(Concurrent Sections)

INDUSTRY, TRADE AND TOURISM

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 255, will resume consideration of the Estimates of the Department of Industry, Trade and Tourism. When the committee last sat, it had been considering item 10.3. Strategic Initiatives (b) Health Industry Development Initiative (1) Salaries and Employee Benefits $415,800 on page 94 of the Estimates book. Shall the item pass?

Mr. Tim Sale (Crescentwood): Mr. Chairperson, are the mikes on?

Mr. Deputy Chairperson: Yes, they are.

Mr. Sale: Okay. Mr. Chairperson, when we were last meeting, there were a number of questions asked of the minister, and he undertook to provide some material. I wonder, at the beginning of our discussion today, whether he would like to provide any material to the committee.

Hon. James Downey (Minister of Industry, Trade and Tourism): Yes, Mr. Chairman, I have all of the considerable number of Tourism documents which I said I would table, and there they are. He also asked questions as to the tendering of the Tourism advertising, and the answer is yes, that it is tendered, but it comes through Information Services. They are the ones that handle the process of hiring for the purposes of government.

I believe the other question was as to the involvement in the Gimli resort. The reason for government participation was that initially, to make the project start and proceed, there needed to be some commitment made. There was a commitment made, and all of the risk capital was raised following that initial commitment by the province. That was all risk that came in later. So it was a matter of the need for the province to proceed to start the project. That is what it was put forward for. The amount of money that was raised afterwards really was raised based on the ability of the investors to raise it, but that was the reason why the province participated. I am not sure of other questions that the member had that I am not--

Mr. Sale: I think my question was not whether it had been tendered. I assumed that proper purchasing processes had been followed. It was when was it last tendered.

Mr. Downey: I am told by the department that there are ongoing tenders that are let for work that is desired within the tourism activities that is not necessarily one block amount of money that is tendered to do a certain project, but it is different projects that are done on an ongoing basis.

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Mr. Sale: I think I also asked what the name of the company was that handled the image ads or the impression ads that ran on television and the name of the company that designed, for example, the most recent drop that was referred to in the newspaper in the past week in terms of a drop in the northern border states. If the minister could provide that information?

Mr. Downey: The most recent work that has been done is a company called Deschenes Regnier.

Mr. Sale: I thank the minister for that information. I would like to ask the minister if--and I should also thank him for tabling this information. I believe it is mostly things that we have seen, but I appreciate him doing so. I wonder if he would make available to the committee a list of the companies that are now doing tourist advertising work on behalf of the department either through Information Services or directly through the department during the previous fiscal year just ended, referenced in the Estimates book or currently.

Mr. Downey: Mr. Chairman, what I will do is--I think that if it is normal practice to be carrying that kind of activity out--I will provide him with as much information as is able. I have no reason not to provide with information.

Mr. Sale: Pass.

Mr. Deputy Chairperson: Item 10.3. Strategic Initiatives (b) Health Industry Development Initiative (1) Salaries and Employee Benefits $415,800--pass; (2) Other Expenditures $168,600--pass; (3) Grants nil--pass.

Item 10.3.(c) Aerospace Industries Development Initiative (1) Salaries and Employee Benefits $332,100.

Mr. Sale: Could the minister just very briefly indicate the new Manitoba light aircraft project initiative in brief terms? I would say this primarily out of personal interest, because I have a private pilot's licence and used to fly, and I am always disappointed that Canada has not maintained its position of manufacturing light aircraft as opposed to commercial bush aircraft in the single engine or multi-engine category. Would the minister tell us briefly about this initiative?

Mr. Downey: Yes, Mr. Chairman, we are embarked upon some work, a study to take a look at the whole question of Manitoba's capability, basically a study on product liability, and basically we also survey Manitoba manufacturers to determine their capability to act as suppliers to light aircraft manufacturers. We are also determining the availability of facilities in Manitoba, particularly some of the rural capabilities, with airstrip access and obtaining information on financial and other supports offered in competing jurisdictions.

So there is a considerable amount of work. I know we have one company in particular which I am not able to disclose at this particular time because I do not have their permission, and it is not as advanced maybe as far as it should be, but we are seeing some considerable interest in the whole area of manufacture of light aircraft. We do believe we have the capabilities, whether it is at Southport or whether it is in some of the urban areas. We believe there is a capability of component parts and people that can equip themselves, and, of course, the survival of some of the companies will be to diversify into civilian aircraft activity rather than what has more traditionally been the military production.

Mr. Sale: Mr. Chairperson, I would love the opportunity to discuss this further with the minister at some point, as I say, mainly out of personal interest, but my understanding is that the Piper initiative, which briefly touched down here but went elsewhere, is in fact gone, and we are not referring to that initiative here.

Mr. Downey: That is correct, Mr. Chairman. I understand that there were changes in the U.S. that actually allowed the Piper Company to continue their operations there, so that was the product liability changes. But I would be most in agreement to discuss with the member the opportunities that Manitoba, we believe, can present to the world. I guess, as we look at the overall aerospace industry, we are the third-largest aerospace industry in Canada, and we want to continue to see that grow and develop and diversify.

Mr. Sale: I thank the minister for that. One of the great benefits of Manitoba is that we have no shortage of landing spaces, as a number of bush pilots have discovered over the years, both in the North and the south.

Mr. Downey: If you do not handle them properly, that ground will come up and smite you.

Mr. Sale: Maybe we could get together and swap lies about private planes and flying sometime. That would be fun. Pass that area, Mr. Chairperson.

Mr. Deputy Chairperson: Item 10.3. Strategic Initiatives (c) Aerospace Industries Development Initiative (1) Salaries and Employee Benefits $332,100--pass; (2) Other Expenditures $136,900--pass; (3) Grants nil--pass.

10.3.(d) Information and Telecommunications Initiative (1) Information Technology (a) Salaries and Employee Benefits $421,700.

Mr. Sale: Mr. Chairperson, I realized in turning the page that I had one other question on the previous initiative, if the minister would allow it.

Mr. Downey: Certainly.

Mr. Sale: The serious issue in regard to Southport is the continued uncertainty in regard to Canada's military training requirement for aviation and the potential sales to other countries that have used the contractor at Southport. I believe the contractor is a Bombardier subsidiary. Can the minister tell the committee anything about the status of that issue, of the longer-term viability in the light of potential further cutbacks, either at Moose Jaw or Winnipeg or both?

Mr. Downey: Mr. Chairman, all I can tell him is that we are continuing to lobby to make sure that Southport maintains the training activity that it currently has, and any expansions or activities as it relates to that, we believe, can quite efficiently and competitively be carried out there. So we will continue to work with Southport to make sure that the training activities are maintained and enhanced, but nothing further to report on specifics.

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Mr. Sale: Mr. Chairperson, I thank the minister for that, and I would urge him to communicate our party's concern in this regard as well. It is an important area in terms of maintaining a critical mass of aviation capability in Manitoba, that this resource continue to be located there and expand.

Does the minister have any sense of a time line on the decision that Canada is currently, I guess, reviewing for the umpteenth time at this point?

Mr. Downey: Mr. Chairman, I can refer to the fact that the briefing note has indicated that the federal government is currently working, and I am aware of this as well from some previous discussions, to provide multi-engine training to German pilots. It will be the fall of 1996 before there will be a response, it is my understanding from a briefing note that I have. We have also written to the Minister of National Defence, again, communicating our desire to see more activity carried on there. So that is the most up-to-date one that I have available, and I will communicate anything further that the opposition party are supportive of this initiative.

Mr. Sale: I thank the minister for that. We could go to 3.(d) (1) and (2).

Mr. Deputy Chairperson: Item 10.3. Strategic Initiatives (d) Information and Telecommunications Initiative (1) Information Technology (a) Salaries and Employee Benefits $421,700--pass; (b) Other Expenditures $155,700--pass.

10.3.(d)(2) Canada-Manitoba Communications Technology Research and Industry Development Agreement (a) Salaries and Employee Benefits nil--pass; (b) Other Expenditures nil--pass.

10.(c) Grants $482,400.

Mr. Sale: Mr. Chairperson, could the minister indicate the status of this agreement and whether there is any replacement or new form of agreement in this critical area that Canada and Manitoba are discussing?

Mr. Downey: Mr. Chairman, the agreement ended March 31, 1996, and there is no new agreement. We do have some commitments, which basically is provincial money, which go past the end of 1996. One is TR Labs, and the other one is Manglobe.

Mr. Sale: Mr. Chairperson, I am very concerned about this area, as our party is, and I am sure the government is too. If I could refer the minister to page 52 of the Estimates additional information, the Expected Results almost read like a who's who list of the most important aspects of technology industry in Manitoba. I would like to ask the minister to respond to several areas of concern within this list. I ask these questions not in a negative sense at all but because we are very concerned about the weakness of our R & D base, not just in Manitoba, but in Canada as a whole. Canada is well known for underinvesting in research and development, and the areas listed here are very, very critical areas for Manitoba's economy.

So I want to ask first, the joint venture incorporating MANCET, chambers of commerce and others, what is the actual status of that initiative and what are the expected results coming from it?

Mr. Downey: Mr. Chairman, again, there has been some positive developments over the past short while with the chambers of commerce. They believe very strongly this was a program or project that would assist in the accessing of market opportunities for a lot of municipalities and chambers, particularly, chambers throughout the province. What we have currently done is to come to an agreement where we will have two staff out of our Telecommunications branch work with them to further develop a business plan. The ongoing operational costs could be very, very high for both of the chambers and for the province and, without the federal government being involved, would fall extremely heavily upon us. So what we have done is we are developing a business plan. If it works out to the way in which we believe it will, there could be a longer term secondment to the MANCET operation with the departmental staff being involved.

Mr. Sale: Mr. Chairperson, are there grants from the minister's department or any other department of government in addition to the staff secondments?

Mr. Downey: Yes, there is not a tremendous amount of money, but I think it is in the neighbourhood of--this will be subject to correction--but I believe it is in the $20,000-range as seed money to start. If that is not correct, I will correct it with the member. I am just going from memory, but I believe that staff have indicated that is correct.

Mr. Sale: Mr. Chairperson, this area is one that I am sure the minister, and probably the minister of telephones, may share some concern in. The cost of developing and using information can be very, very high particularly for younger companies or smaller companies or companies that are not located close to a node on the Internet where they are paying significant toll charges to access. That is an area of concern for companies. We are very concerned about an increasing move--at least we sense an increasing move--to develop the Internet in such a way that it primarily serves those who can afford some of the significant costs and is much, much less accessible to users who cannot, for whatever reason, afford those access charges.

I am wondering if the minister is able to give us any assurance that the goal here is to develop a broadly distributed open network and not a fee-for-service or quasi-private network controlled by chambers of commerce. Not that I think chambers are unimportant, but I think access for all potential users is very important and sometimes chambers may not represent all of those groups.

Mr. Downey: I do not disagree as it relates to the overall need for the general consuming public to have access to the service. I think that is extremely critical, because it is like any other infrastructure that is available. Those who have it, continue to grow and develop; and those who do not, either sit still and/or go backwards. We have done some work with the Blue Sky FreeNet people to try and--in fact, we have given them some financial support--expand and provide the service at minimal cost to the users. I know that the federal government have a program that they have supported some communities as well with some smaller grants.

To me, at this particular point, you could refer to it as pilot projects or somewhat ad hockery, I guess, would be my best way to express it at this particular time. I think what has to be clearly put in place--and I do not have any trouble with reasonable amounts of money being spent to get the service. There are not free services out there. There has to be a requirement for payback. It is matter of making sure that there is a balance and that communities that do not have access to it can in fact enter on a basis of getting started on it.

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Again, I think the other question that has to be raised of those users is to make sure that when services are provided, one way to make sure that it is legitimate services that are being used and the demand is there for legitimate needs, that, in fact, there is a charge. Otherwise, I would think you would see a tremendous amount of, how should I put it, not for business purposes. That is maybe not the only reason. There are certainly social needs, but, again, if it is seen as no charge all the way through, then it, in fact, could be seen as abused, I would think.

I think it is a matter of both the federal and provincial governments having to work very closely together, because a lot of it now--as I have said, there is some support coming from the federal government, and there are some programs from the province. The need is certainly out there and has been demonstrated to me from my own communities, how much they would like to be part of it. Some of them are now currently being hooked in. I think it is some ad hockery, and I do believe that we have to try to make sure that it is provided, but, again, there will be some cost to it.

Mr. Sale: Mr. Chairperson, I would give the example of geomatics which is also one of the issues here. We have had some debate in the House, and members of the geomatics industry have met recently with the minister responsible for Linnet, who I presume is Mr. Driedger--at least his signature is on the agreements--but it also has obviously a concern and a linkage for the Minister of Industry, Trade and Tourism because of the industrial linkages, so this is one of those that crosses a number of lines.

The geomatics experience seems to be that where governments open up the provision of data and treat the data as a public utility, that the economic development that follows provides a very large payback; in other words, the notion that the geomatics base maps and the cadastral map are, in effect, like a road system and that the road system is not something that you build only when you decide that you need the road. You build roads and maintain the roads on the basis of basic fundamental public infrastructure, and you recover your investment through the economic development that goes along because those roads are there.

So to further that analogy, we twin the highway from Winnipeg to the Emerson border, and we believe that that twinning will bring us benefits in terms of long-distance trucking and tourism and other payback, but we do not link the cost of the twinning to the first however many thousand trucks that drive over the road. In other words, we do not take a toll road approach. That seems to be the international--international meaning North American--experience in the geomatics sector.

In the debate about the quality of information in Manitoba, I referenced the high quality base maps of Alberta and Saskatchewan. The minister responsible replied and replied correctly that while they had very high quality base maps, they were not being used as much as perhaps you would wish, and the reason, I am told by the geomatics industry, is because Alberta and Saskatchewan both tried to apply quick recovery approaches to their investment in the base map, and so the information is so expensive, that people cannot afford to use it.

I am really concerned that in our rush to make everything pay for itself and to move to a user-pay system in every area that we can, that we will choke off the kind of creative use of new capacities in geomatics or in the Internet or in any number of new areas, because those who are perhaps the most creative do not have capital that allows them to use these initiatives.

I hear the minister's concern about abuse, but my limited experience with the Internet is that after you have played around on it for a little while and, you know, have seen what the bells and whistles are there, it gets just as boring as any other dictionary does. After you have looked at pretty pictures for a while, you kind of realize that there might be better things to do with your life, so you go looking for stuff that is really helpful. I think we are on a learning curve on this, and I suspect that there is really not much abuse in a real sense, but that there may well be exploration going on, and some of that is not very productive, but the people do not enjoy sitting in front of a TV screen that is not helpful to them for too long. It is kind of interesting at first, but it loses its interest very quickly.

I would urge the minister to pursue policies that do not allow these vital sectors to become subjects for quick payback policies, because I think those will choke off, as they have in fact in the area of geomatics, choked off the industrial development that could have happened here and should have happened to a great extent in Saskatchewan and Alberta but did not, because they pursued quick payback policies.

Mr. Deputy Chairperson: Item 10.3.(d) Information and Telecommunications Initiative (2) Canada-Manitoba Communications Technology Research (c) Grants $482,400--pass.

10.3.(d)(3) Telecommunications Marketing (a) Salaries and Other Benefits $287,500.

Mr. Sale: Could I, Mr. Chairperson, ask the minister, through you, where the third last Expected Result on 3.(d), the Introduction, might most appropriately come up? It is the development of a cable/telco alliance that come up most appropriately under this subappropriation, or is there another one that would be more appropriate?

Mr. Downey: It is fair to proceed right now with it, Mr. Chairman.

Mr. Sale: Mr. Chairperson, this is an area of some considerable concern for us for a number of reasons, and I want to make a bit of an opening comment in this area.

Manitoba has been reasonably successful in attracting call centres to our province. There are difficulties that we see in this industry. The first is that we have reason to believe that some significant incentives have been provided to some companies, not just the one that is best known, Faneuil, but a number of other companies in terms of rates, some other incentives that have helped to attract the industry. I suppose incentives are a fact of life in interprovincial competition, which was supposed to be done away with through the interprovincial trade agreement. We are all going to be playing on a level field, but I suspect that field has still got a lot of bumps in it.

First of all, we are concerned about the level of incentives that have been extended to attract companies to Manitoba; secondly, we would ask the minister to provide us with some very clear indications of how the jobs and the job creation rate is counted.

As the minister knows, in government we talk about staff years, SYs, and I think that it is unlikely that is the mechanism that is used in counting call centre jobs, because as the minister knows I am sure, most of the employees of call centres are permanent part-time employees. Few have any benefits because of their employment patterns, and their employment patterns are quite irregular depending on whether the call centre has a contract or not; if there are no calls to be made then nobody is in calling.

I would just give the example of polling firms who, if you ask a polling firm how many people they have, they will give you the number of people they can call in to do a contract, but if you ask them how many people are in today working, they will tell you how many people are in today working. Some days it might be none, and some days it might be 150 So the actual employment created is not the number of people who have actually worked for them in any given year, it is how many hours they have actually put in towards anything like full-time work.

Our second concern is that the way in which we count the jobs needs to be standardized, and we need to understand when we are told that there have been 200 jobs at, let us say, AT & T, or Faneuil or Systemhouse or wherever, we need to understand the basis on which those jobs are created.

The third concern is we were told that there are a number of call centres in Manitoba that are having difficulty meeting their cash flow requirements. I think that it is highly likely given the huge expansion in this industrial sector in Canada and the United States that there will be a shakeout in this area. We are very concerned that some of Manitoba's firms may be at the beginning stages of being part of that shakeout.

So if I could address those broad questions to the minister, and in particular, we are asking, Mr. Chairperson, for very specific indications of how jobs are counted, and we would like to know some significant detail about the numbers of jobs in each of the call centres that we have assisted in one way or another.

Mr. Downey: Mr. Chairman, this gives me the opportunity to make one quick response that I should have made during the discussion on tourism. The StatsCan information that he was working from the other day, it is my understanding from the department, we have been informed by Stats Canada that they have changed the calculation of numbers of tourists coming across the border and into Manitoba three times since about 1981, which the member made reference, that in fact the bases from which he was using are basically meaningless because you cannot compare apples and apples with a change in calculating the numbers three different ways over that period of time. In fact, they have provided the department with a letter saying pretty much to that effect. I wanted that on the record.

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Mr. Chairman, as it relates to the call centre activity, I think what we consider the jobs--we call them full-time equivalents--I can give him a global figure that we have established in the province with the development, and contrary to what public impression may be, we have been extremely successful in the establishment of call centre jobs in Manitoba of very high quality. I think the working conditions, any interviews that have been done, any discussions that have taken place, I would say the majority of them are extremely satisfied with the work activity. The numbers that we have are just under 4,000, just about 3,800 full-time equivalent jobs is what we refer to them as. We are not unhappy with that number. We are currently in discussion with many other people in the call centre activity and hopefully we can accomplish some more.

As it relates to those ones that we have assisted and full-time equivalent jobs, I will get that information for the member. It is providable. I do not think there is any reason why we cannot provide it, and I will get that on the ones that we have supported.

Mr. Sale: Would the minister define what a full-time equivalent is? What is the full-time equivalent?

Mr. Downey: It is usually based on the standard hour of workweek that each company--some have a 37 hour workweek, some have a 40 as a company--and we base it basically on the number of hours that would equate to that 40 hour workweek and consider that as a full-time equivalent.

Mr. Sale: Mr. Chairperson, so it is the workweek equivalent of whatever company is the employer. That is very helpful.

Would the minister be prepared to table a list of the call centres that total up to the 3,800 jobs, with the approximate number in each call centre at the present time or as of the 3,800 number?

Mr. Downey: Mr. Chairman, as I indicated, I am prepared to table what we have provided assistance to. I am not able to provide what other people who are maybe in--that would be information that is not in the public interest as it relates to competition from other areas. So I will provide it for those that we have in some way reached an agreement, where they have to reach certain numbers of jobs as it relates to the support that they get from the province.

Mr. Deputy Chairperson: Item 10.3. Strategic Initiatives (d) Information and Telecommunications Initiative (3)Telecommunications Marketing (a) Salaries and Employee Benefits.

Mr. Sale: Mr. Chairperson, I am not finished in this area yet. I want to ask the minister, he provided information about tourism. I am aware that StatsCan changes definitions from time to time. Would the minister table a letter from StatsCan so that we have an indication of the periods of time at which changes took place and what were the nature of those changes so that we might understand where our numbers are in error. I would appreciate it if he could do that. The fact remains that even more recent years, and I do not know which year there were changes, Manitoba's record does not appear to be as favourable if we go from even 1988, which is fairly recent. If we look at last year, which is even more recent, Manitoba does not stack up well, and so I would be interested in seeing StatsCan's new definitions or changes that render the information, the historic time series, inaccurate. I presume that the point-to-point comparisons are still accurate, though, for any given point in time. So given that, we still do not have a sterling record even on point-to-point basis.

Mr. Downey: Mr. Chairman, I will make an attempt to provide the information for the member, particularly if it is helpful to my side of the argument.

Mr. Sale: Mr. Chairperson, I expected no less from the minister.

Okay, I want to ask some questions about the current situation with a couple of the organizations that grants have been provided to. I want to start with GWE in Brandon, Mr. Chairperson. GWE provides fundraising activities for a number of Manitoba charities. It is our information that the cost of the fundraising frequently exceeds 50 or 60 percent of the dollars raised and sometimes goes as high as 80 percent of the dollars raised. My question to the minister is whether he is aware of Revenue Canada's rulings about acceptable levels of expense in fundraising and in expensing charitable dollars. It would seem to any sort of reasonable reading of the situation with GWE in Brandon that Canadian taxpayers who think they are providing support to charities are really in effect paying the freight with a charitable receipt for a private company that is making a profit. The expense ratios of most charities does not exceed 10 percent of the monies raised, and, in the case of some charities, it is lower. Does the minister share the concern about the expense ratio, and is he aware of Revenue Canada's concerns in this regard?

Mr. Downey: Mr. Chairman, I would take this as a concern between the three parties, of which we are not one of them, that being the federal tax department, the other being the GWE company, and the other being the client. What our job is, is to make sure that in any support that we give, they live up to the agreement that has been established between the province and GWE before they get the support which is committed. So I am not aware of--there may be some within the telemarketing branch that are, but the staff who are with me at this particular time are not aware of any discrepancies in this particular case. For the information of the member, I could check into it, but I do not think it is relevant as it relates to what we have to do with GWE.

Mr. Sale: Mr. Chairperson, I think it is extremely relevant in that provincial funding support has gone to a company that I think arguably is transgressing at least the intent if not the letter of Revenue Canada's rulings on acceptable ratios of fundraising for the provinces by providing support to this company. In some sense, at least, it is party to a fundraising practice which I do not think meets the tests of fairness or of stewardship on the part of Revenue Canada.

I realize that that may be technically Revenue Canada's concern, but I believe that the province has a moral obligation to not be taking part in an organization that is bending all normal understandings of charitable fundraising activities quite badly out of shape, so I would ask the minister if he would not share my concern that the government by supporting GWE at least appears to be supporting a situation where fundraising is an extremely expensive proposition.

Mr. Downey: Mr. Chairman, I do not know specifically what the member is referring to. I am not aware of the federal government, the taxation branch, giving us notice that in some way we should be paying money that we would have normally paid to GWE for meeting a contractual arrangement, and in some way they would want to garnishee it.

I am not aware of that. I do not see it as being a lot different than what would be the Manitoba Agricultural Credit Corporation lending money to a farmer, as it relates to an income tax problem that they may have, and we should force our way into it to get involved.

If we were asked or requested to, then we would be co-operative in the efforts at which the other levels of government were trying to carry out their work, but I am not quite clear as to what the member is saying; should we be pushing ourselves or forcing ourselves into a situation which, quite frankly, the case that he puts forward has not been made that we should.

I will check with the department to see if there has been a request by the federal government, the taxation branch, to in some way lay claim against the funds that may have gone to GWE because of improprieties in the way in which they have been paying their taxes.

I am not aware of that, and I do not feel compelled that I should be pushing my way into that situation. The initial program was to get GWE established, to hire people in the Brandon area which is where they decided to locate, and if they meet their conditions, they get the support from the province. If they do not, they do not get the support from the province.

Any communication from the federal government I am not aware of, but I will certainly look into it.

Mr. Sale: Mr. Chairperson, I thank the minister for being willing to look into that, and I would appreciate a report back as to whether Revenue Canada's guidelines are being exceeded in the work of this company.

I would be prepared to pass this area at this point and go on with telemarketing. [interjection] I am sorry, it is 5:30.

Mr. Deputy Chairperson: The time being 5:30 p.m., committee rise.