective. I have no problem with that, and if we can improve on it in discussions with the federal department of statistics, I am certainly not going to oppose it and will try and make sure that, again, the most accurate information is available to the decision-making process.
Mr. Sale: Mr. Chairperson, for the last couple of years, I think I have acknowledged and I hope the minister would agree that I have acknowledged that south of No. 1 and southern Manitoba and in parts of Winnipeg we effectively have no unemployment. It is effectively the frictional rate, and that is good. That is not bad at all. The difficulty is that we have a very geographically dispersed unemployment problem, and we have a racially characterized unemployment problem. I guess my point is that I do not hear the provincial government acknowledging that.
I hear them taking credit for good things, and I do not blame them for that. I am glad the situation in southern Manitoba is so buoyant. We have toured that part of the province, and we are impressed with the entrepreneurial spirit, the employment levels, the investment levels. It is very impressive. However, that is not reflective of conditions north of No. 1, by and large, and particularly once you get north of the Yellowhead. I think the minister knows that as well, that the unemployment levels in the Parklands and certainly as soon as you get north of Parklands are very, very severe. Even in areas of Eastman like the Lac du Bonnet area, with the loss of over 700 jobs through AECL and the likely closure of that entire operation, we have some very regional problems.
Now, the minister says he is open to changing the approach, but I think--I mean, to be fair, he is trivializing this issue. The policy of Statistics Canada, the policy of the federal government is not to count First Nations people on reserve for any purposes. They are not counted when it comes to poverty and income statistics. They are not included in the statistics of employment and unemployment. They are not surveyed for labour force.
They are treated as a different category of Canadians, and that treatment itself gives rise to the perception that they have some second-class status because they are not worthy apparently of being surveyed to find out what the true conditions are on reserves at the same time that we are surveying our Canadian populations off reserve to find out what the true conditions are.
So the minister may be right that there may be more self-employment on some reserves, but I can tell him that on reserves affected by the northern flooding, for example, that is not the case. The fish are gone, the furs are largely gone, the unemployment rates have been estimated by INAC themselves and by bands to be in the 80 percent to 90 percent region on many of those northern reserves. Of course, there is some seasonal hunting--it is the only way to survive--but it would hardly constitute self-employment in any kind of normal understanding of that. So I am asking the minister whether he would take to his government and hopefully then to the federal government a position of this government that says we believe that First Nations people should be included in our labour force statistics.
They should be included in our poverty statistics, our income distribution statistics, and, yes, there are all sorts of statistical and sample survey problems with this because Roseau River is a different kettle from Dakota-Tipi, and it, in turn, is different from Peguis. They will all be different, so how do you survey in a statistically reliable fashion small communities that are geographically different, ethnically different, et cetera?
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I know it is a problem, but the failure to do so keeps making us think and making Saskatchewan think, an NDP government, that they have virtually full employment in some areas of their economy when, in fact, they have unemployment which is very like Nova Scotia and New Brunswick and about half of Newfoundland's, but it is well over 10 percent.
We carry that burden in our economy. We carry it through social assistance. We carry it through increased health costs. We carry it in all sorts of ways, and we, provincially, carry it because the federal government has walked away from its responsibilities. Even though I remember as a civil servant billing the federal government for services, we never got paid for those bills. They are still outstanding. We should turn them over to a debt collector, I think, and see if they can harass Mr. Martin by seizing one of his steamships or something, like we seized one of the Russian airliners a few weeks ago.
So I sympathize with the government for the federal government's failure to honour its obligations, but at the same time, I do not hear us calling for a more accurate counting of the employment and poverty or income-related realities that very dramatically affect our province differently, and Saskatchewan, as I keep saying, dramatically affect Saskatchewan and Manitoba differently from every other Canadian province. So when we compare ourselves nationally without taking these into account, we fool ourselves because the proportional importance of aboriginal populations in our prairie provinces is many times greater than it is in Quebec, for example, or Ontario.
So I am asking the minister: will he take a position instructing his staff and seeking the support of his cabinet colleagues and then taking a firm position with the federal government that says we want you to move away from the colonial practice of not counting aboriginal people in key areas where you have statistics which we count on for our public policy purposes? I ask the minister whether he could respond to that.
Mr. Downey: I certainly can, Mr. Chairman. I do not think it was very fair comment for the member to say that I was trivializing any of this debate because, in fact, that is not the case, and I will go back over the record of the work that I have been involved with as it relates to the employment activities and working with our northern communities as Minister of Northern and Native Affairs.
I can go through a tremendous line-up of positive initiatives that this government, under Premier Gary Filmon, initiated to, in fact, create employment, self-reliance and all of those things that lead to meaningful employment, but I also want to say that it is my understanding that the place in which they are not counted is on reserve. Now, I am not so sure that after they come off reserve that they are not included in the overall population base as it relates to the statistics and the count. That I will check for definite, but it is my understanding that it is on reserve, in fact, that there is not an inclusion as it relates to the statistics.
Now, if the member has a short question, I will take it, but I have some things I want to put on the record on this particular subject, so I will take a short question.
Mr. Sale: Mr. Chairperson, the minister is absolutely correct that it is on reserve, but there is also a time component to the status off reserve. So I believe, according to Stats Canada, that they have to have established residence which is normally deemed to be six months, and if it is under that, then they are not counted for employment purposes or for poverty-related or other Statistics Canada purpose, that they have to have established residence off reserve. I am not sure of the technical definition of what residence constitutes.
Mr. Downey: So, again, it appears, and I say this in a political tone, that the member, when he and his people, the NDP, were in government, had every right to move in this direction and include everyone, but now it appears that because we have seen--and I am not accusing him of this political motivation because the unemployment statistics are so positive for us, so that it is now time to change the ground rules so, in fact, the numbers do not look as good. I hope that is not what he is trying to do. I hope he is genuinely sincere about trying to make sure these people find employment.
But I can go through a list of positive initiatives in northern Manitoba. In fact, it would be interesting, and we may even consider doing that as long as I would not get criticized from the member. He is blanketly saying south of No. 1, south of the Yellowhead, that all the employment is taking place. I can tell him that I am pretty positive and pumped about the employment opportunities that are taking place in our northern communities.
Now, he has some policy problems as it relates to creating employment in some of those northern communities. Number one, one of the policies which could be changed that would allow some processing of fish in some of those northern communities would be not to force all of the fish that are caught to come into Transcona to have them processed, that the communities, because of the laws and the regulations of this province and the marketing board structure, they cannot, in fact, do that. Now, there have been special exemptions made because of pressure from certain communities in the Island Lake area, but, quite frankly, the policies which he strongly supports of central desk selling and marketing and all of those things have, in fact, denied those communities of doing work in their communities and doing much to help the unemployment.
This government, Mr. Chairman, with the North Central Hydro, it was a direct policy and injection of cash by the province, Manitoba Hydro and the federal government to bring employment opportunities to nine communities that did not have the same electrical power that he is able to enjoy sitting in his nice, comfortable home in southern Manitoba, that this government, this Manitoba government and this Hydro that operates under this government and the federal government--I give them credit--put a hundred and some seventeen million to thirty-five million to put in overland electricity, so those communities could enjoy the same amenity that he and his family can here. Who would want to stay living in those communities when they did not have the same capabilities and the power sources that he has in his home?
This government moved to do that, and it has created employment through Manitoba Hydro for those people to install those overland lines. It has created training and employment opportunities for those people to upgrade the wiring in their houses when they go from 15 amp to the traditional services that are provided. Those are employment opportunities that this government has worked very hard and aggressively to help those communities accomplish. Maybe with that power supply, there may be the ability to introduce the processing of fish which is a natural action and an actual way of life for those communities.
Tourism is another area which we believe very strongly is a natural way of progression for those people to develop and grow, and I can make several examples. One of them is Big Sand Lodge where, in fact, we have seen a tremendous number of positive initiatives from the communities themselves; yes, working under the management of other people from southern tourist activities, but it is a clear example of creating employment for those aboriginal people who live in those areas.
The forestry industry, Mr. Chairman, I can talk about what we were part of in the selling of Manfor, which was a drag on everyone. Yes, the selling of Manfor has, in fact, changed hands again from Repap to Timbec, but they are working closely with the communities, the communities of Moose Lake who now have the ability to on their own--not run by government-- supply wood supplies under long-term contracts to supply the product to that plant. We also finance them through the Community Economic Development Fund to buy the in-bush chippers to provide product for them.
We have not been sitting back not paying attention to economic opportunities. I would like to do a survey--in fact, I may consider that--precisely to get a better picture of what is happening, because he cannot sit back and say that there are not jobs being created. The mining industry, in fact, he knows it, Cross Lake, the band itself are very aggressive in the development and working to develop the mining system. I can tell him as well that up the east side of Lake Winnipeg, one of the restricting factors has been the lack of an overland road access to their communities. They desperately want it, Mr. Chairman. It would create greater opportunities for those communities to access the many things that he and I take for granted.
So I want him to know, yes, we are concerned about making sure they are part of the picture as it relates to statistics. It is better for making decisions, but this government has not sat back waiting on somebody to paint a better picture for them. We have realized the need for these people to get employment, a better way of life so they can educate their children, they can feed them properly, so we can work towards the reduction of some of the terrible diseases such as diabetes that these people are faced with on a daily basis. These are challenges that we all have to work on collectively.
Set the politics aside. I say set the politics aside. It is important, yes, that we recognize there are political structures, but we have to set the politics aside. I could tell him that a lot of people would have said that the Conservative government, quite frankly, did not get a lot of support out of those, but I will tell you this government of Gary Filmon has set the politics aside, and we have done what is right.
Mr. Chairperson: The time being 12 noon, I am interrupting proceedings. The Committee of Supply will resume sitting this afternoon following conclusion of Routine Proceedings.