Mr. Chairperson (Marcel Laurendeau): Would the Committee of Supply come to order, please. This section of the Committee of Supply has been dealing with the Estimates of the Department of Consumer and Corporate Affairs. Would the minister's staff please enter the Chamber at this time.
We are on Resolution 1.(b)(1) Executive Support, Salaries and Employee Benefits, and as the members had discussed, we are wide open.
Mr. Jim Maloway (Elmwood): Mr. Chairman, I wanted to ask the minister about the state of preparedness of his department and what he is doing or not doing with regard to the year 2000 problem, and I believe he has an executive summary of the recommendations of the Year 2000 Task Force that were provided to him the other day, and whether he would make some comments on that.
Hon. Mike Radcliffe (Minister of Consumer and Corporate Affairs): Mr. Chairperson, I have only a passing body of information, I guess, on the Y2K problem as I am not--I do not pretend to have any great expertise on the technology of computers. However, this is a matter that is of significant concern to government. Government considers it very seriously, and I can tell my honourable colleague that there are currently five departments, five different subsections that I am responsible for in my department that have 2000 year projects going.
They are the Manitoba Land Titles, the Personal Property Registry, the Companies Branch, the Vital Statistics, the Manitoba Securities Commission. Specifically with Land Titles, Personal Property and Companies office these systems all fall under the Better Systems initiative who are responsible for the year 2000 retooling or refurbishment. I can tell my honourable colleague that work on this project started on May 12, 1998, and it is expected to end in February of 1999.
The budget for the entire BSI core projects, the Better Systems Initiative core project, is $2.551 million so this indicates a very significant commitment on behalf of government to this issue. A separate breakdown for the cost of the individual Better Systems Initiative Year 2000 Refurbishment is not available at this time. I do not have that, so I would not be able to be responsive to any further questions on the particulars of that. I just have the gross number. The cost of the year 2000 refurbishment is being billed on a time-and-materials basis by IBM corporation.
Vital Statistics has an obsolete system which we have had some significant difficulties with, and we are in the process of, as we speak, implementing a new system. I believe it has been introduced in phases and segments and the new system will be year 2000 compliant. Vital Statistics started their systems development in June of 1997, and they expect to be finished the implementation and be fully operative by August of 1998. The prime contractor for the Vital Statistics project is K.E. Software, and the cost of this project is $1.4 million for Vital Statistics.
The last department that is involved with the issue of Y2K is Manitoba Securities Commission. Again, we are dealing with an obsolete technology. We tend to cope with problems of failure from time to time on the system, but I can tell my honourable colleague that the existing Securities Commission system is not 2000 compliant. The commission is currently evaluating responses to an RFP for a new system, and they will be planning a start date of July 1998.
Mr. Chair, I am told with the Manitoba Securities Commission that the new system will be up and running and implemented by October of 1998. The vendor and cost for this project are dependent upon the winning bid, and, as this is in midprocess at this point in time, I cannot comment any further on it until more knowledge and information is available. Other than these five departments--and I do not mean to minimize them, by any means, because I do not consider them to be a minimal issue--all other systems in Consumer and Corporate Affairs have been made year 2000 compliant.
Mr. Maloway: Mr. Chairman, would the minister endeavour to provide us with the information, when he is in receipt of it, as to who gets the the Y2K contract for the Securities Commission and the amount of the contract? I would like to also ask the minister whether he is aware that these Y2K projects that his department is involved in are also taking into consideration a leap year problem as well, which is another curve to this whole area.
Mr. Radcliffe: Mr. Chairman, I would be most pleased to supply the particulars to the contract when it is awarded to my honourable colleague; that is, supply the information to my honourable colleague when the contract is awarded. I am advised that the leap year anomaly is also being considered and taken into account with the restructuring.
Mr. Maloway: Mr. Chairman, could the minister give us an update of the individual Y2K projects that are in progress right now as to whether or not successful testing regimes have been completed on these projects?
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Mr. Radcliffe: Perhaps the good news first, Mr. Chairman. The Vital Statistics expects to go totally live on their entire system this June, within the next week or two, and so they are well into their testing process. As I say, they intend to be completed with the testing and up and running totally by August. So the testing process will go through the summer, and some of this has already been implemented because I gather that certain components of the program have been implemented as we have gone along over the course of the winter, and quite fortuitously, because there have been a real necessity for modern technology with the Vital Stats.
The Securities Commission, of course, as my honourable colleague can appreciate, is a long way from being tested because we are just at the RFP basis, and, equally with the Land Titles, personal property and companies, this is under the conduct of the BSI, the Better Systems initiative or people, and they have not yet commenced testing.
Mr. Maloway: What major glitches, if any, have you found in these programs so far?
Mr. Radcliffe: Again, I guess I would have to confine my remarks to Vital Statistics because the Securities Commission is not at that stage yet. BSI has not commenced the testing--and if I could just take a moment for counsel.
Mr. Chairman, I believe that Vital Statistics has adopted an entire new system, and I think there have been, as we are told, some minor administrative issues that have transpired but nothing of any significance, and, in fact, staff here today do not have any of the minutiae of the problems with Vital Statistics. The administrator of financial services for the department advises me that, in fact, the bottom line, the report that he gets from the director of Vital Statistics is that Vital Statistics is on schedule, on budget and operating in a satisfactory fashion and that staff are, in fact, quite pleased with the implementation.
Mr. Maloway: Included in the recommendations from the federal task force report is a reference to provincially regulated financial institutions as to whether there is a formal year 2000 action plan associated with them and as to whether they, in fact, have a Y2K plan in place as a prerequisite for the loans that they make. I would like the minister to update us as to what steps he has taken to make certain that this is, in fact, happening in Manitoba.
Mr. Radcliffe: Mr. Chairman, there is nothing hard and fast on a Y2K policy for the credit union system, save and except I can advise that internally, of course, the new banking system for the credit union system is year 2000 compliant.
Having gone through this progression or education curve themselves, the credit unions, the individual credit unions are, in fact, very aware of the necessity for compliance with 2000.
When the credit union people are now making new loans, the assessment of viability I guess or risk to the borrower is something that is discussed as part of the application, the credit application issue. It is certainly something that the credit unions are being proactive about. They are discussing it. They are aware of it themselves. They are spreading the message to their clientele, to their sphere of influence in the province.
With regard to the caisse populaire, which is a branch of the credit union system or a connection to the credit union system I guess, they would not necessarily be complimented to be considered a branch of the credit unions. The process of compliance to 2000 is being co-ordinated by the Fédération des caisses populaires. The main suppliers of the various components of a new system have been included in their contracts with the Fédération, and a clause that their products are 2000 compliant has been inserted. The Fédération has requested that software suppliers for the year 2000 supply certification from their software company. This is in the process of being sought.
I do not have anything further on the internal organizations of these credit granting institutions or savings institutions. But in like kind, the caisses populaires are also discussing this matter within their communities.
Mr. Maloway: Mr. Chairman, I would like to then ask the minister whether or not the credit union movement has adopted a requirement of a year 2000 action plan as a prerequisite for loans. If they have done that, at what date did they start implementing such a program?
Mr. Radcliffe: Mr. Chair, the role and function of the government supervision of credit unions takes great pains, the director takes great pains and the office of the director takes great pains to keep the individual operational issues of credit unions at arm's length and only looks at the overall viability of the guarantee system, the Guarantee Corporation and Credit Union Central. The actual day-to-day management of the credit unions is not something that the director nor his office nor this government becomes involved with. So being an operational matter, I would recommend that my honourable colleague refer this question to the individual credit unions themselves.
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Mr. Maloway: I think under normal circumstances the minister would be correct in his assessment, but if the people on the task force can be believed that this is a very serious matter and could in fact jeopardize the viability of a lot of companies, I think it would be important for the minister to take some initiative here and just make certain that there is some sort of consistency as between the credit union lending requirements and say that of the banks. For example, if a line of credit for a particular company were to come up for review, or if different companies, different institutions had different policies, then one might see a certain institution refusing certain loans at a certain level and then companies being funnelled through the path of least resistance to the institution who provided the least requirements.
So I do not know how serious an issue it is in terms of tying this requirement to the obtaining of a loan, but if you have a certain institution who requires a certification that Y2K compliance be in place before they get, say, $50,000 of money, and then you have another institution that is totally out to lunch on the matter and grants the loans without any questions asked, then what you will see is an overabundance of risk attached to that particular institution that does not require these compliance regimes. So I would simply ask the minister to check the consistency out there, as to the awareness of the problem and the consistency of the application of a policy, if in fact there even is one.
Mr. Radcliffe: I would like to thank my honourable colleague for those opinions. I think they are well based, and the role of the director as an educator, as a communicator is, in fact, very appropriate, and one that is taken very seriously. As I say, I think those are very appropriate remarks. Thank you.
Mr. Maloway: So does the minister have any information as to whether in fact what limits the credit union has placed on its lending, on the level of its loans before a Y2K compliance certificate is required?
Mr. Radcliffe: Again, I guess, I would refer my honourable colleague to my previous answer where the whole issue of operation of the credit unions must be free from political interference of any nature in kind. So any, however well-meant policy or insistence on who gets loans, limits of loans, risk of loans, coming from this Chamber or from this government would be ill advised and not well received by an independent banking system, albeit for the most altruistic of causes. I join cause with my honourable colleague in his concern for this issue, but it is something where we must be scrupulous to make sure that we keep to our side of the fence in the issue of governance of the credit unions. Therefore, the matter of lending policy, a loan policy, risk assessment is something that is operational and must be addressed at the individual credit union level.
Mr. Maloway: I would like to remind this minister that not so many years ago the taxpayers of Manitoba were forced to come in and bail out the credit union movement at the time. I would like to remind the minister again that when the year 2000 rolls around, and if in fact there are serious shutdowns with companies going out of business and general mayhem in this province, then this minister will have a large load to bear here in asking himself as to why he did not check this whole question out a little bit further, assuming that it is such a fundamental issue to the survival of companies in this province.
Mr. Radcliffe: The millennium fever is something that I think that is a real issue in all of business and all of our technology at this point in time, and I want to assure my honourable colleague that the effective and thorough and incremental system of problem solving of the Filmon government has been effective in managing such issues as the economy, such issues as health care, such issues as education, as we move through changing phases of our lives. This is one more issue which I have every confidence will be dealt with in a very expeditious fashion by the administrators, by the people who manage our business affairs.
I want to take this opportunity to express my confidence in them. I think that, although my honourable colleague has a different role and that is not to be a doomsayer but somebody who offers critical assessment, his remarks are well taken and that the director of the credit unions will carry those remarks back to his colleagues within the system in order that the appropriate education and safeguards be instituted. We are all very mindful of the difficulties that credit unions have faced in the past, and I want to assure my honourable colleague that I do receive an annual report from the credit unions. The government guarantee which had underwritten a lot of their loans and operation was not renewed in the past year because they were being so successful. They have now come of age, taken hold of their business enterprise, and are managing their affairs in a very, very sound and fiscally prudent manner. I believe that this provincial government has set the pace and the tone for fiscal prudence and management in this province and that has been emulated by all the financial institutions in this province. I must congratulate the credit union system for their prudence in this area.
Mr. Maloway: Well, Mr. Chairman, the minister, you know, his comments remind me of the Titanic movie where the band was playing while the ship was sinking. He has got another year and a half to find out whether that is true but, if it is true, then he is going to look pretty bad for not taking this as seriously as he probably should.
Now, Mr. Chairman, I would like to ask the minister as to what sorts of communications or alerts or warnings he has issued with regard to the consumers of this province as it relates to the Y2K problem and the issue of imbedded chips. The minister should be aware the task force has certainly examined in its recommendations the whole area. In fact, the task force chairman told me the other day when we met that in fact the whole area of imbedded chips was new to the task force as late as 12 months ago.
They are now only realizing that the imbedded chip problem is a huge problem. What that really means is things like VCRs have imbedded chips, VCRs may not work properly in the year 2000. Hospital equipment, airplanes, cars, you know, everything around you may have problems. Now, I am aware that as late as last August a department store, a well-known department store in Winnipeg, a national chain in fact, that sells fax machines, when I went in there last August to check on Y2K compliancy of the fax machines, they had, I believe, four models of fax machines. When I asked about Y2K compliancy, I had been the first person to ask about the question. No one had asked before. They told me that three of the four were compliant; the fourth one was not.
Now there is some consumer in Manitoba walking around who has bought this fax machine just last August and will find that it is not Y2K compliant. So clearly this is a serious problem. Your constituents will be phoning you January 1, Mr. Minister, asking you why you did not do something about their problems when their VCRs do not work and all the other things, when they cannot get out of their houses because their security systems do not work and they cannot get out of their driveways because their cars do not work. I want to know. What are you doing? What are you going to do about this problem?
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Mr. Radcliffe: Mr. Chairman, my honourable colleague is correct that there is a plethora of articles in our society, everywhere from the computers that run our motor cars to convection ovens or microwave ovens, to elevators, to all sorts of equipment that is--
An Honourable Member: Microwaves?
Mr. Radcliffe: Microwaves, yes. We want to cook the goose of members opposite from time to time, I guess, or cook the goose for the members opposite.
Nonetheless, there is a multitude of objects in our society that are computer driven, that have embedded chips in them. I believe that the federal government, in compliance with their study and their discovery, is going after the manufacturers of many, many objects and suggesting, urging, trying to educate them as to the issue. I believe that this is a very worthy suggestion, and I am quite happy to broach this matter with my director of Consumer Affairs. I would tell my honourable colleagues that there is a branch of the Consumer Affairs department that is involved with consumer awareness, over and above the complaint-driven process which normally is the way that the Consumers' Bureau operates.
So we do have a facility for getting out into the public and bringing issues to the attention of the public, and I think that my honourable colleague makes a very valid point.
Mr. Maloway: That actually was my next question. Has he written to manufacturers questioning them about this matter and encouraging them to not--actually, you should be sending a letter to the retailers, as well, encouraging them, if for no other reason than their legal requirements, encouraging them not to sell products that are not Y2K compliant.
The minister may or may not be aware that, in fact, computer companies are very reluctant, even today, to certify that the product they are selling is Y2K compliant, and it is a huge legal area as well because, in fact, software companies, many of them I am told, are putting their noncompliance software into separate companies with the idea that when the time comes they will simply collapse the company and head off on a new ship with a new company selling compliance software, because there is just so much software out there that will create havoc and invite lawsuits from people who bought this software.
So is he planning to write letters to the manufacturers and the retail establishments outlining the potential for their legal exposures and the fact that they just should not be selling equipment that is not compliant?
Mr. Radcliffe: In response to my honourable colleague's last remark which was, am I about to write correspondence to various manufacturers, retailers, to advise them of their legal liability, I would suggest, with the greatest respect, that that perhaps is not the proper role of a regulatory office of government or a registry office of government. This falls more properly in the role of legal counsel.
As I have given up my certificate for practising law, and I have gone inactive at the Manitoba Bar, this would be something that I would be loath to do. I think that a general education process might be appropriate, and making information available to the public, which would be as pro-active as the Manitoba government should fall on this issue, but for the Manitoba government to actually direct, instruct, advise, manufacturers as to legal liability, I think that we would be criticized as exceeding our jurisdiction, and would be subject to admonishment ourselves.
Mr. Maloway: Well, the task force people have suggested that Canada is at the forefront of this problem in terms of solving the problem and the United States, I gather, is right up to speed, but evidently there are parts of the world, Latin America being one part and other parts of the world, where there has really been next to nothing done in terms of compliance at this point.
So, Mr. Chairman, it becomes, in fact, a competitive issue because if Canadian manufacturers can get ahead of the pack, they can secure their survival and, in fact, thrive because when the year 2000 comes, if the manufacturers in Latin America, for example, are not compliant, then they will no doubt go out of business. It is suggested that a very high number of businesses, in fact, in Canada will be going out of business because of this problem, because the cost to convert will just be too much, or, in fact, if they do not convert, they will just lose their markets.
So the federal people actually see this as a big opportunity to establish Canadian companies as leaders in the world and actually increase market share because if your product is compliant and it works, then you will be able to sell it worldwide, and companies that are not compliant, that do not work, will lose their markets. To that end, there has been enormous pressure on companies to carefully look at their suppliers. I mean, so far, it has been sort of a one-sided problem in the last couple of years with people simply looking at their own computer systems, and that, in fact, is what the government is doing. That is what the minister is talking about.
He is looking at his own problems, but he can have the greatest computer systems in the world, but if his suppliers--if you are producing a product here in Canada that requires components from around the world, then the chain is only as good as its weakest link. So of your hundred pieces that go into the machine that you are building here in Canada, the product you are building, 99 of them can be compliant, but that one piece, if it is not compliant, can bring down the whole process.
So that is what the emphasis is on now, is to look at all your suppliers, and companies, in fact, have dropped long-distance phone companies in favour of ones that are compliant. Companies like Bell Canada are going to do a terrific business because they are compliant, and some other smaller company may not be. This is what has happened. I mean, cold, hard decisions are being made right now about this matter as far as suppliers are concerned. So that is really what it boils down to, is looking at the suppliers and so on, so you have to trace back the problems.
So the ministry has to I think be more proactive. It is supposed to be Consumer and Corporate Affairs, and just because the Industry minister spends all his time travelling around the world, you know, enjoying himself in Geneva and other places--and, you know, he ought to be advised that he should not be getting on a plane January 1, year 2000, because he may be stuck wherever he is at that time, although that might not be bad for the people of Manitoba. But I do not have a lot of hope for the Minister of Industry, Trade and Tourism (Mr. Downey) anyway, so I would confine my efforts to getting this minister to do something where the other minister is not.
Certainly, the minister has the power, as he suggested, to inform and engage, and, certainly, some involvement with this task force, putting in an effort to inform the businesses and so on of the problems, will go a long way to making Manitoba competitive and doing what the government wants to do, rather than just making it rhetoric. It may be nothing more than that come year 2000 if, in fact, this is true, if, in fact, these businesses cannot compete because of suppliers who cannot provide the supplies.
So, once again, I would like to ask him what is going to be done as regards the retailers in Manitoba who are selling to our consumers, selling them products that may not be compliant?
If the product is coming from Latin America, as an example, we are told there is no concern over there about Y2K issues at this point, as a generality, as a general area. So, you know, if you are trying to save a couple of dollars and you are going into a retail store, and you happen to buy the product that is a little cheaper and it is not Y-2000 compliant, then you are really not doing yourself any favour here. I am just thinking out loud as I go here. Perhaps, there should be some requirement of Y2K compliance put on products that are sold.
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I am finding it very difficult to get computer companies to certify compliance. Even last year, one of the huge majors, Dell and Gateway--the minister is probably familiar with them; they are in the top five in the world--even though they insist their plant is compliant and it has been retooled at a gazillion dollars, they are still not really prepared to certify that this computer is compliant. So I would think that the minister could be breaking new ground here, might find him on The National and The Journal, if he were to demand that national chain stores indicate whether these products are Y2K compliant. That would certainly force the ones that are not off the shelves. What does he think about that?
Mr. Radcliffe: Mr. Chairman, I guess my honourable colleague's remarks remind me of a situation a number of years ago when I happened to have been in the province of New Brunswick. The province of New Brunswick, as everybody knows, is a significantly bilingual province.
I was visiting some relatives and staying on some family property. This one particular relative ran a hardware business in New Brunswick, and he said quite clearly to me that if he wanted to sell hardware on "de nort shore," then he spoke French; and if he went down to Saint John, he spoke English. We were in Bathurst, and when he was in the Anglo community, he was very adept and successful in the Anglo community; when he went to the Francophone community, he would switch back and forth. I looked at this situation and I thought, well, this is information, and the more skills, the more language you have, the more ability you have to communicate with people, the more successful one is.
I apply that same analogy as a general rule to this issue, and I believe that Canadians are well educated, well skilled. We look at our position right now of exporting technology and knowledge to the Americas and how Manitoba has prospered so incredibly under the Free Trade Agreement that Canada had entered into, the NAFTA agreement. I know that at the time these agreements were signed that there the naysayers and the criers, the chicken littles, who were saying that this was the end of the world and that Canadians could not compete and that they were bereft of all innate ability and skills. In fact, I think that the last number of years have shown essentially the wonderful skills, the wonderful competitive ability of Manitobans, particularly, and Canadians, at large, that we have been able to take information and technology and ability and skill to the world. This has become a global village.
I think this is where I depart from my honourable colleague. We both have concern about the problem. We both have an awareness of the problem. We both have knowledge of the problem, but I perceive my honourable colleague's remedy to be to look for guarantees, to try to impose the central will of government, the force and violence of the Crown on enterprise, on business, to impose on people a solution which may well be well intentioned, rather than saying to the community, here is a problem, with every problem, with every challenge, there is the accompanying opportunity.
I think that Canadians themselves have shown that they are equal to that challenge and that the best role that the government of Manitoba and the Consumers' Bureau and the employees of our government can do is to acquaint our populace with the issue, take it to the marketplace, and step back and get out of the way of entrepreneurs and academics and people who address their minds to these issues. Let them take charge, and give them the responsibility, because that is where the responsibility properly rests. We get our house in order, we go to the marketplace to assure ourselves that our securities commissions, that our registries, that our individual databases are, in fact, compliant, and that we spread the information, we spread the good news to the marketplace that, in fact, there is a challenge out there and our people in Manitoba, who are technologically gifted, will rise to this challenge, and they will meet the challenges.
Mr. Maloway: I am not talking about the heavy-handed government here. What you have--the members of this year 2000 federal task force include president of Canadian Tire Corporation, president of the Royal Bank of Canada, president of Cargill Limited, president of Crown Life, president of Chrysler, Nova Scotia Power, Canadian Institute of Chartered Accountants, president of Placer Dome. You are talking about people here who see this as a serious problem, and they are so concerned about this matter that they are taking a lot of arbitrary steps here. They are going methodically through all of their suppliers and axing them, cutting their contracts, eliminating long-term business relationships because they are so fearful of dealing with suppliers who are not Y2K compliant. These are the major companies in the country.
So it is not a question of the heavy hand of government and so on. I guess I am pointing out that if he goes to a consumer electronic store in Winnipeg, or any computer store in Winnipeg right now, you will see nowhere, nowhere, not one reference to year 2000 compliance on one consumer item. All these items have embedded chips. Now, this year 2000 committee says that the embedded chip problem is even more severe than the computer problem, and that is bad enough. So you have retailers across the country selling products in which I have yet to see one reference, not one, on any product. We are talking about hundreds of products here. So clearly, Mr. Chairman, something is wrong. If the product is year 2000 compliant, then why do the retailers not happily include that in the promotion or in the little sticker that appears with the product? Why is that such a problem? Or is it a case where all these people, all the members of this Y2K committee, are wrong? Are we saying that the head of Canadian Tire and the Royal Bank and all these people are wasting their time involving themselves in this committee, spending millions and millions of dollars upgrading computers, changing long-term suppliers? Are we saying they are wrong and the retailers are correct, there is not a problem, just simply sell your products and let the buyer beware?
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Or is it the other way around? Is it a case where this committee is right, that there is a problem here, and who is informing these retailers? I have just asked the question. If it is such a big issue, then why are more people not doing more about it? Why is it so far being left to a dozen presidents of the largest companies? Why are the media not covering the issue? Why are the Consumer Affairs ministers across the country not sending out promotions and warnings and so on and doing press conferences on these issues? Why is the minister not doing a press conference with the credit union management, a joint press conference? Why is the minister not meeting with the retailers and not having a press conference, and why are these retailers not producing their year 2000 promotions, if this is such a big problem? What is going on here, or what is not going on here that should be going on here? Why is half the population asleep on this issue? That is what I want to know.
I mean, if it is not a big deal, then just tell us it is not a big deal and we will forget about it, but we are getting mixed messages here. We are having Mr. De Vos [phonetic] coming into Winnipeg and meeting with the Auditor, meeting with the opposition, attempting, I guess, to meet with the Industry minister, whom he should be meeting with, but the Industry minister is nowhere to be found and, you know, essentially saying privately that the province may shut down because this problem is so severe. The man cannot meet with the Industry minister, could not find a minister to meet with, so I would suggest that somebody wake up in the government over there and take control of this issue and simply meet with the committee and start liaising with the business community and getting this issue front and foremost. But what I would like to settle one way or the other is to whether it is a serious matter or not, or whether or not we are just going to let the consumers hang, twist in the wind because that is what is going to happen.
I mean, people are buying these embedded chip products. I do not think this government is going to be going for an election, by the way, in the year 2000 because they will not have a single voter in this province that will want to vote for them. They will not want to support themselves. I can just see how people in this Legislature are so used to the soft, comfortable life that I do not think any of us could survive without these embedded chip products, and if they do not work right, I can just imagine the language that will be emanating all over the city when things do not work right. You know, when your VCR does not work and your computer does not work and your this does not work and your that does not work, it is going to be serious, and they are going to be looking to us as their elected officials for remedies. Why did you not tell us, they will say, why? Then it will be our fault. All I am saying is let us get out in front of the crowd, folks. When you are being run out of town, make it look like a parade.
Let us get out there. Let us start leading that parade, and let us start talking to the people to find out just how far along this is. You do not really know what your credit unions are doing and what they are not doing. I did not know what the banks were doing. I do not borrow money, so I do not know what the banks are doing, so I had to phone them. I had to go and round up a banker who lends money and ask them: what do you do? I got them to fax me their information, and it sounds as if there are a lot of inconsistencies there, even with the companies. Over $250,000, they require a Y2K questionnaire. Those companies, it seems to me, would be more likely to be Y2K compliant. The loans under $250,000, they do not ask any questions.
This is the Royal Bank. I mean, this is No. 2 on my list here of members of this federal Y2K committee. John Cleghorn, Chairman and Chief Executive Officer, Royal Bank of Canada, and his own bank, when it comes time to lending, has what I see as sort of not really tough Y2K policies. You know, maybe there is a reason why they are doing it the way they are doing it, but certainly there is something lost between where he is sitting and where the local loans officer is sitting on this issue. So we have to start working a little bit more on this, and I would like to know what the minister is planning to do about it.
Mr. Radcliffe: Well, Mr. Chair, I think that my honourable colleague has really, by virtue of the way he asked the question, supplied himself with his own answer. I look at the make-up of this blue ribbon federal committee, which has been gathered together, and I think that citizens of Canada are probably very happy when different levels of government co-operate with one another. Here, I think that we have a federal committee and we can look to this federal committee for leadership, because this is an issue that goes right across our province.
The individuals involved, the corporations that are involved, are quite properly the leaders in our commercial and fiscal and material world in this country. You know, the Chrysler motor car company, the Crown Life Insurance, the Cargill Grain, these are all leaders in Canadian industry. In fact, these are the people who are directing their minds to this issue.
In fact, I go back again without denigrating or deprecating my honourable colleague's concern about this matter because it is a very significant issue that should be considered. We do not know at this point whether, in fact, it is as onerous as my honourable colleague is trying to outline. In fact, business does not deal in speculative issues; business deals in concrete, objective, provable fact. Corporations today are loath to say that they are 2000 compliant because of the incipient legal liability that might attract to such a statement.
Therefore, I think the community itself, as it becomes more sensitized and more aware, is becoming very cautious with regard to this issue. I cannot be responsible, nor is Manitoba government responsible, as my honourable colleague asks, when he says, what is the media doing about this? Well, in fact, the Consumers' Bureau of Manitoba is not the overseer of the media organs in this province, because we do have a free press, we do have free media organizations in our community, and they are not subject to government regulation save and except for good taste and legal liability under the Criminal Code.
But I think, again, I look to the fact that leaders of industry, leaders of our major corporations, leaders of our financial world are addressing this issue. This is where this problem will be solved. If government, and specifically the provincial governments, were to weigh in to the lists at this point in time and impose a regulatory regime, anything more than an education and communication and sharing process, we would be suspect. The very role of government, I think, would be subject to opprobrium on this, because the role of government is that of being responsive to complaints to regulate the activities of our colleagues in such areas as insurance, regulate such areas as real estate brokers, regulate areas that are known and specific at this point in time. To embark right now and to commit the resources of government on something that is as speculative as this could very well be a misuse of the authority of the Crown. This is not to say that something should be overlooked or ignored, I do not think it should, and I think that to talk about it and to contemplate it, to be reflective upon it, as my honourable colleague is doing is a very worthy project.
But I think that to do more than that at this point in time, more than getting our own registries, our own regulatory process in order, is beyond the ambit of appropriate activity, and if we do more than educate and discuss and share, I think that we are overstepping the mark. This is a matter that quite properly belongs in the marketplace, it belongs in the universities, it belongs in the world of the IBMs and the SHLs of the world, and that is where it remains. They will bring the answer to government. They will bring the answer to the citizenry and that the vibrancy and the vigour of the marketplace will be the appropriate place where the answer will be supplied, Mr. Chair.
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Mr. Maloway: I would like to ask the minister, then, how many grants--I believe there is only the two that his department gives out--does the department give out in a year?
Mr. Radcliffe: Mr. Chair, I want to apprise my honourable colleague or confirm to my honourable colleague that there are, in fact, only these two grants that are given by the department because we have very frugal resources that are ably managed by the deputy, and, in fact, she scrutinizes every expenditure in our department to make sure that everything is handled in a prudent fashion and in a very thrifty fashion.
We do not have the resources that, say, the Department of Education would have or the Department of Industry, Trade and Tourism would have, so while there are very worthy causes that are out there, I must assure my honourable colleague that our deputy and her chief financial officers and her directors are very vigilant to make sure that monies are spent for the best of purposes in our department.
Mr. Maloway: Well, then, I would like to ask the minister did he make a formal year 2000 action plan a condition for securing these grants this past year? Has he done that?
Mr. Radcliffe: Mr. Chair, just to refresh my honourable colleague's memory, the two grants that we give are some $53,800 which is a counselling service for low-income individuals to provide credit counselling. The second grant is to the Consumers' Association of Canada. This grant enables the organization to provide a product-information and product-rating service to consumers, so that the particular issue of embedded chips or the millennia fever are perhaps issues that are beyond the jurisdiction or the competence of these organizations.
I am familiar with Mr. Zoran Maksimovich who is one of the individuals who works with low-income individuals. This is more a management service for people who find themselves in straitened financial situations, and it is an education and a resource opportunity for these sorts of people. I would suggest perhaps many of the individuals who go to Mr. Maksimovich may well not have access to computers or be involved in the computer technology world, that, in fact, while we are much obsessed by this because government relies now on computer technology, many, many, many people, still, in our country are not involved in the technology wizardry. The folks who are the recipients or the beneficiaries of these grants may well be in that category.
Mr. Maloway: I simply asked the question to illustrate the point that the task force recommendations are just simply being ignored by this government. Task force recommendation No. 11 reads as follows: All levels of government should require their lending bodies' programs to make the existence of a formal year 2000 action plan a condition for securing grants, contributions, loans and loan guarantees where applicable.
I realize this would be more applicable in the I, T and T department where they give out some serious money, but the example is there, that the federal government has its task force. All these business people are on the task force. They make recommendations, and you ignore the recommendations. We can go through them recommendation by recommendation.
So what is the point? Taxpayers are paying for this, I assume. They have a role in here; they are paying for this. You make recommendations, and they are not being followed. That is what I see coming out of this particular recommendation.
It is simply a matter of asking the Consumers' Association, which, by the way, should be doing something in this area. I do not know what they do with this grant, but certainly bare minimum they should have a year 2000 action plan. They are no different from any other organization. Every organization should have a year 2000 plan to find out if their data are going to be around after the year 2000. It is very important. So bare minimum, as a grantor, you should be asking them to fill out one of these year 2000 questionnaires for their own peace of mind, for their own good to determine whether or not their equipment is year 2000 so that at least they have some sort of a warning. They are the Consumers' Association. They are the people that are fighting for consumer rights. They are the people, practically some of the first people, that are going to be put on the spot about this issue as to why the consumers are suffering because they have all these products with embedded chips that do not work properly. That is a perfect, in my mind, role for the Consumers' Association.
I would think they would be out there conducting your education program that you are going to have to conduct, that they would be arm-in-arm with the minister and spending this grant on educating the consumers and making certain that their own office is Y2K compliant. I just offer that as an observation, but perhaps the minister would like to comment on that contradiction here.
Mr. Radcliffe: Mr. Chair, I want to assure my honourable colleague that his remarks are, I think, very appropriate; however, we cannot get too excited on $58,000, which is the extent of the granting here. I am sure that the individual recipients have every one of those cents and pennies and quarters and dimes already earmarked. In fact, the Department of Consumer of Corporate Affairs is a very lean and effective and frugal organization, but I do think that my honourable colleague's remarks are very appropriate.
This is something that I do intend to share with the director of Consumer and Corporate Affairs and to the researcher who is attached to our department to make sure that the good words of my honourable colleague are disseminated to the consumers' bureaus, the education officers in the community, so that government services will be well run, will be effective in the millennium, and that the word will get out so that the people in the province of Manitoba will be on top of this problem.
Mr. Maloway: I would like to ask the minister as regards the insurance question. The insurance companies are also grappling with this Y2K problem and issue, and I would like to know what is happening in Manitoba as regards the insurance industry's approach to the problem. The recommendation of the task force is that the insurance community should be providing its corporate clients--they say corporate clients; I guess they are not concerned as much about the individuals-- but corporate clients with early notification of the importance of the year 2000 issue and demanding the action plan.
Then another part of the recommendation is to make the renewal of an insurance policy contingent on the availability of a formal action plan. Now that seems like some pretty serious approach and serious action here. I am also told that some of the insurance companies are designing wordings to simply rider-out the problem and indicate that they are not going to be liable for year 2000 lawsuits that occur. Could the minister make some comments as to what he is doing about keeping track of the insurance industry and finding out what they are up to?
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Mr. Radcliffe: Mr. Chairman, I think my honourable colleague makes a very good point, and as I have said before the role of the insurance branch and the insurance bureau from the point of view of the department is one of a regulatory nature to liaise with the insurance councils who govern the affairs of the insurance agents in the city. I think that the liquidity investigator, which is the office of the superintendent of financial institutions, which is a federal institution, in fact, plays a very real role in this. This is something which is perhaps on a higher plane than the mundane administration from day to day of disciplinary issues, and items of this nature are properly in the sphere of OSFI.
As my honourable colleague knows, OSFI is a very skilled federal institution which liaises with the federal government. This is an issue of a higher plane of thinking which probably more properly rests in the field of OSFI. However, I do think that my honourable colleague makes some very appropriate remarks, and I can assure him that this is a matter that I will be debating and raising with the director of insurance here in the province of Manitoba.
I think that, again, this national task force very properly suggests the answers that my honourable colleague is raising that this is a matter, I would speculate, quite properly a matter of vigorous debate across the street in the Great-West Life Assurance Co., down the road in Investors Syndicate, all the major financial institutions and insurance institutions in Canada at this point in time. I have no doubt but in order to maintain their competitive edge that they have so adequately shown to date that our institutions will be on top of these issues and will be keeping Canadian institutions in the fore.
Mr. Maloway: I would like to ask the minister regarding the Securities Commission. The recommendation of the task force regarding securities commissions was that during 1998-1999, they were suggesting that the Securities Commission should review a minimum of 20 percent representative sample of annual reports of companies they regulate to determine if in fact the company has reported on year 2000 issues in their management discussion and analysis and to assess the appropriateness of the disclosure.
Mr. Peter Dyck, Acting Chairperson, in the Chair
Now the minister should be aware that I think it was last year, about a year ago now, the Toronto Stock Exchange, I believe, made it a requirement for companies trading on the exchange to provide Y2K compliance or updates or whatever information with their annual statements. So I would like to know what the Manitoba Securities Commission has been doing in that regard.
Mr. Radcliffe: Mr. Deputy Chair, it is a delight to see you occupying the Chair this afternoon.
I would like to advise my honourable colleague that the Manitoba Securities Commission has proposed and will be effecting a review of all Manitoba-based corporations that are registered on the Manitoba stock exchange in the next year, and they will be sending notice to all the corporations that are registered to do business in Manitoba as to the importance and significance of this issue. So the Manitoba Securities Commission is on top of this issue and is addressing it in a very forthright fashion.
Mr. Maloway: The task force goes on to say that the Securities Commission should promote year 2000 preparedness as a consideration in the due diligence process associated with mergers and acquisitions. Can the minister comment on that recommendation as to what their plans are?
Mr. Radcliffe: I am advised, for the benefit of my honourable colleague, that in fact the Manitoba Securities Commission does insist on full disclosure of all relevant data and information when there is a merger transpiring of Manitoba-registered and Manitoba-based corporations. So in the normal course of the regulatory regime, this sort of information is disclosed and is requested to be disclosed and is a prerequisite for any of this sort of activity in Manitoba.
Mr. Maloway: One of the ideas that was suggested was that in order to take the partisan element out of the issue, perhaps an all-party task force should be set up and the government and the opposition would involve itself in going out and communicating the extent of the Y2K problem around the province. What does the minister think of that suggestion?
Mr. Radcliffe: I think that probably, and quite properly, every member of this Legislature, as the total all-party task force, has the responsibility to go out and talk to their constituents on an individual basis, on a party basis, and on a total legislative basis, so I do not think that we have to commission any special committee or group of members to be more organized than that, to spend government funds on financing our travel or our communication issue. We are all well endowed with stipend from the Manitoba Legislature which is, in fact, administered by my honourable and very competent financial officer, Mr. Fred Bryans, and in fact I think that if we look at the resources that are available to us at hand, we have the ability to go out and disseminate this information.
So I would urge my honourable colleague to respond in this fashion because I think the tools are here, and it is just one of those matters that we have got to discern what resources we have. Once we discern that we have that ability, it is a matter to inspire our colleagues to go out and do this, and I think that I would make common cause with my honourable friend on this matter.
Mr. Maloway: I would like to ask the minister for his comments on Recommendation 17 of the task force in which the recommendation is made that Canadian and provincial legislative bodies should hold public hearings inviting national or regional associations, relevant government authorities, and others able to exert influence on the private sector to report on their efforts to encourage their constituencies to meet the year 2000 challenge with formal action plans. What are his comments on that recommendation?
Mr. Chairperson in the Chair
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Mr. Radcliffe: I think that the task force suggestion is, in fact, a very appropriate one, and I think that within the limited means of the provincial government, as I said before that I think it would be advantageous to the community at large if, in fact, individual private members of the Legislature were to go out into their communities and hold public hearings, discuss this matter with their constituents, because one must not step over that boundary of what I call almost the big brotherism.
A government really is face to face, telephone call to telephone call, person to person. That is how this information is really spread, and to have grandiose commissions, with recorders and translators and transcripts and to go and stay in fancy hotels and hunt headlines, I do not think is the appropriate way that this should be done. I think this is done person to person, and I think it is done on a very realistic basis. I am sure my honourable colleague, who has an insurance agency, I believe, on Sargent Avenue in the city of Winnipeg, is probably talking to the individual members himself that come to his constituency office to renew their insurance or to discuss this problem with them. I think that is where the real solutions rest in a very populist, person-to-person basis.
The Canadian government, perhaps, has more resources and tax dollars, but the Manitoba government restricts its spending to health care, to education and to family services. There is such a pressing demand for our tax dollars in Manitoba, and we want to be very frugal and maintain our position as a balanced budget, paying down the debt of the Province of Manitoba. Therefore, to run up the tab on task forces going around the province to talk about things that can be done on a very, very elemental neighbourhood basis would be perhaps a misappropriation of our funds. In fact, we have trust funds that are entrusted to us through the tax process; therefore, we must ensure there is money for research, for medical research, for treatment of our seniors, the treatment of our people who are suffering from ill health, that we make sure that people who are challenged economically have the opportunity for education because, as our minister of Child and Family Services says, the best form of support is a job.
Therefore, the provincial government addresses itself to those issues, not to issues of going out and, as I say, holding public hearings on these things. So, while it is perhaps very well intentioned and quite an interesting exercise, this perhaps might be something that our federal government or these very honourable individuals who comprise this task force might address themselves to because their corporations might be forwarding funds for this. This would be something beyond the purview and expertise of the Department of Consumer and Corporation Affairs.
Mr. Maloway: I would like to ask the minister then: would he take this task force report and recommendations up with the Premier (Mr. Filmon) to make certain that he is up to speed with the recommendations and understanding of the problem?
Mr. Radcliffe: Absolutely.
Mr. Maloway: Mr. Chairman, I would like to ask the minister: under this desktop management initiative, how many computers does this department, Consumer and Corporate Affairs, have?
Mr. Radcliffe: Mr. Chairman, 148.
Mr. Maloway: Mr. Chairman, well, wrong. That is the wrong answer. According to the desktop management initiative transition plan, the number should be 178. So the question is then: why does Government Services' desktop management initiative show 30 more computers in the department than the minister thinks there are? Who has got them?
Mr. Radcliffe: I believe that some attention should be given to peripheral devices, Mr. Chair, and that the desktop people may be looking at some other information, but the best information that we have to date, and that comes from our financial administration, is that there are 148, and so perhaps if my honourable colleague wishes to press the issue with desktop he might address some attention to that issue.
Mr. Maloway: Well, then, could the minister tell me when these 148 computers will be installed and operational? How many does he have installed at the moment?
Mr. Radcliffe: I am told that they should all be installed by the third quarter of this fiscal year, which would translate to January of 1999.
Mr. Maloway: Well, how many does he have installed now?
Mr. Radcliffe: I am told that the Vital Statistics department have their computers fully installed, and I do not have an absolute count as to how many machines they have at this point in time, but however many there are at the Vital Stats department--and the Public Utilities Board has 10 machines that are fully operational and fully installed.
Mr. Maloway: Are there any problems associated with the installation or workability of these machines that are installed in Vital Stats and PUB?
Mr. Radcliffe: Nothing out of the ordinary.
Mr. Maloway: I would like to switch now and ask the minister a question or two on gasoline pricing as to what his department has been up to in that area. In the last year, the minister may or may not be aware that, you know, we have suggested in the past that he look into the whole area of using Churchill as a route for bringing gasoline through the North.
The reason for that is relatively simple. Right now, gas is supplied through the pipeline system, and it is pretty well controlled by a couple of companies and refineries and the only way, ultimately, I guess, to effect any really revolutionary change in the supply of gasoline to Manitobans is, in fact, to bring gasoline in through Churchill through the North, basically flood the North or flood Manitoba, the province, through the North with cheap gasoline. The minister has to admit that under the current system it is not possible to achieve any real results using the existing pipeline structure and dealing with the current, I believe it is two, refineries that supply the gasoline.
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The only option at this point is to bring it in from the United States, and that is a marginal improvement at best. It depends on the time of the year, and there are some other logistical problems associated with that, but long term if we are looking for--I guess the long-term solution is hopefully the promotion of the Ballard bus system and the new engine that Ballard is developing out of Vancouver that hopefully will revolutionize the engine business and get cars off of gasoline and on to hydrogen, or at least a mix of the two, and reduce our dependence on gasoline. I am sure that no one in Manitoba will complain about that because we are not a producer of gasoline here.
But in the shorter run, especially with the idea that Churchill is an area, a port that we want to promote--and it has been many years in the making. The problem there has been severe and it has been worked on over the years. Certainly one of the options is to look at allowing gasoline to be brought in through there. In fact, the minister should know that at the present time that is being done. There is a tank farm up there, and gasoline is brought in, but it is being brought in for movement north. All I am suggesting is that with OmniTRAX taking over the rail line and looking at other commodities and other products to move, then does it not make some sense to bring in tankers of gasoline through the northern route and bring them south using--well, you can store them, I guess, in Churchill at the tank farm but bring them down by railway cars using OmniTRAX equipment through to Thompson and other parts of the North.
Now, there does not seem to be a whole lot wrong with that suggestion. As a matter of fact, wherever I have made it, it has been met with agreement. No one seems to disagree with the idea, but who is doing anything about it? So if the minister could tell us what his planning department here is doing with regard to gasoline pricing, I would be appreciative.
Mr. Radcliffe: Well, Mr. Chairman, I am delighted to have the opportunity to tell my honourable colleague what our research department has been doing with regard to gasoline prices.
I am sure my honourable colleague knows that at the Regina conference last year, the federal government and the Consumer and Corporate Affairs ministers right across Canada looked into the whole issue of whether there was any price fixing, whether there was any combines infractions, and, in fact, the conclusion was that after an exhaustive study, the federal government and the task force that was struck on this matter to research the issue came to the conclusion that there was no misfeasance or any infractions of any of our criminal or quasi-criminal investigation with regard to any of the energy management issues in the Dominion of Canada.
Further to that, what we did discern was that there was, in fact, a lack of information, a lack of knowledge, a lack of specific knowledge with regard to the petrochemical industry in Canada. This would, I think, pervade to the highest levels of Canadian society, and I would suspect, with the greatest deference to some of my colleagues, ministers in other provinces, that they were suspicious that there might be chicanery or price fixing amongst the oil companies. Therefore we directed, I guess, a committee of the research departments in the ministry across the country to urge the private petrochemical companies to disseminate their own information as to what the reality was of their price environment.
We are not apologists for the petrochemical companies, but, in fact, I have made it my business to make some probing inquiries as to how prices were arrived at in Manitoba particularly because, of course, that is the area of my responsibility, and I have come to a number of conclusions which I think my honourable colleague would be quite surprised about. We have met with representatives from some of the leading oil companies, and I have also met with some of the officials of the--I do not have the exact, correct name, but it was like a petroleum institute which is a professional association of the petrochemical companies.
First of all, I guess, to perhaps repeat the obvious, but my honourable colleague must know that 50 percent of the retail price at the pump of petrochemical supply is tax, either federal tax or provincial tax. So we are looking right now at--when we are talking of 52 cents, 53 cents a litre for gasoline, that 26 cents of that goes to the retailer and 26 cents goes to the different regulatory authorities.
Now, I would urge my honourable colleague opposite to impress upon our federal counterparts that, in fact, it would be very valuable if they were to take some of that tax dollar that they extract from the sale of petrochemical fuel and put that back into our road systems in western Canada because, as you know, this is the lifeblood of our communication system for the movement of goods and services across western Canada, our grain and commodities. In fact, with the abandonment of rail lines and the withdrawal of the railway companies into only key lines that, in fact, our roads are becoming a more and more important process, which is a resource which is a provincial responsibility.
We have had this conversation I guess a number of times, but one of the determining features of price of petrochemical fuel is the overnight wholesale rate on the New York market, and that determines the base price for the job lots for the oil companies. Then there is the price of the pass-through of the chemical through the pipelines or the cost of transporting it from the wellhead to the area where it is to be sold. That is a component of the price for the oil companies. There is a fixed cost of overhead that the oil companies must defray, and so they look at and they have an issue of the pass-through consumption level. So, therefore, the price of the commodity in Toronto will be cheaper than the price in Brandon or Dauphin, Manitoba, because there is more of the product being consumed on the streets of Toronto than there is on the streets of Dauphin. So the oil company has to have an average price to defray their constant overhead cost and this is something that is constant to all the oil companies. It does not matter whether we are talking to Shell or to Petrocan or Esso or Husky Oil. They all have the same issue that they have to deal with.
I am told and I believe it to be the truth that it is a highly competitive market and that, in fact, today, the oil companies are having to go to subsidiary competitions in order to be successful. They are giving full service gas bars, they are giving away Coca-Cola, they are giving away glass or they are giving away collateral issues in order to attract a piece of the market. In fact, when one looks at the price wars that occur on a regular basis across the country, one sees that the gas companies are being highly competitive. That is on the private sector fuel supply.
Then we have the regulated industry, of course, which is a whole different issue that is regulated by our Public Utilities people, and that is in the monopolistic side. That is where the price is regulated and we must be very, very careful never to get into--
Mr. Chairperson: The committee will come to order. The hour now being five o'clock, time for private members' hour.
Committee rise. Call in the Speaker.
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