The Acting Chairperson (Mr. Ben Sveinson): Good afternoon. Will the Committee of Supply please come to order. This section of the Committee of Supply has been dealing with the Estimates of the Department of Highways. Would the minister's staff please enter the Chamber.

Okay. We are on Resolution 15.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $438,900.

Mr. Gerard Jennissen (Flin Flon): I am wondering if we could continue in a more general vein asking transportation questions, as was started yesterday, before we get to specific lines in the Estimates, if that is all right with the minister.

Hon. Glen Findlay (Minister of Highways and Transportation): Yesterday we were talking, at the end, about federal money and state of the highway network and some of the challenges we face. I think that was the general nature of the member's question. I would like to continue on that for a few minutes.

I talked in terms of the kind of tax dollars collected federally and provincially and what we have put into the road system, and the fact that there has been no agreement at the federal end for a national highway program, although there has been nine years of discussion in that context.

I want to also mention to the member that over the last number of months, under the WGTA transition fund that was coming to the three prairie provinces to deal with the infrastructure challenge that would be created because of more grain moving from rail to road, we argued long and strenuously for the federal government to recognize that the WGTA transition dollar should be used for road infrastructure. That was the way the money has been distributed in Saskatchewan and Alberta to this stage.

We had a coalition of farm organizations, UMM and this department and Agriculture and Rural Development, all strongly supporting the principle and advocated it to the federal government that those monies, that some $26 million worth, should be used to deal with the challenge on municipal and provincial roads. I am sure the member is aware that the Honourable Jon Gerrard then chose to say no to that and has dedicated the money to a variety of projects, very little of it, virtually none of it, going towards roads.

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At the same time, in the extension of the infrastructure programs, some $40 million, $41 million going to the Province of Manitoba for 1997, we argued long and strenuously that there should be a component of those infrastructure dollars going towards roads, rural roads, city streets, and we are certainly pleased to report that a third of that money, approximately $14 million, has been dedicated to roads in rural Manitoba. The announcement, as the member is aware, has gone out in recent days for the wide group of roads that have been approved, mostly from municipal applications, so the municipal roads, I think on that list, there are about six, maybe seven roads which would be called provincial, part of the provincial network, usually in a town or village, so it is a piece of road that is important to them.

So we are facing what I call a tremendous infrastructure deficit. When I came into this department three and a half years ago, the deputy and I discussed the kind of wish list that was in front of us in terms of all the requests for road reconstruction, rehabilitation, additional new roads, new bridges, and at that time he came up with a figure of $600 million on the wish list. That figure has grown to in excess of $1,100 million and this comes from meetings with municipalities and different interest groups and MLAs, like the member opposite, requesting roads to be done here, there and all over. We have approximately $100 million a year to deal with the challenge of $1,100 million in requests, and that is why the fact that the federal government has not come to the table with any dollars to deal with the challenge we have in '97-98 is very, very serious.

We have expended a lot of sweat equity to try to get this to happen, and all the ways and means available to us, NHP to WGTA to infrastructure. At this point I guess all we have accomplished is a third of $14 million going towards rural roads in the infrastructure. We still have hope and expectation that the federal government will realize the infrastructure deficit exists across Canada, and that they have to come to the table to improve the infrastructure with capital dollars.

The federal transportation committee headed by Reg Alcock had a series of meetings right across the country a few months ago and really came up with a recommendation of status quo. It had no new money. It had no new, innovative ideas other than possibly what they call public-private partnerships, which was really another word for deficit financing for building roads today and paying for them tomorrow. Not new, not innovative, and not really going to deal with the crunch that is in front of us today.

Today, I think the member used the words "user pay" in his opening statements. Certainly if we build something, we have got to pay for it. If you want to pay for it later, that is deficit financing in another form, and it just puts further burden on successive governments and generations if you do not pay for what you build today. In a broad sense, that is where we are at.

The challenge is daunting. The demand is high. The economic activity out there on our road system is extensive, it is growing. We have tremendous north-south traffic now. When you talk about Emerson, we have got 600-plus trucks a day going through Emerson and about 700 cars, so that shows you the kind of volume activity that is happening there. We talked to the federal minister. We talk in terms of our trade orienting more and more, as the member mentioned in his opening comments, north-south versus east-west. Where we are going to have to spend our dollars to serve that economic opportunity is on dollars on north-south roads.

Nationally, they have a tremendous responsibility to try to deal with the east-west infrastructure of the country. One particular stretch outside of Manitoba that I might mention is a stretch of road around the north side of Lake Superior, not in great shape. The trucking industry more and more is going south out of Manitoba and travelling to Ontario or eastern Canada through the United States. That is losing the economic activity of those trucks and the buying power they have, whether it is fuel or whatever it is, losing it to the U.S. economy, simply because Ontario has chosen that it cannot afford the costs. We have talked of our problems of building that road without some federal support.

So in a nutshell that is the issue, and I am certainly prepared to discuss it more as the member wants to ask specific questions.

Mr. Jennissen: I thank the minister. Very interesting that he mentioned Reg Alcock. I am also not in the habit of quoting Reg Alcock, but he did have a very interesting analogy or metaphor, though, about our crumbling infrastructure. It is in the Heavy News, such as the Heavy News Construction magazine. If the minister would not object, I would just like to read that into the record. I thought it was a nice analogy. He says doctors tell us that one of the early signs of arteriosclerosis is a subtle weakening of the body. This loss of energy and vitality is all too often dismissed as simply a sign of old age. As a result, the disease goes untreated and the body deteriorates unnecessarily. Interestingly enough, this same process can be observed in our transportation infrastructure during economic slowdowns. We postpone needed work which allows our capital assets to deteriorate. Our transportation arteries become constricted. Our ability to move goods and people diminishes, and the economy loses vitality which I think is what the minister has also identified. What I am asking the minister is, is this then merely an identifying of the problem by Mr. Alcock or purely rhetoric, and there is nothing backing this?

Mr. Findlay: I would say in terms of discussions I have had with Mr. Alcock, and I appeared in front of his committee too, he believes that statement. His series of meetings, he got the message loud and clear as to what I have just said. He has basically reiterated the same thing, that the asset is deteriorating, and if it allows to continue to deteriorate, there is loss of economic activity. He understands the problem but at the end of the day, as I said to Mr. Alcock, you have not brought a single dollar to the table to resolve the problem. A little bit to his credit I guess, at the beginning they used to beat up on the provinces. Through the process he stopped beating up on the provinces. They identified the problems and say to the province you have got to fix it. At least they have stopped that rhetoric and identified the problem, but they bring to the table no solutions in terms of dollars. You cannot build roads without dollars; it is just that simple. He fully recognized that they take the taxes out of the system, but he has not been able to lever any dollars back.

He has had discussion, and he has really stated the obvious. What you just read is a restatement of the obvious, and as ministers of Transportation, whether we are new or old in the game, we are all getting frustrated. We all know the problem, and we all know who as a player should participate in helping to have a national infrastructure. It is some federal component. I do not care how small they start, but they have got to start.

If I remember some other numbers, we are the only country in the economically developed world that does not have major roads built by the federal government. In the U.S. it is 100 percent. In Canada they put 6 percent of the dollars towards the road system. It is a shame, and every time there is a federal budget comes up they get lots of input, lots of leverage, but at the end they say no. They do not allocate anything. As ministers of transport, ministers of Finance, Premiers, we have all raised the profile; we will all support the initiative. At the federal end they do not disagree with what we say, as they might have a couple of years ago. But they still have not brought any money to the table to deal with the problem, and that is fundamentally the bottom line. As long as they stay away from the table, there is a degree of deterioration that is going to continue to go on right across the country. As mentioned, there will be loss of economic activity, particularly from the commercial sector using the Canadian roads.

I think Ontario is one of the big losers in this game, and I would imagine New Brunswick too because there is an ability to go on the road south of the U.S.-Canadian border and bypass portions of Canada, even though the originating and end points of that trip are Canadian origins and destinations.

Mr. Jennissen: At the same time do I presume the minister is sympathetic to what the federal government is trying to do? They are also trying to do some cost cutting because they are paying, what, 30-some cents on their debt dollar, whereas the province is paying a lot less. I am sure that would be their argument--not that I am agreeing with the federal government.

Mr. Findlay: The member makes a valid point. Yes, they are way behind the provinces in dealing with their fiscal deficit. All we are trying to do is raise to the highest possible profile the infrastructure deficit and the economic challenge that infrastructure deficit is going to create.

As things unfold in the next two or three or four years, at the federal end they will ultimately get themselves to a balanced budget, no matter who is in government, because that is the agenda of all the parties that have a chance of forming the government. I do not mean that as any kind of negative comment, but it is important that we raise our profile because other interested parties, whether it is Health or Education or other interested agencies, will be arguing that the new expenditure should go in their direction. We have got to raise our profile to the highest possible level that there is. In addition to an economic deficit, a fiscal deficit, there is an infrastructure deficit, and it cannot be left unattended forever and a day.

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Mr. Jennissen: When we are talking about infrastructure deficit, the gap between what we need and what we invest in road infrastructure, we notice, though, that that gap, that deficit, as the minister pointed out, continues to widen. We also know that road repairs are costly, that bridges especially are very costly, and I was just wondering if the minister could confirm that the same figures or perhaps different figures hold for the ones that were quoted by the Auditor-General, I believe it is, from Ontario.

(Mr. Neil Gaudry, Acting Chairperson, in the Chair)

He stated in his report that the basic preventative maintenance of asphalt highways such as crack sealing and patching is between $500 and $1,000 per lane-kilometre. If such preventative maintenance is ignored, the need for rehabilitation measures will arise sooner than it should, typically about 12 years. Rehabilitation, which includes resurfacing and localized base repair, costs about $80,000 per lane-kilometre. If rehabilitation is carried out when needed, the life of the pavement is extended by another 10 to 12 years. If rehabilitation is ignored when it is needed, within just two or three more years the only remaining option will be major reconstruction at any average cost of a quarter of a million dollars per lane-kilometre. Now those are rather startling figures. Are we facing the same figures here?

Mr. Findlay: Mr. Chairman, he is the guy with the federal dollars. Our costs are in the same category, maybe a little less, but as long as roads get used there is a constant deterioration from the wear and tear of use, as well as we have the weather-related deterioration, the freezing and thawing that is as bad here as it is anywhere.

The member mentions preventative maintenance. Absolutely. The more you can do, either in preventative maintenance or in research to how you build the roads and research into how you maintain the roads, you can prolong the life. Our objective constantly is, find the lowest cost way to maintain the road for the longest period of time.

I might relate to the member a story I picked up in P.E.I. just to understand, there are different ways to do things. The member mentions bridges, and I was in P.E.I. and we were at a ministers' meeting. They took the ministers out to the Confederation Bridge, the fixed link from P.E.I. to mainland Canada. We were talking to the head guy, and I want to also tell the member, this is a totally Canadian operation, Canadian engineers, Canadian ingenuity, the biggest Canadian research engineering project probably in a long, long time. It has brought a lot of world recognition to what they are doing. They had the sections there, the sections which are two football fields long that they build on the mainland and then haul them out by 35-storey-high boat out and put them in place with GPS positioning.

I asked them: What is the length of life of this bridge? And he said, oh, 80 to 100 years. You would more or less think 25-50 years here is what I have heard from our people over the course of things. How do you get this long life? Well, this is a design, build, maintain, finance project by the private sector where they signed a contract that they were going to build it, maintain it, and get the revenue from the use of it over 35 years along with a constant federal subsidy of $35 million, $40 million a year, I believe.

(Mr. Ben Sveinson, Acting Chairperson, in the Chair)

So they built it to a much higher standard than would normally be the case or that we might build here in terms of the standards we have used. The interesting part of the story was, I said, well, how do you do that? He said, we source the very best aggregate in Quebec. He said, in the process of signing that contract and being sure that everything over the four-year period was on time--it was all scheduled out on time, on time, on time, because there was a big penalty if they did not have it open by June of '97, which is upcoming very shortly. He said, we have sourced the very best aggregate in Quebec. He says, the biggest challenge we had in all our planning was the Quebec referendum, because what they signed would have been an agreement that would not have been valid had it been a yes vote. So they were exceptionally nervous. It was the most nervous issue they had because they had a serious problem if it would have been a yes. So they actually went and signed an agreement with the potentially winning side in that argument in case it was a yes.

So that is the complexity of it. All I want to point out is, there is an ability at a higher cost to build something to last a longer period of time, and I am sure that is true with everything. I talked about the smart bridge that is being built at Headingley. Clearly that process of building, that process of information gathering to manage the wear and tear on that structure will allow appropriate and effective maintenance to prolong the life. In a per-year-of-use or per-vehicle-use entity, however you want to measure it, hopefully the bridge is cheaper in the long run and its replacement time is reduced.

What I am saying is not unique to Manitoba. It is not unique to any jurisdiction. It is just a global infrastructure deficit, and I have seen a figure of global infrastructure deficit, and it is in the trillions, I think maybe $3 trillion or something. It is developed by the industry as a plot. Whether there is a future for them, there is a tremendous future, because everything that is built has a deterioration wear-and-tear factor to it and always needs to be replaced.

That is the issue we face, and I do not know what we can do other than maintain the highest possible profile. We have got a high profile here. I think we have got a high profile with the different federal parties that are running, and nobody disputes what we say about the need, nobody disputes the fact that there is an infrastructure deficit. There is a tremendous economic benefit in the building capacity and the use of the infrastructure, but the source of the dollar remains the big hurdle that we still have.

The member might say, well, just raise the taxes and collect some more revenue. We have been on a constant agenda of not supporting increased taxes. We say constantly live within your means, and many provinces support us in that context. So it is a matter of choosing priorities, and we hope that at the federal end ultimately, it will choose a priority that road infrastructure replacement, rebuilding, refurbishing, maintenance becomes something that they are prepared to participate in Canada-wide.

Mr. Jennissen: Now, just to clarify for the minister. I was not advocating an increase in taxes, but still the dilemma is there, and sometimes an ounce of prevention is worth a pound of cure. Sometimes you have to borrow a dollar to save a dollar, and I wished we did not face that dilemma, but we do.

But just as an aside, the minister did mention the Headingley bridge again. Just for my clarification and I am really unsure about this, but reading that some of the up-to-date, modern cutting edge technology material is being used has 600 times the strength of steel, now I find that hard to believe, I guess is the word. Like, how do you test the material and say it is 600 times as strong as steel? Do you put 600 times as much weight on it or how do you do this?

Mr. Findlay: Mr. Chairman, I think the figure that they use is 10 times the strength of steel, and it is a carbon fibre. I have seen it in rods. I have seen it in mats. I was telling the deputy I want to go see that bridge to see what they have done and how they use it, but it is exciting and from the standpoint of what they are doing relative to that bridge, the fact that the research activity is headed by Dr. Sami Rizkalla at the University of Manitoba is exciting as here.

Ultimately, as this technology becomes more cost-effective, there is also a whole economy in making the material and selling the technology for its use worldwide as opposed to just here. So it is not only what it can do for our infrastructures if we can create in terms of engineering and manufacturing capacity and capability in Manitoba or Canada for export to the world. So there are a lot of benefits from being at the leading edge in terms of this kind of technology.

Mr. Jennissen: I thank the minister. Back to the national highway system though. Thirty-eight percent of our national highway system is substandard and, in fact, CAA Manitoba has listed how it is substandard. I would like to just go over those points. I think it is good to have them in the record. It is entitled, What is wrong with the national highway system? I just want to go through them and see if the minister concurs that is indeed what the problems are.

Number one, funding for roads has been decreasing, car and truck traffic has been increasing. Secondly, much of the system is already beyond its intended life span. Thirdly, in 1988 the national highway policy study revealed that 38 percent of the system was substandard. That percentage might have risen, since provincial funds for highways have not kept pace with maintenance and repair needs. Fourthly, 33 percent of the system is substandard from a geometric design perspective which compromises safety for users.

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The next point is, 18 percent is substandard from a serviceability viewpoint, meaning traffic cannot move at 90 kilometres per hour under normal conditions because of poor surface or congestion. Next point, 26 percent of pavement surfaces are substandard, delivering a poor ride. The next point, according to CAA national survey, 30 percent of members rated the condition of their roads and highways as good in 1990; but by 1994, only 18 percent gave their roads a good rating. The last point was, Canada is lagging behind its NAFTA partners in highway transportation. United States has an interstate network of divided highways and a national highway system of other key highways. Mexico is currently building a high quality national highway system. Canada's national highway system continues to decline.

I could add, and I think I talked to the minister yesterday that some of the European roads I was on last year are just phenomenal in terms of being modern and safe and wide, just quite a difference from what I see in Canada. Would the minister comment whether he agrees first of all with the CAA list?

Mr. Findlay: In terms of a long list of items, fundamentally, no, I cannot disagree with what they are saying. They make comments about, you know, funding is decreasing, traffic is increasing. Well, funding, if we take into account inflation, maybe you can say it is decreasing slightly, but it is reasonably consistent and constant, at least from our point of view. Provincially, yes, the federal dollars that we once had have shrunk. So, yes, I guess you could argue that we were up at $110 million at one point in terms of our capital annual budget, and now we are down to roughly $98 million. Definitely traffic is increasing; there is no question about it--particularly large truck commercial traffic is increasing.

Just as a bit of information for the member, when we do traffic counts, that is how we judge a traffic increase for sure. The numbers increase. Generally you run 10, 12, 15 percent trucks on most roads, and a really high tourist road, a low truck traffic one, might run 5 or 6 percent trucks. Recently measurements were made on Highway 16, and it is up to 21.6 percent trucks. That is phenomenally high for trucks, and to think that road can withstand that kind of use based on the way it was built a few years ago, and the sections have been built over the course of time. We are starting to see more wear and tear on that road than would have been predicted from the kind of use that was projected when the road was built, so an increased challenge to the road because of the increased traffic in total, particularly the big increase in truck traffic.

I think the member mentioned NHP and the significant need for it, and all that. It is all part of that picture.

The safety and the geometry of roads. As we do things, we constantly try to respond, but building a turning lane, say, in a location where a high through-put elevator is built, where you know you are going to have a lot of big truck traffic, particularly semis in one form or another turning, you can spend $400,000, $500,000, $750,000 quite easily just building turning lanes to accommodate those big trucks, to improve the safety for the through-traffic public, give those trucks some place to go when they want to make a turn or some place to speed up when they are coming onto the road.

The member mentions going from 30 percent good services in 1990 to 18 percent in '96, probably symbolic of what we said in terms of the infrastructure deficit. We are losing ground as opposed to keeping up. I think I can say to the member that we put roughly the $100 million a year into capital, into our roads. I think analysis like what he is mentioning would indicate that to stay even, to keep up with the rate of wear and tear and deterioration, we should be spending around $125 million a year--that is on the existing network--and we should also, at the same time, be spending about another $50 million a year on new road construction, like four-laning in existing two-lane ones, as we are doing with 59 south, converting it to a four-lane--14 kilometres is going to cost $60 million. You know, it is big dollars, short distance--or the interchange at Lagimodiere, or Highway 59 at the northeast corner of the city, the interchange with the Perimeter. Currently, it is level lights at the interchange, and it is a $29-million cost to build the infrastructure for the interchange there. It is big because of the high-traffic volumes, and that is an astounding figure, but it does symbolize what we face. At the same time that you spend that kind of money on two kilometres of road, you have got another 18,000 kilometres that you have not spent money on.

The member mentions Canada versus the U.S. I suppose, certainly, you could find some U.S. roads that have been rebuilt and they are in fantastic shape, but a lot of their interstate network was built in the '60s, you know. Well, some of it which I have driven on, it is starting to show wear and tear, and I am sure they are scratching their head where the dollars are going to come to rebuild the tremendous network that was built in the '60s, which was away ahead of us at that point in time. Whether they are ahead of us in terms of the infrastructure deficit they face today, with the kind of large cities they have and the high cost of building roads in and around the cities, I do not have a handle on, and I do not know if my staff do either, but we focus on the challenges we have got at home.

We know our challenge; we know our problems; and we know the demands that are out there--and the increasing demands. Every time you hear an investment, whether it is in Winnipeg or anywhere in northern Manitoba or southern Manitoba, an investment of $50 million creates a 100 jobs or $250 million creates 200 jobs, there is always an infrastructure need associated with the activity of that operation on an ongoing basis, whether it is lumber, mining, or whether it is agricultural processing. There is always a challenge.

I mentioned to the member about timber hauls in the North and ore hauls, and the railway question of less track and more tonnage running on the roads. The operators, the users, the bill payers see a greater efficiency, cost efficiency in many cases of running on the road, but the taxpayer does pick up the roadbed costs on an ongoing basis.

We are in a state of rapid evolution. To think that we are going to catch up is quite a challenge in the next two or three years. I would like to think we are, but again I come back to one common denominator. Until we get some federal dollars in this system, every province faces exactly what I am talking about.

Sometimes I think we have got big costs. The member mentioned some costs. It was not too long ago when we had a ministers' meeting in Victoria to see the kind of roads they are building on Vancouver Island and the challenge they have to build them. Our costs are nothing compared to what they face. Either it was land cost or it was construction cost because of all the rock or because of all the bridges that have to be built. Everybody has got their challenges. Whether the Canadian taxpayer can continue to supply the kind of road infrastructure we need in a vastly scattered country like Canada remains to be seen.

First we have the scattered principle, we have long miles, but also at the same time our population wants to concentrate in the cities. In order to build the roads to serve that, again the costs rise exponentially. I do not paint a very good picture at times but, nonetheless, that is just exactly as we face it.

Mr. Jennissen: The minister mentioned that construction dollars have stayed relatively constant over a number of years at roughly $100 million. In fact, if my figures are correct, 1981-82 $97,950,000 and some change, so the figure for 1981-82 is about the same as for this year. Now, in those 15 or so years, that means a lot less dollars, because we are talking, this is 15 years later. I know the cost of inflation and so on and so on. Although we are constant in terms of dollars, we are not constant in terms of bang for the buck. What the minister is saying in effect is that we are gradually on a down slope. Is that correct?

Mr. Findlay: He said '80-81, but in '86-87 it was down around $85 million, and we got it up over 100 to 110 with some federal dollars in the SHIP program. It slipped back as federal dollars had disappeared from the SHIP program, slipped back to where we are at today, just around a hundred, that we identify as direct capital. We have other aspects. Whether it is the grant in aid for streets, the bridge program, or the roads that we do for the former LGDs, our total capital, as you will see in the Estimates, comes in around $106 million.

All I will say to the member, we are way short of what is urgently needed to maintain our infrastructure at what I would say the level that most Canadian users want us to be at. At the same time, they are not prepared to see more taxes to achieve that, not at this point in time. That might change in a few years, but at this stage they are saying, do what you have to do with what you have got.

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Mr. Jennissen: It is still disconcerting to realize that in 1982-83, which is a year later, we were spending more money on road construction than we are today in 1997. So it poses a real problem.

The minister makes reference to the fact that there has to be funding, and of course everybody has identified lack of funding as a big villain here. Does the minister support an idea such as the CAA campaign, which asked the federal government to contribute 2 cents of every 10 cents collected in gas taxes to fix the crumbling national highway system? Would the minister favour that kind of an approach?

Mr. Findlay: Yes, we do. As I said earlier, NHP has been developed in principle as a road network, and the kind of rough cost I think today they are talking is $18 billion. That does not really matter to me. We want them to start, start with any amount and build on it. When ministers met in October of '94 here in Winnipeg, we put that idea in front of the feds. I said, Manitoba will take the lead to generate cost-sharing money from the 10 provinces, and I said, if we can do that, will you respond yea or nay as to whether you will match that money, in any formula, towards an NHP principle? We were told to have our proposals in by the end of October, I believe, that year, and we did.

We generated across Canada. Nine out of 10 provinces proposed to put on the table $2.6 billion over five years, which caught the feds off guard who did not expect us to be able to do that, and the one province that did not was Quebec. Because of the referendum and all that kind of stuff, they were not prepared to do that yet. At the federal end, the Honourable Doug Young had committed that they would make a decision by December 15, and, lo and behold, they did; on December 15 they said no.

So we did what we had to do as a province to try to come forward and opt up, and they chose to say no. Whether they start at one cent out of the 10 cents they currently collect per litre, or 2 cents, all we want them to do is start, just start, and we will see the benefits grow.

I really do believe that it is fundamentally no cost to the federal government to do this, because in the infrastructure program, where it is a third, a third, a third, for every million dollars they put up in that cost-sharing agreement, they get their money back from the total project in the course of one year. So it is a tremendous investment because of the economic activity they create in the building of infrastructure, and the same applies here.

I do not think Mr. Alcock would disagree with that. They have done their work; they have done their analysis, but he cannot sell it with his colleagues that it is a very significant, good investment of their dollars. You get the asset improved; you get the economic activity associated with the building of that asset and then the using of that asset forever and a day. If there is a stumbling block there, I cannot tell the member exactly what it is because they have the capacity to earn the money back through the tax system, and they collect 10 cents a litre. Now, that is roughly $5.5 billion a year, but they are just saying no.

I do not know of anybody that is on their side in this argument. As I said earlier, I mean, the CAA, the trucking industry, the construction industry, every Minister of Finance, Minister of Highways and Premier is onside that it is absolutely essential to do it, and the strength of those commitments have grown over the years. The CAA says start with 2 cents out of 10--great, that is a start, and it will grow from there, but so far we have not even got that commitment or any understanding that that commitment is under discussion for the future. When we have a federal election on, you would think that that would lever somebody to step up to the bar and say, we are ready to go if you vote for us, but it just has not happened.

Mr. Jennissen: Just so that I am clear, was the minister saying that, as the CAA recommended 2 cents per litre from every 10 cents of the gas-tax dollar from the federal government, the province was willing to match that at 2 cents a litre?

Mr. Findlay: We are currently putting up every cent per litre that we collect. We are putting up a hundred million, and they are putting up zero. Then lots of people could say, well, you put up another 10 million, and they will match it. Well, let us have them match the first hundred million first. I mean, why should we be levered to put more money though our revenue sources when they put none? I mean they have an ultimate responsibility.

No matter how you cut the argument, they have a moral responsibility; they have an economic responsibility; they have a nation-building responsibility to start putting something towards it and say, well, we will put it up only if we match it. Well, we put it on the table, the $2.6 billion, as nine provinces. We put it on the table and said, here is our money for five years, approved by ministers of Finance and Transportation in those nine provinces, and they chose not to match it.

I think the provinces have all done their reasonable share to try to keep this infrastructure at an acceptable level, and at the federal end, they collect the taxes out of the system, put nothing back. I am frustrated, fundamentally frustrated, that we collect--as I said in my opening comments the other day, I said that we collect from the system roughly the $160 million, $180 million, and that all goes back in capital or maintenance to our network. They take out of Manitoba roughly $155 million in taxes, and with this budget we get zero back. We are doing our thing. They have to start meeting us at the table with some kind of catch-up, not that we could lever higher. They have to start getting involved.

Mr. Jennissen: So can I assume then from those comments that the minister is saying when the CAA suggests that we can rebuild the national highway system in 10 years if the federal government were to devote its 2 cents, but providing it was matched by the 2 cents from the province, that the minister would not agree, because essentially it means that we would have to jack up the provincial gas tax another 2 cents, right?

(Mr. Marcel Laurendeau, Chairperson, in the Chair)

Mr. Findlay: I would have to do the arithmetic on whether 2 cents would do it. That is basically 20 percent of the $5 billion, so that is $1 billion a year over 10 years, doubled to $2 billion. Yes, okay, you would generate roughly $20 billion over 10 years that way, and the Canada national highway program does identify about $18 billion needed, current dollars, to meet the need. So, yes, fundamentally I think the arithmetic would work that 2 cents a litre, or 4 cents a litre really, as the member was saying, would move a long way.

At neither the federal level nor any provincial level that I am aware of do taxes get dedicated. It has been a tradition or a policy of provincial governments and the federal government that dedicated taxes are not something that is done. Again, that would be breaking new ground if there were a policy that you collect and dedicate. I know I have heard people say, well, if we just knew it was definitely going to roads, we would not mind paying more as a dedicated tax, but that is a hurdle with ministers of Finance that has not been crossed yet, federally or provincially, that you get dedicated taxes.

The other thing is that I am firmly convinced Canadians do not want to see more taxes because they see it as higher cost, and as long as it is going into the general revenue, they are really opposed to it. I can tell the member the federal government has not even advanced that argument to the public about, well, would you accept more tax that was dedicated. They have not even advanced that, and that would be the first hurdle they would have to go over.

Mr. Jennissen: Well, the minister does make a reasonably good argument about the average citizen not being in the mood for higher taxes. I agree with you, but the argument is harder to make, though, if you do have a surplus, if you do have a Fiscal Stabilization Fund of, let us say, $400 million or $500 million.

Now, if we are caught in this bind, is it then ridiculous to make the assumption that perhaps we should be trying to tap that fund? We should be saying we are dealing now with infrastructure that is so important to the welfare of our nation, to the economic lifeline of our province--what would be wrong with dedicating 20 percent of the Fiscal Stabilization Fund to infrastructure upgrading? Is that an unreasonable demand?

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Mr. Findlay: Well, with surpluses and every--well, not every--but most provinces except Quebec and Ontario are in this position or are very close to it, there are three things you can do with surpluses. One is you can reduce your total debt like start paying down that accumulated debt that exists; in our case, it is $6.8 billion over the course of the history of Manitoba. Or you can reduce taxes; that is the second option. The third is new spending. That is really what the member is talking about. You take your surplus and you get involved in new spending. So you have the three options.

We have talked about this with the public, and you will see polls that are done. Just recently in the paper there are polls about that kind of question. Very clearly, the majority of the public is demanding that we use the surplus for accumulated debt reduction so that the interest you pay in the future is less. So the surplus that you have with existing taxes grows and ultimately will reach a point in time where the public says, okay, now it is time to dedicate some of it towards new spending. But still, at this point, the highest public demand is that surplus money go towards reducing the accumulated debt, and that is where we are at this point.

To be quite honest with the member, I argue for ability to have more resources towards the capital of roads. Within the context of the provincial government, are you for it? I will also argue, as I have mentioned already, at the federal end to get some contribution from there. Ultimately, over the course of time, hopefully both happen, and you will see other provinces in the same situation, not necessarily ready to get involved with significant new expenditures, because the stability of our economy is not totally nailed down yet. I mean, yes, it is improving and our interest rates are low and there are some respectable signs, but there is a lot of nervousness in the economy about a wide number of events that could happen that would wipe out that annual surplus very quickly, and then new spending would hurt you.

So we are not in the position to get involved in the new spending idea other than, in my point of view, I keep the profile high so that when we cross that barrier where we start looking at new spending, the issue of infrastructure deficit is recognized in competition with all the other places that his colleagues would ask that it be spent or the citizens at large ask that it be spent. So I do the best I can to raise the profile as high as I can for whenever the door opens, and I get more opportunity to have dollars towards the capital of road infrastructure.

Mr. Jennissen: I am sympathetic to the minister's argument, but I do not think it is necessarily either/or. I guess you could do all of those things. You could still have part of a rainy day fund. You could still spend some on, you know, really needy programs, education and health and certainly road infrastructure as well as devote part of that fund to paying off the debt. No doubt about it, we have to pay off the debt at some point. I just do not think it has to be one or the other. I am not entirely convinced that the electorate is in a 100 percent antitax mode, especially if it was made clear to them that spending a dollar now would save them $10 tomorrow. I know it is not popular, however.

Mr. Findlay: Just a further comment, Mr. Chairman, the Fiscal Stabilization Fund may look like it has a lot of money to some people, but a lot of things could happen along the way. Clearly the flood we have had this year, yes, because there is a federal election now, we get all kinds of federal offers to, you know, cost sharing 90-10 and, oh, yes, they will pay the bills, and we got a $25-million advance. But let me tell you, I am not aware that we got paid for '95 or '96 yet for the Disaster Assistance money that they owe us, paying for the previous years.

If there was not an election on in '97, we would be in a serious stage right now and really leaning on the Fiscal Stabilization Fund to deal with the reconstruction for roads, for citizens' homes and businesses. It absolutely has to be spent by government. The call will be on us. We could not avoid it. Federally they have come to the table real quick, but it is because there is an election on. After June 2 our ability to get their willing contribution and support in this will be so much less than it is today. So we have got some good will from them because of the election, and we have had a terrible fight over the years. So we have to have that fund there to deal with these kinds of emergencies.

Heaven help us should there be a big hailstorm this year. You know, Crop Insurance might have a big draw that would challenge that fund. On it goes. These disasters have the ability to strike. We have been around here, have been in government nine years. We have seen droughts and hailstorms and floods repeatedly and fires. If it is not one disaster, it is another. The only thing that has not hit yet is the locusts. But along the way we have been able to reach a balanced budget, we have been able to reduce the debt and, ultimately, there will be considerations of newer spending down the road. We will do the best to be at the front door when that door opens.

Mr. Jennissen: In terms of getting real value for the dollar, is there anything in the offing in terms of new technology that could reduce costs, because the minister had alluded to it earlier that there are new materials coming on the market, perhaps new surfacing materials, stronger, harder materials? Is there, in the future, a chance that this would save us a lot of dollars? I am thinking 25 years ago or 20 years ago when I bought my first VCR, you know, it was $1,000, and now you can buy the same machine for a quarter of the price perhaps. Is that a possibility? I am grasping at straws here, but you are talking funding. Is anything happening on that front?

Mr. Findlay: Mr. Chairman, we are not dealing with the same thing as in the electronic industry. In the electronic industry, yes, costs have really come down. We do not have that luxury. When we build roads or pave roads or build bridges, you are paying for equipment that is used, for labour, for oil, for aggregate, and the costs of all of those have been creeping up. There is no shortcut on those kinds of costs. Yes, we use any available new technology at our disposal, whether it is in polymers or different kinds of asphalts or whether it is different textiles, geotextiles, but ultimately they cost more. They may prolong the life of the infrastructure asset that we are building, but fundamental kinds of savings the member identifies in the electronic industry are not achievable here.

When we build a road now, it either has to be higher or wider or more safety conscious in terms of turning radiuses and access and exit from those roads. Sometimes it has to be used as a dike, so it actually has to be higher. Two-lane roads were built with two slabs of 10-foot pavement. Well, now, if you want a bit of a shoulder on it, the shoulder is roughly a little over two feet. There is a narrow shoulder, or the full shoulder is a doubling of the 10 feet. So you have got increased demands because of the quality they want, the driving safety they want; it raises the costs.

The cost to do a mile does not decrease no matter what kind of new technology you grab. It just costs a bit more. There has been an immense pressure for certain roads to be four lane. We cannot sometimes afford to do it; simply the traffic volumes are not high enough. So you do pave a shoulder to improve the driving safety. But all of these elements do not help our cause here really.

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Something I mentioned earlier--I think I used Highway 16 as an example. It was built to handle certain kinds of weights over a period of time and had a lifetime to it, and now because of what has happened, that lifetime is drastically shortening and the department looking at spending more money on a relatively new asset in order to get the lifetime out of it that we originally thought we had because of the kind of use it is being put to because of the economic activity created by big trucks. Sometimes you say the wall you are trying to climb keeps getting higher. No matter how many steps you take up the wall, the height that you are going to is always way beyond your reach. That is kind of what we face. We use all the best technology available. We do everything we can to keep costs down, to be efficient, but still the challenge we have grows and gets further away from our sights. I do not mean that to be negative, but that is just the way it is.

Mr. Jennissen: So is the minister saying that prototype structures that are at the cutting edge such as the Headingley bridge do not actually save us any money, that if you can expand the life of that structure say to 75 years instead of the normal 25, 50, the costs of the new materials are so expensive, really there is no net savings? Is that what you are saying?

Mr. Findlay: Fundamentally, what the member says is right. We do not save costs--now, in fact maybe incur greater costs to build that, but the lifetime will be extended. So your cost over 100 years per unit of use or year of use is actually going to come down, but those savings are in the future and they are not here today.

As I mentioned earlier, one of the big advantages of this, and why I promote it so hard, is the ability to sell the technology to the world or manufacture the material here to sell beyond our borders. That is the economic activity you create. Of course, you get the taxes off it and your economy grows. That is the real bonus right now.

Mr. Jennissen: There are other technological innovations, are there not, though, such as electrochemical chloride extraction to increase the lifespan of concrete and concrete structures such as bridges? This is also something that the province is experimenting with, and I know other provinces like Saskatchewan are as well. Is that not true?

Mr. Findlay: Mr. Chairman, what the member mentions is a maintenance technique, and, yes, such techniques are used where and when it is deemed feasible, but, rest assured, the department is very conscious of trying to be cost-effective, efficient, use the best technology that is affordable and achieves some net benefit in the course of using it, short term or long term. It is always a judgment call. Yes, it works, there is a cost, and, to whatever extent the department believes from an engineering point of view it will do a good job, those kind of techniques will be used.

Mr. Jennissen: In terms of new pavement, are there any developments on that front? I know when I lived in Saskatchewan many years ago they were experimenting with shredding rubber tires, I believe, and putting them in the pavement. That, I think, was to lengthen the pavement life. Occasionally I hear stories about super pavement, but has such a product actually been developed?

Mr. Findlay: Yes, the department does use any means of improving the length of life of pavement. The member mentions super pavement. It has been developed in the U.S. under the Strategic Highway Program, and the department two years ago used it in a test section on Highway 240 at Portage south of No. 1 on the new stretch that was built to the new bridge going to Southport. So there is a test section there that is being utilized to determine what information can be gathered to determine its effectiveness relative to its cost in our climate under our conditions, but it was developed in the U.S., yes. The department is looking at another test section on Highway 44, on the new lanes that we will be paving that are currently programmed.

Mr. Jennissen: So we do not have test results then on how that pavement stands up?

Mr. Findlay: Mr. Chairman, we have one year of use, test results, and it is performing better than our existing pavements, but they need a little longer period of time to determine whether the higher cost and the better performance balances so that your net effect is ahead or behind.

So it has been an ongoing research project, and I would definitely assume that other provinces are doing the same thing. Our staff travel to lots of meetings to gather information, exchange information, so we learn from what we do as well as learn from what other jurisdictions in Canada and the U.S. do. There is a tremendous interchange of information on highway construction and new techniques right throughout North America.

Mr. Jennissen: The new automated weigh scales, the sort of help yourself type weigh scale that do not require personnel, are they sort of technologically advanced, or is this for a standard procedure?

Mr. Findlay: Mr Chairman, the member is talking about the automatic weigh scales. We have, we believe, four operational right now where the person pulls up and stops with his axle on the scale and then there is an electronic readout that he reads.

The idea here is to allow people to know what they are carrying. The long-haul commercial trucker when they load the truck or even the gravel hauler, he knows what a bucket weighs and it would be pretty close, but you get the farm community, the implement dealers, the kinds of people who put various types of loads on, those are not consistent loads. They are not sure what they have. It is the ability for them to weigh and understand what they are carrying. At least we think that if they are conscious of what they are doing, that it will improve their ability to not overload their vehicles, so we try to educate them to know what the right weights are.

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This first came to my attention from users probably about three or four years ago, maybe even before I was Minister of Highways, where the cattle industry came in to say, you know, these automatic weigh scales that we see in the U.S. would be fantastic here. We really do not know what we are carrying. We would like to live within the law, but we just do not know what we are carrying and these would help us. Wherever we come to one, we could stop, weigh, so that when we arrive at a legal weigh scale we know where we are at, and we can load accordingly so that we do not get caught and do not get ticketed. So it is a customer-service point of view, but it is certainly designed to protect our roads, so that vehicles are not over the legal load limit on the axles.

If you talk to any of our staff who are engineers, you talk about the exponential wear and tear on the roads and you start overloading your axles compared to what the road is designed to carry. There is a tremendous science in this as I have learned and continue to learn.

Mr. Jennissen: Yes, it does sound like a good proactive idea, and I am happy to see it being implemented, but talking about heavy loads, just looking at an article from the Winnipeg Free Press, Monday, November 25, 1996. This dealt with a paper by Barry Prentice of the University of Manitoba, Transport Institute, and Jake Kosior about how trucks on Manitoba highways over just a very short time have become bigger and heavier, I think he said. The most common tandem truck in 1994 weighed around 20,000 kg., I believe, but now we are at around, I believe, a 50,000 kg. weight. So, obviously, this trend cannot go on forever. I mean, are there some finite limits here or are there not? We are still dealing with the same amount of money, but the trucks seem to be getting bigger. So where do we end this trend, or how do we cope with this? Because it must be very difficult for the road system if you continue this.

Mr. Findlay: Just to give a quick little bit of snapshot history here in terms of weights. In the mid-'60s, around '65, the legal limit that vehicles could carry, any truck could carry, would be around 40, 000, 45,000 lbs. Today the maximum legal limit on E-axles, which is the maximum number of axles, is 138,000 lbs. So in 30 years it has gone from roughly 44,000 to 138,000, and the number of trucks out there has exploded over that time frame.

Now you consider when a lot of these highways were built. They were built in the '60s, the '70s and built to carry loads like--at that time it was 50,000 or 60,000 or 70,000, up to 80,000. I mean, it was not that long ago that 80,000 was the maximum load limit, built to carry those weights, and today those B-trains are running at 138,000 lbs. fully loaded, eight axles.

I clearly believe that the weight distribution amongst the axles is technically correct to minimize the damage on the road. The kind of geometry in how they are built and the suspension and how the truck operates prevent the up-and-down action on the road. There is a constant discussion going on about the geometry of axles, the number of axles, how close they can be, use of pupped axles.

When I was driving last summer, I was in Minnesota, and they allow these big trucks that might have a tandem axle to allow what I call a pup axle either in front of that tandem or behind it, and I saw trucks, one in front, one behind. This was the size of your normal tire. These tires were this small, and they put them down to carry a little more weight. They were so flimsily mounted, in my mind, they were just doing this on the road. The main axles were running smoothly, but these little axles were doing this. Well, I cannot imagine anything worse for wear and tear on the road than some axles doing this, up and down. I was driving beside watching it; I could not believe it. That sort of reflected back to what my deputy used to tell me about how these things do not work. I mean, I saw proof in the pudding right there.

There are pressures. I think we are in the maximum of 9,000 lbs. per axle and being pressured to go up to 10. Anyway, we are being pressured to go up a thousand pounds per axle from the east, from Ontario, who want to run higher weights on trucks. So there is constant pressure to go up. We have maximums on lengths of trucks, maximum axles, maximum weights.

I mean, I would concur with the member. I cannot hardly see how it can go higher, although you can build power units in those trucks to pull anything, it seems, but the commercial pressure is to be raising the weights, and the pressure continually comes from the east to do that.

So, you know, where there are timber hauls or ore hauls, we are prepared to discuss with companies the ability for them to haul heavier loads but pay a continuous penalty for that to offset the additional costs of wear and tear on the road that those kinds of loadings cause. They make a decision, and the same is done in Saskatchewan, as to whether they want to pay for the overloads or run regular loads and not pay the extra charge.

So this issue of how they load, how much they load, how much per axle, all that, those challenges, those issues, those discussions will never come to an end. They will constantly be there as people fight to be competitive with whomever they are competing with in their industry. Whether it is ore, timber, east-west long haul or north-south long haul, it is always going to be a challenge.

As I referred to earlier, a tremendous amount of discussion between the various jurisdictions in terms of information, they collect research, in trying to analyze whether you can move higher or you should not move higher for protection of the road and to be sure you do not sacrifice safety of the other road users by what you allow to be pulled.

Mr. Jennissen: I was reading an article today which actually someone left on my desk. I am sorry I do not have the actual publication's name, but it is entitled In for the Long Haul for Highway Planning, Leading Traffic Research in North America Underway at the U of M. It mentions an Alan Clayton, who is head of the U of M transportation information group in the Faculty of Engineering. They have also been employed, I guess, at one point with Manitoba Highways as well as Transport Canada, City of Winnipeg, and so on and so on.

One study, though, comes up with a conclusion that I find rather interesting, perhaps even contradictory. I mean it does not make any sense to me, but I would like the minister's comment on it, and I will quote it verbatim. One study on whether truck traffic is adversely affecting Winnipeg streets reached a conclusion which may seem counterintuitive to some people. Here is the quote from the study: We did not see any signal that the truck loading is causing significant damage compared with the natural effects of our difficult climate, Clayton says. On roads elsewhere in North America where the traffic is greater, the trucks would certainly be the greater factor, but with the relatively less volume of trucking in Manitoba, the weather harms the roads more.

So there are a lot of things in there that I am just questioning, like lower volume of traffic in Manitoba not a major factor in hurting the roads in Winnipeg just does not seem right.

Mr. Findlay: The member mentions an Alan Clayton, and along the way he mentioned doing work for the Department of Highways. Yes, he has a three-year contract, which is being extended, to do traffic data for the Department of Highways.

I had mentioned earlier that there are two factors that cause wear and tear on roads. One is the use, and the other is the weather. Both of them contribute. But if you get a low-use road, let us, say, pick the North as an example where it may be frozen really well for a long period of time, on these low volumes, overloading the trucks may do little or no damage to those roads because the volumes are low and the road is frozen. That is probably very understandable. Even down south or in the summertime, probably the same principle does apply. If you have low volumes of trucks, you may not see any impact of higher weights.

I mentioned earlier the fact that we had 21.6 percent trucks on Highway 16 which is way higher than the normal, which might be 10, 12, 15 percent. The department is reporting increased stress showing on that road, and it is related to the higher than expected volume of trucks, so therefore there is more weight rolling over that road per day per week per month. I guess I might say it is not a precise science completely, that weights and road impact are totally correlated, but where the volumes are high, the evidence says, yes, they are correlated. Where the volumes are low and the weather conditions are such that the road is frozen, as an example, the two may not be correlated, and that is consistent with what you just read.

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Generally speaking, if you compare two roads that are equally treated weather-wise, more weight, more volume on one versus the other, you are going to see more wear and tear, more potential breakage, more movement, pressure action on it. You add in the weather factor of freezing and thawing, it puts a tremendous stress and strain on that road.

Mr. Jennissen: I guess the phrase that concerned me was the one that said relatively less volume of trucking in Manitoba. I guess it depends on what that is being compared to. That could be being compared to some place in the United States, or I am not sure what. That term kind of worries me. I am sure it cannot be correct.

Mr. Findlay: I did not catch what you said, the term.

Mr. Jennissen: Well, one of the terms that is being used, and I am not even sure this Mr. Clayton is actually saying this. It is a study, but in this particular study they are saying, on roads elsewhere in North America where the traffic is greater the trucks would certainly be the greater factor, but with the relatively less volume of trucking in Manitoba, the weather harms the roads more.

I presume they are talking as compared to other areas rather than as one year to the other.

Mr. Findlay: Dr. Clayton is doing similar work in the U.S., and we would have to assume that he is comparing really high volume roads. Example, in maybe Chicago or Detroit or Los Angeles, where you have incredible roads, maybe eight lanes wide going each direction, and constant truck and traffic versus roads even around Winnipeg what he would probably call very light use. We would call it pretty heavy, but compared to those kinds of examples, you are really not comparing apples and apples here, and the kind of weather impact there is much less than here.

I would be cautious in extrapolating from a U.S. situation to ours, Although we see ours as high volume here, an American from those kinds of places would say, hey, you have nothing. I was surprised, and I am sure the department was surprised by what I said about Highway 16 in terms of 21.6 percent truck traffic. It is just really high, and there is a price to be paid for that in terms of what we see happening to that road, because it was not built to handle that.

Again, I am not an engineer, but the more I listen to these guys, the more I understand there is a tremendous science in how you build a road, and it is not just a bunch of clay thrown on the ground and a bit of gravel and a bit of pavement on top. There is a lot of engineering that goes into the construction of that road, so it will carry the kinds of weights that it is going to be challenged with and deal with the kind of weather it is going to be challenged with.

I always have to comment that the next weak point in that road is likely the next bridge. It can, over the course of time, be the weak link in a road, and it determines what the road is built for. You build the bridge and the road to handle the same kinds of weights, and then along the way, because the decision is made by governments under pressure of industry to move from 44,000 maximum weight to 60, to 80, to 105, to 138, it is rather remarkable that our infrastructure has held up as well as it has with the kind of weather conditions when you look at it that way, but if you are somebody driving down a road and it is a little bumpy or whatever, you forget all that and you just complain and ask for a few million to be spent to make it ride better.

Mr. Jennissen: In 1970 John Heads produced or led a study called the Manitoba Transportation Action Plan, or wrote it up, I guess, and this Manitoba Transportation Action Plan to the Year 2000--and, of course, the data he used must have been late '80s, but he did make a series of recommendations. I am wondering if the minister could comment on some of those recommendations in light of the fact that we are now seven, eight, nine years down the road, and some of these might in fact appear very curious because they look old fashioned, but just to see how imprecise the science of predicting sometimes can be, or sometimes how accurate, but one of the recommendations on highway transport that Mr. John Heads makes is, extend the RTAC limits on weights and dimensions to other highways in the province as roads and structures are upgraded. So would you comment on that?

Mr. Findlay: Again, we have a network--I do not have the map in front of me--of what is called RTAC routes. If you look at that map of five years ago versus today, it is quite different. We constantly add roads to that network when we know that they have the design capacity or they have done the investigation to determine that they could carry those weights, whether the bridges can carry those weights which is always a significant determining factor. Or in the wintertime, we will extend the RTAC network when the road is frozen so that the first timber haul or gravel haul or ore haul, we make it more cost-effective for industry to use those roads--constantly changing that network, basically adding to that network based on the ability of the infrastructure to carry the loads.

So I do have a copy--staff have just given me a copy of the map, and it shows, you know, the RTAC network. It is roads like 1, 2, 10, 6--a number have been identified--39, 60, a portion of Highway 44. It does not include highways like 59 going south of Winnipeg, for instance, and that is why 75 or 12 are the routes to go to the U.S. from Winnipeg, either straight south or southeast and why in the flood period here, we could not send trucks down Highway 59 because it was not RTAC loading capacity. It is a limited network that the truck industry can use. The recommendations are to extend it to more and, yes, we do, as we are able to.

We get lots of requests and some come to me and some come to staff, but when I get them, I ask staff to review them--can they do it, what time frame they can do it, and they respond as best they can to be able to meet the needs of industry relative to sacrificing the road.

Would the member like this map or does he have one? [interjection] Okay.

Mr. Jennissen: Could the minister or would the minister hazard a guess, then, since 1990, what percentage has extended RTAC? How many more RTAC kilometres do we have than we had then? Would it be, let us say, 25 percent more?

Mr. Findlay: The direct answer to the member--it is very difficult to say percentage wise how much it has expanded--but I know we have made additions, and we have particularly made additions in the North and particularly in wintertime to accommodate the industry. I am not currently, at this moment, aware of any outstanding requests that we have not been able to respond to after discussion with the industry. Naturally they always want more, but they are reasonably realistic in knowing that there is a price that society pays when we let them run those kinds of weights on roads that were never built, nor have the bridges, to handle those kinds of weights.

As we build roads today, let us say, example, Highway 3, which currently is not an RTAC route--we got a letter from an R.M. here, not too long ago, saying you are building the road; is it going to be RTAC standard? Well, yes, when we pave a road today, a major artery like that, we build it stage by stage to an RTAC standard. The only limiting factor is the surface that we are going to build, and this year, I believe it is tendered for this year, will be an RTAC surface, but there are two structures on that distance that have to be upgraded which will be a future thing. So the road will not be labelled RTAC capacity until the bridges are upgraded.

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It is an ongoing challenge; it is an ongoing issue. Really, to make it RTAC, you are really talking deeper pavement, and when you build a road, whether it is grading or gravelling or putting pavement on, the big cost is the pavement, and on an RTAC road that cost is probably about 60 percent of the total. If you want to rebuild a road starting from scratch, approximately 60 percent of the cost will be that thick pavement, six or more inches of pavement, in order for it to carry those kinds of weights.

I just want to relate, it is nice to have an RTAC road, but it is exceptionally expensive to build, and the pressure is constantly there to do it. Whether it is from users of the road or towns that want to attract an industry or more industry to their town that is associated with truck hauls, they want the road to serve the highest possible weight user in terms of the trucking industry. So I think we have got a pretty large network that is identified as RTAC.

The ability to maintain that existing road structure by constant upgrading and improving the pavement or improving the bridges as needed is enough challenge without adding too much to the system, but as we build roads, it is pretty hard to tell somebody we are going to build it to a lower than the very best standard. It really comes to the fore when you are talking to somebody about building a lower-use road, which you cannot possibly afford to put this kind of pavement on, and they say, well, you are going to pave it, are you not? I say, well, just a minute now, if we put the thin pavement on, which is what we can afford or what you warrant relative to the fact you have only got 200 or 250 vehicles a day, remember that it is going to be restricted in the spring. They like it from the first thought because there is no dust, but I say, now you cannot haul your grain or your commercial activity is going to be disrupted in the spring, no matter what it is, involving truck traffic. Then they pause, and I say, you are better off to stay as gravel surface and as unrestricted as opposed to putting thin pavement on to control the dust and then have restrictions on it, sometimes just in the spring, sometimes year round. So there is a tremendous tradeoff.

As we talk to municipalities, particularly towns or villages, I think we are getting the message through that throwing a bit of pavement on to control dust is not the be-all and the end-all that might have been thought five or 10 years ago, because there is a negative effect in terms of truck use of those roads. This spring, because of things that have had to be done, some of our thin-surface pavement, some of them stood up in terms of all the aggregate that had to be hauled to fight the flood, but some did not, and there are going to be people complaining about the broken-up surface, but in an emergency, what could you do? Nobody wanted to stand out there and say we are going to control weight restrictions when the kind of emergency was on that was on.

Mr. Chairperson: I was just wondering, does the committee feel like taking a break for five minutes? The committee will recess for five minutes.

The committee recessed at 3:53 p.m.

The committee resumed at 4:09 p.m.

Mr. Chairperson: The committee will come to order.

Mr. Findlay: Glad you could get back, Mr. Chairman.

I just want to go back to a question that was asked earlier, and that was the strength of the composite fibres used in the Headingley bridge versus concrete or steel. The figure of 600 times that you used is right when you can say a weight for weight, equal weight of concrete versus fibre which is much lighter. On a pound-per-pound basis of the material--and it is 600 times as strong, but because this material is lighter, you use a lot less total weight of it than you would of existing concrete. So that is where the 600 figure [interjection] Okay, steel versus the carbon fibre. So that is where the 600 figure comes in on a weight basis.

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Mr. Jennissen: It is sort of like comparing a Flin Flon fishing rod, which is made out of cast iron, compared to graphite, I guess, is it.

Anyway, if I could go back to the minister again on the Manitoba Transportation Action Plan to the Year 2000 by John Heads. The second recommendation, bearing in mind of course that this was 1970, was for the province to take a proactive role to ensure that Manitoba's participation in the motor carrier industry was not adversely affected by the consolidation of carriers expected to result from deregulation. I do not know if this is any connection to Reimer no longer staying in our province, or at least being owned in the province, or not, but would you make a comment on that, please?

Mr. Findlay: The member is talking about 1970, and that is back in an era--

An Honourable Member: 1990.

Mr. Findlay: --I am sorry, 1990. But there was a lot of regulation in the industry through the '70s and the '80s, and some of the regulation was really protectionism to keep competition out. The trucking industry in Manitoba or Canada has dealt with deregulation very positively in terms of being able to be competitive, being able to supply customers with quality service at a reasonable price, competitively reasonable price. The industry is now focused, not on the kind of regulation of 10 years ago but on what we will call meeting fitness criteria. That is financial capability, meeting all the safety requirements and being able to pass safety inspections wherever, whenever they encounter.

We have a national safety code in Canada that all truckers ascribe to. The trucking industry may have fought it a little bit in the beginning, but my understanding is, in talking with them, they are very proactively supporting the concept of improving safety of the trucks. That is now the regulator, who is on the road and who is not. It is whether you have the kind of quality unit out there that does not fail in safety inspections, and clearly they take a responsible role, in my mind, to be sure that they look responsible to the public in the very broadest sense. So the issue is safety, and the kind of appropriate maintenance and inspections of those vehicles to maximize the ability that there are safe vehicles out there.

But I will concede that there is the odd individual out there who does not believe in that, small units. He thinks he can away with--you saw some of the units the police picked off the streets here. That is the abnormal individual; it is not your commercial guy who is in the business for the long haul.

Mr. Jennissen: But the minister would concede that a number of the larger trucking firms are no longer headquartered in Winnipeg, though, since 1990.

Mr. Findlay: Mr. Chairman, yes, the member is right. There are fewer trucking firms today than there used to be, but I will pretty much guarantee him there are more trucks operated by the existing carriers. Some carriers adjusted, as I said, very positively. This is life. Some do not adjust or decide not to be in the industry for the long term. There are amalgamations, there are various things that go on. But we have six large, very successful trucking companies, and it is a changing world constantly. Certainly you will have noticed that Reimer, as an example, has just signed an agreement with a large trucking company in the U.S., Roadway.

I see it as their view is that they are hauling an awful lot into the U.S., and they have really got to have an efficient capability to source back haul, and it might well be one of the reasons they have signed this agreement. The headquarters will stay here, the name will stay here, the management stays. They have signed an agreement that they must feel strengthens the capability of their trucks and their employees or their drivers to remain in business in the changing trucking industry. Whether it is Reimer or Arnold Bros. or Big Freight, these trucks are running all over North America, and I have heard the odd one say that they run 85 percent of their miles in the U.S. They live here, the truck is here, they are registered here. That is export business at its best. The dollars are earned down there, but the revenue is brought back home.

The trucking industry will not stop changing. It simply will not. The demands are there. The intermodalism of the trucking industry used to be--and they are talking intermodalism with rail, that is still going on--but there is going to be more intermodalism with air and truck in the future. That is basically the Winnport concept.

But there was the big failure in Montreal of Maislin trucking, big, big failure, and probably there will be more. At the same time, if you are looking for good news, there is an awful lot of good news in terms of how the trucking industry has adjusted, the technology they use.

I remember talking to Kleysen's, and they have a classroom out there and every trucker goes through that classroom every year for a certain amount of additional training. A lot has to do with the high technology of the engine and the communications system that they have got which is satellite communications. They have constant contact with the truck. The idea is, if there is delay by weather or any reason, they are constantly in contact with the customer that they are delivering to so that he knows in advance they are early, they are late, because the customer wants it at a specific time to meet his needs. So the integration of the system to satisfy the customer is using all the highest technology in the trucking industry.

The level of education they constantly go through makes them better drivers for the betterment of the safety of all the road users. I think I noticed that the Truck Driver of the Year Award, the fellow has been driving for 42 years and never had an accident. You can imagine the millions and millions and millions of miles that individual has driven. I think he works for Reimer Express if I am not mistaken. So you know there are a lot of good stories out there.

Maybe it is Penner.

Mr. Jennissen: So I take it then it does not worry the minister the fact that the real decisions for Reimer will be made in Akron, Ohio, and for OmniTRAX, even though they are based in Denver, that is where the decision will be made, even though they have the headquarters supposedly in The Pas. Still, the main decisions are going to be made outside this country.

Mr. Findlay: I guess I take my strength from the fact that over the years our trucking industry has adjusted, has responded to changing needs of customers in North America. As I go back to what I said, when some of them were running 85 percent of their miles in the U.S. as Canadian truck, this hauling to an American customer and the back hauls from an American customer, we are competing very well with the U.S. trucking industry. I think what Reimer has done further strengthens their ability to be a viable entity here in terms of creating employment in the trucking industry that is oriented out of Manitoba. But change is inevitable; there is no question about it.

Mr. Jennissen: Again, going back to the Manitoba Transportation Action Plan to the Year 2000 by John Heads, another one of his recommendations was--and in hindsight see how the minister sizes this one up--to ensure adequate expenditures on highway maintenance and construction in Manitoba, continuing to give high priority to providing four lanes on Highway No. 75 between Winnipeg and the United States boundary.

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Mr. Findlay: Mr. Chairman, clearly we responded as a province in terms of the four-laning of Highway 75 to the U.S. I actually remarked on this the other day when we were out viewing the flood. It was just this past winter they completed the bridge over the La Salle in St. Norbert, which really meant that we had a four-lane all the way from the Perimeter in Winnipeg to the U.S. border, which cost $110 million over about seven or eight years to have completed. It is open; it is running. Now, we have umpteen miles under water and will be under water for quite some time, so we are back to the two-lane detour road.

So we have responded, we have done the right thing. I do not believe at this time Alberta has a four-lane road all the way to the U.S. from Calgary. Actually, they are working on it, but no, we can hold our head up high. I mean, you look across the Prairies, both Saskatchewan and Alberta are behind us in that context. Neither Calgary nor Edmonton have a by-pass for No. 1 or No. 16 highways around the city. Winnipeg does. I think we are the only city in Canada that has a full-highway-speed circumferential road around the city, in other words, our by-pass after we open the northeast Perimeter. We have responded to serve the travelling public, but particularly the trucking industry which has to use our roads to create jobs and do it in a fashion that has the least impact on the rest of the road users in terms of safety and all that sort of thing. I think the mention there is four lanes wherever possible. That is a difficult question.

I know that in reconstructing roads like Highway 16, 10 years ago I am sure there was expectation we would be four-laning, but as we reconstruct, instead of four-laning with the volume of traffic and try to improve safety, instead of four-laning we are building two driving lanes and paving two shoulders, so at high speeds a person has somewhere they can go at high speed quite safely on the shoulder. I think it has worked well, but it is all we can afford at this time with all the other demands that we have in front of us.

I think we have talked quite a bit earlier about adequate expenditures for capital budgets up for construction. I think my points of view are fairly straightforward there, Mr. Chairman.

Mr. Jennissen: I certainly can relate to the minister's feelings about the circle roads around cities, because it always aggravates me when I go to Edmonton, I have to drive right through the city in order to get to the mountains, although I have noticed Regina and Saskatoon either have completed or certainly are in the process of building a circle road as well.

The next recommendation made by Mr. Heads was to continue the Manitoba initiative of a joint provincial endeavour to obtain federal funding for the national highway system. I guess that is what we have been talking about a fair bit.

(Mr. Neil Gaudry, Acting Chairperson, in the Chair)

Mr. Findlay: The NHP discussion process started in about '87-88, and it has been ongoing. There was an agreement en route and all that sort of thing by 1992, and we have been battling to get dollars from the federal government ever since. It is really on hold at the moment in terms of any new developments. Every time we meet as ministers of Transportation, the issue is always discussed.

We made our big pitch in '94, and on December 15 the answer was no. I guess we always had hope that in the Reg Alcock transportation committee study that they did, that they would develop a basis on which to lever money for the future for the NHP, but as I said earlier, it has not happened yet. It may have advanced the yardstick slightly, but until we see the first dollar the yardsticks have not moved to where they need to move for the good of the nation, and we talked about the reasons why they have not been able to move, and they are legitimate reasons.

Mr. Jennissen: Would the minister comment on this recommendation, continue to press the federal government for compensation in respect of increased highway costs caused by branch line abandonment.

Mr. Findlay: Well, clearly, we have, as the three prairie provinces, on an ongoing basis, but more particularly when the WGTA was eliminated which was definitely going to stimulate an even further degree of movement of goods from rail to road, plus changing from the National Transportation Act to the new Canadian Transportation Act which allowed much more rapid process of rail abandonment. Those two factors together have accelerated the rate at which roads are going to be used by trucks to haul grain that is destined for wherever it is going, even if eventually it ends up on rail.

We have argued, basically unsuccessfully, that there is a big impact, and the federal position is basically, well, roads are provincial responsibility, good luck. When the WGTA transition fund of some $140 million was identified, we had actually argued for a bigger figure, but they said $140 million for western Canada on the basis of degree of abandonment or something like that, so we ended up with $26.9 million in Manitoba.

As I said earlier, Rural Development, Agriculture and Highways jointly stressed as strongly as we could to the federal minister, every federal minister, whether it was Agriculture or Transportation or Jon Gerrard of Western Economic Diversification, that that money has no other legitimate use than for rural roads.

We have had the municipalities, UMM, onside with us. All the farm organizations are onside saying, yes, there is not enough money, but every dollar should go to roads in some process similar to what we used in infrastructure. Municipalities of the province could apply. The joint committee would make decisions on successful applications.

We met with Jon Gerrard in my office before he had the round of meetings on what-do-you-want-to-spend-it-on questions. We told him we had a solution that everybody would buy into, and he walked out of the meeting and went on and had his meetings and basically said, well, if you do not spend it on roads, what would you spend it on? Then there were water projects and gas projects, and that sort of thing came up. Saskatchewan and Alberta are getting the money toward roads, and Manitoba is not.

I mean, yes, the answer is there should have been money toward this, but no matter what angle we argued, they have ultimately said no to us in terms of contributing to the roads, even though the decisions they made, both the CTA change and the WGTA elimination, is significantly moving product onto our roads in greater and greater quantities. They basically accept no responsibility for what they have done.

Mr. Jennissen: The last recommendation that I would put forward for the minister from the Manitoba Transportation Action Plan to the Year 2000 was to develop a rationalization plan for the interprovincial trucking industry. How has that changed, in the minister's opinion, since 1990?

(Mr. Chairperson in the Chair)

Mr. Findlay: The issue of interprovincial trucking regulation has been an issue of significant discussion preceding my becoming minister and in the early year or so of my being a minister. There was an agreement signed called the Canadian agreement on Interprovincial Trade Barrier Reduction, and one of the requirements was that intraprovincial trucking be deregulated by January 1, '98. Now this agreement would have been signed in '92, '93, somewhere back in that point, '94 maybe, somewhere in that point in time.

So to meet that test, the staff and the department have had considerable negotiation with the trucking industry back in '94 particularly and into early '95, and made proposals, batted back and forth and ultimately the trucking industry came to us with a recommendation for a two-stage process of deregulation. The first stage was for geographic restrictions to be removed on January 1, 1996, and they were. The second stage was for full deregulation on January 1, 1998, and that is what we have--we passed the amendments to the act last session or the session before to accommodate that. It is a national agenda, a national commitment on January 1, 1998, and if we do not as provinces find a way to deregulate, it will be done nationally. It would be ordered or unilaterally done nationally.

So we spent a lot of time and effort in the process of discussion. They ultimately came up with the resolution that we adopted, and it is working, without any challenges that I have heard in the last year or so.

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Mr. Jennissen: I thank the minister. If I could go back to an article I mentioned earlier, a November 5 article from the Free Press, truck traffic too big for highway britches. It mentions a study or a report done by Barry Prentice and Kosior from the University of Manitoba, I believe, dealing with factors such as increased road traffic or truck traffic on our roads, especially in rural Manitoba, on the one hand rejoicing that we do have economy activity and on the other hand that these huge machines are also pounding our roads to pieces. They added or identified certain factors that were causing this increased stress on the roads, such as new and expanding value-added processing plants in Manitoba, which is good for jobs but not maybe so good for roads, abolition of the Crow rate, which would put more stress on our roads, bigger trucks, heavier trucks and so on. The minister mentioned that earlier.

They also, though, in that report, offer some options for how to solve the problem. I guess this is how to make an extra buck, how to pay for it. I do not know how favourably anyone would react to these suggestions, but there are a number of them. Some of them were obviously already tried, but I would like the minister's opinion on those suggestions. There are four of them.

Maybe I will just read the introduction: The authors of the new Transport Institute report on the emerging pattern of agricultural trucking in Manitoba say there are several options for solving the province's highway woes, including--and we have already discussed the first one, but maybe the minister can add to it--allocating more funding for road construction repair and maintenance in the new federal-provincial infrastructure agreement now being negotiated. This was a while back.

Mr. Findlay: I did not get all four there.

An Honourable Member: That was just the first one.

Mr. Findlay: Oh, that was the first one. Okay. Well, I think we have had significant discussion around the idea of trying to get federal dollars. Clearly in terms of the infrastructure we argued the principle that has already been accepted of some portion of the infrastructure dollars to roads in rural and in the city.

The 42 million that we are dealt with now, I personally consider we have developed a template for future. I cannot imagine that whoever is elected as a federal government--I will still say who for the member for Inkster (Mr. Lamoureux)--does not see the merit of further infrastructure investments. Now that we have established the ability to spend it on streets and roads in Manitoba, the next tranche, whatever it might be and whenever it is, hopefully bigger dollars, we have established a process that will work for municipalities and the city to receive that money to use on their roads and the province too.

I hope we have developed--we are setting a pilot project, really, in '97 that will be used in the future for infrastructure investment in roads and streets because there is nobody that argues against the fact, in terms of using that, that it should be done. Maybe it is good we started with a small amount of money and proved it will work, because the applications are out there. There is no question, the applications are out there.

Municipalities see where they can get a dollar's work for 33 cents is a pretty good investment and naturally as a province we see it the same way too. But there may be modifications of how that can be done in the future, but infrastructure investment is critical. If we do not get NHP, at least let us try to get, through the infrastructure concept, the same net effect.

I do not care where the money comes from or what roads it goes to. Wherever new money is spent, it frees up existing provincial dollars to go to whatever else needs to be done. So we are always adjustable. We just get some more dollars in the front door in some fashion, and I think the infrastructure process is good to do that. I take some credit for the fact we did argue to get some dollars there and for the City of Winnipeg also, and I just hope that it is as successful as it looks like it should be.

Mr. Jennissen: The second suggestion that was made was doing away with the gas tax break farmers received for burning less expensive purple gas in their farm trucks. I know that will not be a popular one, but it was a suggestion that was made. I know it was at one time quite popular in Saskatchewan, I think.

Mr. Findlay: Well, the amount of tax that would be collected by making farmers pay is pretty small compared to the total consumption of fuel, but I will tell you, farmers, they have had the WGTA taken away, they have had railroads taken away so the higher cost of moving grain to market. This is one I would not want to announce. People in the city say, oh, do not give those farmers any more freebies, but it will all get translated back into higher food costs, so you pay for it one way or the other, but this is one sacred cow that the rural farm community has had for a long time. It would be a tough one to take away.

Mr. Jennissen: The suggestion is much more popular in the North than it is here, I guess. No use riling up your voter base too much. The third suggestion was charging tolls on some highways similar to what is done in some United States.

Mr. Findlay: I am not an advocate of tolls, and I do not think the driving public in Manitoba is prepared to accept tolls. They see it this way. They are paying taxes in various ways and means to general revenue, and our roads are built. We are doing that and now I am going to drive down this particular road and I am going to get charged again. Very offensive. When you are building the fixed link from P.E.I. to mainland Canada, there is no alternative. You either paid $14 to go on the ferry or you pay $14 to go on the bridge. It is kind of a neat trade-off.

On the high through-put road in Nova Scotia, I believe it is, it is the only road to travel, and I think they have legislated that trucks have to run on that road. They have got no choice. You build the 407, I think it is, in Toronto because there are really not enough roads to handle all the traffic, people just have to use it. But, if we tolled any particular road--pick any one you want in Manitoba--the majority of the public would not use it. They would go on another road. You would create congestion and impact on roads you do not want the traffic on. It just is not a saleable item. I just do not see--it works in the U.S. high-congestion corridors, but, here, no, it definitely will not work.

The idea of shadow tolls is a different principle, but it is debt financing in another way. Direct tolls that the public pays, again, I would not want to be the minister that went out and had to sell that one, because it just--[interjection] The member from St. Boniface (Mr. Gaudry), you want to be lead party on that one.

Mr. Jennissen: I am glad to hear the minister say that, because I am certainly not enamoured at the idea of toll roads either. It always aggravates me when I drive in France and you drive some great roads, but every once in a while they have their hand out for money. You understand it, but it is never popular with the populace.

The last suggestion made was introducing a surcharge on shipments of farm commodities. The amount of tax could be based on the weight of the shipment and the distance travelled.

Again, I do not imagine that would be popular, but it was a suggestion made.

Mr. Findlay: The minute you do something like that, you increase somebody's cost. You tip the scale of competitiveness against that individual performing in the economy. There is no magic in it. You can charge more. Some people say, well, just charge trucks more, double their registration or charge them an additional tax on their fuel. Well, all those trucking companies that boasted a little while ago about being stationed in Manitoba would instantly be stationed somewhere else. Think of the jobs you would lose.

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So you have to stay competitive with other jurisdictions. You cannot jump the tax up or the costs up or they leave, because they cannot be competitive and still pay that tax. So the downside is a lot worse than not doing anything because they will leave. There is no question. They cannot be competitive. They will leave.

You have to maintain your tax structure so they will stay. You might have noticed that the provincial tax on railway diesel fuel, we lowered it from 13.6 to 6.3 simply because we were high compared to other provinces. We had to get it down if we were going to get the business of railroads and keep them creating jobs here. We have lowered it on aviation fuel by a cent a litre in this budget, the same concept. We were just a little out of sync.

With this global competitiveness, you cannot raise the costs or you lose the business and the people that create the jobs. You have to stay in sync. So ultimately taxes, as they always do, fall back on that ultimate consumer, the user of the end product. If you charge somebody like the farm community surcharges, they will stop producing here. They will do something else. You cannot extract taxes that are noncompetitive or create a noncompetitive position for the person you are charging the tax on. It just will not work in the long run. Short term, yes. You put up with the wheeling and the screaming and the crying and get a little tax, but five years later you will find that you lost a lot of jobs in the process. Your net effect, I bet you, is minus, and you still have to build the roads.

Mr. Jennissen: But the minister would admit, though, that prior to the election, for example, $90 million was promised for northern roads in connection with the Repap expansion. I mean, that need has not gone away. I do not know how far Repap is expanding, but there is certainly a lot of wear and tear on the road. Now $90 million is a lot of dollars; that is almost a yearly construction budget.

Mr. Findlay: The $90 million the member is referring to was part of an original agreement signed with Repap back in '89, '88, '90, somewhere back in there. That agreement was rewritten and the commitment of $90 million on roads, because they had not met the initial expectations they had put on the table. As we allowed them to withdraw from the agreement commitments they initially had made, we withdrew the $90 million of commitment on roads.

We respond to their road needs the same as we do to road requests from Flin Flon or Thompson or Melita. We do what we can within the existing budget, but that was an agreement that was rewritten willingly on both sides, and that $90-million commitment is no longer there.

Mr. Jennissen: But the minister would admit that, if we had better railroad infrastructure, a lot of that weight that is now on the roads from pulp and from ore could have been carried differently and would have saved our roads considerable problems in northern Manitoba.

Mr. Findlay: In the case of pulp, whether the railroads are in the right place from where it is sourced to where it is going, there is always a connecting link to require some degree of nonrail transportation to get it to rail, and then the people who are making those decisions of which vehicle to use, road or rail, look at the cost efficiency, time efficiency, extra costs of moving from one to the other. In most cases, as I see it, they choose to use trucks, over and over again, trucks, trucks, trucks. For a variety of reasons, whether it is reliability, whether it is easy access to the source, costs, trucks win, and of course trucks use our public infrastructure.

The railroads? I know a lot of people say, well, just keep the railroads there, but they are really roadbeds owned by those companies, and I for one will say those companies are not immune from failure in the Canadian context, CN, CP. I do not mean that negatively, just the challenges they are facing, the competition from truck, from U.S. rail, is immense. We cannot order them as a government to do things that are not economic in the long-term interests of those companies. We want them desperately to survive, and they will rationalize a system in a fashion that they can survive.

I have learned a lot about railroads relative to the U.S. in the last three years, particularly at what we call WESTAC conferences, where all the different transportation activities, airline people are there, railway people are there, governments are there, other people from industry are there talking about the broad issue of the transportation challenges of our economy, and the railway, we always get a lot of discussion on the railway.

We had a major presentation from a U.S. consultant a few months ago where they pointed out where their U.S. railways are at, where they are going relative to the Canadian, and I said the Canadian guys have a lot of challenge to continue to do what we want them to do without our ordering them to do things they do not deem as economic. So I know it is a tough trade-off. If you look at the narrow picture here in Manitoba, let us keep more rail, but at the end of the day, I do not want those railroads to fail, and I said it is not out of the question that one might or that we may end up with one railway, as the discussion was three or four years ago about one buying the other out, that sort of thing. We need both, we need as many rail lines as can be economically maintained in conjunction with our road system to serve the economic needs, and it will not be the perfect world we would all want, but I think it will at the end of the day be the rational, economically supportable world.

Mr. Jennissen: As I read about the attempted funding, the crumbling infrastructure, road infrastructure, three means of payment or three means of addressing this come to mind, and I read it everywhere. I would like the minister to very briefly talk about that, how he views that. One is the public-private partnerships and the other one is user fees and tolls. I think we have an inkling of how the minister feels about that, and thirdly, divestitures and privatization. Those are all ways we could go, obviously, but--

An Honourable Member: What was the last one?

Mr. Jennissen: Divestitures and privatization, as one grouping; user fees, tolls as one grouping; and public-private partnerships as one grouping.

Mr. Findlay: There are some examples of public-private partnership, and I have mentioned some of them. The Charleswood Bridge would be an example; the Confederation Bridge is an example; Highway 104 in Nova Scotia is an example; Highway 407 in Toronto is an example. The Confederation Bridge is the cleanest example, where a company signed a contract for I think it was $800 million--something in that order--to build a bridge over a four-year period that would open by January 1, '97. They designed the bridge, they built the bridge, they will maintain the bridge, and they receive the revenue from the tolls on that bridge--they get the tolls for 35 years--and they get from the federal government also the current subsidy to the ferry system for the next 35 years. So that is all packaged together, and then it is turned over to the federal government, I guess, at the end of that. But they have designed it to attract people to use it. The more people who use it, the more tolls they get. So it is an example. The ferries will not be running, so if you are going to make that trip you are going to have to use the bridge. They are trying to attract industry to the P.E.I. side so they are ending up with traffic going back and forth, so that is a good public-private partnership.

The revenue flows are all set down in agreement upfront and the interest rate, the people who invested are taking the risk. As I recall, a lot of the investment came out of Europe for this, because there are lots of examples around the world and it has worked. Another example would be building a road and using what is called shadow tolls. The government signs a contract with somebody to build a stretch of road and I guess 104 is an example--no, anyway, we will just--Okay, the only Canadian example is in Hamilton, shadow toll example. They build and finance the road. They get paid by government paying so much a year basis and, generally speaking, the number of miles driven on the road.

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So it is really deficit financing, because let us say you build a $10-million infrastructure today and government signs a mortgage agreement to pay for it over 25 years basis the amount of traffic on there, so you really commit your budget year after year for 25 years to pay for this structure that was built X years ago, and that is deficit financing. That is shadow tolls, and that is what Reg Alcock is referring to when he says shadow toll. I mean, there are examples of public-private partnership and the Charleswood Bridge is some degree of an example of that. I guess that is really a shadow toll because they are paying--[interjection] No, the City of Winnipeg is paying the mortgage, just a fancy mortgage.

Some of these work on different conditions, but I do not say they are uniquely successful in every example. I said earlier, the idea of tolls of any form in Manitoba are not attractive for the customer and deficit financing for roads is not attractive for us as government, and the reason I say that is because that is effectively how hospitals were financed. They were built and they were mortgaged and every year we had to pay principal and interest and most of the money that was set aside for capital in these hospitals had to go to pay the principal and interest on previously built structures. You ran out of new money because the debt kept building. You have to get on a current account basis with capital; otherwise, you get eaten alive in the future.

It is good in the front end, for the governments in the front end it looked great and would we not look great if we went out and spent 10 times as much money over the next two years to build roads. Subsequent governments would be paying that principal and interest for a long time and 10 years out when you need more new roads and all you do is use your annual budget to pay previously built roads, principal and interest, it is not a good policy down the road. So those are various examples. I just constantly say there is no magic if you do not have new money.

Mr. Jennissen: I thank the honourable minister. Just before I conclude, in fact, I am concluding. I wonder if the minister would be willing to entertain a few questions from the honourable member for Inkster who asked for five minutes on a particular topic, and then we will continue tomorrow.

Mr. Kevin Lamoureux (Inkster): Mr. Chairperson, I did have a bit of a change of topic and I know on the infrastructure and so forth I have had plenty of opportunities to speak in different ways, whether it is Question Period or other ministers. So it is really a change of topics.

The other day I was actually visiting my father at a local dealership and a question that he had asked me was if I had heard anything with respect to the new licence plates that are coming out. Now it is going to be required to have front licence plates, and he was indicating to me that there is concern from within the dealerships as to what expectations the government is going to have of the famous dealer plate. In the past, even when we have had two plates the dealers have always been allowed to have one in order to accommodate things such as test drives for their customers.

Mr. Findlay: This has been a fairly significant issue, but it has been laid to rest, and I think the member will--your father or father-in-law--

Mr. Lamoureux: Father.

Mr. Findlay: --father will be pleased with the outcome. The issue for having two licence plates was for identification of a vehicle, commitment of a crime or whatever. A couple of examples that were brought to us by law enforcement people, by school divisions, by citizens in general, it is like a car going by a school bus when it should stop. Maybe the school bus driver cannot catch the rear plate but he can catch the front plate. It helps identification. Somebody that is stalking an individual drives up a driveway, backs out. You might catch the front licence plate with the car backing out; so you increase identification. It helps police officers in identification.

We have around 5,000 dealer plates, so without requiring front plates that means that you have over 5,000 cars out there with only one plate. Now the broader issue is to be sure we have identification of these vehicles, and you know that dealer plates are on cars that are driven all over the province, not only in the business aspect but in terms of recreation, wherever they go a lot of these people are driving cars with dealer plates on. So we have had a major discussion involving the dealers, the Manitoba Motor Dealers Association.

We have certainly involved the Winnipeg police and the RCMP, and ultimately came to a conclusion that yes, there are too many dealer plates out there and in the process of issuing dealer plates in the future maybe we would tighten up the criteria as to who qualifies as a legitimate dealer, at least having such things as a business licence, that sort of approach. But we will not require dealers to have a front plate because they have argued, the member mentions the efficiency of moving plates and vehicles and test drive and all that sort of thing, and the police have agreed with that, that dealers only need to have the one plate. The other thing they point out, well, if you have two plates they could end up on two cars kind of thing.

So we came to the conclusion that dealer vehicles only need the one plate, and we have written a letter to every dealer telling them that. That has been done in the last two weeks. So discussion with the industry, discussion with the enforcement people; we went from one plate, said we should have two, back to one plate for the dealers, legitimate dealers.

Mr. Lamoureux: I am pleased to hear that because I think it was a legitimate concern as expressed. I would also concur with the remarks of the minister in terms of the need to go back to two plates. As someone that was not a very big fan when they went to one plate, for numerous reasons, the primary one being of course that of safety concerns. There are many different forms of safety that are out there that require the two plates.

I am pleased to hear that the decision has actually been made, and I am quite content just to leave it at that. Maybe sometime in the future we will have more of a dialogue on possibly a more substantive issue such as the infrastructure dollars in Highways. I appreciate the minister's comments.

Mr. Findlay: For the member's information, seven out of the 10 provinces will have dual plates in Canada, and I believe it is 35 out of 50 states have dual plates. So we are in the majority by going back to dual plates. Then again, it seemed like a big issue in Manitoba. Most people have the two plates or stayed with the two plates.

One of the issues, and this is going back to I think it was '83 or '85, somewhere in there, it went from dual plates to single plates on the basis of cost. It was too costly to cut two plates. We solved that by charging the plate user $7 for the pair of plates, so that covers the cost side of it. It does not cost the government more to have dual plates, it effectively costs the car owner the cost of the plates, and $7 is not out of line for two plates, especially as good as they look. Those vehicles that have one plate, whether it is motorcycles or dealers, it is $4. It is not a big cost, but we solved the cost problem for government by doing it that way.

Mr. Lamoureux: The minister's last comment in terms of "as good as they look," the first thing that came to my mind was my colleague from St. Boniface and his concerns with having the word "Bienvenue" on the plates, of course, but I am sure the minister is quite aware of the pros and the cons of that particular issue and the member for St. Boniface's genuine sincere concern with respect to it.

Seeing as there is approximately another minute, has the minister given any thought--and now I will go to the infrastructure--in terms of infrastructure has been used for other programs outside of highway construction. Does he believe that a certain percentage of infrastructure dollars should be assigned to roads? Does he believe that all of the infrastructure dollars should be assigned to roads?

Mr. Findlay: Very quickly, I believe that a portion of infrastructure dollars should go to roads, because it is the big crying need for cities, municipalities, provinces and for the federal government. We have a road infrastructure deficit, and the money has to come from somewhere, so this cost-sharing of it benefits everybody but only costs any individual 33 cents out of the dollar. So I am a strong advocate that a portion of infrastructure dollars should go to roads. We have a pilot project called 1997 with $14 million in rural roads, $14 million in city streets.

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Mr. Chairperson: Order, please. The hour being 5 p.m., time for private members' hour.

Call in the Speaker.