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The Acting Chairperson (Mr. Helwer): Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Executive Council.

Does the honourable First Minister have an opening statement?

Hon. Gary Filmon (Premier): I do, Mr. Chairman. I also have copies of my opening statement and the attachments which are communiques from the Western Premiers' Conference for members.

As is customary, I have a short introductory statement. The Main Estimates for Executive Council for 1999-2000 fiscal year total $3,460,000, which includes a $6,600 allowance for the amortization of capital assets. The overall percentage increase for the department is 5.5 percent, slightly higher than the 4.4 percent change for the government as a whole, which reflects a significant dropoff in the allowance for public debt costs. Most of the year-over-year change is accounted for by normal salary increases. The staff year total for the department at 44 remains unchanged as it has for several years. One major increase in the department's expenditures, to which I would like to draw members' attention, is an additional $25,000 allowance for the International Development Program of the Manitoba Council for International Cooperation, bringing Manitoba's annual commitment to a milestone total of $500,000.

I want to acknowledge the fact that members on both sides of the House in all parties have been very supportive of this initiative. Recently, the Manitoba Council for International Cooperation celebrated its 25th anniversary. I am pleased that several members took the opportunity to attend. I believe all of us are proud of Manitoba's leadership in supporting a wide range of worthwhile development projects around the world.

Another significant change in the Estimates this year is an increase of $30,000 for other expenditures under the Intergovernmental Relations Secretariat appropriation. This amount will help cover front-end costs for two major conferences which will be held in Manitoba in 2000, the millennium year. Next spring and summer it will be our turn to host both the Western Premiers' Conference and the annual Premiers' Conference, a double responsibility we have not had since 1990, although we did hold a Western Premiers' Conference in 1994 in Gimli.

We have found in the past that some expenditures have to be made ahead of these events. Once the conferences have been held and our responsibilities as hosts and chair have been fulfilled, the other expenditures figure will return to a lower level. It is appropriate that Manitoba will be hosting both the Western Premiers' Conference and the annual Premiers' Conference in the millennium year since our province played a key role in getting both the Western Premiers' Conferences and the annual Premiers' Conferences off the ground.

As some of you will know, annual Premiers' Conferences began in 1960. The first meeting was held in Quebec with the Honourable Jean Lesage as chair. The Right Honourable Duff Roblin worked closely with the Premier of Quebec in getting those conferences off the ground, and for several cycles Manitoba has followed right after Quebec in hosting what have proved to be very valuable forums for helping make our federal system work better.

Some members, such as the member for Brandon East (Mr. L. Evans), will know that the first ever Western Premiers' Conference was held right here in Winnipeg in this building, I believe, in the spring of 1973 under the chairmanship of the Right Honourable Edward Schreyer. Over the years both the Western Premiers' Conferences and the annual Premiers' Conferences have played a very positive role in shaping the national agenda and specific national policies. As members are aware, this year's Western Premiers' Conference was held in Drumheller, Alberta, in mid-May. I believe members will have seen the communiques from Drumheller, but, if not, I have provided copies for your attention.

Agreement was reached on several key issues, including the need for restoration of federal CHST support for post-secondary education, as well as continuing restoration of federal support for health care. There is a strong consensus among the western provinces and right across the country that, while the commitments made to health in the last federal budget were a step in the right direction, a great deal more federal support is required since only 40 percent of the federal cuts have been committed to be restored over the next three years.

We also agreed in Drumheller on the need for a federal commitment on a national transportation investment strategy with a national highways policy as the No. 1 focus. We have made the point time and again that Canada is the only G-7 nation in which the federal government plays hardly any role at all in highway financing. In the West, of course, it plays virtually no role at all. From a Manitoba perspective, the federal government takes almost $150 million a year in fuel taxes off our highways and contributes none of it back to construction of new highways. It is encouraging that some federal ministers are now starting to talk positively about such a program, and only a few days ago the federal Minister of Finance even hinted at the possible renewal of the national infrastructure program as well. It appears that the provinces' messages are finally getting through.

Discussions are just getting underway on the agenda for this year's annual Premiers' conference which, as I said, is being held in August in Quebec City, immediately after the Pan American Games. However, it is reasonable to expect that many of the issues western premiers discussed will also be covered when all premiers and territorial leaders get together. I should add that we were joined in Drumheller and will be again in Quebec City by the new government leader of Nunavut. Members are aware that our province has a special relationship with Nunavut, both government to government and business to business, and we are working hard with our colleagues in the new territory to sustain and strengthen those links.

This coming weekend, along with other western premiers and territorial leaders, I will be attending the 1999 summer meeting of the Western Governors' Association in Wyoming. This will be the first time all western premiers have attended the WGA meeting together. We will be talking about a number of opportunities for co-operation with our U.S. counterparts, but our principal focus will be finding ways of improving communication on trade disputes in an effort to resolve at least some of them informally before they become major problems. We have all been concerned about protectionism in the United States, especially in the agriculture sector. Ultimately, of course, the Canadian and U.S. federal governments have responsibility for international relations and international trade issues, but we believe there is room for subnational governments to play a positive role in dialogue and information sharing on some of the key issues. I have always believed that reasoned discussion is more productive than confrontation, and I believe there is considerable support for that view on both sides of the border.

The western premiers will also be discussing a number of other issues with the western governors, including co-operation in north-south transportation such as our midcontinent corridor initiative and improved air service, along with co-operation in environmental protection. The Governor of North Dakota represented the western governors at the Drumheller meeting and indicated that he believes that it is important to build closer relations between the western premiers and the WGA. I am proud that Manitoba helped lead the way toward that kind of improved co-operation. My own view continues to be that there are a great many promising opportunities for western provinces to work together with western states. I know, for example, that the western Canadian Justice ministers are now meeting regularly with the western states attorneys general and that one specific by-product of those meetings was a special conference on cross-border co-operation in crime prevention which was hosted by my colleague the Minister of Justice, the member for Rossmere (Mr. Toews), here in Winnipeg last winter. I am told that the conference was a major success and has been followed up on both sides of the border.

I will be pleased to discuss these and other issues with members when we review the Estimates in greater detail. Thank you very much, Mr. Chairman.

The Acting Chairperson (Mr. Helwer): I thank the Premier for those comments. Does the official opposition critic, the honourable member for Concordia (Mr. Doer), have an opening statement?

Mr. Gary Doer (Leader of the Opposition): Thank you very much to the Premier for his statement and just a couple of comments. We would note that the statement mentions basically status quo on most of the expenditures in the Executive Council with a similar staffing complement to last year. I would say increased spending for the International Development Program of the MCIC. We, of course, support the International Development Program. We have had the opportunity to meet with them on this the 25th anniversary of that program. We think that the initiative of the Schreyer administration 25 years ago and carried on by successive governments has been positive. I know the Premier has commented in the past about his own direct contact with communities in Brazil and outside of Rio de Janeiro during his visit there, and we are certainly satisfied that a small investment in this project has resulted in tremendous economic, social and educational opportunities for people that are in the sponsored countries. The direct community-to-community approach, rather than government-to-government approach, we think, works well, and we certainly support the increased spending in this area this year.

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We also note that the staffing levels are comparable to last year. I guess our concern with the Premier is not the numbers of staff, but some of the political appointments he has made, and I will deal with that later on in Estimates. But he and I have had a disagreement before on his former principal secretary, chief of staff. In fact, it is an unusual motion that I moved a couple of years ago to delete that salary item. Perhaps we certainly did not know all the events to come later on, but perhaps our judgment, who now the Premier has called or has stated lied to him, really begs the question: why did we know this and why did the Premier not know it at the time when we were dealing with that in the Estimates?

We certainly respect the fact that the Premier is involved in a number of items of federal-provincial responsibility. He mentioned health care, post-secondary education; we will certainly be dealing with those issues. There is the gas tax; we certainly support efforts of the government on the gas tax. The Pan Am Games, certainly we will want a status report as the lead member of the government on that situation.

The Premier mentioned the western premiers' meeting, and we note the communique that we received a couple of weeks ago. I would point out that, with Nunavut, it might be useful to also use the member for Point Douglas (Mr. Hickes), who has a number of key friends and relatives and contacts in the Nunavut region, to encourage contact, commerce and particularly using the Port of Churchill and the community of Churchill as the gateway to that community two ways, rather than the St. Lawrence Seaway. Sometimes, right within our own midst, we have–if you had a choice of taking somebody that knows everybody up to a community on behalf of Manitoba versus somebody in the department that might not know anybody, it is always better, I think, to go to the personal contact. I would say that also for trade. We have a lot of people from different regions of the world, and sometimes some of our own people in our own community can increase trade and economic opportunities in countries and can open doors that we may not get open, by their own culture, language and community government contacts.

The western governors' meeting, I think, is important. I think it is important to know the people directly. I know the Premier has a good relationship with Governor Schafer and others. I am not sure whether he has met Jesse "The Body" Ventura yet. I do not know whether he will be in Wyoming. Do not get in a wrestling match, I would suggest, but the western governors, I think, is a good idea. Getting to know people directly makes a lot of sense. Having them here makes a lot of sense, and certainly attending those meetings makes sense as well. I think agriculture and transportation are important issues of access; crime and borders are other important issues that must be on the agenda.

I heard a rumour and I have not had it verified that in North Dakota it is $125 per acre in disaster assistance for flooded unseeded areas. The Premier may want to check that out over the weekend with the governor of North Dakota. When we look at the information from southwest Manitoba, which talks about 50 percent survival at $50 an acre for unseeded acres, 75 and 100 correspondingly, with only 95 percent success with the $100 an acre, perhaps there could be some very useful information from the North Dakota governor and how the state government accesses the federal government. I know that this is still a concern for the member for Tuxedo, the Premier of the province.

We are concerned about the areas of southwestern Manitoba and central Manitoba. I quoted municipal officials from the central area around the Yellowhead Highway; 10 out of 12 municipalities that I talked to on Friday talked about the huge flooding. I understand yesterday we got another inch of rain in a lot of communities. I know that the government has members that represent those communities and is fully aware of the situation in southwestern and central Manitoba that are particularly affected, although the flooding is spotted and therefore it can be over a wide range of areas. We have always pledged ourselves to work in a co-operative way with the government on this issue. We continue to throw out ideas and push proposals that we hear from producers and municipal officials and from businesses in the area based on their read of what is going on or what is not going on and the uncertainty that that represents.

We certainly will be making statements or be looking at issues of federal-provincial relations with First Nations people. Again, with the economic and demographic challenges in Manitoba with First Nations people, we think it is crucial for Manitoba's future to have opportunity rather than lack of opportunity for First Nations people in Manitoba. We think it is crucial to have a co-operative, long-term strategy with the federal government, First Nations people, and the provincial government. Nothing gets solved by blaming another jurisdiction. Things get solved when jurisdictions sit down together and develop a plan of action to deal with the demographic changes, the social and economic changes that we will have to face.

So we look forward to some of the Estimates. We know that they always feature some disagreements. I am sure there will be the odd one here today and some agreements. We will pursue the Estimates accordingly.

The Acting Chairperson (Mr. Helwer): We thank the Leader of the official opposition for those remarks. I would remind members of the committee that debate on the Premier's Salary, item 2.1.(a), is deferred until all other items of the Estimates of this department are passed.

At this time we would invite the Premier's staff to take their places in the Chamber.

Mr. Filmon: First of all, while they are coming down, if I may just ask if it is the expectation of members opposite that we deal with all of the items together and we vote together at the end rather than go line by line. We have done that in the past. It allows a certain degree of flexibility to members opposite. I am happy to do that since it does tend to be wide ranging. If anything is forgotten, members can go back and pick it up. I am happy to go through whatever process members opposite prefer and bring all the votes to the end of the consideration.

The Acting Chairperson (Mr. Helwer): Is that the will of the committee? [agreed] Thank you.

Would the Premier's staff please enter the Chamber.

Mr. Filmon: While they are coming in, for members opposite, I would introduce the clerk of the Executive Council, Mr. Don Leitch; the Administration and Finance officer is Karen Hill; and the deputy minister of Intergovernmental Affairs, Mr. Jim Eldridge; and my principal secretary, Mr. Hugh McFadyen.

The Acting Chairperson (Mr. Helwer): The item before the committee is item 2.1. General Administration (b) Management and Administration (1) Salaries and Employee Benefits $2,043,300 on page 23 of the Estimates book.

Mr. Doer: I welcome the members of the Premier's staff. I think the only time I had a disagreement with any members of the staff, I have never raised the issue of Mr. Spector having a copy of our pictures in previous years, but you know, I am not a senator either.

No disrespect to the individual here today, but my difficulty with the Premier's choices of staff have not been in, how should I describe it, the civil service side of his appointments but more in the political side. I want to say that from the outset. Mr. McFadyen is the new political appointee here. I recall meeting him first when he was working campaigning for Linda McIntosh at the time, the member for Assiniboia. I think that was our first contact, and I think he threw me the football 40 times just so I could pull a Robert Stanfield because there was a Free Press photographer there at the time. But I know that he is working for the Premier, and I know he has, from what I have heard, a good reputation.

I would like to ask the Premier a couple of questions. Is Mr. McFadyen on permanently or is he on a full-time basis? Is he on leave from Thompson Dorfman Sweatman, which, I think, is his law firm, and for how long?

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Mr. Filmon: My principal secretary, Mr. McFadyen, is on full time plus I think he puts in considerably more hours than the normal expectation. He is here permanently. He is not on leave from any law firm or organization.

Mr. Doer: Can the Premier indicate the salary of Mr. Sokolyk when he departed and the salary for Mr. McFadyen, and was Mr. Sokolyk part of a different pension plan than the public service pension plan, the Superannuation Fund pension plan? Is Mr. McFadyen receiving the Superannuation Fund, or is he receiving, what I would describe, as the more generous one that some members of the Executive Council and other senior executives receive?

Mr. Filmon: The current salary adjusted as of April 1 for the GSI for Mr. McFadyen is $100,069. He receives a payment in lieu of pension which is equal to not in excess of the payment that would normally be paid to the Civil Service Superannuation Fund.

Mr. Doer: I asked also Mr. Sokolyk's salary, and was he part of the pension plan outside of the civil service?

Mr. Filmon: He would have been at the same salary, minus 2 percent for the GSI, which took place on April 1, and he had the same pension arrangements as Mr. McFadyen does, which is the same payment that would go in on his behalf to the Civil Service Superannuation Fund, but was instead paid to an RRSP, a self-directed RRSP.

Mr. Doer: So the former incumbent and the present incumbent receive a pension plan payment of 7 percent deducted from their pay and 7 percent that would go into the Superannuation Fund, or is it 14 percent put into the fund or something between 12 percent and 14 percent?

Mr. Filmon: I am informed that it is not the 14 percent; it is approximately 7 percent that is flowed on their behalf into their self-directed RRSP.

Mr. Doer: So that I can understand it, is the previous incumbent and the present incumbent deducted the equivalent of 6 or 7 percent, within that range, to go into the fund from their cheque, or is the 7 percent added–I mean, both the employee's portion and the employer's portion? After the Roblin changes of '63, the employer's portion does not go into a separate fund for the civil service. It is an unfunded liability. This one, is it a deduction or the pension requirements or–I am just trying to understand how this thing changes from the media reports of about 7 years ago with Mr. Benson's pension.

Mr. Filmon: We put into their self-directed RRSP an amount equivalent to what the government would have put in to their pension plan. They put, in addition, funds from their own salary to their own self-directed RRSP. That means that, at the end of their time here, the provincial government has no further obligation to them, as opposed to the pension plan in which they would have an ongoing liability from the Civil Service Superannuation Fund. There is no further liability.

Mr. Doer: So it is similar in terms of the employer portion that an MLA would have, no more than an MLA would have, and the individual portion is a matter of choice up to the obvious legal or tax provisions that are provided.

Mr. Filmon: That is correct, Mr. Chairman.

Mr. Doer: So, in essence, this pension plan for this incumbent and the previous incumbent–and I am talking incumbents, not people–is different from and lower than the employer portion that was provided for and publicized for Mr. Jules Benson.

Mr. Filmon: That is correct. The arrangements for Mr. Benson and Mr. Leitch were the same, and they were both different from this particular initiative.

Mr. Doer: Since the last time we had Estimates, I asked the question about who has received and is afforded the higher amount in pension. If the existing incumbent is in a fairly senior position, and this comparable pension to MLAs, premiers and public employees under The Superannuation Act is there, is that the new formula for all other employees? We are not going to get into these pension arrangements that are different than, higher than, say, the formula used for the Premier or any other member of the Legislature, including cabinet.

Mr. Filmon: That is correct. The only person who is grandfathered into that other arrangement is Mr. Leitch, and no other employees have been placed on those terms and conditions.

Mr. Doer: I know how much Mr. Leitch likes discussing this issue, so I will move on–just as long as I have the information. The public relations staff or the media communications staff of the Premier–sorry, Freudian slip. Can the Premier indicate: does he still have one position beyond what Premier Pawley had in his Executive Council line, and who are they and what are their salaries, please?

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Mr. Filmon: I just want to say to the member opposite that the Executive Council communications staff work for all the ministers, unlike in Mr. Pawley's in which he had three plus one for every minister. So we have substantially fewer–[interjection] Well, the ministers that he cared about. I am just kidding; I know he had a deal with you.

The staff people that we have, and they fall within the total that I spoke of, which I think was 44, are Patricia Best at $42,933, Roger Matas at $51,254, James O'Connor at $47,415, Bonnie Staples-Lyon at $73,988. We have one person on maternity leave, Michelle Bailey-Picard. We have, in order to cover for that, utilized one of the staff positions from my Policy Management group to cover. So we have not added to the 44; we just simply changed a designation temporarily.

Mr. Doer: So is Mr. Godin still in that office? He apparently was the person who was fingered for the mistake that was made when the press release did not go out on the–actually I cannot ask that question about that because I would be–I cannot pursue that. But Mr. Godin was mentioned as a communicator. I do not want to be in a conflict of interest.

Mr. Filmon: Mr. Godin is a staffperson from the Department of Health who primarily deals with Health issues but occasionally also deals with issues to do with communications in general. So he is not on this list.

Mr. Doer: Can the Premier then indicate who is filling in for Ms. Bailey at this point?

Mr. Filmon: Her responsibilities are being shared amongst the names that I have given you.

Mr. Doer: So, Mr. Godin, when he performs functions of communications, for example, when he was mentioned in terms of an I, T and T grant as opposed to Health, he would then be the sixth communicator, notwithstanding the fact that his appropriation comes from another department.

Mr. Filmon: He would be the fifth active communicator because Michelle Bailey-Picard has been on maternity leave now for, I am guessing, but I think it is about seven months or so. Since November, so it would be more than seven months.

Mr. Doer: Have there been any other changes for people in the Executive Council office? Are there any other people hired in senior officer positions in the Executive Council office, or comparable to senior officer remuneration since last time we heard?

Mr. Filmon: We have had Ms. Shelly Gillert leave and Mr. Philip Houde take her place at a P7 level, which I believe is below senior officer. That is the only major change that I can think of.

Mr. Doer: Mr. Houde, is he the individual who was working for the Reform Party in Ottawa and came to Manitoba? He is not the one. Who is the–[interjection] So the individual who has come to work for Premier Filmon, in all the media reports, is the person not working for the Premier, as reported in the National Post?

Mr. Filmon: Do not believe everything you read in the newspapers. No, he does not work for me and has not worked for me. I think the individual you are referring to is the caucus chief of staff.

Mr. Doer: I have some other questions I want to ask dealing with a number of items that the Premier mentioned in his statement. One is the Pan Am Games. Can the Premier indicate: what was the original bid on revenues and expenditures and the contribution from the provincial government in the original bid book? The status report we received about 18 months ago had changed numbers. As I understand it, there is a third set of numbers in terms of both revenue projections and expenditure.

What I am particularly concerned about is: what has been the changed contribution from the provincial government, both in terms of direct grants and grants in kind by departments that are being provided for the Games?

Mr. Filmon: As the member opposite knows, that is under the responsibility of the Minister of Sport (Mr. Stefanson), but we did discuss it last time, and I gave him all the information about the changes that took place as of the summer of 1997. The arrangements have not changed since that time. I have not seen either new revenue or new expenditure projections. Our contribution, from memory, is around $40 million.

Mr. Doer: Does the contribution of $40 million include contributions by departments? For example, does it include the work, say, at Birds Hill Park from the department of Parks, the Natural Resources department? If it does not, how much in kind work is going on? We hear Manitoba Hydro is going to put up banners. I know that is a Crown corporation contribution, but there are all kinds of departments that I hear that are involved. Can the Premier indicate what that is?

Mr. Filmon: The Crown corporations may have signed on as corporate sponsors. I believe, from my recollection, that Lotteries and Hydro and maybe even MPI have and would derive their publicity benefits that they would see from doing that, as any other corporation in the province who has signed up for it.

I might say, in that vein, that in addition to major corporate sponsors, one of the areas in which the Games has achieved much higher than expected revenues is from their partner packages, which were specifically designed for smaller local businesses. They have many, many corporate partner packages that allowed local businesses to participate as well as sponsors, aside from the major sponsorships.

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Because of our going the extra mile for the Games in the adjustments that we made in 1997, we have been very careful to try and avoid getting nickel-and-dimed for other things to throw into the mix. We have been specific about that, as I think the federal government has. Anything that is being done in addition, or is being done that appears to be for the Games, would have to have been done as part of the multiyear capital plans of the departments themselves. I am informed that the road improvements at Birds Hill, although they will be a benefit to this year's Pan American Games, were part of the multiyear capital spending plans of the department and were not something extra that was thrown in for the Games.

Mr. Doer: Well, just take the Birds Hill, has any change in the equestrian site, any of those capital investments, been made by the Department of Natural Resources out of the Parks budget over and beyond the $40-million commitment, just so we know what the actual commitment is of the Manitoba taxpayers on this?

Mr. Filmon: I am given to understand that the improvements are being taken out of the Pan Am Games budget for that particular facility for equestrian competition. That is something that the Minister of Natural Resources (Mr. Cummings) could be more specific about.

Mr. Doer: In terms of the Premier is responsible for intergovernmental affairs, federal-provincial affairs, the City of Winnipeg has done an audit on the Pan Am Games, a status audit. The federal government has also prepared an initial audit.

Has the Premier received a copy of the federal audit on the status report of the Games and the contributions and the liabilities?

Mr. Filmon: I have not received any report. It is possible, because the Minister responsible for Sport (Mr. Stefanson) monitors all the activities that are going on with the Games preparation, is responsible for our appointees to the board. He might have either federal reports or up-to-date information which I am sure that he would have to satisfy himself that the Games are going according to plan and budget, which was my understanding.

Mr. Doer: I noted that there were statements made by the City of Winnipeg and then further statements made by the federal minister that the city would be responsible for all overruns or cash shortages if ticket sales were not as budgeted because the city was officially the bid maker, as opposed to the other two levels of government. Obviously, all of us want the Games to come in under the revised budget, the revised budget from the original bid in terms of public contributions to the Games. We want it to be a success. We want tickets to be sold. We want to enjoy the events ourselves, and we want to certainly ensure that Manitoba and Winnipeg are good hosts for these Games.

But is there a contingency plan for a potential or a possible shortfall on the revenues based on ticket sales? We already have an adjustment of the budget based on TV revenues. Is there a contingency plan, or is there going to be the federal minister saying that the city is responsible and the city saying the province is responsible and the province saying the feds are responsible? Is there an agreement in place now, and should there not be?

Mr. Filmon: From any meetings that I have been involved with, the Pan Am Games Society takes the responsibility, and they have said flat out that they will not be approaching governments to take care of their responsibilities. They are confident in their figures; they are confident in their ability to manage the entire process of the Games. They have made adjustments in their budget from time to time, some upward, as I indicated, with some of these local partners. They have a name for the local partners program, which has exceeded their expectations substantially. They have recently, as you have probably seen from media reports, put on a very significant push for ticket sales even although they recognize that Winnipeg and Manitoba are known as a walk-up crowd. They have taken on a big effort to ensure that they get a higher percentage of sales. A comparison was made that a month prior to the World Junior Hockey Championships only 30 percent of the tickets were sold. At the end of the championships they set all time records for ticket sales. They believe that they are on track, and they are putting forth an even greater effort to try and ensure that they meet their expectations.

Mr. Doer: So the bottom line is, we are not going to go over $40 million as a provincial government contribution, which is up from the original bid. As I understand it, the total budget, I am just going by memory now, is about $140 million. There are civic, federal, and provincial responsibility that add up to close to $100 million. We are not going over $40 million and the Premier is confident in that number.

Mr. Filmon: Well, I am confident in our number because, at the time that we made the adjustments in the summer of 1997, the Minister of Sport and I, along with the federal minister Mr. Axworthy and the Prime Minister, all of whom met with the senior executives of the Pan American Games Society, made it absolutely crystal clear that we would not be responsible for any more money. They told us with plenty of witnesses around that they had absolutely no intention to fall back on anybody but themselves if they were unable to manage the budget and the entire Games. They continue to say that in any discussions that I have been a part of in recent times.

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Mr. Doer: So I would like to ask the Premier: who is legally liable for debt? Is the Pan Am Games Society themselves, the individuals on the Pan Am Games Society are liable for the debt? Who is liable for the debt? We want to see the Games come within the budget, the revised budget. You do not run a deficit anymore; you run a shortfall. The shortfall then is made up of contributions usually by the public sector and then the budget is revised. At this $40-million mark, who is liable for the debt if there is one, legally liable?

Mr. Filmon: I want to emphasize, Mr. Chairman, that I have no reason to believe that there is a debt or that there will be a debt. Nothing that I have seen would indicate that, but that discussion has taken place. The Pan Am Games Society, as represented by its board, would be liable for any shortfall.

Mr. Doer: So the Pan Am Games Society is liable, legally liable for the debt. Is there anything in writing on that to assure, because people say to us, well, gee, everybody wants it to succeed. But Manitobans say: where is the money going to come from if there is a debt? It is an answer our constituents ask us for, obviously, and it is an answer we should have. So we are singing from the same hymn book.

Mr. Filmon: The Pan Am Games Society is an incorporated legal entity. They would have responsibility for it. We have said, and I am putting on the record yet again, as I have in the past, that we will not be responsible for any further contributions.

Mr. Doer: Is there any document in writing that we can receive on the liability, question No. 1; and No. 2, is the Pan Am Game Society made up of any provincial, federal or civic reps?

Mr. Filmon: I will attempt to see what paper is available, but there certainly are agreements that they had to enter into with the Canadian Olympic Association, with the Pan American Sports Organization, PASO, and that would lay out their responsibility, and that responsibility is to the Pan Am Games Society of Winnipeg 1999, and there is no legal obligation on the part of any level of government beyond that.

The governments have on the executive committee, I believe, three appointees each. Our appointees are, I believe, Mr. Orton Harrison, who is a school principal; Mr. Ken Lee, who is a chartered accountant, and I thought there was one other, but I cannot remember. The Minister of Sport (Mr. Stefanson) incidentally is right down the hall having his Estimates, and he has probably got this at his fingertips.

Mr. Doer: Just another question that comes to us generally. People see the Premier as the person who, you know the clock goes off and the Pan Am jacket and around town, so the questions we get asked are about the Premier and the government's responsibility, and the Premier knows that.

The travel costs for the athletes coming here, I know that from the original bid it was a change to deal with. I think we went from 6,000 to 8,000 athletes. Just how, for example, if Michael Johnson is an athlete competing for the U.S. in the 100-metre race–I do not know whether he is. I certainly hope he is, but if Michael Johnson was competing against Donovan Bailey, who would be responsible for the travel costs of the U.S. Pan Am Games team? How would that work, just so I know because they get questions out in the community on that, and it is something that we have to know.

Mr. Filmon: I really have no idea. You would have to organize that either through the Minister of Sport who might have it at his fingertips or else undertake to provide it for the member. I would certainly undertake to provide it, but I certainly do not have that at my fingertips.

Mr. Doer: I know that there were some adjustments to our bid to get certain consideration from other countries as we proceeded with the voting, and I know the Premier and the former mayor were involved in that. What is the general policy on, for example–I will go from the specific to the general–what is the general policy, for example, for the U.S. team in terms of its travel expenses for the responsibility of the Pan Am Games Society here in Manitoba? There is $40 million of public money. Will some of that money be going to pay for the travel of members of the U.S. team? Again we hear different stories on this, and this is a place where the $40 million is accountable.

Mr. Filmon: My recollection was that the amount of money that was going into public facilities, that would be a permanent legacy here, would exceed the amount of money that we were putting into the Games. So items such as the travel subsidy would be in the area much beyond the public contributions and ones that the society itself would have to fund out of ticket sales, revenues, television advertising and all of those things, corporate revenues.

Mr. Doer: So I guess my question is: as host of the Pan Am Games, the Pan Am Games Society, are we paying for the U.S. team to travel to Winnipeg? I just want to know that. I mean, it is going to come out. I do not think it is a secret.

Mr. Filmon: Mr. Chairman, it is not a secret because I have discussed it on the air on various talk shows. As I say, the investments in public facilities will far exceed our contribution to it. Our contribution is going to the legacy of the things that are being built at The Forks, at the university, at various different places throughout the province. He talked about the equestrian matters. There are all sorts of areas in which our money has gone: velodrome, et cetera, a second pool to the Pan American swimming. Various contributions have been made, and two facilities that will be the lasting legacy. There is some arrangement for travel subsidies, but that would not come out of our money. That would come out of the money that the society raises through corporate sponsorships, ticket sales, advertising revenues, and all of those kinds of things.

Mr. Doer: I did not hear the Premier on air. I sometimes see him on air or hear him on air. In fact, I turned him on this morning, at 6:30 in the morning. He was not talking about that on Newsworld or something close to that. He can be assured he had my utmost attention. But I did not hear his answer to the question I asked on the air some other time, some other random occasion. So I just want to know: what is the travel policy for the Pan Am Games? What is the host society, which we are part of, paying for?

Mr. Filmon: If the critic for Sport has not already got that information, I will undertake to get that information for the member. But I can assure him that our $40 million is going to the facilities. It is not going to the travel subsidies. There are other revenues that will pay for that.

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Mr. Doer: I just want to know what the Premier's understanding is of the policy on travel costs, and what he said on air about the subject that he said he talked about before. I just want to know what it is. I mean, we hear that we are paying for all the athletes and officials to come; we hear we are paying for part of it; we hear we are paying for all countries, save the United States and Venezuela; we hear something else. I just want to know and I think it is just a question we get from the public. The Premier has said he has already made that statement on the air. Can he make the statement on the air here in the House?

Mr. Filmon: The debate on the air took place back in 1994, after we got back from the Games when it was publicized that that was part of the bid. My understanding is that it has changed since then because they have put a limit on the number of athletes whose travel they will subsidize because there was a difficulty, and they have also put a limit on the number of athletes whose housing they will subsidize. In other words, there is the cost of housing these people, and if it was unlimited, there could have been 8,000 athletes here. I believe that the number is going to be somewhere slightly in excess of 5,000, as a result of the renegotiations that the Pan American Games Society had with PASO. So I could not tell him what it is other than to confirm that there is a travel subsidy, that it does apply I do not believe to all athletes and it may well be that it does not apply to the United States. It was in some discussion that indicated to me that the Americans, to save money for themselves, were staging their athletes in Grand Forks so that they were only sending them here for five days at a time as opposed to the entire two-week period. They were accommodating them in a staging situation in Grand Forks so that they would spend their own money in their own country rather than here in Canada. So that leads me to believe that there is not a subsidy, in all likelihood, going to the American athletes. But I do not have the exact detail on it. I will undertake to get it for him.

Mr. Doer: I will move on. At the Western Premiers' Conference, the governments talked about returning the funding for post-secondary education, were quite critical of the unilateral change in post-secondary education. We certainly would agree with that. We were quite critical of the '95 federal budget that withdrew $240 million from the budget of Manitoba. We would agree that the announcements made by the federal government in the '99 budget were just one step ahead from about three or four steps behind or backwards from the budget of 1995.

But the provincial government itself has also offloaded decisions to the universities. There has been a change on the budgeting and treatment of the property tax and assessment at the university and the grant levels. Is the Premier aware of the changes that were made by his Rural Development minister? Does he not consider that a similar offload onto the universities and therefore students and qualities of programs?

Mr. Filmon: I am not familiar with the detail of the changes that Rural Development has initiated. I know that the intent was to try and put all the post-secondary education institutions on the same footing, that they did not all pay taxes in the same manner. I also know that in this past year the universities located here in Winnipeg have successfully challenged their assessment and dramatically lowered their assessment under appeal, which also reduces very substantially the amount of taxes that they pay.

Mr. Doer: As I understand it, the U of M used to have an amount of $11 million. The assessment has gone up at that institution, has a comparable amount of money at the time that there was a great deal of concern in committee. The minister tried to assure us, his minister tried to assure us there would not be any financial negative treatment. Is that true today a few years later?

Mr. Filmon: I do not have that information.

Mr. Doer: I would like to ask the Premier, when the Minister of Municipal Affairs and Rural Development went to the government and the Premier for permission to pass this law and in committee he assured members of the university community and opposition members and therefore the public that this would not be a negative financial consequence, it is kind of like the Brian Mulroney comment that we have with the GST and the manufacturers sales tax, that it is revenue neutral.

Was he assured as Premier that this would be not an impact on the revenues and expenditures at the university?

Mr. Filmon: I do not have that information.

Mr. Doer: Well, I guess my point is that one government's unilateral action to us, which is negative, may be, regrettably, also carried on by an unilateral action from this government to another institution. For us to be consistent with the federal government, I think is important to ensure that when we say there are not going to be changes in laws that will be negatively impacting on the revenues and expenditures at our educational facilities, that in fact we can be consistent with the federal government about this "offload." If the legislation, as we understand it, has reduced the financial–notwithstanding the other grants through the post-secondary education budget–if the changes in Municipal Affairs have not resulted in being a revenue-neutral item, but have in fact been a de facto offload, would we not be better to investigate that matter and have a consistent position ourselves internally as we approach the federal government to deal with their offload on to us?

Mr. Filmon: That sounds reasonable to me, Mr. Chairman, but I cannot confirm whether or not there has been this so-called offload.

Mr. Doer: I would like the Premier then to investigate the statutory changes, I believe it was '95 or '96, certainly within this term, Bill 32, the concerns raised by us, the assurances made by the minister, and whether in fact there has been an offload as a result of that change at the University of Manitoba. If he could, I do not want to take up the whole Estimates with it, but I think it provides for if the federal government is aware of this, and I certainly know that the federal member representing the University of Manitoba is fairly well aware of what is going on out there. It may not help our position in a consistent way on one government offloading to another, with our government offloading to the universities. I would ask him to investigate this matter. If there is a shortfall through offloading, I would like to know about it and see if we cannot agree with the Premier about dealing with the shortfall from the federal government. We certainly agree with the priority of that, but we thought that some of his ministers were acting the same way as the federal government with the university.

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Mr. Filmon: Well, Mr. Chairman, you cannot spend what you do not have. We, over the course of four federal budgets, eventually were receiving $263 million a year less in transfers to the CHST. Those transfers, as the member knows, were intended for, first and foremost, health; secondly, post-secondary education; and, thirdly, social programs. The point that we make is that the federal government has, over a period of the next three years, agreed to reinstate approximately 40 percent of those cuts. That is simply not enough, and it does not leave us anything. Since we have made a commitment to put all of that reinstated money into health care, it does not leave us any room to address the needs and the issues of post-secondary education.

So at the request of Dennis Andersen, the president of Brandon University, who is also the president of the council of university presidents of western Canada, and as well all of the presidents of the universities in Manitoba, I took the issue to the western premiers' table, and we talked very specifically about us making the commitment to invest the funds that we would get restored from Ottawa. The proposal that I put forward was that anything over and above the current commitment of 40 percent restoration would be divided between health and post-secondary education. So post-secondary education would end up getting actually, under that commitment, more money than they got before than was in any way reduced. They would be getting a very substantial bonus out of that arrangement. I have since heard from some of them that they were very happy to hear that commitment.

Mr. Doer: I would like to ask the Premier whether in fact there has been any positive response from the federal government to this proposal. Have they heard anything from the federal people about this proposal leading into the year 2000 budget?

Mr. Filmon: Subsequent to the Western Premiers' Conference and the resolutions and communiques that we passed, that question about putting more money into transfer payments to the provinces for university funding was put to the Honourable Stephane Dion, the Minister of Intergovernmental Affairs in Ottawa. He said, among other things: Today the Government of Canada is in the position of having a surplus, as are all provinces with the exception of Ontario, which has opted for lowering taxes more quickly. So we have the possibility, we do have the possibility of helping our universities. The future of the country depends on it. This is a very important issue, as everyone realizes. Last year it was important to do something for health, and now it will be important to look at what we can do for the universities.

So it looks as though Ottawa may be favourably inclined to consider that proposal.

Mr. Doer: As I understand it, in the 1990s the only province in Canada that has increased funding to universities over the decade has been British Columbia, with Saskatchewan remaining at constant dollars, and every other province in Canada reducing the amount of money to universities, including Manitoba. That is an analysis I have heard. Is that correct? I have also heard that every state in the United States in the '90s has increased their funding for universities over the last nine years. There is a certain degree of investment going on in the United States and the universities versus Canada in the 1990s.

Mr. Filmon: I cannot confirm that. I am sure that the Minister of Education and Training (Mr. McCrae) would be able to, but I point out that British Columbia is still running a significant deficit, something in the range of $900 million, and is rapidly approaching Manitoba in terms of its debt to GDP ratio and its per capita debt ratio as it adds consistently to its total accumulated debt. So that is a choice I suppose that they are making to run huge deficits and to spend more money in a whole variety of areas. That is something that we have chosen not to do.

We are, however, leading the discussion with respect to the federal government restoring its transfers. We have had to live through some difficult choices and some difficult times as a provincial government with the loss of up to $263 million a year of transfers from Ottawa. With the restoration of the funding for health care, we are able to do things there that we were unable to do in the mid-'80s. We are suggesting to Ottawa that we will make a commitment that we will utilize the money as I have indicated for both post-secondary education and health care and make commitments to have the additional funds be transparent in our budget so that they can be assured that the money will go to post-secondary education. We believe that we are in a position to do that within the realm of a balanced budget.

Mr. Doer: The Premier indicated that the cut was $263 million. What is the reinstated amount of money on an annual basis? What are we down from the '95 numbers in terms of health, post-secondary education and social services?

Mr. Filmon: This is not something that obviously is, again, within my area of responsibility. It would be within the Department of Finance, but it is something in the range of $100 million out of the $263 million that would ultimately be restored under the current commitments, but it grows over a three-year period to reach that level.

Mr. Doer: As Minister responsible for Federal-Provincial Relations, this is a fairly major issue of federal-provincial responsibility, and so as I understand it, the $100 million is backloaded in terms of the three years. Can the Premier, if he has not got it here, but if we use the number 245 and now it is 263 and I would just like to use the same numbers unless we disagree about them, and I do not disagree about the range of 260, can the Premier provide the year 2000, the year 2001 and 2002, what those numbers would be vis-a-vis the 263?

Mr. Filmon: Yes.

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Mr. Doer: There were a lot of media reports around the budget about not just this year's number on equalization but future year numbers on equalization. What is the status on equalization? I know we can get into a huge discussion about population growth and all the other things, and we can do that if you want. I just want to know what the numbers are in the next couple years. The complex formula, I know, has produced benefits to us in some years and has been a penalty to us in other years. I just want to know, there was a Canadian Press report out at the time of the budget. It had a huge decline in equalization. Then of course the Minister of Finance indicated they were investigating that but he did not think so. Can we find out what are the immediate and short-term or medium-term impact of equalization changes on Manitoba, notwithstanding the fact it has changed every–the formula has adjusted.

Mr. Filmon: The formula is adjusted on an ongoing basis to take into account our own source revenue growth vis-a-vis that of the country as a whole, our own population growth vis-a-vis that of the country as a whole, or the other equalization receiving provinces, I guess, because it is our portion of the pool. But the one major shift that is taking place is the re-establishing of the formula.

My recollection is that Manitoba is the most negatively impacted by the new formula because of two things. One is that they now take gaming revenue into the formula, which it was not before, and there was a second item which they folded into the formula which negatively impacted us. The general trends are that we had some negative impact out of the reformation of the equalization formula. We have some reductions as a result of a growing economy, therefore giving us less entitlement to equalization. We continue to have reasonable growth in terms of our share of the population of the recipient provinces being favourable. So all of those factors continue to be at play. I guess the Minister of Finance is the best person to give you his current estimates of what all of these different factors will produce in the next year or two.

Mr. Doer: So the initial Canadian Press reports about over $100 million per year on the wire were wrong and there is an adjustment but it is certainly not in the range of a 10 percent reduction. I know it is in the budget this year, but I am more concerned about the forecast for year 2000-2001. Are they still holding firm? Because the government gets quarterly adjustments and has discussions with the federal government.

Mr. Filmon: The budget document says that the federal government renewed the equalization program from April 1, 1999, to March 31, 2004. Equalization changes resulted in a reduction in entitlements to Manitoba of $37 million annually. The effects of the technical changes will be phased in over five years.

Mr. Doer: So there has been no change on that in those numbers based on since the budget has been produced, printed and distributed. Because I know that the federal government changes those things as they go along.

Mr. Filmon: I understand that about three or four times during the year we get adjustments brought to us from Ottawa based on their most current numbers. It is backcast usually for two or three years, adjusted for population and adjusted for economic revenue numbers. We are part of the whole pool of seven provinces who are recipient provinces. So all of their revenue numbers are fed into the computer to produce the results. The person who could give you the most recent estimates on that would be the Minister of Finance (Mr. Gilleshammer). I do not have that right at my finger tips.

Mr. Doer: The provincial government has stated in 1995, when they made the capital commitments, that they would deliver those capital commitments notwithstanding the changes that were made in February of 1995 to the health care funding by the federal government. Many of those capital projects have been delayed, some of them have been cancelled, the formula for capital contributions has been changed. The result has been pretty negative consequences for people who are in the hallways and hospitals or awaiting surgery or other needed medical services, a thousand nurses laid off, now 600 being rehired. Did the government make a mistake by not fulfilling its election commitments in 1995 and freezing those promises and only now proceeding with some of them?

Mr. Filmon: Mr. Chairman, you cannot spend what you do not have, and we made commitments to capital projects in health care. Yes, they were delayed as a result of a lack of revenues from Ottawa, but virtually all of them have either been completed or are under construction at the present time. To my knowledge, there are very few that either have not already been given the go ahead or are not already under construction or completed.

The member may have a few that he wants to go over. Again, the Minister of Health (Mr. Stefanson) can give him the exact details as to the status of it, but I know that some of the ones that he has raised in this House are out to tender, and tenders may be even awarded as we speak. So virtually all of that five-year program has either been completed or is under development at the present time.

Mr. Doer: Well, what I am worried about is the revisionist history of the Premier and his statement now that because of the federal cuts he could not spend what he did not have. When he made his announcement on capital, his two Health ministers ago made the statement that we will build these projects and we will fulfill these capital commitments, and the federal reductions and federal cuts have been factored into these announcements we are making today. Something that also the Premier said in April of 1995.

Now he is saying that we could not do it because the federal government cut us back. I guess what I am really concerned about and the public is concerned about is two different stories. One during March and April of '95 that, yes, we will be able to build it; it is our commitment; we will fulfill these commitments; the federal government cuts have been factored into these decisions; and then in June of '95 and now into June of '99, the federal government cut our money; therefore, we could not spend what we did not have.

You knew what you did not have in March of 1995, and you made the announcements accordingly, I think, to a great erosion of your own credibility, if I might add, but that is for somebody else to decide. [interjection] Well, we await that, and so does the member for Assiniboia (Mrs. McIntosh), I know, who helped out the Premier (Mr. Filmon) in his Estimates the last time around. I would have been very disappointed if the member for Assiniboia did not start heckling at one point in the debates. I guess she feels that the Premier needs her help. I do not think he does, but–

An Honourable Member: You need distraction.

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Mr. Doer: Well, perhaps, you would pipe down then, and we can proceed with our Estimates.

I am sorry that we were so rudely interrupted, but if I can proceed to ask the question on Health. In March of '95, you said that the cuts from the federal government would not stop us from proceeding with capital. Are you now changing your position on what you announced and committed to in 1995?

Mr. Filmon: No, I am not changing my position. They have not stopped us. That is the point is that those projects are either constructed, under construction or under development, and commitments are being made on the vast majority of them. The one thing that we did say afterwards was that we would give the regional health authorities the ability to review some of these projects to see whether they fit in with their overall plan for the regions. In a very, very small number of cases, they have given us other advice about the priorities in their areas and suggested that we do this project rather than that project. We have basically followed their advice, but there are not very many instances of that to my knowledge.

Mr. Doer: Does it make any sense at all to close a hospital bed that has been paid for by taxpayers in 1995, in a hospital that is still operating and have a three- or four- or five-year delay in the personal care home bed that would replace the acute care bed in a hospital? Does it make any sense at all to close that hospital bed that has been paid for, not build or replace that hospital bed for three or four or five years, and then have a situation where a family whose parents or members of their family have paid taxes for years has their loved ones in a hallway rather than a room that has been paid for and built but not open because of the close first and build later policies of this government?

Mr. Filmon: Mr. Chairman, there have been patients in hallways at various times of the year going back into the days of the Pawley government and probably into the days of the Schreyer government. I have press clippings to show the member opposite. The capacity requirements of any of our health care institutions or acute care institutions vary substantially during the course of the year, and as the member well knows, you do not build a church for the number of people who are going to be there on Easter Sunday. So for staffing purposes and for volume purposes, the hospitals have always had to manage their available spaces and make adjustments. I have many clippings that would say during the Pawley years that elective surgery was cut off in order to allow for more people to be in acute care beds.

I have clippings that would suggest that in the Pawley years there were people in hallways, and all of this is part of the normal cycle of volumes that go through the acute care hospitals in our city. I have looked at 20 years, and I have seen in the 20 years of the cycle that there have been spikes that lasted for a period of several weeks each and every year in which the capacity of the hospitals was exceeded in the acute care side and people were left in hallways as a consequence, so if the member opposite is trying to say that this is something new or unusual, I do not believe he is right.

Mr. Doer: I will leave that again to the public, because the fact that people paid for hospital rooms to be closed down, and I was in the St. Boniface Hospital a considerable amount of time myself, watched people in hallways and families in hallways, while I knew that beds were open and then closed in that hospital and paid for by the taxpayers.

Of course, the Minister of Health (Mr. Stefanson) challenged us to come up with–remember he said, if there are any rooms, I will open them up. I think that is his former Minister of Health, not two ago, one ago, said: well, you find them. Of course, in every hospital, Seven Oaks, Misericordia before he closed it down, St. Boniface, Health Sciences Centre, Grace, Concordia, we found hospital rooms. They were closed down by the government and could be reopened. He said oops. Of course that leads to the credibility problem that the government has with the public on this issue. They know that their taxes have gone to pay for hospital beds and rooms that have been closed down before the personal care beds have been opened, Mr. Chairman.

We even have a modest example of that again today where we have a good program, the comprehensive breast program at the Misericordia Hospital. It provides a comprehensive program. The program which is going to be replaced now that the government has changed its mind and it is going to close the hospital down. The program is being closed down. Initially we had an announcement that the new project will be at St. Boniface Hospital on April 1, then May 1, then June 1. On June 15, the hospitals closed down. The programs are closed and it is now allegedly September 1 before the new programs are being opened–[interjection]

Is this the deputy premier now or the associate premier? Somebody who wants to join in on the debate? I am more than willing to accommodate the ministers. [interjection] I did not know you were asking them. I guess you are getting used to your new role perhaps and perhaps not. We should not be too arrogant for the public, should we. So the question I have–perhaps the minister does not need to interrupt. When she is finished interrupting, I will proceed with my question. [interjection] Thank you.

I think that the example at Misericordia Hospital, which was a good program, will be ending as an excellent program on June 15, is another small, micro example of what in our view is wrong on a macro basis with the lack of planning and lack of delivery in health care. Innovations are necessary in health care. There is absolutely no question about it. But, when something is closed down, it must be replaced with something else as part of the innovation, otherwise patients end up in the void. People end up in the void. You would not have a situation where somebody goes from one technology to another where they close down their whole operations before the other technology would come in. It just does not make any sense.

I guess we believe the government has erred dramatically in having hospital rooms that have been paid for by the public closed down by the government before the new personal care beds have been opened. I guess the Premier does not agree, and I guess he is defending his commitments he made in '95 and feels that there was no breach of trust there and no breach of trust with the public on health care. I regret that. Does it make any sense for the Premier to fire a thousand nurses in reductions that are made through his government and then a couple of weeks ago announce the hiring back of 600 nurses? Is that a sensible way to proceed with resources in health care?

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Mr. Filmon: Mr. Chairman, the member knows that the government does not hire and fire nurses, that institutions staff to the levels that they believe are required to meet the demands of their institution, and that if he looks at the numbers overall, I do not have them again. I am here debating Health with the member when this is the Executive Council Estimates. My recollection from the most recent figures I have seen is that basically our nursing complement is very much the same as it was seven years ago. It is within 100 nurses; in fact, on a per capita basis our nursing complement is one of the highest in Canada.

The fact of the matter is that there is a shift taking place, which the member opposite probably does not acknowledge. I know that my colleagues across Canada, regardless of their political stripe, acknowledge it and are engaged in it. It is why my colleague to the west, Mr. Romanow, closed down 52 hospitals. There is a shift taking place from acute care facilities to long-term care facilities.

Very shortly after we came to office, the member opposite has quoted this report and so has his critic. In 1989 we were told we were 900 personal care beds short in this province. That was not something that occurred in the six months or so after we had taken office. That was obviously a legacy from the New Democratic administration that we succeeded. Between 1989 and 1998 we built those 900 additional personal care beds. In 1998 we were told we were 600 more short, so we are building those 600 at the present time.

These are all things that are being done, and every one of those facilities requires nurses. There are considerable nursing jobs added by adding 900 personal care beds and adding another 600 personal care beds. Staffing mixes changed, partly in response to the collective agreement that was entered into in 1991. I know that we as a government held out during that strike to try and persuade the nurses' union that there should not be such a close monetary relationship between LPNs and registered nurses, that that would lead to administrators making decisions, not the government, because we do not run the hospitals and the institutions. But in order to meet their payrolls, they changed to a mix of registered nurses and nurse's aides, eliminating quite a number of LPN positions. Not at our behest. In fact, we were not happy with it, but that was done in response to the fact that the top-level LPN salary was within a dollar of the R.N. salaries, and so they changed their staffing mixes.

These are all things where actions cause a reaction in areas where we do not ultimately control the decisions, but nurses also have been shifting over into long-term care positions and into home care. We have probably hundreds more nurses in home care today than we did back in 1992. So the nursing jobs are in different areas.

We are also training twice as many LPNs as we had been. I think there is about 190 in training who will be coming into the workforce very shortly. I am very encouraged at the fact that the vast majority of registered nurses graduating this year, or it could be B.N.s, I am not sure what, are almost all of them staying here. These are all things that are designed to assist us in filling those nursing shortages.

Mr. Doer: Did the Premier support the decision of the government to change the training methodologies for nurses, cancelling the nursing training at St. Boniface, Health Sciences Centre, a number of the other hospitals–Grace, Victoria, Brandon, and other communities–closing down the hospital-based training programs that have had the benefit of not only turning nurses around in a shorter period of time but also giving nurses more practical experience on wards and giving the ability we hear to recruit and retain nurses coming from that training program in an acute setting, in a personal care setting, maybe more favourably than coming out of a university setting?

Mr. Filmon: Mr. Chairman, that certainly was an issue that I had grave concerns about. I would say that it is fair to say our government resisted it for a long period of time, perhaps the first eight years or more that we were in office. Unfortunately, the movement from the Manitoba Association of Registered Nurses, which was part of the Canadian registered nursing organization, was advocating to every province in Canada that the change be made, and I believe that we probably held out till at least half of the provinces had agreed to it and others were planning to.

To my knowledge this has been agreed to literally right across the country, and we recognize that there are things that are going to have to be done in order to help us to meet our nursing shortages, and that includes making sure that the B.N. program can recruit in greater numbers than they have in recent years. We also believe that they need to have the hands-on experience that they got in the training programs that were hospital centred. These are all things that will have to be worked out by the professional organization, but we had grave concerns about it. Essentially we were forced into it as part of a national movement.

Mr. Doer: Sometimes national movements are correct in their predicting the future, and sometimes they are wrong. Has there been discussion then at the national level about the status of nursing and the original decision that has been made by a number of provinces? The Premier has often said the best time to plant a tree is 20 years ago, but if you do not plant it today, you are not going to have the tree 20 years from now.

Are we making a mistake of monumental proportions? Professional organizations certainly have the profession in mind, and certainly I am not disputing their motivation from the public interest but sometimes the public interest–and we have been critical of the government before on other professional organizations on the specialist agreement and the government giving away public responsibility and rights and other agreements, and the MMA agreement of the mid-'90s or 1994. Sometimes organizations, employees and professional organizations can be correct, and sometimes in terms of the long-term public interest they might not be correct. The person who ultimately bears the responsibility for those decisions for the public interest is the government, and the person who must evaluate whether the decision was the right or wrong one based on the next 10 years of projections in this area is the government, not the professional body. Are we evaluating that decision? Were the Premier's first instincts correct? Is he going to look at any kind of evaluation of going back, not back but going forward with a plan that will accommodate the huge demand we are going to have as a community?

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Mr. Filmon: Firstly, it certainly has been discussed at the national level and more recently at the Western Premiers' Conference. The communique refers under Health to the fact that we have discussed the challenges and critical issues facing western provincial-territorial health care systems, including, in bullet No. 3, "the national shortage of health care professionals, in particular, nurses."

Every province was lamenting the fact that the switch over to B.N. was creating stresses and pressures on them, that there was the shortage of nursing personnel that was seen right across the country, and that there had to be some ability to have short-term flexibility in meeting some of these needs. The final answer, obviously, is going to have to be developed in consultation with the professional organization. That is something that I know the Department of Health and the minister are certainly looking at, at the present time.

They have, as a for instance, persuaded the university to reduce the length of time for completion of the nursing course by having the training take place over longer periods of the year and, I believe, reducing a four-year course into three years. They also have, as I said, instituted greater training for the LPNs, doubling the number that is normally trained. They are looking at the fact that there are a very significant number of nurses who are not working in the nursing profession at the moment, but who could, with some fairly minimum retraining and requalification, be put back into the profession. So those are a number of things that I am aware of, and I am not the Minister of Health (Mr. Stefanson), so there might well be many other things ongoing.

Mr. Doer: The health care situation, I think, will be an issue that, obviously, will be debated more conclusively whenever the election is called. I know Mel Myers could not find out from you when it was going to be, and I do not expect I will find out the date in the Estimates, but I want to proceed with other matters of federal-provincial relations.

The gas tax and revenue, has there been any indication from the federal government that they would be willing to–I know there was some confusion last year with the western premiers and the premiers about making sure health was the No. 1 priority, even though a lot of us feel we are being robbed literally in terms of the gas tax revenues not being spent at all for the programs, roads and infrastructure, particularly when you consider the federal government in western Canada walking away from the Crow rate without any transition plan whatsoever and then walking away with the tax revenue without any national programs to be in place. You know, I think that it is a scandal what they have done in terms of western Canada in particular and, certainly, Manitoba.

Has there been any success in this area by the premiers? I know the Heavy Construction Association always has a statement about it, but has there been anything beyond that in terms of public consciousness and the consciousness of the federal government?

Mr. Filmon: Well, I certainly concur with the member opposite that we are being robbed of a great deal of money that ought to be reinvested in this province. It is almost $150 million this year that will be paid in fuel taxes to Ottawa, and there are zero dollars coming back from Ottawa for highways, infrastructure. This is an intolerable situation. It is out of step with every other country in the G-7 nations, and it is our view that it has to be rectified.

In every communique from the annual Premiers' Conference and the Western Premiers' Conferences going back to about 1992, we have had a reference to the federal government funding a national highways policy. The federal government has steadfastly refused to endorse that. Although they are talking now about the possibility of putting some money in, they specifically decouple any investment from the revenues that they get. They say all those revenues just go into general revenue, and if they structure a national highways program, it will not bear any relationship to revenues. It will be just simply a program that they develop for this particular purpose.

You may know that in the United States, I believe the federal government commits every dollar, and it is the billions of dollars that they take out of fuel tax revenues, to the construction of the interstate highway network in the United States. In many of the other G-7 countries, the federal governments do anything from 60 percent up in terms of their percentage of spending.

This year in our Western Premiers' Conference our communique says: "Western Premiers called upon the federal government to commit in the 2000/01 federal budget significant, long term funding for a National Transportation Investment Strategy with a National Highways Program as a major component." So we certainly concur completely with all of the thoughts that the Leader of the Opposition has put forward. I have used the same arguments about the loss of the Crow rate, the transference of responsibility onto the road network, all of those things, many times in the past decade, but nobody seems to be listening at the federal government level.

Mr. Doer: Has the Prime Minister responded to this issue ever or does the provincial government deal with another federal minister? Is there any attempt by, particularly western caucus members of the federal government, notwithstanding the fact that not all of them live and work in rural and northern communities, to push for these proposals?

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Mr. Filmon: The Prime Minister's reaction has simply been to say that is an issue that should be dealt with by the Minister of Finance and the Minister of Transportation. So we have dealt with Mr. Martin who has flatly refused to endorse anything like this program and Minister Collenette who has given, I would say, warmer signals towards it in recent times.

The question was asked about lobbying federal members. During the last election campaign federally, the member for Winnipeg South put himself forward as sort of the champion of the national highways program and in fact gained significant support from the heavy construction industry association financially towards this campaign as a result of saying he would carry on the ball on this issue. It has not happened obviously. So whether that means he has been turned down by the Minister of Finance or by the Minister of Transportation, I do not know. Certainly we thought that he would have some impact on this debate, and so far it just has not transpired.

Mr. Doer: Has the government been dealing with the federal government on the whole issue of airports in aboriginal communities, the landing strips that were built, a lot of them, in the '60s and '70s by previous governments to deal with medivacs? Many of the airports are now too short.

I was in Little Grand Rapids last week. I think the Premier thought I was doing something else, but I can assure him there is no golf course in Little Grand Rapids. There was none that I could find, and I would still do lousy anyway if there was. But I was there last week–my one game a year will not be played there from what I could see–and, you know, the airport, there was a tragic accident there. There have been four accidents there at the airstrip. It is literally a peak and valley thing. You could see it even as you land. The member for Rupertsland (Mr. Robinson) raised that. I know it is not the only airport.

I know there are thousands of people living in the Island Lake area that are really in trouble in freeze-up and the thaw. I know that there is now up to 5,000 people that are across the water from the airstrip and if, in the middle of the night, somebody has a heart attack and there is no helicopter there, it is just awful. So we have some serious problems on transportation.

Has the federal government participated with the provincial government in this matter? Are we looking at moving some of the airstrips, for example, that were brought in by the provincial government for transportation? Because of jurisdictional issues they are put across the way in the provincial side as opposed to the federal side. It just does not make any sense to spend all that money on helicopters during freeze-up and potentially risking people's lives and skidoos and other situations during other times of the year. Where is that at, and what do we know about that program? Has there been any discussions between the federal minister responsible for federal-provincial relations and the federal government in this regard?

Mr. Filmon: I know that both at the ministerial level and at the deputy ministerial level our people have been lobbying very hard. The tragic accident at Little Grand Rapids which, I think, was about December of 1997, caused everyone to re-evaluate the needs there. I believe that our former minister, the member for Springfield (Mr. Findlay), has verified the poor condition of the landing strip at Little Grand Rapids personally there, and the difficulty we have is that there does not seem to be any commitment on the part of the federal government to putting money in. Most of these cases where it talked about airstrips that are on reserve or built primarily to serve the needs of the reserve community, and so we have, as the member knows, in the last two budgets put money in to upgrade a number of the northern airstrips, but there is obviously a great deal more than we have the capacity to fund out of our own revenues.

Mr. Doer: Is the federal government willing to sit down–I mean, here we have airstrips that are outdated, some of them very much outdated for the type of transportation and airplanes that are being used, particularly necessary for medivacs. In the case of Little Grand Rapids, you are four or five miles across the water. It makes more sense, if you are going to build a new airstrip or to improve an airstrip to spend the money on the reserve side. Is there any effort to sit down with the federal government and the provincial government to come up with a community-by-community common-sense solution that deals with safety? The increased economic activity in these communities now, I mean, there are regular airlines going into these communities now, sometimes two or three airlines going to these communities, whereas before it used to be the odd medivac. Things have dramatically changed in terms of population, medical considerations, economic viability, economic opportunity in these communities that seems to me that a community-by-community approach should be the way we go rather than just two people saying, it is your job between the federal and provincial governments.

Mr. Filmon: There is no question that there is a huge demand and requirement for air transportation that is safe and reliable in many of our northern communities. As the member has said, many times of the year it is the only access into many of our remote aboriginal communities. That being the case, we then have to look at the condition, the length, in some cases they are built in places–I think Little Grand Rapids may be one of them. Certainly the one at Island Lakes, Garden Hill was not big enough and could not be lengthened. It was on an island. You have to start all over with what is a multimillion dollar project. When you are looking at maybe a couple of dozen of these, the fiscal capacity of the province to get involved in this is simply not there. It has to be a federal responsibility. We have had the discussions. We have had the interchange of correspondence with the previous minister and the current minister who have, I believe, emphasized to the federal government that this is a necessity. There does not appear to be a willingness on the federal part to come through with it. It is frustrating for me.

The member opposite knows, probably enjoyed the fact that we had a couple of demonstrations here at the Legislature in March and April of this year on issues to deal almost entirely with federal responsibility. I subsequently went to the meeting with the Assembly of Manitoba Chiefs in early April. Jane Stewart was at the same meeting. She is the one who should have the demands placed upon her. They essentially gave her a free ride and took great delight in attempting to embarrass me and my government over issues that really are federal responsibility. I say that there has to be some focus on this. We can certainly do our best, but if the aboriginal leadership themselves are not prepared to really make their demands known to the federal government and make it a high priority, the federal government I think finds it too easy to ignore the province on this one.

Mr. Doer: We agree that it should be a strategy to deal with the provincial. There are provincial airstrips under our jurisdiction, there is federal land under their jurisdiction. But there is a joint economic and health problem, and I agree it should not be just one level of government in terms of this issue. I think we should try to develop a joint action plan with the federal government based on safety first as the criteria and economic opportunity second. It has to be, if you start from the community up, it has to be both jurisdictions. By definition things that have happened historically have not necessarily taken the longer term issues into consideration in those communities.

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Similarly in health care, we have a situation now where, for example, in Island Lake there must be thousands–I do not know the exact count but it must be getting close to 10,000 people residing in those five communities. That is a huge community by Manitoba definition, and it is, in my view, better to have health care services closer to the community, appropriate to the community. Obviously, prevention is best. Recreation programs are better, and programs like home care and programs that can keep people living in the community in dignity make a lot more sense than medivacs and long-term stays in southern-based institutional care.

Is there any work going on between the provincial and federal governments? I know the Minister of Health (Mr. Stefanson) indicated that the new nurse recruitment program would be available for northern nursing stations that are short staffed. I think that has been passed on to those communities. Has there been any work on again a huge, huge challenge for us as a province, again with the changing demographics, huge population growths in some areas, to get a kind of co-operative long-term program rather than just relying on the, it is your job, it is my job? So what happens is people get moved from one community to another with medivacs that are expensive and programs that are expensive in the south when cheaper programs closer to the community can be and should be made available where populations and health care warrant with the provincial and federal governments working together, first on prevention and secondly on some of the community-based programs that are necessary and should be located closer to communities rather than further away.

Mr. Filmon: Well, I certainly agree with the objectives that the member has laid out. In terms of the detail of what has gone on and what discussions have taken place and what arrangements are being worked on, I really cannot speak to that. The Minister of Health would certainly be able to respond to that.

Mr. Doer: Has the Premier of this province ever met with the Prime Minister and the Minister of Indian Affairs to discuss this huge, huge–when you look at the demographics, when you look at the population changes by the year 2010, it seems to me that on a federal-provincial relations basis, this is the biggest challenge anybody has to face. It seems to me that the old way of saying it is your job because you are provincial and your job because you are federal is not in the end going to move us forward if we do not have a kind of common sense way to provide opportunity, to provide education and training programs, to have the people be able to take the jobs of the future, a longer term strategy to deal with Canadian citizens who live in Manitoba in First Nations communities and adjacent to them.

Has this government had any discussions with the federal government at the highest level and the minister responsible to just say, listen, we have got to do something about this, it is a very serious problem, it is not going to get better unless we have a long-term action plan in place?

Mr. Filmon: Absolutely. Not only has my Minister of Northern and Native Affairs (Mr. Newman) had numerous discussions with his federal counterpart on the matter and put in perspective the magnitude of the challenges as we see it, and it is one of the biggest challenges. But when I had an opportunity to have a private dinner with the Prime Minister about a year and a half ago, and he asked me to lay out for him what our biggest challenges were, it was one of the two or three largest challenges I laid out to him. What I found intriguing and comes up, obviously, over and over again in a whole variety of ways is the fact that federal politicians, when they think about the challenges of a very rapidly burgeoning aboriginal population, still think in terms of programs aimed at those who are on reserve in First Nations communities. When I pointed out to the Prime Minister that that was only essentially addressing one-third of the problem and the issues, I think he was taken aback. We had a lengthy discussion which I laid out for him that, in Manitoba's context, somewhere between 60 percent and 70 percent of all First Nations and aboriginal people live in the cities, towns and villages of our province. They do not live in the First Nations communities and that every time they developed a program, and they might do it hand in hand with the Assembly of First Nations, that they were leaving out two-thirds of the aboriginal people from the access to that program.

I had the same discussion with Mr. Axworthy, I might say. As a result, I think that they have attempted to do some things that are addressed to urban aboriginals and people living off-reserve, and unfortunately that has created a backlash. Now when we went to–in Regina this year and in Winnipeg last year, the annual meeting that has been set up between the premiers of Canada and the leaders of the aboriginal peoples of Canada, we get a very, very sort of strident position being taken by notably the leader, the Grand Chief of the Assembly of First Nations and the president of the Metis Council of Canada who say that organizations like the Winnipeg Aboriginal Association have no status and have no right to get any programming money, any funding. Everything that is directed at aboriginal people, they say must be directed through only those two organizations. They do not recognize the existence of any other organizations.

Frankly, that is a real detriment and a real roadblock to making progress. We have got to recognize that wherever the populations are who need the programming, whether it is for social services, recreation, education, health, any of those things, we have to find community-based organizations who have the capacity to deliver these to the best possible extent to the people involved. We cannot stand on ceremony and put boundaries around certain organizations and say only they are entitled to receive funding. It is a challenge that I believe is very important for us to undertake, but breaking down the barriers that have been set up by formal relationships that have been established in the past is going to be our biggest challenge.

So I say to the member opposite that we want to be able to work with all of the aboriginal peoples of Manitoba. We want to be able to say to the federal government: let us collectively address the challenge of our First Nations people. We have already crossed the barrier where unilaterally, I believe it was back in 1992 under the Mulroney government, that they began to offload the costs of social services to aboriginal peoples in Manitoba. It is now estimated that it is costing us over $30 million a year for services that we used to get paid for–these are First Nations people who do not live on reserve, and they are not being paid for in terms of their social services by the federal government any longer, and we have got to deal with it. But the federal government is taking a very hard line position.

Premier Romanow and I have very strong common cause on this one because we are in exactly the same position, and the proportion of our populations that are aboriginal peoples is just about the same. So we have worked in concert on it, but even under the Social Union Framework Agreement we held out to get some acknowledgement of this special issue which is basically an issue for western Canada.

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I have to tell you that even in Ontario, where there are some reasonable numbers, as a percentage of population, it is so small that it hardly impacts on their radar screen in terms of a policy issue. Once you keep going east from there, it becomes less and less of an issue, but in Canadian terms, we have over 10 percent of our population who are aboriginal people. Saskatchewan is about a half percent less than us and Alberta is 4 percent. Then after that there is nobody else in the country who is any more than 2 percent, so the issue is really concentrated here. It is our biggest challenge, and it has to be part of the development of any opportunities in the future, economic opportunities or opportunities to improve our population's health status, our social status or any of those things

In fact, at the conference that was held in March in Regina, as well as the one that was held in Winnipeg in November of '97 between the aboriginal leaders of Canada and the premiers, we called on the Prime Minister to hold a national conference, a special conference of First Ministers and aboriginal leaders on aboriginal concerns, but it seems to be falling on deaf ears.

Mr. Doer: Has the government prepared an analysis of the recent court decision talking about the right of First Nations people in urban communities to vote in band elections, and what impact will that have on the federal offload for the provincial government here in Manitoba and Saskatchewan?

It seems to me that the consistent message from that decision, notwithstanding your comments about the national grand chief, you may have more in common with the national grand chief and its precedent from the Supreme Court to go back to the federal government now on the offloading of social services based on this national decision. Has there been any analysis of it? Will you and the national grand chief now become allies on using this precedent for another matter as a way of using a legal precedent, if you will, if a moral argument cannot be utilized, a legal argument that is consistent with this Supreme Court decision on responsibility? It seems to me rights of individuals to participate in their community's elections also would be reflected on responsibilities of the federal government for programs off-reserve.

Mr. Filmon: I want to agree with the Leader of the Opposition's interpretation of what that court decision might mean. We had in the past been so frustrated that we were prepared to go to court to challenge the federal government's unilateral decision to offload its responsibilities for First Nation people living off-reserve. We were cautioned by constitutional legal advice that there was a real downside to that, and that we ought not to proceed.

Both Premier Romanow and I have kept it as a failsafe that we might still attempt to go to court to make the challenge in the frustration for not getting the attention of the federal government on the matter and on a whole series of matters on aboriginal issues. With respect to this particular court decision, because I said I think that it does have the possibility of giving us a lever to have the court say that indeed the federal government is responsible financially for First Nations people living off-reserve if they have the rights also to vote on reserve, and they are still considered to be residents and citizens of those First Nations communities.

I understand that our legal staff from Manitoba have been meeting just very much in the last few days with the Saskatchewan government's legal staff on the matter, and that they are trying to put together a collective opinion for our two governments, because we took the position a number of years ago that we had the most in common and the most reasons to be aggressive on this. Indeed, I have talked with Grand Chief Fontaine, and I am not in any way suggesting that I do not co-operate and work with them. I mean, he and I and the Saskatchewan government are absolutely in concert on this position.

Mr. Doer: I was wondering whether after the conclusion of the analysis and the "collective opinions of lawyers from two provinces" on the one hand, on the other hand it just seems to me as a layperson on a gut level that the precedent is a useful one for us, and could that be provided to members of the opposition?

Mr. Filmon: Mr. Chairman, I would consider it, but I would also take advice from them as to whether or not they believe that we should tip our hand by sort of putting out our opinion publicly before we decide to go to court.

Mr. Doer: I think our hand is pretty nicely tipped. There is a problem with the Mulroney unilateral action and we want it rectified, we want justice. However, we will leave that position to you. The Premier is being cautious and he should be cautious.

Another matter of court with the federal and provincial governments is the whole issue of gun registration, C-68. We disagree with the measures in C-68 on registration. I think now four years later the view that was held by those of us who believe it was going to be costly; it was going to come out of police services. The registration costs were going to be much higher than estimated; the budgets would be higher; more people would be employed. I cannot understand why, if we are going to spend money, we do not have more border guards to prevent illegal guns coming in from United States rather than this kind of "gotcha politics" from the federal government, creating some real degree of concern by people in Manitoba. We were on the same page on C-68. We agree with the government on taking the federal government to court along with the Saskatchewan NDP and I think the Yukon NDP is part of this case. I am not sure whether B.C. has jumped in or not. I know Alberta has. But I certainly agree with the government, and hopefully that would lead to not a court case where winner takes all but rather the federal government and the federal Justice minister coming back with proposals that actually have some consensus with the public–the governed as opposed to just decisions made unilaterally by the governors, by the federal government.

Have there been any discussions with the provincial government, with the federal government on this matter, or are we just getting extensions on the implementation of this granted and the federal government proceeding to defend their position and the provincial governments, particularly in western Canada, certainly the three prairie provinces, opposing this provision?

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Mr. Filmon: I gather this is the subject of ongoing discussions. I will just note for whatever it is worth that we have a new ally who will be joining the provinces in the challenge: New Brunswick's new premier, Bernard Lord, as part of his 100 promises, promised to join in with Manitoba, Alberta, Ontario and Saskatchewan, I guess it is, in the challenge to Bill C-68. So that is interesting because it now spreads into an area of Canada that had previously been co-operative with the federal government on the issue.

We are also getting many, many reports about the administrative costs, the withdrawal of RCMP resources in order to fund the gun registration, all of those issues that we argued would take away from safety and security and just simply put into a bureaucratic system. It appears to be being confirmed, but on the issue of the challenge, I do not know at what stage the issue rests. I do not know if it is in the Alberta Court of Appeal or where it is at the moment, quite honestly, so maybe I can get some advice on that.

Mr. Doer: The issue of disaster assistance from the 1997 flood, there was a considerable amount of discussions between the provincial and federal government, interpretations of the disaster assistance program, amendments on three separate occasions by the provincial government for coverage pursuant to that program and different estimates of the amount of money necessary and the amount of money provided by the provincial government and provided by the federal government. One, do we have a negotiated agreement with the federal government on all matters related to the 1997 flood in the Red River Valley?

Mr. Filmon: Well, it is fair to say that we have an agreement in principle on all matters, but, for instance, our initial contemplation was that the flood proofing would be in the range of $150 million to $200 million, and I do not think the federal government has agreed to all of that. They keep agreeing to it one phase at a time.

The member opposite may know that a number of the issues that we thought might be covered in the city of Winnipeg's flood proofing were left out, because the federal government has yet to agree to fund some of the dike improvements within the city of Winnipeg. What is our current number that is agreed to by the feds? About a hundred million. So if we were to do what was contemplated at the time, on May 1, 1997, that Mr. Axworthy and I signed that agreement in principle, we would still have another $100 million worth of work to do.

The federal government has not said it will not go ahead, but it obviously is leading each step of the way to a subsequent negotiation and discussion in which they may or may not agree with the ultimate proposals that we put forward. Our Natural Resources people believe that for us to do the job as well as we can and in a justifiable manner, there are proposals, as the member knows, to deepen the floodway which would put us into hundreds of millions of dollars, but we are just doing what we believe are the absolute necessities at the moment to protect us against a flood of similar proportion to 1997, with maybe a little bit of extra safety factor.

We are not talking about one-in-500-year flood which some are saying we should be contemplating being able to protect against. That would require a great deal more effort in cost-benefit studies. You know, the cost of several hundred million dollars investment versus the impact of this happening one in 500 years has got to be really worked out in the longer term. So we are going at it a step at a time.

With respect to all of the other programs, there are all sorts of things, like the JERI programs that were addressed to small businesses in the valley and to agricultural producers in the valley, some of which were entirely federal dollars. There have been issues and concerns with that because the federal government that was handing out $5,000 cheques at the time of the 1997 federal election has been earlier this year collecting that money back, or attempting to collect the money back, saying that it was only supposed to have been an advance, and that if people cannot produce receipts and confirmations of payments, they are not entitled to keep the money and things of this nature. It has been very complicated and difficult, and obviously these are parts of the federal response that we were not a party to.

With respect to the Disaster Financial Assistance arrangements, I believe that we have had a reasonably satisfactory resolution to all of those issues, maybe taken in some cases a lot longer to get the payments in and to get the approval of the accounts submitted. But we have financed it all through the piece, and we believe that when we take into account our contributions–for instance, we had to add a number of properties that were not covered by the Disaster Financial Assistance program and those were rental properties or vacant properties, farm properties that were not covered–when we take it all into account, we will be paying approximately, I think, 75-25 as opposed to the 90-10 that the feds kept trumpeting during the election campaign, that they were putting in 90 percent of the money because a number of these things that we insisted in fairness had to be covered. They eventually agreed to, but only on a separate 50-50 basis.

The rest of it is going along. We certainly have not collected any money recently. I think there is probably a lot of bills outstanding, but that is fairly typical. We, in previous flood disasters, have waited three and more years to get reimbursement for the money we have put out.

Mr. Doer: The Premier mentioned three or four years. In his Estimates, we have dealt with the '96 flood before and the dispute about using municipal staff and equipment and that being covered by the disaster assistance. The Premier indicated that on one of the Team Canada trips, he had discussed this matter with the Prime Minister and had promised to provide documentation. Has the '96 flood in the western region of the province, where municipalities used equipment and staff and felt that that was the appropriate way to proceed and that was not included by the federal government, has that flood been dealt with and concluded?

Mr. Filmon: We will have to check on the status in the '96 payments and report back.

Mr. Doer: In terms of policy, did the federal government finally agree that using on-site graders, on-site staff and people expert with the local situation made more sense than going out and hiring people and then having to deal with people that are not even conversant with the terrain and communities and concerns?

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Mr. Filmon: No, they have not accepted the method of dealing with it that whoever is on the scene should be paid for the work. They will only pay municipalities who are using their own equipment for the work which is (a) the most rapid response, and (b) the most effective response, and (c) the cheapest response. They will only pay them I believe it is a factor of 16 or 17 percent of their costs, which they believe to be the out-of-pocket portion of the cost to the municipality that pays for no wear and tear on equipment. It probably pays for no operator time. I think it just pays for fuel and a little bit of other costs, so it is an unfair situation.

Now, I do not want to suggest that we are behind the scheme, but what is happening is that municipalities are working for each other and billing each other, so then the whole bill becomes reimbursable. It is an unfortunate situation to put municipalities into, but I believe that some of that is happening to counteract what appears to be a senseless federal policy.

Mr. Doer: So we could have a situation where a community is, and I am not using these as an example, but this would not be appropriate, but you could have a situation where one community, Morris, has its equipment being utilized and paid for by Rosenort, and Rosenort could be using the Morris equipment. I am sure that is not the example, but that gets covered 100 percent by the federal government, and that is actually going on in Manitoba?

Mr. Filmon: I am not suggesting this is happening, but it could also be that Rosenort hires Morris to construct their dike, and Morris hires a private contractor to do theirs.

Mr. Doer: Maybe my guess was accurate. No, I know that, I just mentioned those communities because we had an opportunity to visit them in the middle of the crisis in '97. So the flood of '96 has not totally resolved the issue of municipal funding, and its response to disasters is not resolved. We may have municipalities having creative ways of advocating following the rules but not, you know, because the federal government is being too rigid and inflexible. The purpose of disaster assistance is to assist people in disasters, not to have a situation where the economic fortunes of a community are so compromised by the disaster that it is such a huge hole to get out of that the community will take decades to do so. Well, that is unfortunate.

In the 1997 situation, has the federal government considered any cost to the City of Winnipeg as part of the disaster assistance of that flood of 1997? Are we saying then it is better to have the city flood as opposed to spending money to prevent flooding? Is that the message that is being made? It is better to have the actual disaster in terms of compensation, not for the people, for more flexible treatment by the federal government, than it is to have prevention measures in place, which seems to me to be the more logical way to go and would seem to most citizens to be–not all citizens in this community–a better way to proceed.

Mr. Filmon: Firstly, the bills for whatever damages occurred within the city and there were many–I mean the areas of the member for St. Norbert (Mr. Laurendeau) and others, Christie Rd., which was in the Speaker's constituency. There were plenty of damages for which Disaster Financial Assistance claims have been made and probably paid out to the residents involved in the commercial enterprises involved and so on.

There have been some elements of the floodproofing of the city of Winnipeg that have been included in the current hundred-million dollar commitment, but they are not the big-ticket items. That includes the pumping of the outflows of, for instance, sewer outflows into the Red River where they are below flood stage. Under flood circumstances they are below the water level, and that means we get the sewer backups, the potential for basement flooding, and all those kind of things.

Fixing that and fixing a number of other major problems have not been included so far by the federal government. So what we are doing is cost-sharing a risk analysis with IJC of what things need to be done in order to adequately protect the city of Winnipeg against a further flood event that would be equivalent to or slightly greater than what occurred in 1997. It is our hope that that risk analysis will demonstrate to the federal government that the city came very, very close to having a major disaster and that, indeed, an ounce of prevention is worth a pound of cure. It would be much cheaper for them to be putting these dollars into this flood prevention as opposed to risking, tolerating another major flood in which the protection work for the city of Winnipeg, which was just about stressed to the limit in 1997, would fail. So that kind of thing is, we hope, going to come out of this risk analysis that we are cost-sharing with IJC.

At the moment, we do not have enough. It seems we do not have enough justification to convince the federal government to approve these projects. We certainly as a province believe that these projects ought to be approved. The city has put them forward legitimately and, I think, conscientiously, but the feds have not yet approved them, and we hope this risk analysis will push them over.

Mr. Doer: When will this report be completed?

Mr. Filmon: I am informed it is a fairly extensive analysis, and we are expecting it later this year.

Mr. Doer: Will the risk analysis include communities all along the Red River Valley? Will it include communities just inside of the floodway? And will it include–well, I will just ask those two questions first.

Mr. Filmon: I am informed that this one just focused on Winnipeg because we needed the extra evidence to support the case that this had to be part of the floodproofing.

Mr. Doer: There are other studies now along the whole valley from, as I understand it, Fargo, Grand Forks, adjacent watersheds–part of the watershed rather, not adjacent ones, we do not want the adjacent ones connecting to us–the watershed area and up the valley here in Manitoba. That announcement was made by the federal Foreign Affairs minister in the height of the situation in 1997, a of couple meetings, where is that at?

One of the things you notice, the desire for all producers and the need sometimes to get on the land early enough to get the crop out before the frost and the first freeze-up sometimes gets us a lot of water quickly, as well as Mother Nature and other means. So where is the rest of the kind of study on the Red River outside of the city of Winnipeg?

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Mr. Filmon: I am informed that this is being handled by the Foreign Affairs federal people, and it is the study of the international watershed through the IJC. It is running considerably behind schedule, and we are expecting an interim report by the end of this year and a final report about a year later.

Mr. Doer: So both the risk analysis by the IJC and the committee to look at the total watershed area and the drainage challenges and flooding challenges, both of them will not be ready in time to take action for the year 2000 spring period. So it will be at least three years since the report was announced or the committee was announced, and the risk analysis will be not ready for the flood, the year 2000. Is that correct?

Mr. Filmon: Essentially that is correct. We do not expect to receive any report in time to initiate any construction activity before next year's spring potential flooding season.

Mr. Doer: Reading the Water Commission report, and I am sure the Premier read the studies attached to it, there was a study conducted–or one of the presentations dealt with the floodway. Then there was a subsequent story in the newspaper with a thesis that had pretty strong conclusions.

Dealing with the subcommittee report dealing with the Water Commission review on the strengths and weaknesses on the existing floodway and the projected capital, has the Premier had his department review those analyses, and what is the status of those findings?

Mr. Filmon: The Department of Natural Resources is the lead agency in doing the analysis, and they are taking that information and utilizing it in their discussions with the federal government to attempt to persuade them of the need for additional investments over time.

Mr. Doer: Well, some of the conclusions from some of the subcommittee reports were massive amounts of investment, comparable to the original floodway itself. Obviously, the original floodway had both federal and provincial money in it. So have there been any discussions at all about the capacity of the floodway, the infrastructure on the floodway, the surrounding banks of the floodway and other analysis to suggest a fairly steep level of capital investment and a fairly high risk if that does not take place, with the warning that we came within an inch of a rainstorm or a windstorm of getting further flooding in Winnipeg and I know in many other communities as well?

Mr. Filmon: My understanding, Mr. Chairman, is that there is not a consensus on what is the best action to proceed with because we are dealing with very substantial potential costs. I do not know what it would cost to, say, deepen the floodway, but I suggest it would be in the hundreds of millions of dollars. So they are doing their own further studies to try and arrive at what they consider to be the best investment of dollars, and then they would have to convince the federal partner to cost-share it.

Mr. Doer: Has the Premier had any discussions with the Manitoba lead minister on the findings in the Water Commission report, the subcommittee report, and both its impact of doing nothing and the cost of doing something? Has the Premier had any direct discussions with Lloyd Axworthy on this matter or Mr. Duhamel? Are they aware or concerned about this, or are the costs so high, they do not want to discuss it?

It seems to me that there is more of a public sense of urgency based on the people's views of what happened and experiences of what happened in 1997. I agree we should know what the risk is and the analysis is and the cost-benefit, but it seems to me the longer we wait, the more we can be lulled into a sense of false security about something that is pretty serious to hundreds of thousands of people.

Mr. Filmon: I do not think we would attempt to lull anybody into a sense of security. I believe that we think that more must be done. It is a question of what extent we should carry this, but we have been trying to convince the federal government one piece at a time to do more and more floodproofing to give greater and greater security and protection. I am not sure that there is a consensus on the big-ticket item of essentially in some way massively increasing the capacity of the floodway. Until we have that position ourselves, I guess it would be difficult to persuade the federal partner to go forward with it.

The Minister responsible for Natural Resources (Mr. Cummings) has talked with his federal counterparts, both Mr. Duhamel and Mr. Axworthy, at various times about continuing the process, but I think it is fair to say that the big-ticket item has not been seriously put on the agenda as the best route to go at this point. I think that more studies need to be done on it.

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Mr. Doer: I am not sure. The Department of Natural Resources is reviewing the report on the flood commission report. Will they be reporting, given the fact that this is a concern of all of us? Obviously, during the flood of '97, we had a lot of disagreement about some of the announcements being made after the flood for victims of the flood, but there was a lot of consensus in this Chamber on co-operating to prevent the flood. Votes were cancelled. People were out, whether it was the member for St. Norbert (Mr. Laurendeau) or the member for St. Johns (Mr. Macintosh)–well, people were out continuously working with their community, working with their neighbours and working with officials to try to deal with this crisis.

When will the Department of Natural Resources be completing its analysis, and will it be shared with all members of this Legislature, so that we will all have a common understanding of their analysis, their technical analysis, their technical reports, provided for the flood commission whose report was tabled in this Legislature?

Mr. Filmon: Various pieces of their analysis are being completed and taken into the discussions with the federal government for future action and financial commitments. So there is not one big sort of study ongoing, but there are a whole series of steps along the way of various pieces.

I would think that there would be no reason why we would not want to be public about our position on the issue. I would think that during the Estimates process the Minister of Natural Resources (Mr. Cummings) could probably give the member for Concordia (Mr. Doer) more information as to the status of any of the analysis.

Mr. Doer: I noted the Minister responsible for Western Diversification made a statement the other day, quote: that the process to access flood protection was bureaucratic. Whose bureaucracy was he speaking of? His own or ours?

Mr. Filmon: It must have been his. It certainly is not ours. We have a pretty good handle on it and we have been able to–there are, for instance, in the settlement, all sorts of issues that flow out of the flood event. We got down to really having something like 25 to 30 files that did not qualify under the normal rules, and there were choices to be made about reconstruction, mould involvement, all sorts of things.

We created a category called anomalies. We simply approached the feds to say: technically, these do not come under your DFA, so let us find a way to deal with them. I think we have dealt with them more on a cost-shared basis 50-50, as opposed to the 90-10, because we believed that they were legitimate cases that we had to find a solution for. So we are very flexible. I think he must have been speaking about his own bureaucracy.

Mr. Doer: Has any minister contacted the federal minister after his statements to try to find out? I mean to have a federal minister criticize a bureaucracy when we have not settled the 1996 flood yet, I thought was a little strange and not helpful. I notice the leader here, the provincial leader here, was also part of that apparent meeting. Did anything come out of it, what bureaucracy they are going to streamline, and where and when and how?

Mr. Filmon: The Minister of Natural Resources (Mr. Cummings) has never been shy about challenging the federal government if they have misspoken or misrepresented issues. It may not have been the federal minister that said that. It may have been Mr. Iftody and he has been unfortunately known to misrepresent where things are at and who is responsible for what and who is doing and who is not doing things. I must say that he has caused a great deal of consternation, I think, for his own bureaucracy as well as for our people trying to work on issues when we have put our position forward. We have passed things through our Treasury Board and Cabinet process and are waiting for a federal decision, and he makes statements to the effect that we are stalling or we are holding it up and things of this nature. So he appears to, from time to time, say things that just simply are not accurate. That may be what the member is talking about.

There was an issue that came up about something being forestalled. It was the environmental assessment and review process, that is what the discussion was. Well, it was all federal issues. It was about the freshwater fisheries regulations and all of those which were totally federal. It was not provincial at all. So I can tell you that we were surprised to hear about this, but certainly it is the federal side that is stalling on that environmental assessment on the floodproofing.

Mr. Doer: So, if the federal government is stalling on the environmental side on the floodproofing, what communities are affected? Is Ste. Agathe affected? Is Ritchot affected? Grande Pointe? What communities would be impacted by this delay?

Mr. Filmon: We do not have the list. The Minister of Natural Resources certainly would have the list, and if the member wants to raise that in Question Period tomorrow, we will perhaps have him briefed and ready to go on it.

Mr. Doer: I will just brief you on all my questions for the next while, I am sure, or maybe not. But I thank the Premier for that offer, I appreciate it.

The matter of Devils Lake, we have asked questions here. We have offered the all-party committee. We have suggested communities be involved. Can the Premier advise us where those discussions are going and what is the capital expenditure for this year and what is its potential impact on Manitoba?

Mr. Filmon: I understand that there are still studies ongoing as to what is the proper solution to the Devils Lake problem. That funding has been approved by Congress not only for studies but for the development of the project. It is subject to their not being transboundary water transfers and to IJC approval, so it has strings tied to it that at the moment provide some comfort for us.

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Devils Lake continues to increase. The member may know the history that initially Devils Lake was in danger back a couple of decades ago of drying up, so all sorts of farm drainage was diverted into Devils Lake to give it source of inflow, but it has no source of outflow. So all that drainage work over a period of a lengthy dry cycle, and I think we are in the tenth year of the dry cycle now, has resulted in it being 25 and 30 feet above the datum that it was sometime ago. According to the governor, whom I spoke to a few weeks ago in Drumheller, it is now naturally overflowing into Stump Lake, which was predicted, but it still is not overflowing into any drainage channel that will take it into the Red River Valley basin.

We have said on the record and directly to Governor Schafer and his representatives that we are unalterably opposed to any transference of water from the Missouri River basin to the Red River Watershed. We will use every means available to us to oppose it, including IJC and any other mechanism that is required. His position is that if something is not done, obviously, that nature will take its course, that it is possible, but we are given to understand that it would take quite a number of years before natural circumstances cause that to happen, and in all likelihood we are entering into a dry cycle sometime in the near future that would perhaps forestall the problem for another cycle. That may be a seven to 10 years away kind of thing.

We have people assigned to the file who are in regular contact on it. Certainly, the Canadian Consulate in Minneapolis has been our contact point and have had representatives attending any meetings to do with it in the States and have kept us apprised of all the various different steps that take place either in Congress, Senate or at the local level.

Mr. Doer: Is there any court action contemplated by the province at this point?

Mr. Filmon: Well, we certainly would not rule out court action, but there is no action taking place that would result in court action, so if somehow approvals took place to actually develop a project that violated our principles on the matter and did have the potential to transfer water interbasin, then we would take any action at our disposal, including court action.

Mr. Doer: Does the Premier know what authority the U.S. Corps of Engineers has in this regard? We received bulletins last year, which we raised as a concern to the Premier, about what authorities and what expenditures have been provided to the U.S. Corps of Engineers. In the budget before Congress now are there any additional funds to this project to the Corps of Engineers, and are there any strings attached to that?

Mr. Filmon: Essentially, the U.S. Corps of Engineers operate as a design and development arm for large-scale water projects in the United States. They have received small appropriations to do continued design work on potential solutions to the Devils Lake project. These are the matters that I said the funds were allocated subject to the conditions that they had to meet, which included IJC approval. The other thing to be aware of is that there are some very major opponents to this in the United States, notably the National Audubon Society and the Sierra Club who, if any action began on any particular development that resulted in an interbasin transfer, would be in court quicker than we would on the issue.

Mr. Doer: As I understand it, the National Audubon Society and the Sierra Club, the local chapters in Minneapolis, are also keeping their national offices appraised of the situation. Is there contact with our government, our people, to their people in Minneapolis, or do we do it through Washington, and how is that working right now?

Mr. Filmon: Our contact to them would be maintained through the consulate, as well as through the embassy in Washington, but our officials end up being at some of the same meetings as their officials are, and so they maintain a dialogue and exchange of information.

Mr. Doer: So there is notwithstanding the subject to provisions–are there any new funds in the appropriations for the U.S. Corps of Engineers for this project in the '99-2000 budget?

Mr. Filmon: Apparently their fiscal year runs July to July, so the money that had been allocated is what we just were talking about, which was small amounts because the North Dakota congressional delegation continues to press that issue and continues to try and vote small sums on to various money bills to continue to fund the design costs for the Corps of Engineers. They have been successful in getting small amounts with all of the conditions attached that we talked about.

Mr. Doer: So July '99 to July 2000, in the congressional budget, there has been some money allocated to the U.S. Corps of Engineers, subject to the conditions the Premier indicated. Do we know how much that is?

Mr. Filmon: We do not have that file with us, Mr. Chairman, but we will try and get it for the member and see because some is allocated to studies and others have strings attached that it cannot be touched, so it seems as though it has limits to it. At the same time I think we have to recognize that we have people out there who are continuously monitoring and are vigilant, and we do send people to any meetings that can report to us from these sources, though we will give him the actual status of what money has been allocated and how much of it can be attached.

Mr. Doer: As a former volunteer involved in the community efforts in Garrison, besides our responsibilities in the Chamber, I am very interested in it. Anything you can provide, obviously all matters we raise we are interested in, but some are longer-term issues for all of us.

I am not sure what the House leaders have arranged for us. I understand you are busy tomorrow. We need a time mutually agreeable, I suppose, through the House leaders. I do not have a long time to go. I am not sure about the member for Inkster. [interjection] An hour, hour and a half? Oh, okay. I have some other stuff.

Mr. Filmon: I will double-check my schedule. Tomorrow is time that I will be away from the House, but I assume that we can pick several days in a row next week to complete whatever discussions we have.

Mr. Chairperson: The hour being six o'clock, committee rise. Call in the Speaker.

Mr. Deputy Speaker (Marcel Laurendeau): The hour being six o'clock, this House is now adjourned and stands adjourned till tomorrow (Thursday) at 10 a.m.