Mr. Chairperson (Ben Sveinson): Good morning. Will the Committee of Supply please come to order. The committee will be resuming consideration of the Estimates for the Department of Industry, Trade and Tourism. When the committee last sat, it had been considering item 2. Business Services (a) Industry Development-Consulting Services (1) Salaries and Employee Benefits on page 103. Shall the item pass?

Mr. Tim Sale (Crescentwood): Mr. Chairman, I wonder if the minister would like to introduce the additional staffperson who is here this morning.

Mr. Chairperson: Would the honourable minister like to introduce his additional staff this morning?

Hon. Mervin Tweed (Minister of Industry, Trade and Tourism): Mr. Chairman, I would be happy to. With us today is Mr. Ian Robertson. He is assistant deputy minister of Industry Development. Mr. Jim Kilgour is the director of Financial Services. He is not quite at the table but close by for sound advice.

Mr. Chairperson: Very good, thank you, Mr. Minister.

Mr. Sale: Mr. Chairperson, have there been any material changes in the first line, Salaries and Employee Benefits? Could the minister describe what they are if there have been in the past year?

Mr. Tweed: Mr. Chairman, as part of the discussion that we had yesterday with that one position, there was one position transferred from research to consulting.

Mr. Sale: Mr. Chairperson, as I ended yesterday, I think I had asked for an explanation of the significant difference in the increases in wages in this section versus an earlier section where the increases were in the order of 10 percent. The increase here, I think, is in the order of 4 percent. I am wondering why, in a similar line, Professional/Technical, there is such a difference.

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Mr. Tweed: Mr. Chairman, I am advised that, along with the general increases that we had discussed yesterday, some of the staff were qualified for the increment increases, plus the one position transfer.

Mr. Sale: Mr. Chairperson, I think perhaps the minister misunderstood my question. In the previous section where there were eight professional people on section 10.1.(c), the increases were in the order of 10 percent in that Professional/Technical line. In this area, they are in the order of 4 percent. I am asking for an explanation of why this group did not receive the same level of increase as people in the 10.1.(c) group. Did they not merit the increase? Did they not earn their merit bonuses? What happened here?

Mr. Tweed: Mr. Chairman, they would have received the same general increase, but it would all depend on their position as far as whether they would also receive the benefit of the increments.

Mr. Sale: Mr. Chairperson, that is not an answer that helps me very much to understand what has happened here. I refer the minister back to 10.1.(c), where salaries overall rose by some $42,000 on a $382,000 base. He explained that in regard to a general increase of about 2 percent, the increments to which people were entitled by virtue of service of about 1.9 percent, I think he said at the time, and the rest he described as merit increases. So I am wondering why there are no merit increases in this line, as compared to the previous line. Did the staff not merit an increase?

Mr. Tweed: Mr. Chairman, I am wondering if I could offer to the member that we will get the full information and breakdown on the increases to clarify it.

Mr. Sale: Mr. Chairperson, I would appreciate that. If he could provide a comparison between 10.1.(c) and 10.2.(a), in terms of the increases and the reasons for the increases being significantly different, so, yes, I would be glad to have the minister do that.

On that basis, we can pass this line.

Mr. Chairperson: Item 10.2. Business Services (a) Industry Development-Consulting Services (1) Salaries and Employee Benefits $2,338,000–pass; (2) Other Expenditures $844,300–pass. (3) Grants $16,900.

Mr. Sale: Could the minister indicate what these grants are and to what organizations they go?

Mr. Tweed: The grants went to the following organizations: Canada West Foundation, Manitoba School Science Symposium–

Mr. Sale: Could the minister indicate the amounts.

Mr. Tweed: Be happy to. Canada West Foundation, $10,000; Manitoba Schools Science Symposium, $1,200; Western Manitoba Science Fair, $1,200; Northern Manitoba Regional Science Fair, $1,200; Manitoba Provincial Science Olympics, $500; the Assiniboine Community College Awards Committee, $300; the Prairie Implement Manufacturers Association, $1,500; and the Manitoba Marketing association, $1,000.

Mr. Sale: Mr. Chairperson, pass.

Mr. Chairperson: Item 10.2. Business Services (a) Industry Development-Consulting Services (3) Grants $16,900–pass; (b) Industry Development-Financial Services (1) Salaries and Employee Benefits $749,100–pass. (2) Other Expenditures $248,900.

Mr. Sale: Earlier in Estimates, the minister indicated that computer services for the desktop initiative and other things were in each line. What line are the computer services in in this particular set of Estimates, because it does not talk about computer support.

Mr. Tweed: I am advised that it falls under Other Expenditures, within the $248,900, and it is the total. I presume the amount, part of that is $24,700.

Mr. Sale: My question was in which line is that included, Supplies and Services or Other Operating?

Mr. Tweed: Other Operating.

Mr. Sale: Mr. Chairperson, the minister had agreed to table a list of the Estimates broken out by computer services for Systemhouse. I wonder if that list is ready.

Mr. Tweed: Mr. Chairman, we are still working on gathering all the numbers and, as previously stated, when it is available we will bring it to the committee.

Mr. Sale: Thank you, Mr. Chairperson. I pass.

Mr. Chairperson: 10.2(b)(2) Other Expenditures $248,900–pass.

2.(b)(3) Programs (a) Manitoba Industrial Opportunities $9,714,800.

Mr. Sale: Could the minister table a list of the MIOP grants and loans with the terms attached that are currently outstanding, the complete list. I believe I have asked for this in previous years and I think that it has been supplied. If he has any committed but unannounced amounts that would come out of this $9,700,000, I think in past years the practice has been to show them as commitments but unannounced in terms of the identity. I wonder if he could table that today, because we are going to spend some time in this area. I am sure he anticipated this request or at least his staff did.

Mr. Tweed: I will ask one of my staff to bring forward and anticipating the honourable member's question, staff have prepared a list and, as he stated, there are some at the bottom that he will see that there have been allocations and obligations shown, but they are unannounced at this point in time.

Mr. Chairperson: We will give a copy to the member for Crescentwood (Mr. Sale) as soon as we get one.

Mr. Tweed: Mr. Chairman, I believe the Inkster (Mr. Lamoureux) has also requested a copy.

Mr. Chairperson: Okay. Everybody at committee will get one.

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Mr. Sale: While we are waiting for that to come back, Mr. Chairperson, could I just make a couple of other requests that I am sure staff is also anticipating, since we have been down this road before. It is not in this line. It is 10.3.(b) and (e).

Mr. Chairperson, I am sure the minister is aware of our concerns in regard to the capital invested in both the Vision and Manitoba Capital Fund. What I would like to ask for, and in previous years I have asked for a list of the companies, they have always been refused on the, I think, spurious basis of third-party confidentiality, but I would be happy if the minister would change his view on that ground. What I would like to ask for is a fair market value of the Manitoba government's investment in Vision Capital and the Manitoba Capital Fund as at the most recent evaluation of the portfolios.

We know what we have invested. At least I think we know what we have invested. We would like to know what the fair market value of that investment is as determined by competent authorities.

Mr. Tweed: Mr. Chairman, I am advised that the portfolios are not valued annually, because there is a suggestion that the interim evaluations may not be completely accurate due to market conditions.

Mr. Sale: Mr. Chairperson, this is a new one. On an annual basis, most companies have to report for all kinds of purposes, whether it is capital tax or whether it is income tax or whether it is simply accountability to shareholders. When the minister ran a car dealership, I think he got an annual report. I think at the end of that annual report or at someplace in it there was an inventory evaluation, and his auditor probably had some arguments with him about how much his inventory was worth, but at the end of the day there was a figure.

Now, I do not accept the notion that we should not know the list of companies invested in. I never accepted that notion, but the minister has always maintained that. Surely he is not now saying that we should not even know the value of the portfolio in aggregate. That would be an amazing position to take, given securities laws in this country.

Mr. Tweed: Mr. Chairman, I am advised that these are not publicly traded securities, and that no annual evaluations are done. The reason being is that when people make the investment into these particular funds, they are locked into for the length of the program.

Mr. Sale: Mr. Chairperson, I have to be very careful here, and I want the minister to be very careful. The board of directors of Vision Capital must annually receive and adopt a financial statement by law. In that financial statement, there must be an asset valuation. There is no way that you can adopt an annual statement as a board of directors if you do not adopt a balance sheet, and the balance sheet has to have in it–according to my understanding of standard accounting practices, generally accepted accounting rules–an asset valuation.

We know what portion of the portfolio comes initially, what proportion comes from the province. That is public knowledge. All I am asking is what is the fair market value of our share in Vision Capital as at the last annual meeting of that corporation. Surely, the minister is not maintaining that the board of directors of a corporation does not know the fair market value of its portfolio. That is an incomprehensible position to take.

Mr. Tweed: Mr. Chairman, I am wondering if I could take this as under review and prepare a statement back to the honourable member just to clarify for myself and for him.

Mr. Sale: Well, the minister may have to do that, but, no, I am not prepared to just leave this item at this point because I find this an incomprehensible position for a business person to take.

Is the Vision Capital corporation formed as a limited partnership?

Mr. Tweed: Mr. Chairman, yes, it is.

Mr. Sale: Mr. Chairperson, who is the general partner?

Mr. Tweed: That group would be Westgate Capital Management.

Mr. Sale: Mr. Chairperson, do the limited partners have a board representative, and how is that structure currently constituted?

Mr. Tweed: We have one member sitting on the investment advisory committee.

Mr. Sale: What is that member's name, Mr. Chairperson?

Mr. Tweed: Steve Kupfer.

Mr. Sale: Steve Kup–?

Mr. Tweed: K-U-P-F-E-R.

Mr. Sale: Okay, I did not hear the minister the first time. Mr. Chairperson, when was the last annual meeting of the partnership?

Mr. Tweed: I am advised April 19, 1999.

Mr. Sale: At that meeting, Mr. Chairperson, did the members of the partnership adopt annual statements and proceed to elect officers, et cetera, as they normally would do?

Mr. Tweed: I am advised that yes, they did.

Mr. Sale: Mr. Chairperson, in those statements was there a balance sheet?

Mr. Tweed: Yes, there were.

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Mr. Sale: Mr. Chairperson, did our representative on that board vote to adopt the balance sheet as part of the annual statements? Did he vote in favour of the adoption?

Mr. Tweed: Not having seen the minutes of the meeting, I would assume that that would be correct.

Mr. Sale: Mr. Chairperson, the other partners in Vision Capital are whom, the other limited partners, other than the long list? I am not asking for the long list of people who invested in Vision; there are several pages of them. Who are the limited partners along with Manitoba?

Mr. Tweed: I am advised, Mr. Chairman, that that is the long list.

Mr. Sale: So just to clarify then, Manitoba has the same level of representation as all other limited partners, private and public sector, teachers fund, for example? There are many different partners in this investment fund.

Mr. Tweed: I am advised that there are many different partners, and we do have one on the advisory committee.

Mr. Sale: So just to clarify. The scale of our investment has entitled us, in effect, to sit on the investment committee. Other limited partners might only attend annual meetings or have some other lesser role in the day-to-day direction of the corporation.

Mr. Tweed: The general partner runs the day-to-day operations of the fund.

Mr. Sale: I understand that, Mr. Chairperson, but what I am saying is that our scale of investment has essentially levered us. I am not making this as a negative comment, but it has levered us into a role of sitting on the investment advisory committee, whereas an investor that might have put up $100,000 is not sitting on that committee. His scale of investment is much less.

Mr. Tweed: I am advised that that is correct.

Mr. Sale: Mr. Chairperson, what is the total invested to date by Manitoba in Vision Capital?

Mr. Tweed: Our equity position is $900,000.

Mr. Sale: Mr. Chairperson, I think that we are talking about two different things, possibly, here. I believe we have somewhat more than $900,000 invested through Vision Capital, one way or another. I believe that this is perhaps not a complete answer.

Mr. Tweed: Mr. Chairman, I believe the question dealt with the equity, and that, as I am advised, is in the $900,000 range.

Mr. Sale: Mr. Chairman, what other forms of investment do we have being managed by or through Vision Capital? What is the total amount of provincial funds in and through Vision Capital of all kinds?

Mr. Tweed: Mr. Chairman, I am advised that we have an outstanding loan of approximately $20 million.

Mr. Sale: I am going to have to look at my companies branch information on Vision Capital to try and make sense out of this information because it is something either I am misunderstanding or perhaps my questions are not clear. Certainly these amounts are not what I expected.

Mr. Chairperson, what is the form of security for the loan? What are the terms of the loan?

Mr. Tweed: I am advised it is a general security agreement of all assets of the fund.

Mr. Sale: Did the minister say all assets of the fund?

Mr. Tweed: Yes.

Mr. Sale: Does the security rank any differently than any other securities in Vision Capital's overall capital base? Are we behind a number of others, in front of a number of others? Where do we rank?

Mr. Tweed: I am told we have first position.

Mr. Sale: The minister undertook that he would provide a statement, and I would like to have that from him, but I want to close on this by saying that I think it is an incomprehensible position if the minister chooses to take, ultimately when he provides a statement, that not only are Manitobans not entitled to know the companies in which they invest through the various vehicles that we have used, Manitoba Capital Fund, Vision Capital, et cetera, we are not even entitled to know whether the total amounts advanced are represented by assets at fair market value that are larger or smaller than the total amounts advanced.

It just does not make any sense to me that the minister would maintain a position that the public sector is not even entitled to know the fair market value of the investment that we have made in a fund. I do not agree with the withholding of companies' names basically because virtually the entire business community knows where loans are made. This is not a secret in the business community. In fact, I would think businesses would feel positively about Vision Capital investing in them and not worry that this would somehow be negative.

But that aside, I hope the minister does not at the end of the day come to the position that we are not even entitled to know the fair market value of our investment as a proportion of Vision Capital's overall assets.

Mr. Tweed: Mr. Chairman, I am sure we will have further discussions, but just in regards to the investment disclosure practices, I refer to the Provincial Auditor report of June '98 where he states in his conclusion: based on the information gathered in our study, we concur with the current investment disclosure practices of the province regarding publicly supported risk capital funds delivered by a third party.

Mr. Sale: With the understanding that the minister is going to provide a statement, let us pass this line. I am sorry, we are not at that line. We could if you want to, though, pass 3.(b) instead of 3.(a). I do not know how Pat feels about that. Do you want to come back to it and pass it in course, in order?

Mr. Chairperson: Item 10.2.(b)(3)(b)–pass.

Is there agreement by the committee that we had to set (a) aside while we did (b)? [agreed]

It is the committee's will to now go back to (3)(b)(a), and the member for Inkster has some questions.

Mr. Kevin Lamoureux (Inkster): Mr. Chairperson, I do want to try to get a better idea in terms of this particular line. It has actually been the first time in Estimates dealing with this line for me, so it is somewhat new, and I was hoping the minister and his staff might be patient as I try to get a good understanding of it.

Mr. Chairperson: If I might just jump in here for a second, I made a slight error. It is not (3)(b)(a). It is 2.(b)(3)(a) Manitoba Industrial Opportunities.

Mr. Lamoureux: In looking into the Supplementary Estimates on that particular line, it shows the $9,714,000 and it makes reference to a Citation 2, which says that it "Reflects adjustments to carrying costs for interest and the provision for losses plus a reduction in the budget for forgivable loans."

Now, the minister had tabled a document, and I believe that that document is associated with this specific line.

Mr. Tweed: Recognizing that the member for Inkster and the minister are quite new at this, he is correct.

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Mr. Lamoureux: Okay. So we will both hopefully learn something from this.

On this particular line, maybe the minister can indicate where that $9.7 million is actually spent. I have made reference to two. With the document that was tabled, am I to understand that this particular line is strictly for loan guarantees, repayable loans, interest-free loans? Is that the sole purpose of this particular line?

Mr. Tweed: Mr. Chairman, the interest costs, including concessionary interest on existing portfolio of loans, it is with the provision for cash flow of an estimated $10 million for new approvals and $5 million for approvals during the past year at an estimated 7.5 percent. That represents $5,639,100. The allowance for forgiveness for loans negotiated with forgivable principal terms is $3,463,100, and increase in allowance for doubtful accounts $612,600 which is the $9,714.8 that you have.

Mr. Lamoureux: So the millions that are being referred to, these are already monies that would have been committed, that there is an obligation of the government to provide for.

Mr. Tweed: I am advised that it covers current existing businesses and also any new applications in this year.

Mr. Lamoureux: What percentage of the 9.7 would be for new that has not been–where the government has not committed or obligated to provide funds for?

Mr. Tweed: I would have to ask for his indulgence to get the exact figures, but I am advised that it is less than a million dollars.

Mr. Lamoureux: So, then, of the 9.7, you are talking at least $8 million of that the government has made solid commitments in which they could not get out of.

Mr. Tweed: Mr. Chairman, my staff have advised me that they would like to prepare the full details for the member for Inkster, if that is fair.

Mr. Lamoureux: Mr. Chairperson, I ask it because this would have been the particular line where the motion from the NDP was suggesting removal of $5 million. Is that correct?

Mr. Tweed: You may want to confirm that with the member for Crescentwood (Mr. Sale), but I believe that is correct.

Mr. Lamoureux: The question if that motion was in order and did pass, what impact would that then have on the government commitments?

Mr. Tweed: Mr. Chairman, I am constantly advised never to speculate on what might have happened.

Mr. Lamoureux: If that budget of this particular line, and I think that there is an obligation because if we did have a vote on it, I, as a member of the Legislature, would be obligated to and have a responsibility to vote. It is important that, before I place my vote, I understand the outcome of my action. If there was a question to take $5 million out of this line, my constituents have a right to know how I would vote on the issue. I do not know how to vote right now because I do not know the actual impact it would have.

So the question to the minister is: What would happen if $5 million was taken out if you have a solid 6, 7, X number of millions of dollars that have already committed? Does that mean you would have to renege, which could end up in lawsuits against the government from private companies? I am looking for some assistance on that issue.

Mr. Chairperson: I am going to allow this to go ahead a little bit more, but I just wish to let the members know that indeed you are discussing a motion that has been ruled on and ruled out of order. I am going to allow the minister if he wishes to answer this, but I would like you to consider that.

Mr. Tweed: If I may, Mr. Chairman, again just to advise the member for Inkster, the decision that was asked for was asked for on the decision of the Chair, not on the actual money issue. So I think you could make your decision quite confidently based on whether you support the Chair or not.

Mr. Lamoureux: With all due respect to your comments and the advice that the member for Arthur-Virden (Mr. Downey) is trying to give me, I think there is a responsibility to answer the question that I am posing in terms of what obligation this government has to fulfill that $9.7-million commitment. Is there a legal obligation for the government to fulfill that $9.7 million, or what percentage of it?

Mr. Tweed: Again I just have to respond that these are all purely hypothetical propositions that are being put forward. I will be very honest with the member that I have not had time to consider all the implications of what might be brought forward with motions from the floor.

Mr. Lamoureux: I am not talking about a motion from the floor at this point in time. What I am asking the minister is: what legal obligation does this government have in terms of commitments of that $9.7 million?

Mr. Chairperson: That is different than what I ruled on, definitely.

Mr. Tweed: Similar to all items in the budget, when you set a line, the intention of the department and of the government is to match that line and stay within those boundaries.

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Mr. Lamoureux: Again, with due respect, I do not think that is a fair assessment. If you put an expenditure in a particular line, whether it is in health care or education, and this government has a great track record in particular in health care, where they say: we are going to spend X number of dollars. They do not spend X number of dollars. You do not have the Health Sciences Centre taking the government to court for not spending those dollars or the Cancer Research Foundation taking the government to court because they did not materialize on a promise.

I trust that this particular line, there are a number of documents that are written up in advance. The best I could tell from the earlier response that I was given from the minister was that approximately $8 million is, in fact, committed. I interpret the word "committed" as, you have had negotiations with private enterprise, with companies that are somewhat listed, at least in part, on the paper that we have before us, and those either individuals or companies would have had some form of, in many cases, legal counsel, the drafting of papers in expectations, maybe blueprints, who knows what. Those individuals, if the government tried to renege, unlike some of the things that happen in, let us say, the Department of Health, those individuals or corporations might be more inclined to take legal actions against the government.

I think that that is a fair assessment of what I just finished saying. I would ask again for the minister to indicate, you know, something that would clarify the numbers for me on this issue. I believe that I have a right to know what sort of an obligation this department has made with taxpayers' dollars which if they withdraw out of that they could suffer some form of legal consequence.

Mr. Tweed: Mr. Chair, I am advised that the member indicates that basically we would keep the commitments to the people that we have already allocated the funding, and if I may, I would just like to thank the member for Inkster (Mr. Lamoureux) for complimenting the government on all the commitments that they have made to health care.

Mr. Lamoureux: Mr. Chairperson, I am intrigued by the way in which the minister would take that as a particular compliment. In fact, it was not meant as a compliment. You know in that particular budget there was a commitment from the government to spend oodles of money on capital, and, in fact, they did not spend that money on capital. That is why I had indicated that there were different types of obligations in the different lines.

Mr. Tweed: I believe the member for Inkster's words were: The government has done a wonderful job in health care.

Mr. Lamoureux: Well, the wonderful thing about Hansard is, in fact, that one can always take the context in which one puts words, and I will have to reflect on that. But the minister, through making that particular comment, almost causes confusion to the extent that I might have lost my place somewhat, so it will require me to do a little bit of digging. I do want to continue on just for a few more minutes.

The minister in his response to the question said the government would maintain its commitment to those companies. Is it not a fair assessment to say that not only would this minister be obligated to maintain those commitments but any future minister would be obligated to maintain those commitments?

Mr. Tweed: Mr. Chairman, I would suggest that anything that is contractual in nature suggests that there is a commitment made.

Mr. Lamoureux: Now, then, we will go to the question of when we talked about that $9.7 million, what percentage would be of a contractual nature?

Mr. Tweed: Mr. Chairman, I am advised that that percentage is not available to us immediately, but we will endeavour to get it for the member.

Mr. Lamoureux: Being a person of great flexibility, I like to think, Mr. Chairperson, in acknowledging the amount of expertise that we have in this room, I would be more than happy to get any form of even a guesstimate which I would not necessarily quote from the department.

Mr. Tweed: I do not believe that would be in anyone's best interest to provide a guesstimate. I will endeavour to get you the numbers and provide them to the committee.

Mr. Lamoureux: So the minister is not prepared to say whether it is a 50 percent, give or take 25 percent. As I say, I am not looking for a specific number. What I am looking for is to get some sort of an idea out of that $9.7 million, a rough idea, of how much of that would be committed.

Mr. Tweed: Mr. Chairman, I would not be prepared to guess at the percentage. I will provide the member with the detail.

Mr. Lamoureux: Having gone through hundreds upon hundreds of hours of the Estimates, one of the biggest scapegoats I have always found that ministers will quite often use is they will say they will get back to me on information. Quite often I never do get the information. I think it is primarily because I do not get any sort of timeline on it. I would ask the minister: when could I anticipate getting the information requested?

Mr. Tweed: As soon as possible.

Mr. Lamoureux: I am not too sure if there are rules on being able to speak during the Estimates at length of time. I am quite prepared to talk about the importance of providing information because indeed it is critical, really and truly. When we talk about the budget Estimates, the first thing we do is we table a document in which there is a great deal of debate, eight days of debate. We pose many questions during Question Period, and quite often in Question Period we are told that this is not a question for Question Period, this is a question for the Estimates, and if you ask the question in the Estimates it would, in fact, be more appropriate.

As a member of an opposition party, I feel that it is important that when we have a question that does warrant an answer and the minister has staff that can provide at least some idea that is even close to the answer that I am looking for, I know the member wanted to–

Mr. Tweed: I will advise the member for Inkster, as you can see the staff are here, and when we break at lunch time I will endeavour to get the information back to him, if not after lunch, tomorrow for sure.

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Mr. Lamoureux: I thank the minister, and I will wait for the answer.

Mr. Sale: I think the member for Inkster asked some interesting questions, and I would like to just make a couple of statements about the intention of the opposition in regard to the motion that was made yesterday. First of all, the Chamber of Commerce and the Canadian Federation of Independent Business and virtually all business organizations have long called on governments to stop making grants and loans on a concessionary basis for the purpose of attracting or expanding business because they make the point–and in my view the correct point–that this puts the government in a position of trying to pick winners and losers. It also creates an unlevel playing field for competitors who then either line up at the same trough for equal treatment or find themselves competitively disadvantaged.

So in making the motion that was made yesterday, we are simply following the advice of the Canadian Federation of Independent Business and the Chambers of Commerce to reduce, by a much lower amount than CFIB called for–CFIB identified they believe $40 million of waste in government's support to industry in the form of one form or other of concession. We do not believe it is that high, so we examined the Estimates very carefully and believe that $5 million was a reasonable reduction, still leaving the government $8 million in total in this line so that it was quite possible for them to still make some arrangements that they believed would be advantageous to Manitoba's economy but at a reduced level, in line with the advice of business.

Secondly, the member for Inkster (Mr. Lamoureux) ought to know, and I am sure the member for Turtle Mountain (Mr. Tweed) as minister knows that Estimates are not law until concurrence. So the minister would know and I am sure that his officials know that they cannot make firm commitments until Estimates are concluded unless they use some form of other loan authority to cover that off, and maybe they would do that.

Thirdly, the member, I am sure, knows that if government finds itself in a situation where it has a commitment that it must meet and cannot do so from within Estimates as approved, cabinet will pass a special warrant and those expenditures will be made, and the effect of a special warrant legally is to adjust the budget. It is not additional expenditure over and above the budget. The effect of a warrant is to actually change the budget. That is why, of course, we have pointed out–and most members of the accounting profession and the press have agreed–that this year's Estimates do not include $194 million in Health expenditures that are new, as the government repeatedly claims, but something in the order of $83 million because they passed a special warrant during the previous fiscal year adjusting upward last year's spending by that amount.

So the year-over-year increase is, in legal accounting terms, $83 million, not $194 million as the government would like to claim because, in effect, they are then counting $110 million twice, both last year and this year. I think the government knows that. I am sure the Minister of Finance (Mr. Gilleshammer) knows that, but for political positioning reasons they try to claim the whole amount in the new fiscal year. They know that is not correct, and we know it is not correct, and the public, I think, increasingly understands it is not correct. Certainly, the press does, and that is why the press reported $83 million and not $194 million as the government would have liked them to do.

So I guess for the member for Inkster (Mr. Lamoureux) and the minister and the committee's understanding, we know that the government has no right to make commitments out of this year's Estimates until they are passed. That is why we live on warrants until the budget is passed. I am sure his officials have been scrupulous in not committing more than was available to them.

There is a rather nice point that protects these commitments, and that is that under parliamentary convention the amount available last year is the base and cannot be increased without a vote of the House. So, in fact, they had more available last year to them, and so they may well have made some commitments on that basis believing that they would be able to restore this amount, if it were lost in a motion, either by warrant or by using some other loan authority.

So I think we made a motion that was very based on principle, that maintained the integrity of Estimates as a total because we moved $5 million by this motion–or attempted to do by the motion that was ruled out of order–for the purpose of reducing corporate welfare and increasing the welfare of our poorest children and their families. We think that that is something that is consistent with our vision of society and, interestingly, consistent with the business community's vision as well. So that is why we did it, and I think that explanation is probably the one the minister might give as well.

I would like to move on now to some questions about this long list that we have.

Mr. Tweed: Mr. Chairman, if I could, I would like to just, with agreement, to respond a little bit to those comments.

Mr. Chairperson: I will allow this to go on a little bit here, but I ask all committee members to consider the comments that I made earlier.

Mr. Tweed: Mr. Chairman, I do not think that you will find any jurisdiction in Canada that would probably disagree with the fact that provinces should try and limit very much the providing of direct loans or subsidies to businesses. We certainly know that we are in a competitive environment, and based on strategic positioning of the provinces, each one sees a strength that their community or their province might have, and when we are providing capital, we certainly do it with the sole intention–as all provinces would, I would suggest–that these businesses need this access to grow and prosper.

I can tell the committee that the recent Business Development Bank study did indicate that venture-backed firms not only in Manitoba, I presume, but across Canada create jobs at a 23 percent annual rate. That is far greater than that of the general business community because of the risk involved. The ability to grow and the opportunity to grow is that much greater.

Traditionally in today's world these are the new economy businesses that are out there that every province is trying to develop. I would suggest they are quality jobs, well-paying jobs, and provide opportunities for the provinces to not only attract new businesses to their communities in the province but also an ability to maintain and grow within their provinces.

The example of offering high-quality, top-notch jobs to graduates from universities, from community colleges and in general offer opportunities for the province, certainly there are opportunities when those stage of events where there are companies or groups that just cannot deal or cannot find through the existing financial institutions the opportunity that they want to present and advance in the province. That I see is where we must look at strategic investment capital. We must try and develop what we see as best. I think just one example in recent history was the New Flyer Industries.

An Honourable Member: Saved by the NDP.

Mr. Tweed: It is North America's largest bus manufacturer, and I ask, you know, where would the jobs be if not in Manitoba? It was the direct involvement and, as the member for Crescentwood (Mr. Sale)–I accept his willingness to take the credit, but I would, when we talk about venture fund or venture capital, the previous administration's history has not been very successful in that particular field. I am led to believe that there has been a loss of just under 70 percent with the funds that they put out, and the opportunity of recapturing the existing amounts that are out there are very slim.

I think that when you look at those, I can say proudly today that the MIOP program in Manitoba since 1988 has not had a default, a loan write-off, pardon me, just for the correction of the record. I think that identifies that the province has gone out and through partnering has created private risk capital pools that are creating the opportunities that we see in the province. One of the things that I am advised is that the five-year benefit-cost ratio to these types of businesses, industries coming to our province, it does offer a 3.25 to 1 rate of return for every dollar that is invested in these particular industries. The return on investment is 3.25. I think that speaks very well for identifying and why provinces sometimes I think get involved to create the new economies that are going on in our provinces.

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Mr. Sale: Mr. Chairperson, just on this list, which I thank the minister and his staff for, should that read at the top since 1988 rather than since 1998?

Mr. Tweed: The member is correct. It should read "since 1988."

Mr. Sale: Let us go right to the bottom to Loan No. 85, which is an unannounced apparently. This one troubles me somewhat. We have disbursed all kinds of money here, and we have not announced it. Generally speaking, you announce first and disburse second, or at least you would disburse and announce. But to disburse and not announce is strange, I think. The government again is giving money to somebody, and we have no idea who it is.

Mr. Tweed: Mr. Chairman, I am advised that there are times when companies wish not to have an announcement made because of other issues that surround employees or other ventures.

Mr. Sale: Mr. Chairperson, there are times when governments do not want to make announcements about where they have spent their money, and I think that may be what we are looking at here.

How can the minister defend having disbursed–what is it?–four-fifths and a bit of a loan? It is not clear any of the terms in the loan–we could certainly ask about that–but with no announcement of where it is gone. I understand making loans, and I understand this nice long list, but presumably you do not disburse money you have not announced. This is amazing.

Mr. Tweed: Mr. Chairman, again I would have to just advise that there has been no agreement between the two parties to make this announcement.

Mr. Sale: Mr. Chairperson, what was the date of the first disbursement under this loan?

Mr. Tweed: I am told approximately one week ago.

Mr. Sale: Oh, yes, the member for Inkster is as perspicacious as usual. It sounds like an election announcement to me. Okay. Mr. Chairperson, when does the minister anticipate making an announcement?

Mr. Tweed: Mr. Chairman, I would suggest that we are currently and continuing negotiations to make that announcement.

Mr. Sale: Would the minister then just confirm that the reason it has not been announced is it because the government does not wish to announce it yet and has nothing to do with the company at all?

Mr. Tweed: Mr. Chairman, I would not be able to say that because, as I understand it, we are in negotiations and announcements have not been confirmed.

Mr. Sale: Mr. Chairperson, how much did the Conservative Party spend on Western Opinion Research polling prior to the 1995 election?

Mr. Tweed: Mr. Chairman, I would not be able to provide those numbers. I would suggest that, if the honourable member wanted to contact the powers that be that would know those, I would welcome him to do so.

Mr. Sale: Mr. Chairman, the powers that be were the Monnin inquiry and all of the cheques written by the Conservative Party were tabled, and the sum paid to Western Opinion Research in the months from January 1995 until June of 1995 were over $350,000. Why is the government giving money, which is completely forgivable apparently, to its own polling firm that it already gives vast amounts of business to? What kind of cozy relationship does this speak of?

Mr. Tweed: I would not be able to comment on the operations and the business practices of Western Opinion.

Mr. Sale: Mr. Chairperson, I was not asking for the minister to comment on the business practices of Western Opinion Research. They are a very successful business. They called me last night, as a matter of fact, and asked me some very interesting questions, so I have no doubt that they are a competent firm.

My question is the appropriateness of a relationship where the Progressive Conservative Party of Manitoba spends certainly upwards of half a million dollars in an election year or more, more than $350,000 in the last election year, and this is their polling firm. It has been their polling firm for years, and they are giving them concessionary loans, forgivable loans, that are ostensibly for a call centre. Well, a call centre is who called me last night on the Progressive Conservative Party's behalf. This is just a tad cozy, I would say, in terms of a relationship. How does the minister defend the conflict of interest that is obvious to everybody else in this regard?

Mr. Tweed: Mr. Chairman, I would suggest to the honourable member that government from time to time does business with many of the companies and corporations inside the province. Just a quick glance down the list of names, I am sure we could draw out a few names that as government we have done business with and for. I would suggest to the member that the application was received and with due diligence was approved based on the merit of the proposal.

Mr. Sale: Is the loan entirely conditionally forgivable? The entire amount, interest and capital?

Mr. Tweed: I am advised that when the job obligation of 80 jobs is met, it would be that way.

Mr. Sale: When must this obligation be met by?

Mr. Tweed: Like many of the job obligation requirements, it can be spread over a period of years, but I will get the information for the member and bring it back.

Mr. Sale: I presume most of these jobs are telemarketing jobs. What mechanism does the government use to calculate 80 jobs? What does a job consist of in this regard because telemarketers do not work normal hours, and they work episodically. The centre is busy, they are busy, and when it is not, they are laid off. How do you calculate a job?

Mr. Tweed: I am told it is based on one 12-month full-time work which would equate to 1,750 hours.

Mr. Sale: How does the department actually determine the number of equivalent full-time positions? What is the actual auditing procedure that is used?

Mr. Tweed: I am advised that we go out annually to review their T4 slips and the employment records.

Mr. Sale: Okay, I appreciate that. I think that it is difficult to conceive of how 80 jobs can be created for $383,000 unless the call centre previously existed and there was absolutely nothing else invested to produce these jobs. Those would have to be the cheapest jobs that I have ever seen, $4,000 a job, a little more than that, closer to $5,000 a job.

Mr. Tweed: I would just advise that, again, when application is made, we do not necessarily look at the high end cost of creating that job. We are always pleased when companies in Manitoba can come forward with an application that creates jobs, that creates wealth in the province, gives people an opportunity to stay in Manitoba and be a part of our economy. We are pleased that they can do it for such an efficient price.

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Mr. Sale: Can we look at North West, which is Loan 11? The entire amount is outstanding. It is not a forgivable loan. The current status is active and it has been outstanding since '92-93. It does not seem to me that anything is being paid down here. Does active simply mean they are paying the interest and nothing else? What is the answer here?

Mr. Tweed: Mr. Chairman, I am advised that it was a 10-year loan agreement.

Mr. Sale: Most 10-year loan agreements would have an interest component annually, perhaps with the capital all owed in the last year. Is that the nature of this agreement?

Mr. Tweed: Similar to other situations, the interest is forgiven annually if the job obligations are met.

Mr. Sale: Could the minister indicate–I am not familiar with North West. Is this the North West Company, the Hudson's Bay spin-off of the Northern Stores?

Mr. Tweed: I believe it is the North West warehouse space out in Murray Industrial Park.

Mr. Sale: So that is the North West Company then. That is their major warehouse and distribution centre.

Mr. Tweed: I am told that is correct.

Mr. Sale: GWE, Great Western Entertainment, I believe in Brandon, again, no money repaid, '93-94 date. It is conditionally forgivable. Is there interest attached to this loan?

Mr. Tweed: Similar to the other one that we discussed, the interest is forgiven annually if the job obligations are met.

Mr. Sale: So then just to be clear, the form of the loan may not always indicate the entire form of it. So an IFL is an interest-free loan that is not forgivable, but a CFL is conditionally forgivable and it may be both capital and interest in that case. Is it always capital and interest when it is a CFL? So IFL is interest free, CFL is conditionally forgivable as to both principal and interest.

Mr. Tweed: It can be both. It does not necessarily have to be. It can be just–

An Honourable Member: It might be both.

Mr. Tweed: Yes.

Mr. Sale: Sorry, we are confusing Hansard, Mr. Chairperson. I apologize.

So GWE then, as long as it meets the job obligation of 115, would qualify for forgiveness of both principal and interest. Is this correct?

Mr. Tweed: I am advised that the principal can be forgiven over time if the obligations are met.

Mr. Sale: I am somewhat familiar with GWE, Mr. Chairperson, I guess because of my role on various volunteer organizations. Is the 115 jobs an annual level that must be maintained, the equivalent of 115 full-time positions each year?

Mr. Tweed: Mr. Chairman, I am advised that, although not exactly sure of the numbers, that is the commitment that they made to reach and maintain. They still could be ramping up to that number. I can verify that if the member would wish.

Mr. Sale: Can the minister tell us whether GWE has reached that level and is maintaining it?

Mr. Tweed: Mr. Chairman, I am pleased to indicate that, as of the year ending 1997, they had achieved 122.8 jobs full time.

Mr. Sale: Has that level been maintained since then?

Mr. Tweed: We are just in the process of reviewing all the paperwork on that.

Mr. Sale: Mr. Chairperson, there are a number of notations saying "see FS"–see initials FS. What does that mean?

Mr. Tweed: Mr. Chairman, I would just ask the member for clarification where he sees "see FS"?

Mr. Sale: The current status line of the Loans Repaid, Active, Forgiven. See FS. Loan 31, for example, CalWest.

Mr. Tweed: Mr. Chairman, I am told that it may be just an internal spreadsheet, but I would certainly be able to get the definition for the member.

Mr. Sale: Mr. Chairperson, one of the biggest loan agreements we ever made was to Faneuil. I think actually it is bigger than Isobord. We have a $1.25-million conditionally forgivable interest-free loan, which essentially equipped their call centre when it was opened in the end of 1994. I think it was November or December of '94.

In addition, through a very complex mechanism that we have talked about in this committee before, the province loaned $16 million in convertible debentures, which, I think, have since been converted, and this loan is repayable in full, in my understanding, in November of 1999. It is a complex loan involving Manitoba Trade, then Manitoba Telephone System and the Manitoba government.

What can the minister tell us about the ability of that company to meet the obligation that is due this fall for the $16 million? In fact, $19 million were advanced. They have to repay $16 million. There is an interesting process in there that gets from the one to the other, but what can the minister tell us about that company's ability to repay $16 million at the end of November, I think it is?

Mr. Tweed: Mr. Chairman, I can advise the honourable member that, again, as of December 1997, they have met their job obligations to within two, of which they have the following year to meet that target. I think at this point in time it would probably be unfair for me to speculate on any company as to what their abilities are or are not.

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Mr. Sale: Mr. Chairperson, are any of the member's departmental staff directly involved in oversight of the Faneuil agreement?

Mr. Tweed: I am advised that Mr. Jim Kilgour is on the board of directors.

Mr. Sale: Mr. Chairperson, I guess it would not be appropriate to ask for a member of the board to disclose that kind of information, so I thank the minister for that answer.

There is another one that we have many discussions about, and that is TeleSpectrum. The money was promised and announced and apparently was never disbursed. The agreement has since been cancelled. Can the minister shed some light on why that happened?

Mr. Tweed: Could I ask the honourable member for the number?

Mr. Sale: Sixty-one.

Mr. Tweed: Sixty-one. Thank you. Mr. Chairman, when negotiations are final, a list of terms are provided to the corporations or companies that are approaching us, and I am advised at this particular juncture TeleSpectrum could not meet the requirements.

Mr. Sale: Mr. Chairperson, what requirements were made as a condition of this proposed loan?

Mr. Tweed: I would suggest, Mr. Chairman, the two most common I think that we see–I would suggest probably not only in Manitoba but across Canada–would be to meet the job obligations and also the security.

Mr. Sale: I am sorry, I did not hear the last part of the minister's answer.

Mr. Tweed: The security required.

Mr. Sale: Mr. Chairperson, I must say that I am glad to know this loan was not advanced, not because I do not want to see entry level jobs in the economy. I think we need those, but I do not know that we need as many as we have, but we do need them. I have never in my four years had as many complaints and concerns raised about any Manitoba company as I have about that one.

I think the minister is probably aware of that. I am glad to see that we are not in the process of loaning that particular company money.

Mr. Tweed: Mr. Chairman, I would just like to note that while the member is free to make his comments on the record, I would suggest we try not to form an opinion on any of the companies that we do business with in the province, be it through our industrial opportunities or for that matter any business that wants to come and create jobs in Manitoba and create employment and create wealth.

Mr. Sale: Mr. Chairperson, the minister may not want to form an opinion, but those of us who have been on the other end of a litany of complaints about the practises of some employers have formed some opinions. Obviously the province chose not to proceed with this process of doing business with this company and has cancelled that arrangement, and so it obviously formed an opinion too. In this particular case, I concur with the opinion. I am glad they formed that opinion.

Mr. Tweed: Mr. Chairman, I would just like to make sure that there is no mistake on the record, that when we make a commitment or a proposal that we ask the proponents to meet a certain list of requirements, and the decision perhaps was not Manitoba's but the employer himself.

Mr. Sale: Mr. Chairperson, Loan No. 66, was also cancelled, CCSA. I do not know what CCSA is, and perhaps the minister could indicate what. It is a call centre obviously, but I do not know what the initials stand for. Perhaps he could indicate when this was cancelled.

Mr. Tweed: Mr. Chairman, we are not quite sure of the lettering. It is a call centre. Whatever the S stands for and association we believe, but we will get that back to the member.

Mr. Sale: Mr. Chairperson, I believe this issue came up in Estimates last year in regard to this particular company. It was a company that we had asked about last year, and the answer then was that the loan was not proceeding at that particular point. It looks now like the discussions have come to an end and the loan agreement is cancelled, so there is just going to be no further on this. Am I correct that was the case?

Mr. Tweed: I presume, as the member does, when you see "cancelled," it means that the funding was not going forward. If he would like further clarification, I would be happy to ask the department.

Mr. Sale: Mr. Chairperson, I will check my own records, but I believe that is the case, that this one was in last year's list, and it had not been disbursed. We discussed it at that time and I think that is the same one.

I just want to ask about Akjuit; Akjuit, that is No. 72; and I think there are actually two Akjuits if I am not mistaken. I have trouble seeing the other one, but I thought there were two.

Akjuit at least suspended its operations if it is not winding up operations and going out of business. The loan has been disbursed, does the government expect to write it off? Is that the situation we are in here?

Mr. Tweed: I have been advised that it is under review at this point in time.

Mr. Sale: Mr. Chairperson, what does the "under review" mean? What is the issue that is under review?

Mr. Tweed: I am led to believe that the review, based on the situation there, is to determine what our next steps will be.

Mr. Sale: Mr. Chairperson, is one of the next steps the writing-off of the $2.5 million that the province advanced to Akjuit?

Mr. Tweed: I am advised that we have made the write-off provision, but we have not taken that next step until the review of the situation is complete.

Mr. Sale: Could I ask, and I am not sure where I would find it in the Estimates, where is the provision for write-offs in the MIOP operation? How do we find that?

Mr. Tweed: Mr. Chairman, I am advised that we annualized the write-off on the loans, and this year it is $612,600.

Mr. Sale: Mr. Chairperson, from an accounting perspective, where does one find that?

Mr. Tweed: Mr. Chairman, I am just looking for the line. It is included under Program Delivery, and it is listed under the Manitoba Industrial Opportunities Program. It is part of that $9,714,000.

Mr. Sale: So note 2 on that page, would I be correct in saying that this then is a net figure that has in it $612,000 for loan write-off? Is that how the accounting works? I am not an accountant, so I am just wanting to understand how this goes.

Mr. Tweed: Mr. Chairman, I am advised that on an annualized basis that would be the correct figure.

* (1140)

Mr. Sale: So this $9.7 million includes about $9.1 million of new projects and about $600,000 of write-offs of existing loans or agreements, essentially.

Mr. Tweed: Mr. Chairman, just for clarity, the member for Inkster (Mr. Lamoureux) had asked for a detailed number on that particular figure, and I will return to the committee with that.

Mr. Sale: Mr. Chairperson, the $2.5 million for Akjuit potentially is a write-off. Is there any amount included this year in the $612,000 for Akjuit? It seems like a small proportion of that amount.

Mr. Tweed: Mr. Chairman, I am advised that that amount is fully provided for in the Estimates, although we have not at this point, while under review, made a final decision.

Mr. Sale: Mr. Chairperson, does that mean that some of it was provided in previous years and you have accrued it, because there is not $2.5 million available in this year's Estimates? There is $612,000.

Mr. Tweed: Mr. Chairman, as it is an annualized number, it is provided for over a period of time.

Mr. Sale: Mr. Chairperson, then perhaps the minister would also include what the total amount accrued for forgiveness is. Presumably, what he is saying is that there has been sufficient loan loss provisions made in previous years, that in total the amount available would exceed the $2.5 million for that and whatever else is needed for others that might be in trouble this year. Is that essentially the correct answer?

Mr. Tweed: Mr. Chairman, not being an accountant either, but I believe that, when you annualize loan write-offs over a period of time, you take into consideration past write-offs and future.

Mr. Sale: It seems that the staff were using body language to indicate that, yes, there is an accrued amount sufficient to cover this in the accounts of the fund.

Mr. Tweed: I am advised yes.

Mr. Sale: Mr. Chairperson, I think we can pass this line.

Mr. Chairperson: Item 10.2. Business Services (b) Industry Development-Financial Services (3) Programs (a) Manitoba Industrial Opportunities $9,714,800–pass. (c) Manitoba Business Development Fund.

Mr. Sale: The Business Development Fund presumably does a number of interesting things. Perhaps the minister could just briefly tell us what some highlights of this might be this year and what his anticipation is that it will achieve this year.

Mr. Tweed: Mr. Chairman, I would be pleased to just identify some of the things that this Business Development Fund is doing. The fund was designed to provide financial assistance to companies and industries in support of projects which have been identified to have a potential significant impact on economic development in Manitoba. It has been available and around since 1992. It came as a result of when a number of I, T and T's financial programs were brought under one umbrella.

It currently has four subdivisions, the Feasibility Studies Program. That is a cost-sharing financial assistance. It is up to a maximum of 50 percent to companies who wish to hire outside consultants to prepare business plans, carry out market research, or study the feasibility of investments in plant equipment. The projects have to have the potential to expand economic activity within Manitoba and create job opportunities. The eligible costs consist of consultant fees and expenses. It is limited to $25,000 or 50 percent, whichever. I do note that there are some larger amounts that can be or may be approved under Special Projects.

The second part is the Technology Commercialization Program. That basically provides a cost-sharing financial assistance again to a maximum of 50 percent to companies proposing to develop technically innovative new products and processes. It is a wide range of development costs that may be supported, including prototype, patent fees, tooling, software, and outside consultants. Again, it is limited to a maximum of $50,000 or 50 percent. I would suggest that there may have been larger amounts approved under the Special Projects allocation.

The third one is the Strategic Studies. It involves industry associations and other studies of a strategic nature, generally involving a particular industry. The assistance may exceed 50 percent of total government involvement, depending on the circumstances of each proposal.

The final one is Special Projects. Those projects support projects that are not covered within budgets from other general program areas. They vary in scope and size, are usually considered as key in relation to the government's overall economic strategic plans. I think that would probably be it.

Mr. Sale: Was the fund fully disbursed last year? Was it fully used?

Mr. Tweed: I am advised that it was not fully disbursed last year.

Mr. Sale: Okay, maybe the minister would tell us how much it was, how much was disbursed.

Mr. Tweed: I am just trying to answer as directly as I can, Mr. Chairman. A total of $1,509,006 was disbursed.

Mr. Sale: Just for the record, I think this is the kind of useful fund that departments should make available. I think this is a good fund. I would be interested, if I ever had the time, to go back and look at all the studies that have been done and would have yielded further results. I am sure that it would obviously be a mixed bag, but I think this is how good ideas get started and often people do not have the resources to do the feasibility work properly.

I think also with the staff of the department and their expertise, they can often save people a great deal of time and energy and stop them from going down dead-end roads, so I think this is a very useful kind of fund. I hope that it continues to be utilized. I would be glad if it were fully utilized. If it even got a little bigger, I would not be unhappy about that, because I think these are the kind of things that the government can do well, especially when the grants are not disbursed under a political process but are done essentially on the basis of the expertise of the staff in terms of supporting relatively small studies. So I like this program. Let us pass that line.

Mr. Chairperson: Did the minister want to make a comment on that?

Mr. Tweed: If I may. I take the comments of the member at face value. It is easy to identify some of the companies that have been very successful launching their businesses, and it is something that the business community across Manitoba has made this government aware of the opportunities. The areas that they are focusing on, the feasibility, the technology and the strategic is something that quite often the small business entrepreneur or the new business does not have the wherewithal to do it. I agree with the member that it is an excellent program.

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Mr. Chairperson: Item 10.2.(b)(3)(c) Manitoba Business Development Fund $2,000,000–pass; (d) Small Business Expansion Fund.

Mr. Sale: The Small Business Expansion Fund seems to be contracting. Are we winding this up and rolling it into something else? A hundred thousand dollars is hardly worth even putting in the cents. Given the number of small businesses in Manitoba, it obviously is not going to do much. What is happening here?

Mr. Tweed: I am advised that the Business Expansion Fund has been cancelled. It was a pool of risk capital that assisted banks in making higher risk loans to Manitoba-based businesses. We have found that history shows us that we have had difficulty getting banks to deliver on the risk capital side. Their projections were considerably higher than the actual. We have reviewed it and basically decided to cancel the program.

Mr. Sale: I believe the TD bank was the delivery agent, along with CIBC I think also was involved in this one. This was projected to be wound up last year in last year's Estimates. We discussed the same issue. I think the staff and the minister at the time indicated that it was being wound up. I was sort of surprised to see it here again. So maybe we are just fulfilling some obligations that were contracted for. Why is it still here, given that it was being wrapped up last year?

Mr. Tweed: The $100,000 that shows up in the '99-2000 Estimates I am told represents a provision for compensating the banks for the early termination of the program.

Mr. Sale: Mr. Chairperson, I have a particular case which the minister may be aware of, of a gentleman who had I believe a sound business plan, had his track record in an industry. It was the funeral services industry–had a market. I am sure the minister is probably familiar with the case. It was the opening of a funeral home in the riding of Steinbach, I believe. It would be either Steinbach or Emerson. It was at Vita in any case. This person got a ready loan guarantee for the maximum amount, had his own capital and not a lot of it, but I think in the order of $75,000. He simply was unable to get support from the minister's department to make that service available to the people of the Vita area.

I do not know whether he is still pursuing this business opportunity or not. He worked very hard at it for a couple of years and was the victim of Loewen funeral home's process of going bankrupt, it looks like actually, given that Loewen is in Chapter 3 Protection in the States at this point and I think is probably destined for the high jump sometime fairly soon, but they have left a lot of human carnage in their wake in terms of laid-off staff from the variety of homes that they took over.

Is the minister able with his staff to check back, I am sure, without–I do not want to identify the person, but I am sure the minister knows the case or at least the staff know the case. Is there anything that can be done for this person at this time, particularly in light of the apparent impending failure of the company that put him out of business in the first place? The citizens of Vita, according to the member Jack Penner, the Honourable Mr. Penner, need this service, would like very much not to have to support the Loewen bought-out chapel in Steinbach. Can the minister shed any light on whether this gentleman has any further recourse with his department?

Mr. Tweed: I am told that the Province of Manitoba or the fund did not deny this gentleman or this company the funding. It was, I think, the combination of a few things, and I am told that one of them was his unfortunate inability to obtain bank financing.

Mr. Sale: My understanding is he did have a ready guarantee for the $100,000 maximum. I think, while that is not bank financing, it is a guarantee to a bank. Is the minister saying that he needed further bank financing which, of course, he was unable to get because his equity was not sufficient? I know he was in discussion with the department over some of the potential programs, and I thought the Small Business Expansion Fund, even though it was being wound down, might have been a source of support for him.

Mr. Tweed: Mr. Chairman, the REDI, as I think the member knows, is under the Department of Rural Development, but I will certainly be prepared to look into it and give him the answer or report back to him directly.

Mr. Sale: Well, I thank the minister. I would like that report. I must confess that I do not know if the gentleman is still pursuing this opportunity at this point, because he had certainly worked very hard at it, credibly I thought, and simply was not able to put it together and did not seem to be able to get any help from the minister. So I look forward to that report. Pass.

Mr. Chairperson: Item 10.2.(b) Industry Development-Financial Services (3) Programs (d) Small Business Expansion Fund $100,000–pass. 10.2.(b) (3)(e) Manitoba Capital Fund $240,000.

Mr. Sale: What is the total amount of capital committed to the Manitoba Capital Fund at the present time?

Mr. Tweed: Just for clarification, by the province or in total?

Mr. Sale: My question was with reference to the province itself, because I think all the limited partners contribute the same amount. I think they move their commitment up in equal amounts because I think they are equal limited partners.

Mr. Tweed: I believe our commitment was $5 million.

Mr. Sale: Mr. Chairperson, my understanding is that that is the maximum commitment. My question was: what has been committed? Because it is moved up each–if you go and look at the Companies Branch files, you will see, at least I believe you will see that the amount actually committed has moved up towards the $5 million, but the full $5 million has not been or at least had not the last time I looked been advanced.

Mr. Tweed: I am sorry, I misunderstood the question. The actual draw-down as of March 31, '99, was $4,363,200.

Mr. Sale: Is the government contemplating increasing its commitment above the $5-million limit?

Mr. Tweed: Not at this point.

Mr. Sale: Are we to twelve or twelve-thirty?

Mr. Chairperson: Twelve o'clock.

Mr. Sale: Twelve o'clock. It essentially is. Why do we not stop there?

Mr. Chairperson: You do not want to pass this line?

Mr. Sale: No, I have a number of questions in this line.

Mr. Chairperson: The time being twelve o'clock, committee rise.