COMMITTEE OF SUPPLY

(Concurrent Sections)

RURAL DEVELOPMENT

Mr. Deputy Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order this afternoon. This section of the Committee of Supply, meeting in Room 254, will resume consideration of the Estimates of the Department of Rural Development.

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When the committee last sat, it had been considering item 4.(d)(1) on page 130 of the Estimates book. This is on page 52 of the yellow book. Shall the item pass?

Mr. Clif Evans (Interlake): Mr. Chairperson, it states in Activity Identification that in '93-94 the government recovered the applicable grant-in-lieu costs from respective government departments. Could he explain just how that works?

Hon. Leonard Derkach (Minister of Rural Development): Mr. Chairperson, what has happened is that we now charge. The various departments have responsibilities for various properties for their portion of the grants-in-lieu, so the Department of Rural Development pays it up front and then recovers it from other departments.

Mr. Clif Evans: So, then, as the minister is saying, they administer and put the funds out. Is there a time element involved in receiving the monies back? Is there a time where the other departments have to come back to your department with the finances?

Mr. Derkach: There is no time element put on the time of recovery as long as it is done before the end of the fiscal year.

Mr. Clif Evans: Mr. Chairperson, these grants are paid out at the beginning of each fiscal year to the municipalities, or over the period of time?

Mr. Derkach: It is the same as taxes; it has to be paid before the end of October, I believe.

Mr. Deputy Chairperson: Item 4.(d) Grants to Municipalities in Lieu of Taxes (1) Grants $37,836,800--pass; 4.(d)(2) Less: Recoverable from other appropriations.

Mr. Clif Evans: Mr. Chairperson, the subtotal (d) on that figure of $201,000 is a surplus from--

Mr. Derkach: No, that is not a surplus. That is what the Department of Rural Development's share is for grants.

Mr. Deputy Chairperson: Item 4.(d)(2) Less: Recoverable from other appropriations $37,635,500--pass.

4.(e) Information Systems (1) Salaries and Employee Benefits $680,200--pass; (2) Other Expenditures $1,678,200.

Mr. Clif Evans: Mr. Chair, can the minister explain that line as far as what the other expenditures are?

Mr. Derkach: The largest portion of that is for what we refer to as the MACS system which is the computer system for our taxation notices and assessment. Basically, that is the largest portion of that other operating aspect.

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Mr. Deputy Chairperson: Item 4.(e)(2) Other Expenditures $1,678,200--pass.

Resolution 13.4: RESOLVED that there be granted to Her Majesty a sum not exceeding $12,808,600 for Rural Development, Local Government Services, for the fiscal year ending the 31st day of March 1996.

Item 5. Rural Economic Development (a) Executive Administration (1) Salaries and Employee Benefits $100,500--pass; (2) Other Expenditures $30,700.

Mr. Clif Evans: Mr. Chair, could the minister give us a little brief detail besides what it says in the Supplementary as to how this part of the department works with the municipalities as their mandate to assist them with the programs that are listed here?

Mr. Derkach: The economic development arm of our department works not only with municipalities but also works with individual businesses. It works with organizations in communities. It works with our regional development corporations. It also works with agencies such as the federal agencies to try and stimulate economic growth in rural Manitoba.

The programs that we deliver through our various offices from this branch include all the economic development programs such as Grow Bonds, REDI and those kinds of programs, the REA program and so forth. We simply have officers throughout the province who interact with a variety of organizations and individual businesses throughout the province in terms of delivery of these programs.

Mr. Clif Evans: That includes all the municipalities. Does that also include businesses and/or jurisdictions on reserves?

Mr. Derkach: No. Reserves are a federal jurisdiction. We do not work on reserves because the bands and the reserves have programs that come from the federal government that they work with.

Mr. Clif Evans: This branch is part of the whole scheme. The minister indicated earlier that they were available in all ways, whether it be small businesses or individual businesses or individuals themselves or municipalities, jurisdictions, whatever. Is the minister, is the department getting many applications for the different projects through this branch? Besides Grow Bonds, besides the REDI program, are there any other applications for funding or assistance through this branch?

Mr. Derkach: There are many applications that come in for a variety of programs, Grow Bonds and REDI being two of the larger programs on the economic development side. There are also applications that come in for conservation districts, our handivan program, our Manitoba Water Services Board, planning activities around communities. There is assistance from the department to communities in all of those areas as well.

Besides that, Mr. Chairperson, we also have the REA program which the member is aware of that is operating in the province currently in conjunction with the various credit unions and I think one banking institution. Also, as the member knows, there was an introduction of a program through the election campaign called the community works program that we will be working on for the fall. To complete that list, we also participate in supporting Junior Achievement. We also participate in the MBA consulting program that is offered in conjunction with the University of Manitoba. We provide The Green Team program, and we also participate in the Partners with Youth program.

Mr. Clif Evans: Under Activity Identification, it says: Provides the municipalities and water co-operatives technical and financial assistance for water and sewer infrastructure.

Does the department have a list, or can the minister indicate just how many municipalities or water co-operatives have applied to the department?

Mr. Derkach: No, Mr. Chair, I do not have a list of the applications that have come before the department. We can certainly provide that for the member because there are just pages of names of municipalities and organizations that have applied for funding under our Water Development program and under our Water and Sewer Program, all of the programs, for that matter. But, if the member can be more specific with respect to what lists he is looking for, we can certainly provide that for him.

Mr. Clif Evans: Can the minister tell me whether the community of Riverton has applied for any assistance under this part of the program, under water and sewer infrastructure?

Mr. Derkach: I cannot tell you that at the present moment, but I have staff here who might be able to help me.

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Yes, Mr. Chairperson, the community of Riverton has applied for a project under the Water and Sewer Program.

Mr. Clif Evans: I apologize to the minister. I did not--

Mr. Derkach: Yes, the answer is yes.

Mr. Clif Evans: They have applied?

Mr. Derkach: Yes.

Mr. Clif Evans: Can the minister tell me what stage--my understanding is that they have approached not only this minister but some of the other ministers for some downtown revitalization programs, highway program or road program and also through the Rural Development department.

Is it still ongoing to the point that we can see light at the end of the tunnel with this?

Mr. Derkach: I am not understanding the member's question. When you say light at the end of the tunnel, I do not understand what you mean with regard to which program. You have listed several.

Mr. Clif Evans: I asked the minister about under the water and sewer infrastructure program that the community of Riverton had applied. He says they have applied. What stage is it in? When can we see some response? Is there an ongoing collaboration with the community on that?

Mr. Derkach: Well, Mr. Chairperson, we do work with the community almost on a constant basis through our economic development officers and through the other department branches that we have in the department.

I cannot give the member the status on each and every one of the requests and applications that have come forward from Riverton. I would certainly be prepared to sit down with him and go through each of the applications that have been submitted by the community of Riverton and give him an update on the progress, if there is any, on each of those applications and requests from the community.

Mr. Clif Evans: Mr. Chairperson, was this part of the program part of the infrastructure in Arborg? Is this where finances and assistance came for the new sewer and water system for the community of Arborg? Did it come from here?

Mr. Derkach: The community of Riverton did apply for infrastructure assistance. I believe they did receive assistance through the infrastructure program, but if the member is looking for the details of what they received and how much, I would suggest that be better addressed in the Estimates of the Minister of Finance (Mr. Stefanson) who has the responsibility for the infrastructure program.

Mr. Clif Evans: Well, there is the Canada-Manitoba Partnership Agreement on Municipal Water Infrastructure within this department. Then what does this have to do in relation to any other infrastructure?

Mr. Derkach: Mr. Chairperson, the Canada-Manitoba infrastructure program between the federal government, the provincial government and the municipalities is one which is co-ordinated through the Department of Finance. The Minister of Finance has the lead role.

This department participates, through myself, at the ministerial level on an infrastructure committee. We also have a technical committee that is made up of staff. If the member has questions with regard to the infrastructure projects, I suggest they would be better posed to the Minister of Finance who has that responsibility and mandate for that program.

We have an agreement through Rural Development which was called formerly the southern development agreement or PAMWI, as it is known now, which addressed specific infrastructure needs in specific communities, but that is separate and apart from the Canada-Manitoba infrastructure program.

Mr. Clif Evans: So then the PAMWI program was involved in the assistance as a partner in the Arborg community's work that was announced and done or beginning to be done? Is that under PAMWI?

Mr. Derkach: Mr. Chairperson, the community of Arborg was one of those 13 communities that was added to the PAMWI agreement. When the community of Dauphin did not participate in the PAMWI agreement there were some monies that were--a surplus if you like. So the technical committee then advised that we could add some communities to the program. Arborg was one of those communities that was added to the program.

Mr. Deputy Chairperson: Item 5.(a)(2) Other Expenditures $30,700--pass.

5.(b) Infrastructure Services (1) Salaries and Employee Benefits $1,281,000--pass; (2) Other Expenditures $328,200--pass.

5.(c) Community Economic Development Services (1) Salaries and Employee Benefits $2,601,400--pass; (2) Other Expenditures $776,000--pass; (3) Grants $545,000.

Mr. Clif Evans: I can appreciate the fact that staff is needed. If I can just point out $2,600,000--$1,280,000 in Salaries and Employee Benefits in that department plus Executive Administration. Through the Infrastructure Services and the Community Economic Development Services we are looking at $4 million in salaries.

Mr. Derkach: Mr. Chair, in terms of salaries and other expenditures the sum is $3,922,000 for this fiscal year. This does relate to our field delivery staff throughout the province, both on the economic development side and the planning side, I do believe.

Mr. Deputy Chairperson: Item 5.(c)(3) $545,000--pass.

Resolution 13.5: RESOLVED that there be granted to Her Majesty a sum not exceeding $5,662,800 for Rural Development, Rural Economic Development Services, for the fiscal year ending the 31st day of March 1996.

Item 6. Expenditures Related to Capital (a) Transit Bus Purchases $144,000.

Mr. Clif Evans: Mr. Chairperson, can I ask the minister just to explain itemized 1. at the bottom of the page? Just explain that.

Mr. Derkach: Under the Canada-Manitoba Partnership Agreement on Municipal Water Infrastructure there is $3,700,000 included under the Lotteries Funded Appropriations and $825,000 under the Canada-Manitoba Enabling Vote. What this does is it allows for some flexibility for us to be able to transfer some dollars if they are required for work under that agreement from the Enabling Vote.

Mr. Deputy Chairperson: 6.(a) $144,000--pass.

6.(b) Water Development $944,100.

Mr. Clif Evans: What type of expenditure or what type of programs do we see under this line?

Mr. Derkach: This is to help municipalities, our agriculture producers including our Hutterite colonies, to develop water sources in an efficient way and to develop wells in rural communities that might be required for truck hauling or for domestic purposes where there are water shortages. There are areas in this province where we have some severe shortages of good potable water and this department along with the PFRA and the communities and municipalities work co-operatively to try and secure water supplies for those communities where there are severe shortages. This program, which is not a large one, goes a long way to helping communities to achieve some of those objectives.

Mr. Deputy Chairperson: 6.(b) Water Development $944,100--pass.

6.(c) Sewer and Water $4,000,000.

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Mr. Clif Evans: Mr. Chair, I am rather pleased to see an increase in that line. Hopefully this will mean that there is more assistance available for communities that are obviously lacking good sewer and water or in need of expanding their sewer and water within their communities. I would certainly appreciate it--and I will get back to the minister or to his staff just to see where some of my communities would fit into this and, hopefully, support their applications of such and make them well aware of this availability of funds for assistance.

I think there are quite a few communities not only in my constituency but in northern communities and other areas that would provide the upgrading and use infrastructure for that, so I am pleased to see that line have an increase in it.

Mr. Derkach: Mr. Chairperson, this is a doubling of the program as the member can see. This extra money is coming out of the Lotteries pool, and again, we looked at what the needs were out in our rural communities. They far surpassed what we can afford in any one year, but this does give us a fair amount of increased ability to meet the needs of some of the communities. Again, this will not resolve all the difficulties and issues that are out there, but at least it gives us some ability to address some of those critical needs.

Mr. Deputy Chairperson: Item 6.(c) Sewer and Water $4,000,000--pass.

6.(d) Canada-Manitoba Partnership Agreement on Municipal Water Infrastructure $3,300,000.

Mr. Clif Evans: Perhaps an explanation on the No. 2 item. At the bottom of the page, on that line for $3,300,000.

Mr. Derkach: It is not unlike the other explanation, Mr. Chair, where part of the money for the program is in the Enabling Vote which allows some flexibility for us to transfer monies for works that are required throughout the year.

Mr. Deputy Chairperson: Item 6.(d) $3,300,000--pass.

6.(e) Conservation Districts $2,197,800.

Mr. Clif Evans: I think the minister indicated earlier in his opening remarks or in one of the other times that we were discussing this issue of water, the conservation districts, does the department have a plan in place to support the further development of conservation districts, or are they specifically staying with this amount of money or the increased amount of money with the ones that are there? How is the minister's department doing that?

Mr. Derkach: We certainly are looking forward to expanding the conservation districts throughout the province. I think conservation districts have done an admirable job in addressing some of the conservation and sustainable development needs in the areas that they operate. We are encouraging other communities to come together in groups of municipalities and watershed areas to form conservation districts. We are working now with, I can tell the member, at least two regions in the province who are looking at the feasibility of organizing conservation districts in their regions.

We expanded one conservation district last year, and I believe that was the Turtle Mountain conservation district. Then we added a new conservation district and that was the West Souris conservation district. So, yes, we are promoting the establishment of conservation districts. Again, we cannot do it in one year, but in time I think we have an ability to address some of the sustainable development needs that are out there through our establishment of conservation districts. It also allows for participation by municipalities in a financial way. It provides for the participation of individual grain producers and farmers who can participate, and also we can draw money from other agencies and other levels of government as well.

Mr. Deputy Chairperson: 6.(e) Conservation Districts $2,197,800.

Ms. Rosann Wowchuk (Swan River): The minister was talking about conservation districts and expanding the different municipalities. I recall a time when there were efforts being made to form a conservation district in the Swan River area, and I wonder whether there has been any progress on that or whether the department is working with the R.M. of Swan River. I guess it would involve the LGD of Mountain and the R.M. of Minitonas to develop a conservation district.

Mr. Derkach: To the member for Swan River, we have had some preliminary discussions with the communities in the Swan River area, but I have to underline that the communities and the municipalities have to come forward and show their willingness to participate financially in an organizational sense. That has not happened in that region of the province yet, but we are certainly most eager to continue working with those communities towards the establishment of a conservation district which would involve more than just one municipality.

As the member points out, it would involve the LGD of Mountain, the R.M. of Swan River and Minitonas and it could probably involve others depending on the watershed areas. So it is a consideration in the region, and we are hoping that the municipalities there will see the wisdom of creating a conservation district and will come forward with a plan.

Ms. Wowchuk: I guess what I am looking for, is the department taking a leadership role to promote or encourage the development of conservation districts?

Mr. Derkach: Mr. Chair, the way we encourage and try to become an active facilitator of the process, if you like, is through our participation at UMM meetings. For example, where the conservation district association would make a presentation, staff from our department would be more than willing to meet with municipalities who display some interest in establishing a conservation district. This has happened over the course of the last year. So are we providing a leadership role? I think, yes, in a very direct sense we are because we are making sure that people are aware of what conservation districts do, what their benefits are. Conservation districts do have field days as well where they invite others to participate, and I would encourage the members of the opposition when they do have their field days to participate because they are very educational.

The other way the department participates is, of course, financially. We make sure that all municipalities are aware of how we as a government and as a department financially support conservation districts.

Ms. Wowchuk: I wonder if the minister can explain when a conservation district is being formed, and again I will look at the example of my constituency, and there are lands surrounding the municipalities that are bands living in those areas--when water is being managed sometimes there are consequences outside the area. So when these conservation districts are being formed, is there any communication with the bands or with the treaty land entitlement areas or bands in the area for their involvement? Whose responsibility would that be to draw them in? Would that be the department's responsibility or would it be the municipalities' responsibility to draw them in?

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I am asking this specifically because I am thinking again back to the time when we were looking at forming a conservation district in the Swan River area. I was involved with the municipalities at that time and we ran into some problems with people not agreeing with it. Part of it was where things were going to end up. So is there any avenue to involve these people who are on the outside of the area, or can they be included in the conservation district?

Mr. Derkach: Mr. Chairperson, the avenue for, I guess, communicating and dealing with bands is through the federal government, of course, and when a conservation district is being formed in an area where there is a reserve that borders a particular watershed or is within the watershed, then we would certainly be discussing that with the federal government. As the member knows, bands are the responsibility of the federal government and so therefore we cannot extend to them funding for conservation districts as we do to municipalities.

Ms. Wowchuk: Would this be an avenue to access money? If the bands were involved in the conservation district, would this be an avenue to access federal funding to improve the amount of money the conservation district had to work on?

Mr. Derkach: Most certainly, Mr. Chair. If the federal government chose to participate through the Indian band in a conservation district then of course they would have to contribute their share toward the conservation district as well, so yes, it is a possibility, and we would certainly welcome and encourage that kind of participation.

Ms. Wowchuk: I wanted to continue on this a bit. Is the department aware of any incidences where this has happened, where bands have been involved in conservation districts and I guess if there have, what kind of funding formulas would we--is there any experience in this area?

Mr. Derkach: Mr. Chair, there are no examples of where Indian bands participate in a conservation district. Our funding to municipalities is on a 75-25 percent basis, but because Indian bands are the responsibility of the federal government, then they would have to make up 100 percent of their share.

Ms. Wowchuk: There is a question that I want to ask on the line that you passed already, just one line back. Is that possible to go back to or are we passed it?

Mr. Derkach: I will judge the question, and then I will answer.

Ms. Wowchuk: It is to do with the partnership agreements and municipal water. I thank the minister for allowing me to go back. I was not in the room.

Mr. Deputy Chairperson: Is it the will of the committee to allow the member for Swan River to go back to a previous line and ask the question?

An Honourable Member: Leave.

Mr. Deputy Chairperson: There is leave.

Ms. Wowchuk: I thank the committee for allowing me leave to go back to an issue that is quite important to me. It is to do with water and sewer in one of the communities that is trying to get sewer service, the community of Birch River. I want to know at what stage that is and whether the department is doing any work with the community of Birch River. I know that they got infrastructure money for the lagoon, but they need money for the sewage for the mines. I wonder whether any work has been done on that.

Mr. Derkach: Mr. Chairperson, I will answer this one question on this line. Yes, there was some money accessed by Birch River through the infrastructure program. We are also participating as a department, but one of the difficulties we are having right now is locating a site for the lagoon. Once that has been overcome, I would think that we are ready to go.

Ms. Wowchuk: They got money through the infrastructure program for the lagoon, but they had applied for a lot more money and that was to put in a sewer system. They did not get that approval through the program. Is there any work being done with the department right now to try to find additional money or to find some way that we get sewer service into Birch River?--because it is a very serious problem. They have self-contained wells and with the number of septic tanks that are in the community, there is going to end up being problems with contaminated wells if that issue is not addressed. I am looking to see what further can be done to help the people in that community have a safe water supply.

Mr. Derkach: This is a very generous department, Mr. Chairperson. They received money from the infrastructure program for their lagoon. The department is going to help the community with some technical assistance for their sewer hookup and the development of their lagoon. However, the community itself has to be responsible for some of the cost and at the present time they cannot afford their portion of the water system. So there is now going to be an opportunity in the near future to develop that part of it, but down the road as they pay off some of their debt, they will certainly be able to afford the water system.

Ms. Wowchuk: In a situation where the water supplied becomes at risk because of the number of septic tanks there are in the area, are there other ways if it becomes an emergency that the department could access money? Is there money through the REDI fund or are their other places where funds would be available to ensure there was a safe water supply for that community?

Mr. Derkach: Mr. Chairperson, this is not a unique problem to Birch River alone. We have many communities, many tiny communities that are facing the same kind of situation and problem. To address the problem, the sewer and the lagoon being installed in the community will certainly reduce the amount of pollution that would be going into the aquifer which will make their water source a better one than it is right now, but we have increased our water and sewer program, as the member knows, substantially, There are so many needs out there that we simply cannot address every single need that is out there.

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I have to also emphasize that the government cannot be doing everything for a community. They have to have some ability to pay for some of the infrastructure on their own. I think the split is a fair one and I think if they are addressing this in phases by doing a sewer system first, it will reduce the pollution and they will be able to do a water system down the road.

Ms. Wowchuk: The government, a couple of years ago, announced a sewer and water program for southern Manitoba. Is that program available to the community of Birch River? How far does that extend and what is the coverage assistance under that program?

Mr. Derkach: Mr. Chairperson, that is the PAMWI program the member refers to. As the member knows, it was a $90-million program. There was a community, Dauphin specifically, that decided not to participate in the program although it was identified for some major work for their water, but the community decided not to participate. That allowed an additional 13 communities to come in with smaller projects.

As the member also knows, the federal government has now cut back that program by $10 million, which means that a significant number of the projects that were identified in that last round will not be able to complete their projects because of the cutbacks from the federal government. We have indicated from Day One that we would be prepared to live up to our share of the agreement to 100 percent of what was agreed to; however, because of the federal reduction in money, it is not going to be possible to complete some of the projects that were identified.

So, at the present time, there is not any money in the PAMWI agreement that is available for communities of this nature, and Birch River is one among many. We have communities right now where water is being hauled in by truck. We have other communities where the sewage is coming up to the surface because of the old fields. It is not unlike our community in Headingley, for example, that does not have a water system in the community yet. So there are many communities in rural Manitoba which have fairly serious needs in terms of water development and sewer development in their communities.

Mr. Deputy Chairperson: 6.(e) $2,197,800--pass; (f) Downtown Revitalization $433,000.

Mr. Clif Evans: Can the minister indicate under this line just what communities besides Brandon are involved with the Downtown Revitalization program?

Mr. Derkach: The two communities involved in this program at the present time are Brandon and Thompson.

Mr. Clif Evans: Have there been any other applications from any other communities under this program, or is this program specifically for larger centres?

Mr. Derkach: Under this program there were three communities that were identified: Brandon, Thompson and Selkirk. At the present time, Selkirk has not come forward with their plan for downtown revitalization.

Mr. Clif Evans: Is this available then to any community in the province?

Mr. Derkach: No, Mr. Chairperson, this program was designated to three communities which were not part of the old downtown Main Street Manitoba Program or revitalization program in the beginning.

Mr. Clif Evans: Will the minister's department then be available to, I guess, negotiate with other communities if they so wish to apply for a Downtown Revitalization program, whether it be through REDI or through any other portion of assistance or funding in this program? I believe that there are probably many communities throughout Manitoba that would want to look at revitalization in their own communities. Is there anything available for that?

Mr. Derkach: No, Mr. Chairperson, there is no program available at the present time for other communities in the province to come in for a revitalization or Main Street program, and we do not have any other avenues that money could be accessed from this department for that kind of a program.

Mr. Deputy Chairperson: 6.(f) Downtown Revitalization $433,000--pass; (g) Less: Recoverable from Rural Economic Development Initiatives $2,200,000--pass.

Resolution 13.6: RESOLVED that there be granted to Her Majesty a sum not exceeding $8,818,900 for Rural Development Expenditures Related to Capital for the fiscal year ending the 31st day of March, 1996.

7.(a) Grow Bonds Program (1) Salaries and Employee Benefits $358,500--pass; (2) Other Expenditures $1,216,500--

An Honourable Member: Slow down. Are you in a hurry?

Mr. Deputy Chairperson: All the members have to do is put up their hand.

Mr. Clif Evans: Mr. Chair, 13.7(a)(2), the minister in his opening remarks indicated that the Grow Bond initiative has provided means for many communities already in the province for, you know, allowing them to invest in their own community-based industries. Is the minister aware of any problems in the Grow Bond program. Has there been any problems since the Grow Bond initiative has been developed?

Mr. Derkach: No, there are no problems in the Grow Bond program itself. I do not know what the member means by problems in the Grow Bond program. Perhaps he should explain.

Mr. Clif Evans: If a community or an area wanted to invest in a specific project within their communities through the Grow Bonds, has there been any problems as far as the Grow Bonds being raised, the issue of being raised, and what problems, if there are?

Mr. Derkach: No, Mr. Chairperson, there has been no problem in raising the Grow Bond money. As a matter of fact, I think in almost every instant the amount of money that has been required to be raised has been raised in record time and usually the Grow Bonds have been oversubscribed.

Mr. Clif Evans: Have there been any communities turned down at all with Grow Bond initiatives?

Mr. Derkach: Yes, Mr. Chair. If a project does not meet the criteria or if in fact the equity that the proponent is to have in place is not there or if there are other issues as they relate to the bond which are outside the criteria that has been established for the Grow Bond program, then those certainly do not proceed.

Mr. Clif Evans: Can the minister indicate what role he would play when it comes to the approving of the Grow Bonds issues as they come?

Mr. Derkach: Mr. Chair, the process is that we have staff in the department who work in conjunction with a review committee. Once the project has been vetted through the staff in the department and the manager, who is Mr. Paul Sweatman, the bond moves on to the review panel. The review panel does a fairly in-depth job at making sure that the project not only meet the criteria but is financially sound, to the best of their ability to analyze. Staff from Rural Development participate at the review level. The project then moves on to the Economic Development Board, who also have to scrutinize the project and will give their approval for it. At that time, the minister will issue a letter advising the proponent that his or her project is either approved or declined.

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Mr. Clif Evans: Understanding the program, if something should go wrong, of course, it is insured or protected by the government.

Mr. Derkach: That is right.

Mr. Clif Evans: If then one of these issues or projects does not

continue or fails, how does the department redistribute the monies that were put into the Grow Bond issue?

Mr. Derkach: Mr. Chair, if a Grow Bond fails, then the investors of the Grow Bond will have their money returned to them, but the government guarantees the principal of the money. Any interest that they may have lost as a result of investing in the enterprise will be deemed to be lost, and the only part they can recoup is the principal of the money. That is what the government guarantees.

Mr. Clif Evans: Is the minister aware of any Grow Bond issue or investments that have already been approved, and is he aware of any that are not operating in full capacity for the operation that the Grow Bond issue was put in for?

Mr. Derkach: Mr. Chair, there are Grow Bond projects in the province that are at various stages of development. Some of them are up and running, others are still putting together their plants. You know, there are a variety of stages of development of these projects that have been approved over the last year. There is a period of time when the project has to get its finances in order and then the Grow Bond money is released to it, and then the plant operation will begin and build up to full capacity over a period of time that has been agreed to by the bond development corporation and the proponent.

Every community has a Grow Bond corporation as well.

Mr. Clif Evans: So how long a period of time does any issue have to go or to be at full capacity or whatever? What is the criteria? How long of a criteria is the minister giving the Grow Bond issue to go ahead?

Mr. Derkach: It varies, Mr. Chair, with each project. Sometimes projects encounter some challenges that were not seen at the time they started their project, whether it is a delay in getting equipment or whether it is a delay in getting the equity raised for the plant. There are a variety of situations, and in each situation staff are there to work with the proponent to make sure they get up and running and producing as quickly as possible.

There is not a sunset in terms of when a plant has to start operating once the Grow Bond is sold, but there is a time frame in the agreement when they have to start paying the interest or the dividends on the bonds. So the sooner they get operating, the sooner they can earn revenue to pay that interest.

Mr. Clif Evans: Mr. Chair, I am pleased and was pleased to know and find out and the issue, of course, was presented with Gilbert International in Arborg. Actually the funds were raised rather very quickly on the community's behalf. There are, I believe, some problems with the operation since the issue has been granted and everything else. Is the minister aware of Gilbert's?

Mr. Derkach: That is a project--when the member asked about problems in Grow Bonds, maybe he was referring to the project. I am not sure, but, yes, this project has had some difficulty. We are confident that in the restructuring of the company and some of the potential contracts that are now coming forward, this company in fact will be in production in the next short while, and I can tell the member that it is one that I think has a lot of future for the company and for the community of Arborg.

Mr. Clif Evans: Yes, and I thank the minister for those comments because it is very important. We certainly do not want to see any problems with Gilbert International operating at a full scale, because it is going to create employment and economic development. I am questioning because I would like to know whether there are any restrictions right now or any kind of a push on the company itself to get up--any pressure is what I am asking, because of the whole situation.

Mr. Derkach: Mr. Chair, there is no pressure per se, except to say that staff from my department are working with the proponent, the community and all involved, and other potential investors in the company who have come forward to restructure the agreement, to make sure that plant is in fact in operation as soon as possible.

Mr. Clif Evans: I thank the minister for that; I hope that with Gilbert International and this particular program, I keep in touch with the minister's office, if I may, to work with his department and his staff on this, and certainly with Gilbert International. I hope to be also in touch with them myself to encourage them and the community to get this project going and at full scale as soon as possible.

Mr. Derkach: The member can be assured that I will certainly keep him apprised of the progress that is being made with Gilbert International, and he can certainly visit in my office at any time to get an update of how we are progressing with the company.

Mr. Mervin Tweed (Turtle Mountain): I just wondered, Mr. Chairperson, if you had any numbers available on the amount of employment that it has created with your Grow Bonds and what kind of an investment dollar you have received up to this point.

Mr. Derkach: Yes, we have some numbers with regard to the numbers of projects that we have. The total projects approved to date number 18. We have total Grow Bond commitments of $7.1 million, which translate to a total new capital investment for the province of $21 million. Through the Grow Bond program alone, 450 jobs have been created, but I have to qualify that. We have some Grow Bond projects that have been approved where the operations are not running as of today but, once the companies are up and running, 450 new permanent jobs will be created in the province.

Ms. Wowchuk: The minister just indicated that there is a total of 18 projects, and what I wanted to ask is, is that 18 projects since the program was established in 1991, and if that is the total, 18 projects, have any of those projects failed, where the government has had to reimburse, and what kind of dollars has that cost the government?

Mr. Derkach: Mr. Chair, that is 18 projects since the beginning of the program in 1991, I believe. There is one project that has failed and the call on that Grow Bond was $150,000.

Ms. Wowchuk: When we look at page 79 of the Supplementary book we see that there is an increase in Other Operating and the notes say that is for doubtful guarantees. Are there projects that have been approved that are at risk right now that the government feels that they have to set money aside for, because that is a great increase in the amount of money that is being held for doubtful accounts.

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Mr. Derkach: Mr. Chair, we do not set aside money in anticipation of a particular project going under. Rather, we set money aside as a practice in the event a project should fail, and we do that as a rule of thumb for every project that comes in and is worth X number of dollars. A certain portion is set aside in the event that any of the projects should fail. So we always have a contingency fund to draw from if a project does fail, as was the case in one particular instance. So money is always set aside to ensure that there is protection for both the government and the people who invest in these projects.

Ms. Wowchuk: So does that mean then that in 1994 there were quite a few projects that were started in 1994 that you have had to set aside close to not quite a million dollars more, but is that the reasoning behind it, that the growth came in 1994?

Mr. Derkach: The member is absolutely correct. A lot of our growth came in 1994 and there is a reason for that. The program when we started it was one that was not known all that well and people did not understand the program. We had to do a tremendous amount of marketing, if you like, for municipalities for individuals to understand what that program was all about. As a matter of fact, municipalities and one Mr. Fred McGuinness, who is connected very well in the world of communications, told us that our message just simply was not getting through effectively enough. It was on that basis that we did some advertising of the Grow Bond program, and we did third-party endorsements in terms of the success stories that were existent in the province with the Grow Bond program.

One of the more effective tools that we used--and we did not know it at the time until the proof of the pudding was there--was the Rural Development's newsletter that went out to I forget how many subscribers--14,000 subscribers in Manitoba--which talked about success stories and talked about the programs that are present in Rural Development. I have to tell the member that especially people in northern Manitoba appreciate that newsletter because, as you know, sometimes it is more difficult to get communications up into the northern part of our province. We have received letters from individuals who have read the newsletters and have been able to then get ideas and access information regarding our Grow Bond program. So I think for that reason the marketing was done. We have had much greater take-up of the Grow Bond program in 1994.

Ms. Wowchuk: The minister indicated that there was interest in northern Manitoba as a result of the newsletter. Can you indicate to us where the majority--are there any projects under the Grow Bonds in northern Manitoba? Where are the majority of the projects? How far north?

Mr. Derkach: No, Mr. Chair, we do not have a Grow Bond project approved in northern Manitoba, although we have been working very hard with communities in northern Manitoba to see whether or not a project can be undertaken. But again that comes from the communities themselves. The department cannot generate a project. It has to come through the community or through a proponent in a community. We have had REDI applications come from northern Manitoba, and they have been approved, but there has not been a Grow Bond project yet. We are hopeful, as communities form their round tables and look at their strengths and identify where their strengths are, that some projects will develop in the North.

Ms. Wowchuk: Have there been any new community round tables established in the last year, and are any of these in northern Manitoba?

Mr. Derkach: Mr. Chair, the round table program has been expanding continuously throughout the last three years. We have 62 round tables now, or 64 round tables, 65 round tables--I am sorry. See--they are growing so fast that I cannot even keep up with them. Sixty-five round tables, and these 65 round tables include 125 or thereabouts communities throughout Manitoba. There are various stages that the round tables are at as well. Some have already created their vision statements and know what direction they are going.

Some are in the process of developing vision statements, but by and large, the process of the round table in Manitoba has been very successful because it brings together people from all walks of life in a community. It brings together people from the social side, from the health side, from the economic development side, and it does provide for a very good representation of what the community is like and what the strengths of that community are.

Ms. Wowchuk: Mr. Chair, the minister had indicated that the information about Grow Bonds and other programs was made much more available through a newsletter. You called it the Rural Development newsletter. Is the cost of that newsletter accounted for in the Grow Bond budget here or where is that letter put out from?

Mr. Derkach: The Rural Development newsletter, the cost of that is taken from the REDI program so we will get to it in the next section.

Ms. Wowchuk: I just want to go back to the community round tables and if the minister could just let me know on the funding formula for setting up round tables, what is the money that is available for communities, and is it equal to larger communities? Is it based on population? How is that fund made available?

Mr. Derkach: Mr. Chairperson, the way we support round tables is through a matching grant program. If the community has less than 500 people they would get $1,000. If the community size is between 500 and 1500 they get $1,500, and any community that has more than 1500 people in it would get $2,000. In addition to this, there is a $500 nonmatching municipal grant where more than one municipality joins the round table. So it is a formula that is meant to give them a little bit of start-up money, if you like. It is a one-time program where we start them up and allow them to get going. When they realize what the benefits of a community round table are, they certainly are not reluctant to support it after that initial round.

Ms. Wowchuk: What kind of resources are made available to communities as they start up these round tables?

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Mr. Derkach: Mr. Chair, we have staff in the department whose responsibility it is not only to help organize the round table but also to facilitate the process that is undertaken through the round table booklet, and staff in the department will act as facilitators to lead the community through the process and through the vision statement that they have to produce.

Ms. Wowchuk: Do the community economic development officers that are in the communities in the various parts of the province play any role in community round tables, or is it staff that comes from another area?

Mr. Derkach: Yes, Mr. Chair, the regional offices are involved in the round table process.

Ms. Wowchuk: Is it staffed from the department that goes out or is all the work co-ordinated through the regional economic development officers? Are they the ones that co-ordinate the municipalities in these round table discussions?

Mr. Derkach: Mr. Chair, we do not have a large contingent of staff in this area, but our community offices in various communities do act directly with the round table in terms of being the facilitators and organizers and that sort of thing. So it is people in our regional offices. In addition, we do call on other department staff, whether it is from I, T and T or any other department, to come in and help with the process, because sometimes the information that is required has to come from other departments.

So our department acts as a facilitator once again between the community and even other departments within government. So we try to bring in as many resources as we can and as are needed to make sure that the process of the round table is a successful one.

Ms. Wowchuk: There has been a problem with funding of economic development offices and shortages of funds, and I am looking to see whether there are funds from here. Does any money come from the Grow Bond office if they are to help out the costs of those economic development officers that work in the region, if they are working it with the round tables? The minister is quite familiar, we have the economic development officers in Parkland East and Parkland West who have--so I had asked about the economic development officers doing part of the work, and I am just saying, do they show up anywhere in this Grow Bond money or round table money to cover up some of the costs of those offices?

Mr. Derkach: Mr. Chair, I think what the member is referring to is not our staff; it is not a problem with our staff in terms of money shortages. We have representations throughout our province in nine different regional offices. I think what the member is referring to is the regional development corporations, and they are separate entities altogether. They are run by the communities. We support them as we do conservation districts. Now, the staffing at the regional development corporations is up to the communities. It is not up to the department itself. We simply provide them a grant based on their populations in the communities that they serve, but the staffing is something that is up to them. Now, our staff in the regional offices work with these individuals as well. The member said, does money come from the Grow Bond area? No, money comes from the Community Economic Development area which we passed some time ago.

Ms. Wowchuk: Then I apologize if I phrased the question wrong, but that was what I was asking about earlier, whether those people who work at the community level were involved with the community round table discussions, whether they did any work for the department in the community round table process.

Mr. Derkach: Mr. Chair, they do not work for the department. They work for the regional development corporations which are run by boards, but we certainly welcome them and they are involved in some instances. I would not say they were involved in every instance because they cover a fair number of communities, so I do not think they are involved in each and every community at each and every meeting, but I am sure that they know what the community's round table objectives are, what their strengths are, where they are looking to building on. So in that way there is a link between our development officers and the regional development corporations.

Mr. Clif Evans: Mr. Chairperson, I am just wondering because of the weather and whatnot, the staff having to sit in their seats along with everyone else, if we might take a five to 10-minute break and finish by five?

Mr. Derkach: It is very kind of the member for Interlake. If he would like a break, that is fine, but staff seem to feel quite comfortable and are prepared to carry on. Perhaps we can even wrap up earlier than five, if we can keep going.

Mr. Deputy Chairperson: I believe a five-minute recess would be in order. Is it the will of the committee to take a five-minute recess? [agreed] We will recess for five minutes.

The committee recessed at 3:57 p.m.

________

After Recess

The committee resumed at 4:12 p.m.

Mr. Deputy Chairperson: Order please. We are back on 7.(a) Grow Bonds Program (2) Other Expenditures $1,216,500.

Mr. Clif Evans: A few questions on the REDI program itself. When the REDI program was implemented and there was--

An Honourable Member: Are we into REDI? Did we pass Grow Bonds?

Mr. Neil Gaudry (St. Boniface): I know I missed some of the questions, but in looking at the Grow Bonds, we are talking about increasing employment investment and tax revenues for Manitoba communities. Can you give the figures of numbers of employment that Grow Bonds has created since the start of the program?

Mr. Derkach: Well, in total, I cannot give you the number of jobs that are on the floor working as of today, but the project and the way that they were structured would create a total of 450 new jobs in rural Manitoba as a result of the 18 projects that we have embarked on. The total new capital investment in the province is $21 million, and our commitment to Grow Bonds is $7.1 million.

Mr. Gaudry: In those 18 projects that you have started, you are also talking about young entrepreneurs. How many young people that have started on their own are amongst those 18 projects?

Mr. Derkach: Mr. Chairperson, I guess "young" is a relative word, relative term, but I have to say, by and large, most of the projects have been started by fairly youthful people. I can cite two examples. A Country Woodshed in Killarney--the couple are both very young. They have young children who are also are involved in their family business. They are in their junior high years and high school years. Elias Woodwork in Winkler, again, a company that has been started by two fairly young entrepreneurs. So, by and large, if you look across the province, look at Sterling Press, are they young or are they old? I would say they are fairly young yet in terms of their ages in their working life. So I would have to say that people generally between their 30s and 50s are the ones who are starting the Grow Bond program. Is that young or old? I do not know.

Mr. Gaudry: No, I think it is young because I think if I were going to start a business tomorrow, I would consider myself young. Mr. Chairman, yes, I was referring maybe to people that are young, people that are starting for the first time into business.

Mr. Derkach: Mr. Chair, not in the Grow Bond program, we do not have any 20-year-olds that are starting in the Grow Bond program, but I can cite a couple of examples of people who have undertaken businesses and have accessed money through either the REDI or the REA program. We have a young lady who has started a flower shop and received assistance through the REA program--I believe it is in McCreary.

We have another young chap who was looking for a summer job from Brandon University who went into business on his own and has today become a very successful young entrepreneur. You will see him at most of the festivals in the summertime. He has a cappuccino coffee business, and it is doing extremely well. He travels from Manitoba right across the country to various festivals. As a matter of fact, I am sure that in not too distant a future he will be setting up a permanent business as well. But it has become a very successful small business for an individual who was at university at the time, still is at university as a matter of fact. He does this as a business in conjunction with his education as well. So we have other examples of that as well.

Mr. Gaudry: When they are starting up like that, do you give them start-up monies and advice so that they start on the right track? Because I know there are courses through Canada Employment that are given to people that are on UIC, for example. I was wondering if you do supply them with that kind of advice also, in the rural areas.

Mr. Derkach: Mr. Chair, under the REA program, which is almost an addition to the Business Start program, we have a mentorship component where the entrepreneur, the young entrepreneur, is required to take someone who is a successful businessperson and to have that person as a mentor, while they are getting started in their business.

We also participate with the Department of Industry, Trade and Tourism in the Business Start courses that are offered through that program. Instead of duplicating the effort, we simply access the programs that are available through I, T and T and through the Business Start training program, which are applicable for any business in rural Manitoba. They are very good programs, but the member is correct. You want to get these people started on the right path, and, to do that, we have tried to blend in a mentor and also some training. We also keep very close tabs, or we ask the business community, where a business is starting, to keep a watchful eye on these people and to help them along in any way possible. We try to get them involved in chambers and that sort of thing.

Mr. Gaudry: I do not know if the question has been asked, but have there been any failures in the Grow Bond project since it started?

Mr. Derkach: Yes, the question was asked, and there is one project that has failed, regrettably. I have to tell you that staff in my department, under the direction of Paul Sweatman, have worked extremely closely with every project that is showing some signs of weakness. In this particular case, they worked very, very hard to try and bring in equity partners and that sort of thing. For a variety of reasons the project did not succeed, so we have had to pay out one Grow Bond project, which amounted to $150,000 of investment by investors in a community.

Mr. Deputy Chairperson: Item 7. Rural Economic Programs (a) Grow Bonds Program (2) Other Expenditures $1,216,500--pass.

7.(b)(1) Salaries and Employee Benefits $199,200--pass; (2) Other Expenditures $102,100--pass; (3) Programs--Operating $6,923,700.

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Mr. Clif Evans: As I was going to say earlier, the REDI program, when it was brought in--of course, as any new program--had a lot of confusion to it, a lot of uncertainty to it. There are still some people in my communities, when they ask me about programs that are available to start businesses or to do whatever, I try and get them as much information as I can. To start with, what I would appreciate from the minister's office, and to put it on record if I may, I believe two years ago, when I became critic, I was provided with an updated REDI program criteria, et cetera, who qualifies, how, samples of the application forms, so that I could be more informed on the program in talking to a constituent and whether it might fit into their wishes or needs. So I would appreciate that if the minister's office could send me all of that to my office here, and also so I may have it all in copies in my constituency office.

Mr. Derkach: We do provide that for regional offices. I would certainly be pleased to provide that for the member as well.

Mr. Clif Evans: What I have been doing, when it comes to the REDI program--of course,in the past few months with everything else that was going on--I have been requesting that constituents go to our local RDC office, so I appreciate having all that information. Actually, two sets of it would be greatly appreciated.

Can the minister tell us, under the REDI program, just how the program has developed in the past couple of years, to what extent, and can he indicate the positive sides of the REDI program?

Mr. Derkach: The program has developed exceptionally well. There are criteria that are established for the REDI program, and we do reject a lot of projects that come forward that do not fall within the criteria of the program. I would have to say, by and large, the REDI program is responsible for the creation of a large number of jobs in our province. It is a way in which small businesses have been able to access a little bit of start-up capital, if you like, or been able to expand their businesses, to hire another individual and to not only provide a benefit for themselves but also for the community.

It does not say that we have not had disappointments, but that is part of the nature of this business; because we are, if you like, almost the last source of a person's financial needs. If the banks reject them you know they will come to government for support and that naturally happens with companies and with proponents who are a fairly high risk. So, because of the nature, we do take some risks and there are some disappointments. However, overall, the program, I think, has met its objective very well and continues to on a day-to-day basis.

When you consider the number of successful businesses that are out there today, many of them are successful because they have gone through the process. They have had to do a feasibility study which we have imposed on them. We have also imposed a due-diligence process where we almost demand that the individual does a business plan before they venture into a business.

We also support them by asking the MBA students from the University of Manitoba to do some marketing analysis for them, so by the time the individual is ready to go into business, he or she has had a lot of technical assistance which gives them every opportunity to be successful; or if they find this is just not viable they abandon their project before they have spent large sums of money on it that becomes wasted in the end. So, in that sense, I think the program has been extremely successful and needs to be continued in that way.

Mr. Clif Evans: Mr. Chair, so then the minister is saying this part of the program has been basically added to the overall scope of the REDI program. If I am correct, there was at one time only the 50-50 feasibility study initiative. Now you are saying that someone who might want to expand or start something new through the MBA program, can get that work along with these consultants the department is providing the funding, so they do not have to look at a consultant for $10 thousand and have to come up with $5 thousand. In other words, is it worth it, finding out from the start. Is it worth it before we go into a real full feasibility study on any program? The availability then is there through the MBA consulting process. Is this a set figure for that program?

Mr. Derkach: We have several components to the REDI program. First of all, there is the feasibility study program which you know about. That provides an amount of money for doing a feasibility study for a business.

Secondly, there is the infrastructure component which provides money for infrastructure to a business if, for example, sewer, water or hydro is required. We will assist the municipality to bring that service right up to the property and there we provide up to $100,000 if it is a single municipality. If it is a joint project we will go up to as high as $500,000.

We also have the support program. It is a general support program, where a business can access some funding for development support, if you like, of the project. This is a conditional contribution where we do not require repayment, provided that certain conditions are met in the business. Then we also have the MBA consulting program, which provides a cost-sharing service to the proponent, and we cost share it on a 50-50 basis. There is no maximum to it, depending on the size of the project, I guess. Again, as you indicated, the reason for that is to make sure that the project is one that will show some promise and viability and success for the proponent.

We have also added another one, and that is the REA program. This is a loan program for new and expanding businesses, I guess, and, again, there are criteria around that, but we have developed that program in conjunction with the banking association. To date we have the Canadian Imperial Bank of Commerce participating in the program, and so is the credit union system in Manitoba. The other banks have not participated in the program, and they cite the federal program as being the reason for not participating in it.

Mr. Clif Evans: Mr. Chair, since REA has been brought in this last year, I believe, has it been a successful avenue?

Mr. Derkach: We have a total of 55 loan guarantees approved under the REA program. The total job creation as a result of that program stands around 234 positions or about 175 or so full-time position-equivalents. Has the program been successful? Yes, we think it has, but we would like the banks and the credit unions to do a better job of due diligence. We would like them to share a little more responsibility in terms of if a loan is made and is defaulted upon. So the program is growing. But by and large it has met its objective, it has created a fair number of jobs, and some small businesses that could not access capital through the institutions have been able to continue to expand and to build their businesses.

Mr. Clif Evans: Mr. Chair, is there a cap on this money through these institutions?

Mr. Derkach: The cap is $100,000 for each business.

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Mr. Clif Evans: So then Rural Development then is guaranteeing a certain portion or a full portion of that $100,000 if it goes to a maximum of $100,000.

The other question, if I may, what is the criterion from the proponent's side that he or she or they have to meet before they can come to Rural Development for the guarantee, before they can go to the institution for further funding?

Mr. Derkach: The guarantee is 80 percent, and the bank guarantees the other 20. It is an 80-20 split between us and the bank.

The criteria are such that the proponent has to have a 20- percent equity in the business, but beyond that they also have to have a business plan and they have to go through the due diligence process of making sure that their business is a viable one before they get the loan.

Mr. Clif Evans: New, existing, any kind of business?

Mr. Derkach: It is for all small businesses that are wishing to expand or businesses that are wishing to start. As I indicated, that lady in McCreary who started a flower business is a recipient of that.

Mr. Clif Evans: The Green Team program, which was also brought in, can the minister indicate just how many jobs The Green Team program has provided in the past since its inception, and what kind of future do we see for this program and availability of funding to expand The Green Team program?

Mr. Derkach: Well, I thank the member for the question on The Green Team, because it was his colleague who was so opposed to this program.

Ms. Wowchuk: Who?

Mr. Derkach: The lady who said who.

Ms. Wowchuk: That is a lie. [laughter]

Mr. Deputy Chairperson: Order, please.

Mr. Derkach: The Green Team program has been an overwhelming success. As a matter of fact, it has been such a successful program that we started it in the city of Winnipeg. It is now available in the city of Winnipeg.

We have students in the city of Winnipeg who will be working on community projects right through the city this summer. We are hoping to hire, I think, up to 700 students under The Green Team program in the city of Winnipeg, but that is sort of an extension of the success of The Green Team program in rural Manitoba. In rural Manitoba, again, we are looking at hiring about 700 students under The Green Team program.

We have expanded the program. Before the program was available only to our provincial parks. We have now extended the program, we have added a home town component to the program, which allows communities to access the program, towns, villages, municipalities, but they cost-share in that program.

Also community clubs now and service organizations can also hire Green Team students to maintain their parks, whatever they might have, whether it is a Kinsmen, Kiwanis or Lions club which may have dollars that they want to share in hiring a student for the summer.

I cannot say enough about The Green Team program. Since the inception of the program, at the end of this year about 3,200 jobs will have been created through The Green Team.

Mr. Clif Evans: How much money is involved?

Mr. Derkach: The program is about $2.4 million this year, or $2.3 million, somewhere in that range, but $1.9 million is provided by us, the other will come from the communities that are participating through their contribution to the program.

Mr. Clif Evans: The department is also providing funding for the Rural Junior Achievement Program which I understand is new. What type of funding and what is basically the minister expecting from this program?

Mr. Derkach: Again, I would love to answer that question because another successful program. Junior Achievement was not available in rural Manitoba, as you know, until we were able to partner with Junior Achievement of Manitoba to extend the program to rural Manitoba. We had about 94 or 97 schools last year that participated throughout the province. That number has increased substantially this year.

We have added a new component to that program this year. The Company program has been added to the Junior Achievement program and we contribute something in the neighbourhood of $700,000 to the program and another $200,000 for the Company program. A lot of high schools and elementary schools are now really looking positively into entering into the Junior Achievement program because it is just one excellent program.

Mr. Clif Evans: The minister has a lot of enthusiasm about the past two programs we have talked about. I guess we will have to hopefully see that the program does as the minister hopes it will do and certainly eventually for rural young people, will it be able to tie in with the urban centres as such in Junior Achievement programs? Will they be able to co-ordinate together eventually? Is that the plan, the hope?

Mr. Derkach: Mr. Chairperson, they do run the programs together. It is the same office that runs the programs. The member says that he hopes that the programs will be successful and do what they were intended to do. I can report that they are doing what they intended to do. We had over 400 students at the Rural Forum and all of these students were from schools that have the Junior Achievement program.

I attended at Red River Community College where we had a workshop one day where businesses from all over the city came to instruct students in the Junior Achievement program. We had over 1250 students that were registered for the one-day workshop at Red River Community College. We had business people from the banks, from some of our most sophisticated businesses in the city of Winnipeg, providing leadership courses for these students and working right along with them. So the program is exceptionally well received in the entire province to date, and I can only see positive results in the building of that program for our youth.

Just as a statistic, Junior Achievement for 1995-1996 will run 73 fall school programs and 106 spring programs for a total of 179 programs, which does not include the company program. So I am very happy with the program so far.

Mr. Clif Evans: I would like to ask the Minister about the transportation of the mobility disadvantaged in rural Manitoba. Just what type of funds and grants are going into that? What participating communities? What is the criteria for that?

Mr. Derkach: We added some additional money this year to the Mobility Disadvantaged Program from our Lotteries program. This is the program where you will see the handivans in rural Manitoba. We do not have a Handi-Transit van program as they do in the city in rural Manitoba in every community. Many of our mobility disadvantaged residents who were born and raised in rural Manitoba are now moving back to rural Manitoba and are making their homes in these communities. They require this kind of assistance and transportation system in our rural communities.

Rural communities have banded together to support these mobility disadvantaged residents by investing in a Mobility Disadvantaged Program. We support them by giving them a start-up amount of money. I think the start-up grant is $6,000. We later participate, once they have done their feasibility work and their start-up, in the purchase of the vehicle through a grant program which amounts to just a small $10,000 grant, I believe it is, to the community for the Handi-Transit. Then, we participate in the operation of the Handi-Transit program to a level of about 37-1/2 percent of their operating costs.

A lot of these programs are not run like they are in the urban centres where you have paid staff who run them. These are largely done through a volunteer program and the service organizations and the community comes about through a volunteer system to run the program for the community.

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Ms. Wowchuk: I would like to raise a couple of topics that I would like to address, but I will start with the handivan service. I would like to know whether the department has received application from the community of Birch River for a handivan and whether there has been any indication as to whether they will be getting funding for the service? As the minister indicated, there are people in rural Manitoba who do not have many of the advantages that people in urban centres do, particularly when we see our rural communities depopulating and services closed down.

I look at the community of Birch River, where they have lost the health care services. They have to be transported to Swan River. There have been community organizations that have raised a tremendous amount of funds and now are looking for support from government. I would hope that this government would look favourably on the application that has come from the community of Birch River.

Mr. Derkach: I have to tell you that, since I have come into the department, I was not involved in the inception of the handivan program but I have worked very closely with the people who are mobility disadvantaged and with their organization. We have expanded this program substantially, but we have a waiting list of communities that have applied for assistance under the mobility disadvantaged. It is for that reason that we were able to put in an additional $50,000 into the program this year. I will have to research and get back to the member with regard to the community of Birch River, but what happens is their application will come in. It will be assessed. They will then go on a list that is already there, and we will try to address their needs just as quickly as we can.

There is also an association that works very closely with the department where they actually work with communities, and what happens in some instances a community will start with a small van, a small program that they can afford, and as the program develops and matures, they are then able to go to a larger van, and the van that they used to have will be passed on or sold to a community that is just starting in. So there is some co-ordination going on at the association level in that regard. But, with regard to the community of Birch River, I will have to research that and get back to the member privately.

Ms. Wowchuk: I would appreciate hearing from the minister on that, but the minister had indicated that there was an additional money put in from the lotteries, I believe he said some $50,000 that was put in, and I think that is only fair that that money should go to rural Manitoba. When you look back at the VLTs and the plans that were made when VLTs were first announced, we were told that monies raised from VLTs would go back to rural Manitoba for economic development. That money is not going back at the rate that it is being drained out of rural Manitoba. I think it is only fair that we look at ways to bring this money back to rural Manitoba, and one of the ways that it can come back is by providing services to enhance the quality of life for people in rural Manitoba.

We hear about the tremendous amount of money that is coming in from lotteries. The minister knows from his own communities that there is lots of money coming from rural communities, but it is not being passed back. So I would hope that we would look at ways to get that money back, and this is one of the ways that services can be enhanced for people in rural Manitoba. I look to the minister for his input, whether he would think that would be a way for it to enhance the quality of life. When we look at the budget, we have seen a decrease in this Rural Development initiative budget. There has been a decrease in this budget. If we are looking for ways to enhance the quality of life, I would hope that we would be able to put the extra money into that budget from the lottery money that is being drained out of rural Manitoba.

Mr. Derkach: Mr. Chair, if you look at the percentage increase in this program in the last year, it is about a 10 percent increase for the Mobility Disadvantaged Program. I am not apologizing for that at all. All I am saying is that it is a priority to us. We were able to enter into two new agreements in this past year, and I think we have slated another two for the following year. We are just doing everything we possibly can.

With respect to the lottery dollars, you know, we can argue over lottery dollars forever and a day. We have turned back substantial dollars to our communities, which no other province in Canada that has got a lottery program is doing. We did that in recognition that this money was coming from those communities. We have also embarked on some economic development programs that were never in existence before, again recognizing that there is a contribution being made by rural Manitoba to the general reserve, if you like, or the general fund of the province. If you look at all the other programs that are delivered in rural Manitoba, the only reason, in some instances, that we were able to save programs in rural Manitoba was because we were able to access lottery dollars to keep some of those programs functioning for the foreseeable future.

Ms. Wowchuk: And the minister should not apologize for taking that money back to rural Manitoba. Lots of it is coming from there, and we should be looking for ways to enhance the quality of life for people in rural Manitoba.

Under the REDI fund, I have one other issue that I want to address. The natural gas expansion was supposed to take place in Swan River, but the project that was put forward failed. It is my understanding that the minister has indicated to the people of Swan River that if they do another feasibility study, which will cost the community some $8,000 to $10,000 to do this feasibility study--if they put together a package, there should be money under REDI to pay for natural gas. Natural gas, that is right. It is my understanding that the minister has made a commitment to the people of Swan River that there can be money made available from REDI to see this become a reality. I guess I am asking whether that is the commitment he has made, or was it an election promise or what was happening? Is this money that is going to--

An Honourable Member: Rosann, you are hitting below the belt.

Ms. Wowchuk: I apologize to the minister. Is there money available? Is the infrastructure money still in place for natural gas, or is there money available, because if the community puts out another $8,000 to $10,000 for a feasibility study, if they have been advised to do that, and there is not money in place--because that is the message I have been getting, that they have been advised to do another feasibility study which will cost them $8,000 to $10,000.

I would not want them to go through that expense since they have gone through the expense of one feasibility study already if there is not money in place for funding. So we should be up front with that community, and if there is not money for the project, then they should not be spending the money on a feasibility study.

Mr. Derkach: Mr. Chair, I have to say that I have done everything within my power to try and accommodate the needs of Swan River with regard to natural gas and also to make sure that every opportunity possible was given for Louisiana-Pacific to have natural gas at their plant.

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The member should know that Centra Gas brought to the table with them in their proposal something in the neighbourhood of $2.8 million. When the Centra proposal was rejected or when it was curtailed for whatever reason, that meant that this $2.8 million vanished with the withdrawal of the Centra proposal, but we continued to work with the community and Louisiana-Pacific, and we said we would put in a working group headed by Dr. Murray Cormack, who would look at every possibility besides Centra Gas to bring the project to fruition in Swan River.

The question was asked whether or not the infrastructure money would be made available to them. Because Centra withdrew, it meant that the agreement between Centra and the two levels of government and the community was, in fact, null and void, but we indicated to the community as a province that we would maintain our share of $1.2 million of the infrastructure program to the gas expansion in Swan River, and I guess I should say to the member that we also funded a feasibility study for the natural gas co-op for Swan River to the tune of $11,250 from REDI.

Now, because the community has not come forward with any specific plan, any business plan, for how they are going to deliver gas into the community, we have been asked by Louisiana-Pacific what the status of the situation in Swan River is.

I wrote a letter to the mayor last week or two weeks ago and asked that they come forward with a business plan for natural gas, so that we could make a decision one way or another. To date, I have not received that because they were still exploring several options. One of them was a co-op. Another one was working with a company out of Calgary, I do believe, or from outside of the province, and one was also working with a Saskatchewan company.

So when they come forward with a business plan, then we will be able to assess whether or not we can participate and to what level beyond what we have already said to them in the past.

Ms. Wowchuk: So the minister has said that they have made a commitment, that there is $1.2 million of provincial money that is still in place if there is a business plan that is feasible put forward by the community. Have we lost the federal infrastructure money?

Mr. Derkach: I cannot answer that question. All I can say is that the agreement that was struck previously is null and void. So what the community will have to do now is approach the federal government to make sure that money, that $1.2 million, is made available to their community if they find another way of doing it.

Ms. Wowchuk: Is there any additional money that is available from REDI to be put into the--or can money from REDI be put into a project like the expansion of natural gas?

Mr. Derkach: Mr. Chair, the criteria of the REDI program does not make a project like natural gas qualify for assistance, except in those limited areas, for example, the feasibility studies program, marketing study or to a minor extent even the infrastructure, but that is so minor it really would not do much for a project of that magnitude so in terms of large sums of money from REDI, I would have to say that the answer is no.

Ms. Wowchuk: If the community is required to do another feasibility study, is there money available from REDI or do they have to make another application to access money from REDI to cover the costs of the feasibility study, which I am told will be somewhere between $8,000 to $10,000?

Mr. Derkach: Mr. Chairperson, we did not ask them to do another feasibility study. They have done a feasibility study already. What I asked the community to do was to come forward to the working group which they are a part of with a business plan. Now, that is quite different from a feasibility study, but we need a business plan to see where their sources of money are coming from, how much money they have been able to secure for the project, what their sign-up rate is, what their usage rate is, where they are going to access gas from, because that is still a question with regard to Saskatchewan and all of those areas, and it does not take a lot of time to do a business plan.

In my discussions with Dr. Cormack, he said that he would be able to work with the community to develop that business plan, so it is not as though it is going to require large sums of money or large amounts of time to do that. It is just that the community has to get a better grip of where they are going and allow us to be able to see that business plan.

Ms. Wowchuk: The minister talked about a working group on this and he talked about a Dr. Cormack, I believe it was. Can the minister tell me who else is on that working group and when that group was last in Swan River to meet with the people and what they have done to see this become a reality, what the possibilities are. What is the working group doing?

Mr. Derkach: Mr. Chairperson, I guess I should point out that the community is aware of who is on the working group. I can get the names for the member. But Dr. Cormack has been in constant consultation with the community, and it is really up to the community to bring that plan forward. It is not to say, what is the working group doing? It is the community that has to drive this project. The working group is there to try and facilitate between the community and entities that might be delivering the gas and government. So we are there, willing to work. It is up to the community to drive this. But in terms of the membership, I will get that for the member.

Ms. Wowchuk: I want to ask about another REDI project in my constituency. We have talked about the various projects that have succeeded or failed. There is a project in Ethelbert. It is a wood pelleting plant that the government contributed some funds to. Every time I drive by that plant, I see very little activity there. Can the minister tell us whether that is one of the projects that has been successful? What is happening with that project?

Mr. Derkach: I understand that the operation is still ongoing. They have not been able to put together enough capital to upgrade the equipment that they were wanting to, but we contributed to the operations. As a matter of fact, this past winter, they were still selling their wood pellets.

Ms. Wowchuk: So when a project like that is established, how long does the government follow it? Do they have to make reports? Do they receive funding? Is there follow-up or supports put in place to ensure that the business is successful? If they are in difficulty, is there any help for them?.

Mr. Derkach: The agreement calls for certain conditions to be met with regard to reporting, and staff from our regional offices do work with that proponent and that business on an ongoing basis as the need is required.

Mr. Stan Struthers (Dauphin): I am interested in the conversation that took place a little earlier on VLTs. Is there any way that I could get figures from your department indicating how much VLT revenue has gone into a community in my riding and how much has been taken out in the first place?

Mr. Derkach: That question is better placed with the minister responsible for Lotteries, the Honourable Mr. Stefanson.

Hon. Glen Cummings (Minister of Environment): I would like to make the observation that we do not normally sit down and check how much PST is coming out of Winnipegosis compared to how much is coming out of Dauphin, compared to how much is coming out of Brookdale. The fact is that you do very likely end up, in terms of the amount of activity that goes on in the community, you are going to have wide variations. You are going to certainly have great potential for creating the type of hard feelings between communities that is not normally disclosed in that manner.

If I were to observe how we have used revenues in the government, any form of broader-based revenue base, generally, you have a situation where those who are unable to generate the larger volumes of revenue benefit from the overall program. I would only encourage us to think in that way.

Mr. Deputy Chairperson: Order, please. The hour is now 5 p.m. and time for private members' hour. Committee rise.