Thursday, May 16, 1996

LEGISLATIVE ASSEMBLY OF MANITOBA

Thursday, May 16, 1996

The House met at 9 a.m.

ORDERS OF THE DAY

(continued)

COMMITTEE OF SUPPLY

(Concurrent Sections)

ENERGY AND MINES

Mr. Chairperson (Jack Penner): The Committee of Supply will please come to order.

This section of the Committee of Supply will be considering the Estimates of the Department of Energy and Mines. Does the honourable Minister of Energy and Mines have an opening statement?

Hon. Darren Praznik (Minister of Energy and Mines): Yes, thank you, Mr. Chair. I understand, as well, just for clarification, that the Estimates of the French Language Services Secretariat are also included with the department, so I gather they will be dealt with at the same time today. I just ask the Chair for clarification.

Mr. Chairperson: Yes, Minister, we will deal with that at the same time.

Mr. Praznik: Just so my critic is aware in case she or her colleagues have any questions. If that poses some problem, I am sure we can work something out.

Mr. Chair, I am pleased to present the 1996-97 Expenditure Estimates for the Department of Energy and Mines, as well as the French Language Services Secretariat.

French Language Services continues to report directly to me. However, for budgetary purposes they are included in the printed Estimates for Energy and Mines as appropriation No. 1.(d), as a point of clarification. The role of the French Language Services Secretariat is to advise government on the development of government services in French and matters relating to French Language Services policy. Mr. Chair, the French Language Services policy is being implemented in a gradual fashion, and as we move forward, improvement in both the quantity and quality of the French language services in the designated areas is anticipated.

Mr. Chair, the role and mission of the Department of Energy and Mines is to foster wealth and job generation through the sustainable development of our energy, mineral and petroleum resources and to promote the efficient use of energy. The department has two divisions, Administration and Finance and Energy and Mineral Resources. The Administration and Finance division has two branches, Executive branch and Administrative Services branch. The Executive branch, my office and that of my deputy minister, provides policy direction and overall program management. The Administrative Services branch provides centralized services including finance, personnel, computer services and administrative policy.

The Energy and Mineral Resources division is made up of the program delivery branches. The department is also responsible for a number of mineral industry support programs, the Mineral Exploration Assistance Program, the Petroleum Exploration Assistance Program, the Manitoba Potash Project and the Acid Rain Abatement Program in Flin Flon.

Mr. Chair, with respect to the Marketing branch, this is responsible for promoting the development of Manitoba's mineral resources through consistent promotion of Manitoba's new competitive business climate in accordance with the principles of sustainable development. The branch has a new director since we last met to review the Estimates. Under her supervision, a great many activities have been undertaken, and much has been accomplished.

An eight-point mineral strategy was developed and officially launched at the Manitoba Mining and Minerals Convention in November of last year. The strategy is designed to make Manitoba the best place in Canada to invest in mining. The elements of the strategy are to identify target areas for exploration, make Manitoba's mining taxation structure competitive with other jurisdictions, develop a simple, transparent permitting process, increase the geological database in target areas, establish Manitoba as a jurisdiction with a low cost of doing business, revise exploration incentive programs, resolve land use and land tenure issues and make legislation and procedures the best in Canada for mining and exploration.

Mr. Chair, two new producing mines in Manitoba can be credited in part to the changes to the provincial mining tax structure pioneered by this branch under the direction of my colleague the Honourable Jim Downey when he was minister, as well as the Honourable Don Orchard. Also dealing with taxes, significant changes in The Retail Sales Tax Act, The Corporation Capital Tax Act and The Motive Fuel Tax Act were recommended for consideration in the 1996-97 fiscal year and adopted in this year's budget. The intent of these changes is to improve Manitoba's competitive position.

An important part of our new investment strategy is the Mineral Exploration Assistance Program. Under the program, $10 million is available over three years for eligible grassroots expenditures. The program pays out 25 percent or 35 percent of the total exploration expenditures to a maximum of $400,000 per company per year. Since October of 1995, the program has generated $2.6 million in new exploration activity and attracted five new companies to conduct exploration work. These are five companies that have not been in the field to date. The October 1995 and January 1996 offerings of MEAP resulted in more exploration work than we experienced under the previous program, the Mineral Exploration Incentive Program, and I am optimistic that this will result in more discoveries and more mine openings. We expect MEAP incentives to total $3.7 million by the end of this fiscal year, generating grassroots exploration in excess of $15 million.

In the Petroleum and Energy Branch, Mr. Chair, as part of our refocusing of priorities, we have reduced energy monitoring and planning activities and amalgamated the energy and petroleum functions into a new Petroleum and Energy Branch. The mandate of the Petroleum and Energy Branch is to foster and facilitate the sustainable development of Manitoba's oil and gas resources and promote the conservation and efficient use of energy and to encourage greater use of economic alternate energy sources.

We see signs of continued growth in the petroleum industry. Our goal is to increase the level of oil production by 20 percent over 1993 levels by the year 2000. Total industry expenditures in 1995 are estimated at $73 million, about the same as 1994.

Increased Crown oil and gas lease sale revenue and increased levels of geophysical exploration highlighted 1995. Crown oil and gas lease sale revenue was $2.7 million, up from $1.3 million in 1994. Geophysical exploration was almost double, at $1.6 million, compared to $.9 million in 1994. These are early signs suggesting increased levels of exploratory drilling in 1996 and beyond. Indeed, the winter drilling season has been one of the busiest in years in spite of extreme weather conditions.

I am pleased to tell you about the Petroleum Exploration Assistance Program, or PEAP, that we have designed and implemented. Under the program, assistance of up to 20 percent of the cost of certain exploratory expenditures is available on application. PEAP is designed to provide a maximum of $1 million in assistance for three years.

In response to the initial offering under the program, 37 proposals, totalling $6.3 million, requesting $1.2 million in assistance, were received. Projects were ranked in accordance with published selection criteria, and 30 projects involving $5.4 million of exploration and $1 million of assistance were approved. Twenty-six of the approved projects involved the drilling of new field wildcat wells versus the previous annual average of six.

On the energy side, Mr. Chair, our specific goals for the year 2000 are as follows: to improve the efficiency and energy use in Manitoba by 5 percent and decrease the proportion of imported refined petroleum products used in Manitoba by 5 percent. Achieving these goals will result in real savings to Manitobans. An added benefit is the improved environment that will result from the reducing of the use of fossil fuel.

Our energy conservation programs, such as the R2000 and Pro-Trucker, will, we believe, contribute substantially to the achievement of our goal.

Mr. Chair, I know time is somewhat of the essence here in the period, so I will just try to be brief in my closing remarks.

In the Mines Branch side, Mr. Chair, we have made a number of changes. We have worked very hard administering the legislation governing the disposition of mineral rights, exploration and development and production of nonfuel mineral resources, as well as the rehabilitation of mines and quarries. We are sensitive to the role of the prospector and mineral industry in Manitoba. In the last three and a half years, the Prospectors Assistance Program has approved 102 projects. To date, 80 have been completed at a total cost of $359,477. The program allows up to $7,500 per prospector for approved projects.

* (0910)

In terms of gold, Mr. Chair, we continue to have significant good news. Lynn Lake, having gone through a difficult time over the past several years because of the former mine shutdown, has breathed new life with the continuing Granduc mining operation. Employing 108 people on site, this open-pit mine produced 28,812 ounces of gold in 1995 and is expected to produce 40,000 ounces of gold in '96, with beginning production of the new Farley open pit. Exploration incentive grants and conferral of a new mine tax holiday status for the Lynn Lake gold project has been instrumental in this development.

Snow Lake has received a significant boost with the opening of the TVX New Britannia Mine, currently employing 217 people onsite. The mine is forecasting production at 100,000 ounces of gold in 1996.

In Bissett, Rea Gold is pursuing a major underground development and preproduction program, currently employing 140 people onsite. The mine will stockpile 40,000 tons of ore in 1996 in anticipation of a mill start-up in March 1997, producing 80,000 ounces of gold per year.

Pioneer Metals are continuing to look at the feasibility of reopening the Puffy Lake gold operation near Sherridon.

The base metal portion of the mining industry continues to be strong with one new mine, the copper-zinc-gold Photo Lake property at HBM&S, beginning production in 1995. Located in the Snow Lake area, the mine currently employs 81 people.

Elsewhere, Inco Limited and HBM&S continue to have strong base metal mining representation in the Thompson, Flin Flon, Ruttan and Snow Lake areas. Inco Limited continues their program of delineation drilling at the newly discovered Pipe Deep deposit south of Thompson throughout 1995. Drilling of this structure at depth is expected to be completed in 1996.

Mr. Chair, the geophysical branch has been very, very busy over the last year, and this particular year their budget should show a pretty significant increase. This was part of our redirection and reprioritization within the department. Quite frankly, the reductions in the Energy Management side were by and large used to fund the increase in this particular branch and is part of our goal of increasing work in the northern Superior Province and attracting new grassroots exploration. The need to continue to build our geological base was felt paramount and a high priority within our department, and that is why this particular branch will show a fairly significant increase in their funding for the coming year.

Mr. Chair, in conclusion, I would like to take this opportunity to express my appreciation to the staff of Energy and Mines, as well as the French Language Services Secretariat. They are to be credited for their hard work and dedication in delivering our programs.

I welcome, Mr. Chair, the opportunity to discuss these Estimates and our programs with my honourable colleagues.

Mr. Chairperson: I thank the Minister of Energy and Mines for those comments. Does the official opposition critic, the honourable member for St. James, have any opening remarks?

Ms. MaryAnn Mihychuk (St. James): I thank the minister for those comments and ask if he would table those. I would appreciate having an opportunity to review them in more detail.

Mr. Praznik: I will not table them. They are on the record, but I will provide the member with a copy of my remarks.

Ms. Mihychuk: Energy and Mines is a particularly important portfolio, and we have seen significant improvement in the mining sector. Today I will be concentrating on some of the decisions by the ministry to reduce significantly the energy management component of the department. I will be reviewing some of the projects that are going on in the new Superior project, some of the additional resources that are being provided, if any, to the additional regulation and monitoring of the operations.

In addition, I would just like to say that, although we are in a period of recovery, which is primarily, as the minister knows, based on commodity prices, and we are all subject to the cyclical nature of the market, and in a much larger global economy, any single province or jurisdiction can make minor adjustments.

In fact, if we look at our record, we saw the boom years of the past being in 1988 and 1989, when we saw the value of production exceed $1.7 billion. We are now projecting some $700 million to $800 million annually. This is a significant drop from those levels that we saw in '88.

In 1989, over 4,600 people worked in the industry, and today we see approximately 3,300.

Over that time, we have seen a job loss, over a thousand jobs lost, primarily in the North. These are jobs that are well paying, sustaining our economy, that were very important to Manitoba in a lot of different aspects, not only in mining revenues and taxes, but also in the economic benefits of having a strong northern economy, strong northern communities.

We have seen different strategies by the two administrations. Our government, through the NDP, had the Manitoba Mineral Resources working with industry. This government chooses to use grants and mining subsidies or exploration subsidies. We will see what the record shows. As I have said, we saw boom years in the late '80s, and I will agree that much of it is based on the market.

When we look at the overall situation of mining in Canada, across the board, we see the amounts of reserves that have been identified drastically being reduced. Overall, the amount of reserves are significantly less than even a decade ago. That means that Canada, in general, must put much more emphasis on exploration to ensure that we have a sustained development of our mineral commodity. This is all information provided in Keep Mining in Canada publication, which is a federal document.

There are other trends that are very significant. The number of jobs created when we open a mine is significantly less than it used to be, and there is not much we can do about it, Mr. Chairman. There is technology in a global market that is saying that we can now operate, for example, trucks using technology that do not require drivers.

So many of the jobs that we relied on, that families relied on, are no longer there. So the challenge is, indeed formidable. The department's mandate is to foster wealth and create jobs. Probably the greatest challenge is to regain those thousand jobs and expand it.

In terms of energy, a component that we have seen this government consistently reduce, the emphasis is clearly on exploration, on the short term, on looking at increasing revenues and production. The concept of sustainability and energy management is particularly significant to our government, to our administration, and extremely important to the people of Manitoba.

I will be asking questions in terms of the government's decision to look at extracting or promoting the extraction of a nonrenewable resource in the form of gas and oil when, at the same time, they pontificate that they understand sustainability and those principles. It seems, to me, a clear conflict with promoting the extraction of a nonrenewable resource, which is very limited in Manitoba, and at the same time saying that we are looking to diversify and use alternative energy sources.

Obviously, the decision for that strategy is based on the short term, looking at quick goals and meeting the minister's mandate, which, he has often said, is to make Manitoba the No.1 place to do mining, and I would say, in the short term, that may get the minister bonus points, but in the long term it may have a negative effect and, particularly in the oil and gas reserves and amounts that we have in Manitoba, may impact negatively in the long term. We will run out of our reserves even quicker with an amount of promotion of extraction.

There is a significant difference between the reserves that we have in oil and gas and the reserves that we have in our mineral potential. With our mineral potential, for example, there are vast areas that have had virtually no exploration. We know that they are significant target areas, and I must congratulate the minister on the new initiative in this Superior Province. We are looking at areas that require exploration, and I do believe it is the mandate of the department to go out and provide that base information and encourage that type of exploration, and there is, I think, potential in a lot of Manitoba for significant discoveries of mineral resources.

The difference with oil and gas is that we have a fairly defined field. You can have some more development, but I think the difference is significant. We have large amounts of resources that have been unexplored for the mineral sector and a fairly small puddle of petroleum resources in Manitoba, unfortunately, unless the minister has some other indications that Manitoba is indeed going to find another oil field.

* (0920)

The other areas that I am going to be asking on are the areas of some technical questions on mapping and Linnet, whether the department has chosen to use Linnet, what the relationship is between Linnet and the Department of Energy and Mines, what the status is of our base map collection, and what the areas are that require improvement in that area.

In addition to that, we will be going through, looking at the overall priorities; and, as I say, the department is moving along fairly well, and I expect discussions to be over by approximately 11 a.m. Thank you.

Mr. Chairperson: Thank you very much. Under the Manitoba practice, debate of the Minister's Salary is traditionally the last item considered for the Estimates of the department. Accordingly, we shall defer the consideration of this item and now proceed to the consideration of the next line. Before we do that, we invite the minister's staff to join us at the table.

We ask that the minister introduce his staff. Please come forward. After the introduction, we will then proceed to the line-by-line consideration of the Estimates.

Mr. Praznik: Mr. Chair, if I may this morning, I would like to introduce my deputy minister, who, I do not think, is a stranger to members of this committee, Mr. Michael Fine, who joins me at the front; Mr. Gary Barnes is our Executive Director, Administrative Services; Mr.Craig Halwachs is our Manager of Financial Services; Edmond Labossiere is our senior advisor on French Language Services Secretariat, the tall gentleman against the wall; Ms. Kate Thomas is Director of the Marketing branch; Mr. Grant McVicar is the Manager, Energy Efficiency and Alternate Energy of the Petroleum and Energy Branch; Mr. Art Ball, who, I know, is no stranger to the member for St. James, the Director of the Mines Branch, nor is Mr. Dave McRitchie, who is the Director of the Geological Services branch, who joins us as well this morning.

Mr. Chairperson: Good morning and welcome. We will now proceed to the line 1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits Employees and Benefits $273,300.

Mr. Praznik: I ask my critic and members of the committee how she would like to proceed. We sort of have an hour and a half or so to go. Would the member like to have a more free-ranging discussion and then move through all the items, or would she prefer to keep it to a structure of the Estimates book for her questions, her specific questions?

Ms. Mihychuk: I think, in terms of organization, it would be just as easy for me to go through the book. I have prepared my comments in that way and it would just I think expedite matters.

Mr. Chairperson: Okay, we will then proceed line by line.

1.(b)(1) Salaries and Employee Benefits $273,300.

Ms. Mihychuk: I am looking at the Administration and Finance appropriation. Is that the appropriate section?

Mr. Chairperson: Page 19.

Mr. Praznik: Are we all operating on the same?

Mr. Chairperson: Yes, page 19, first line.

Mr. Praznik: Salaries and Employee Benefits, Executive Support?

Mr. Chairperson: Right.

Ms. Mihychuk: Mr. Chairman, I would like to ask the minister to perhaps explain why we see a fairly significant increase in the Salaries and Employee Benefits for the managerial and the managerial position here in his office.

Mr. Praznik: Mr. Chairman, I am advised that the reason that there is the increase is that this would represent, I am told, the salary of a full-time deputy minister, as opposed to the previous deputy who was in a part-time capacity. I think that resulted in an acting capacity, not a part-time, pardon me, but an acting capacity until a full deputy was appointed.

Ms. Mihychuk: And can the minister explain why the administrative support line has dropped?

Mr. Praznik: Mr. Chairman, we are only talking several thousands of dollars, and I am advised that that is a reflection of the accurate salary levels. You have to remember last year we had two departments merging together. We had quite a discussion about this in an assignment of costs between Northern and Native Affairs, and Energy and Mines and all the classifications in which people came into their jobs. So there was a lot more estimating as things worked themselves through. This is more a reflection of the accurate requirements; they are several thousand dollars less.

Ms. Mihychuk: The decision to have one minister for Energy and Mines, and Northern Affairs was a change from past practice. Does the minister feel, given the significance of both the rapid expansion, new programs in the mining sector, the challenges in energy and the significant work that needs to be done in Northern Affairs, how, given a year's reflection, does the minister feel that appropriate, I guess importance is given to these two departments? Does he feel that he has sufficient resources to manage both areas?

* (0930)

Mr. Praznik: Mr. Chairman, as the member is well aware in our system, our parliamentary system, the First Minister is the individual who makes those decisions as to the workloads of his cabinet and ministerial responsibilities. The Premier of our province felt fit to place his confidence in me to take on both those particular portfolios and I was very honoured to have been asked, and we are attempting to do our best as we always do in achieving the tasks assigned to us.

This is not the first time that this combination of departments has existed in the life of this government. I understand that my predecessor, Mr. Downey, the member for Arthur-Virden, at one time was both Minister of Northern and Native Affairs and then for a period was also Minister of Energy and Mines. So I, like him, had Northern and Native and gained Energy and Mines.

I at one time also had Northern and Native Affairs with the Department of Labour, and other than the Mines Inspections Branch, which was housed in the Department of Labour and had a lot of activity in the North, quite frankly, the marriage of these two departments under one minister has been very advantageous from a strategic point of view.

As I pointed out, our strategy in developing mines in the province, there are a number of particular factors, one of which is land tenure issues, the settlement of land tenure issues, and having both departments, and particularly adopting this mine strategy, gave a whole new impetus quite frankly to settlement of northern land claims, whether they be under Northern Flood or under treaty land entitlement.

The other interesting point I make, and I appreciate this question from the member because it is a pretty significant workload and both departments demand a fair bit of travel, both in and outside of the province, either in promoting mines or touring the North. But with the Energy and Mines portfolio, usually in government has also come Manitoba Hydro, and I must tell the member that it has been absolutely advantageous to this minister, in attempting to deal with treaty land entitlement and Northern Flood agreements, to be the minister not only responsible for Northern and Native Affairs but also Manitoba Hydro, and have the Mines Branch in the cadre of portfolios. The only piece that is highly relevant and not in this is the natural resources area. So really between two ministers now we are able to manage a lot more of these issues more effectively, and I would credit some of the success that we have had in making some very large strides in settling treaty land entitlement, which is very close, I believe, to the conclusion of the document on settlement, to the fact that Manitoba Hydro has had to answer to the Minister of Northern and Native Affairs, and that has only happened because of the departments coming together. So it has been a very good marriage for the purposes of the issues that are there now. It is a very significant workload, but I tell you, it probably pales in comparison to the workload of my colleagues in Health or Education or Family Services, given the array of issues that are there.

Ms. Mihychuk: At one time, I remember that the Department of Energy, perhaps just the Mines section, was with Natural Resources. What is the relationship between Natural Resources and the minister in terms of northern treaty entitlement and that relationship? Is there a working group that is dealing with that?

Mr. Praznik: Yes, Mr. Chair. Although to an outsider this may seem to not be a line of questioning that one would pursue in Energy and Mines, it is highly relevant, because so much of what we are doing in advancing our mining industry, one of the key issues with which the mining industry is concerned is security of land tenure. So it is in everyone's interest to see land tenure issues settled as expeditiously as possible. Unlike British Columbia, where over 100 percent of the province is subject to land claims, in Manitoba it is approximately one percent, so we are dealing with a different issue, but the settlement of them becomes important.

To deal specifically with the member for St. James' (Ms. Mihychuk) question, we have a growing and developing relationship with the Department of Natural Resources. My deputy and the deputy minister speak regularly, because there has been a, I do not know how to describe it, Mr. Chair, a phenomenal momentum in land claim settlements over the last year.

The stars have crossed for everyone in a good way, and I think we are all trying to take advantage of that to conclude arrangements and get into processes that settle these issues. I am hoping very shortly, in fact the member may have read some of the news coverage on treaty land entitlement, and that coverage was very, very accurate, I would think, what has come out in the Winnipeg Free Press. We are very close to concluding an arrangement.

Once we have an arrangement in principle, there will be a lengthy process of actual selection of lands. In Northern Flood, that is virtually complete. We have settled three now. Two are very close to being settled, and the specific land selections there are part of what is going on currently.

In treaty land entitlement, we are currently trying to set up a process we are working through internally. When we do have an agreement, how we will move into negotiating the specific settlements, I can assure the member that the Department of Natural Resources will be very much involved at our negotiating tables, as will Manitoba Hydro, as will municipalities and others.

The reason why it is so important is that we work specific problems, specific land issues, rather than work theory, my experience has been, as we debate the theories of where land should be selected, we bog down in argument. As we deal with specific selections, we tend to get agreement and are able to work through problems. So it is going to be an exiciting area over the next few years that I think is going to be very fruitful.

The last point I make that I think is very critical to where we are moving is, my instruction from cabinet has been to move land, whether it be into a trust or some other mechanism, as we get agreement to settlement, rather than wait until everything is selected to move through about a two-year process in Indian Affairs to become a reserve, and that has been a key point in being able to move land with use permits, what have you, to communities so they can get on to it as we reach agreements.

So it is going to be a very dynamic process. There are always going to be some conflicts. There are always going to be brick walls to get over, in essence, but at least we will be working the problem, as opposed to working the theory. So it has been a good marriage.

Natural resources, the member is quite correct, was once part of the same department as the Mines Branch. It was one ministry. Mr. Driedger and I have a good working relationship as to our deputies, and it is a growing relationship and developing as the needs are there. So it is going to be something to manage, but I think it will work very well over the next few years.

Ms. Mihychuk: One final question, the objectives of the Executive Support, it states, is, advise the minister on energy and mineral matters. I know that, for instance, the minister has personnel with minerals experience. In the energy sector, who in your Executive Support provides that expertise?

Mr. Praznik: Is the member asking in terms of our immediate executive staff?

Ms. Mihychuk: That is correct. It indicates in the Estimates book here that the objective is to advise the minister on energy and mineral matters, and I am asking what type of expertise the minister relies on. What is the expertise of his staff in matters on energy?

Mr. Praznik: Yes, I believe the member is referring to Mr. Bill Hood, who is my special assistant, as an individual. Mr. Hood was my previous executive assistant when I was in the Ministry of Labour, and his intimate knowledge in the mining industry has been very useful and has made him very well qualified for the special assistant role in my office. He is very invaluable because of his contacts in the industry and his knowledge of the field, particularly in exploration, which used to be his source of livelihood.

In terms of the energy side, as in all departments, you cannot always have a full cadre of assistants who have expertise in every area, so on many of the energy issues we rely on our senior managers of those particular branches and the expertise we have in the department. It is a small department. Those people are always available to the minister.

In my deputy side, we have on secondment now as his executive assistant an individual, Mr. Brian Ketcheson, from Manitoba Hydro, who has been seconded into the executive assistant position to the deputy minister. Mr. Ketcheson is a wealth of knowledge and information on the operation of Manitoba Hydro. As the member can appreciate, in terms of energy issues at the current time, electricity and deregulation in the U.S. and the operation of Hydro are probably the biggest issues facing us on a day-to-day basis. So he provides some very direct information and expertise to me, that allows me to bounce things off him from time to time, in essence, to see if I am on the right track in the information I am getting, because it is such a--and he certainly is very good at providing me with technical information on the operation of the utility. So that would be rounding off the energy side in our executive branch.

Ms. Mihychuk: I have no more questions.

Mr. Chairperson: 1.(b) Executive Support (1) Salaries and Employee Benefits $273,300--pass; (2) Other Expenditures $75,500--pass.

1.(c) Financial and Administrtive Services (1) Salaries and Employee Benefits $619,200.

Ms. Mihychuk: In the area of Financial and Administrative services, there have been no changes, but I do see a slight reduction in the salaries for professional and technical. Would the minister kindly enlighten us as to why there is that change?

Mr. Praznik: Yes, Mr. Chairman, I believe the $8,000 less is the reflection of filling a computer programmer position, I am advised, at a lesser salary than had been anticipated, at a lesser classification. So there was a saving there for this fiscal year.

Ms. Mihychuk: In terms of the new incentive programs, do the Financial and Administrative Services provide supports for those programs?

Mr. Praznik: Yes, Mr. Chairman, two contributions, one is on the selection panel. This particular branch is represented for both the MEAP and the PEAP program to offer advice on the finances of a project, their financial information. As well, they provide accounting support in the administration of the program.

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Ms. Mihychuk: Given that we see fairly significant initiatives in those two areas, I see there has not been an adjustment in the number of staffing. Is there a significant amount of administration to these projects? How is the department managing these new programs without additional staff?

Mr. Praznik: Yes, Mr. Chairman, specifically with those programs, we are probably down the equivalent of a half position in the administration of those, of the MEAP program. We went from a--I cannot remember the classification of the gentleman who is on contract to deal with the old program, and that was backfilled with, or replaced with, really, a clerk position to administer them, subject to the review committee.

The reason why, quite frankly, is an interesting one: the old program was a much more complicated program to administer. It involved flow-through shares and flow-through financing and a host of other technical requirements. This is a much more simplified program, which is what industry was looking for. There had also been some changes in federal tax law, on which the old program had been based, that resulted in that complexity. So, by simplifying the program, quite frankly, it is a lot easier to administer and requires less staff time to do. I believe there is a $10,000 saving.

Mr. Chairperson: Item 1.(c) Financial and Administrative Services (1) Salaries and Employee Benefits $619,200--pass; (2) Other Expenditures $150,600--pass.

1.(d) French Language Services Secretariat (1) Salaries and Employee Benefits.

Ms. Mihychuk: Can the minister, given that the French Language Services Secretariat is within our supplementary information here, perhaps go through how the funding is allocated? Is it a joint funding? What is the federal contribution?

Mr. Praznik: Mr. Chairman, we have the Canada-Manitoba Agreement on the Promotion of Official Languages, which is an agreement that was just renewed a year or so ago and carries on for another four years to go. The program is a five-year agreement. It is the second one we have entered into. Under that agreement, eligible expenditures for activities, the federal government, we recover half of those costs, and we have managed, including part of our secretariat, including the administrative assistant to Monsieur Labossiere--part of that salary is also recovered under that agreement.

So it has been a very good program, from a cost basis, for the people of Manitoba because of the federal contribution to it, and I know the member for St. Boniface (Mr. Gaudry) joins us in the committee this morning. Given that he represents a sizeable Francophone community, I know he is well aware of many of the projects that we have taken on that have been very useful.

One area I just promote where we have used this has been in the health services sector in the development of our active offer policy to ensure that we are providing French language services in many of our health institutions. That has been a big push in the last few years. We also used some money under, I think, the end of the previous agreement and part of this year's, in the expansion of books, quite frankly, French language books in our library service program, and we did that with the Francophone municipalities. So we have managed to do a lot of things.

I know sometimes, from time to time, there is a view in the non-Francophone public that some of these dollars are significantly used for cultural activities or festivals or things. The reality is, a very sizeable portion of the lion's share is going to things like health promotion or languages in developing health services, libraries and other things that are very critical I think to maintaining a Francophone language presence, significant presence in Manitoba, which, by the way, has become a very important promotional tool for Manitoba in competing in the telecommunications industry to have a bilingual labour force. So this has been a very good initiative, I think, for the people of Manitoba and for our Francophone community, and it is starting to pay some significant dividends.

The CN call centre, about 400 jobs, I think was largely the result, or a big contributing factor to landing it here, in essence, was our bilingual workforce.

Mr. Chairperson: 1. Administration and Finance (d) French Language Services Secretariat (1) Salaries and Employee Benefits $174,100--pass; (2) Other Expenditures $21,800--pass.

2. Energy and Mineral Resources (a) Marketing (1) Salaries and Employee Benefits $787,000.

Ms. Mihychuk: Mr. Chairman, I am going to, this is the area of marketing, and the minister has undertaken a fairly substantial initiative in terms of promoting our resources. Can the minister explain why he feels it is a wiser investment to put money into brochures and developing relationships and basically producing glossy brochures rather than investing the money in the practical sense in terms of putting out more geologists to provide the base maps that industry needs to find a new mine?

Mr. Praznik: I appreciate the member's question, because that is one that I think we in the expenditure of public money must answer. I would point out that we have increased significantly our expenditure levels in the geological services area, which we will get to, for exactly that, developing the base data. We have also worked in agreement with the geological services of Canada, where we have greater input in their efforts in the province, again, to support that. So that part of the equation is being, I think, significantly enhanced from where it has been because the geological base is very important.

The member's question underlines the basic problem that the Province of Manitoba and all jurisdictions face. Thirty years ago in the mining industry there were probably seven, 10, 15 places in the world that had significant mining industry, significant mining industries. Canada was one of them. Most Canadian mining companies and, by the way, if you look at Canadian mining companies and where they operate, you will find that Canadians have become really the miners to the world. Canadian miners and mining companies operate in virtually every country in the world in which any mining takes place, over 90 countries.

Canadian mine finance, particularly in exploration, Toronto Stock Exchange remains one of the principal sources of equity for mineral exploration in the world. Even when one visits a financial centre like London, many of the placements for mine exploration are done through the TSE. Vancouver is also a very significant centre as well.

So what we have seen over 20-30 years, although Canadians are miners to the world, one of the most active mining countries, one of the places for raising equity for mineral exploration and mine development, the fact is, the market in which they can operate mining exploration companies and mining companies are all over the world. There are probably 70 to 100 countries today in the marketplace, and we are competing in that marketplace.

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The initiative that the Mining Association of Canada has taken on, Keep Mining in Canada, and the member I know has seen some of their promotional materials, has largely been a result of the fact that Canadian mining companies and exploration companies have not been doing business in Canada. The member has talked about the depleting ore reserves across Canada as a nation. That is happening because Canadian exploration companies and mining companies have been going elsewhere.

So you have to ask the question, why has that been happening? Quite frankly, right across Canada for the last 20 to 30 years it has not been the lack of geological information. It has been the competitiveness of our nation that we have not been a competitive place in which to be in the mining business, compared to new opportunities elsewhere. That is particularly the case in mineral exploration, and if you are going to look for orebodies, you want to look for them in places where you know you can bring a mine into production in a very economical way.

There are lots of undeveloped orebodies in the world that are not developed, not because of the lack of quality of the ore, it is because of the political climate, the taxation level, the ease of regulatory authority that have prohibited those bodies from being developed, quite frankly. So when we looked at Canada, one has to appreciate that in Canada most of the jurisdiction that affects mining is at the provincial level. There are only a couple of particular issues that are federal issues. One of them of course is federal taxation and how it affects mining. The other one is environmental licensing and how provincial and federal regulatory schemes apply to one another, and that is another issue the member may want to discuss at a little later point, but virtually all of the other elements of developing an exploration activity in your jurisdiction rests at the provincial level.

When the New Democratic Party government, and I do not want to get into a partisan discussion today, but when the current government of British Columbia made its decision on Windy Craggy, where they halted a major development, and they have taken some other positions, rightly or wrongly that is one example of the signal that was sent, you know, right throughout the mining community--this is not a place to waste your money on exploration because it is too hard to get a mine in development.

When the government of the Northwest Territories, and at our Mines ministers' meeting last year this point was made, has taken over two years to provide an operating licence to a diamond mine which they expect maybe to have licensed within the next year, that is another signal that this is not a competitive place to do business. When the government of Manitoba in the 1970s brought in back-in legislation, that if you find a mine the government owns 50 percent of it, that is a very clear signal not to do business.

What happens when these things happen is that you send a signal, it is not a place to be, you cannot be economical here, and so those investment dollars and activity go to other places where they can be. Even when you change your policies, even when you change your legislation, even when you do all the things that should attract the mining exploration business, those people are somewhere else, and they do not even know or they do not care anymore. They are where they have to be. So you have to get out and talk to them and convince them that it is worth coming back, quite frankly.

Last fall I was in Toronto and I met with a small exploration company on one of my tours. I was meeting with a number of companies. This gentleman was one of my appointments. His company had some significant holdings in Manitoba in the 1970s, and when the then Schreyer government brought in their back-in legislation and brought in, I think it was a 10-cents-an-acre tax where there was some tax on lands to be held, which his company could not afford, which was designed deliberately, I believe, to end up expropriating and taking back mineral rights, this gentleman had to give up his claims in Manitoba, and his company in 25 years has done no work in this province. As I was sitting in his office, he went to his filing cabinet, and he pulled out his letter to Sid Green in 1971, or '72 or '73, whenever it was, and he showed me a copy of his letter. It said: If you do what you are doing, you are going to kill basically your small exploration companies in this province for decades to come.

He was right. It happened. Now, his company, I understand, did come to our show and now is looking for property. So why we are spending the time we are in going to the industry is we really have to go and say to them, forget the Windy Craggys in British Columbia, forget these other things. This is what Manitoba is doing. Here is what we are doing, and, quite frankly, I have been very actively involved in that. I have personally been in the offices of almost, or over 60 companies since assuming the ministry, and between myself and my deputy and my Marketing branch, we have personally visited now 110 mining companies, exploration companies, of a variety of sizes.

One of the reasons I go is because in many companies the president will see a minister. They will not see a business development officer. So we use me in the office of minister to get in the door, and one of the first meetings we did was with Barrick Gold, for example, in Toronto, and we sort of tested our pitch and how we were going to handle this, and we have been doing some of this on the fly, I must admit, and learning as we go along, but because I met with Mr. Smith who is the president of Barrick, which is one of the largest gold producers in the world, 20 minutes, we invited his company to come back to our show in November, our conference in November. Barrick was represented, discovered they had some properties here that they had kind of forgot about, and I look to my director of marketing. I think now they are looking at an exploration program. Now they are developing property that they held in Manitoba and had totally excluded from their planning.

So like any sales job, it is not just having the product, it is going out on the road. I have to say to the member for St. James (Ms. Mihychuk) I want to thank her personally and members of the Liberal Party who came to our convention in November, and their support for the initiatives that they have offered in the House also demonstrate kind of a united front to those companies that were making that effort. So we all have a role to play in marketing, and until we get enough activity to fill our order book, in essence, as much as we can handle, it is my intention and that of our department to continue to be out on the road talking to mining companies, getting them interested, getting them here to our convention in November, our one-stop convention. To be blunt, my problem today is we need to get more of the properties that are available in Manitoba onto the market for the next level of development.

So we are doing a lot of this as we go along, but it is important that it be well-managed and the effort be there, and we have a lot of promotional work to do. A Voisey Bay on the other hand, I might just add, also has the same effect because it attracts all those investment dollars to Newfoundland. So we have to look after our customers. We have to find our customers, look after them, work with them, continue to be a good place. So whether you have a Windy Craggy in B.C. that says, we do not want mining, or a Voisey Bay in Labrador that says this is the next, you know, gold rush kind of thing, in that case nickel, we still want to be able to have a good solid customer base here that we continue, that people will say, ah, we are always going to be in Manitoba because it is a good place to be.

So that is what we are really having to rebuild, and it is not just a political issue in Manitoba. I think virtually every province in Canada to some degree faces the same kind of 20 or 30 years of uncompetitiveness in our mining sector, and that goes through all political parties who have been in office.

Ms. Mihychuk: Well, I know that the minister has been very busy meeting with various sectors including a lot of mining companies, and, as he says, he is probably the most effective marketer for Manitoba in terms of mining, and I agree with him. He has done an admirable job travelling across Canada and into the States, I understand, promoting Manitoba.

My question is, then, given that basically it is the minister and cabinet that decide on policies, taxes, regulations, making Manitoba a friendlier place, and since the minister is the No. 1 marketing agent, why are we expending such large amounts in a branch called Marketing?

Mr. Praznik: Well, Mr. Chairman, let us examine this. I get in the door in some places that our department could not, and the pitch we were using, quite frankly, last year and we will be taking up again this fall is, come to our program, our show in November, our one-stop show. We had a very well-developed, some call it a core shack, others call it a property showcase, but the idea being people who have properties to sell so we want to get people there.

One of the key parts of our selling strategy has been one-stop shopping. We can offer, and what we like to be able to offer to any mining exploration company or mining development that is very serious to the point where they are serious about doing something in Manitoba, we want to be able to assign an officer out of our Marketing branch who becomes their one window into the government of Manitoba. That individual assigned to that mining company has the responsibility of working with that company to make application for any environmental licences, licences with the Departments of Natural Resources, Industry, Trade, whomever, so that the mining company has one-window shopping into the government of Manitoba, in essence.

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So we have our cadre of Marketing officers in the department. In fact when I have travelled to meet with mining cases, on most instances Michael and I, my deputy and I have had Marketing officers with us. We do the introduction and that Marketing officer has the follow-up in essence of working with the technical people. So a fair portion of our expenditure in this area in terms of the people costs is those Marketing people.

We also need to leave some material. Any good salesperson knows that when you get in to deal with someone you want to attract, you have to leave them something that is attractive. So we spent some effort putting into our guide book on developing in Manitoba, I think our total was about $100,000 on our one-window brochures we spent in developing them. If you notice we picked up on the tourism initiative of the map. We wanted to have an attractive piece of material. We also wanted to be well developed, and one of the things that we have done--I will provide a copy, I think, to my critic, if she wishes, of our material.

One of the things we did in developing this was put all of our regulatory forms on a computer disk, and this has been an absolutely wonderful sales technique because when we go in to meet these companies we can present our information, our book, and there is a disk with every regulation--and it has taken a lot to develop this--that a mining company will have to fill out to do anything, from exploration to bring a mine in production, in any department. Iit allows them with that disk to put it in their computer and their staff to work on those applications without having to come to Manitoba or call or have to track down the forms themselves. So it is very effective. In fact we presented it at the prospectors and developers convention in Toronto this year to a number of key exploration companies. I think Placer Dome was one of them that I had the chance to meet with, which is the largest gold producer in North America if not the world, and they thought this was just a tremendously innovative thing on the part of government.

So part of the dollars, the nonsalary dollars we have been using is to develop the kind of, I would not want to call it promotional tools, which include this disk, et cetera, that we can have the one-stop shopping, easy access to regulation and streamlined processing, and this becomes very important. If you have $100 million sitting in escrow to develop a mine and it takes you three years to get your approvals in place, that is a lot of money that you have tied up for a long period of time, and the faster we can move people through our process in one window in terms of regulation and all of the other things that one has to do, the less financial hardship for the investors in that company and the more attractive you are. It is a key part of competitiveness.

One other comment I just make, the member may be interested, we have worked with other government departments. That has also been a key part of putting this together, to get commitments of them on timing for processing applications. Our Environment department, for example, said to us they can provide a turnaround on an environmental licence to build a mine, a standard mine, nothing particularly unique in its function or problem--you know, if there is a unique problem that arises, that has to be dealt with--but a standard-case technology mine, the turnaround in licensing is between three and six months. Most of them to date have been closer to three months. I am told in the industry that that is one of the fastest turnaround times of anywhere in the world. So these are the kind of competitive edges that we have been trying to develop.

By the way, our standards are as high if not higher than many places in the world and certainly the same as what takes place in the rest of the country. The point is we are fast in processing. The mining industry has said to us over and over again, it is not the issue of standards. It is in their interests to have good solid, sound standards. It is how long to get through the process and is the process transparent, like, here is what you have to meet and if I meet it, I get my licence. It is an environmental process. If you meet the environmental standards, then you should be able to get your licence and that should be done in an efficient manner. So from receipt of baseline data--I want to qualify--it is from receipt of baseline data, the time to issue a license has been three to six months, closer to three months. So that is a tool that we are using, in essence, in promoting, is a transparent, timely licensing process, and the same is true in Natural Resources and other areas where permits have to be dealt with.

Ms. Mihychuk: The minister has brought on a new director of Marketing. The last time we were in Estimates there was an acting director. Can the minister provide me with some type of background? The director of Marketing, what is the mineral background that this individual brings, given the significance the minister places on this branch and the technical and complex fashion of the mineral industry? Clearly, this is a job that is challenging, to say the least. You are working with people who have a business economy background and other staff members who are geologists, quite frankly, and so I am very interested to hear what the director of Marketing has in terms of experience with the mineral sector.

(Mr. Gerry McAlpine, Acting Chairperson, in the Chair)

Mr. Praznik: Well, before I get into the specific background of Ms. Thomas, I want to say that, when we were looking to fill this position, one of the great problems we faced was, what do we need in the Director of Marketing for this branch? The member flagged some issues, knowledge of the industry, knowledge of geology. Well, Dr. McRitchie, she knows well, is very well versed in geology. We have the expertise in our department in geology. In terms of knowledge of the industry, well, there are lots of people with knowledge of the industry and how it works and very few that we have found have any knowledge of marketing. In fact, we ran this competition nationally twice, I believe--once provincially and a second time nationally. In both cases it was amazing, we had a lot of people who had background in the mining industry but had no qualifications or work history, with success, in marketing.

So I know the hours that we agonized, my deputy and I, last summer on the kind of person you need in this job, and we thought because we have in our business development officers, people who have geological backgrounds--one of our individuals actually a graduate lawyer as well, which has proven to be useful on some of our regulatory issues--and we have a whole amount of experience. What we were lacking is really marketing. How do you package all of that expertise and knowledge into a package that you can take out? How do you make the approaches? How do you service the clients? Those were the issues that became very important to us.

Just as a bit of an aside, since the member's colleague, the member for Osborne (Ms. McGifford), continually accuses my colleagues of everything we do that might involve women as being sexist. I just want to point out that, on the other side of the coin, this is the first female Director of the Marketing branch, I think, in Canada. So I thought I would take that bit of credit because I know her colleague, the member for Osborne, would never give us credit on something and I think it is worthy of mentioning. [interjection] I agree with the member for Selkirk (Mr. Dewar), it is a shame that the member for Osborne would say that.

Mr. Chair, Ms. Thomas brings to this department, specifically, 10 years of experience as an advertising, marketing and public relations generalist. She has held senior marketing communications positions with the Winnipeg Economic Development Corporation and the Canada 125 Corporation, and has recently completed a one-year term with the Women's Television Network as director of corporate sponsorship. Other achievements include marketing and communications consulting for the Institute for Sustainable Development, the Toronto Humane Society, and significant contribution to Manitoba's education reform and its economic development strategy. Kate was also a member of the 1991 Winnipeg Grey Cup communications committee, and was also the producer of the Innovators program for CKY Television, which, I know, was a very large success. Kate received a number of awards, including the Industrial Developers Association of Canada Marketing Canada award and the best of class Multimedia Gold Leaf award, to name but a couple.

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So that is just sort of an overview of her qualifications. She came into this with the marketing knowledge which we have merged with the technical knowledge we have had, and the contributions--I must admit, as we have gone through this we have learned a lot as we have progressed.

Just one quick, very short, little comment is that last August, as we had all of this together, we thought there was no better way than try what we had to do but by test marketing our marketing plan. So my deputy and I and two business development officers went to Toronto, and we had a number of meetings with senior companies, including Barrick. In the space of the couple of days we were doing this, we learned and fine-tuned what we were doing, and it has been a growing process as we have gone along. One of the things we discovered on that was the information we had to leave was very, very inadequate, and that is why we needed to develop better information. We learned how to set these things up.

Actually, I think we got pretty good at it over a two-day period in Vancouver. I think I personally visited 17 companies, and I think my deputy added another 10 or 13. So, between the two of us, with our business development people, in two days in Vancouver we visited nearly 30 companies. Several of whom--I think in total we have had over 25 in the province now actively looking for properties to develop. Some have found, some are still looking. So, you know, you have to go out there and cast a wide net, and you need somebody who can help on that marketing side who has that expertise in marketing. That is why Ms. Thomas was hired for that position.

Ms. Mihychuk: Well, the minister mentions some of the challenges, and being somewhat familiar with the department and the challenges in Manitoba, I can sympathize. You have a double mandate: a new concept of one-stop shopping, which requires a new approach, a new way of dealing with industry; and a whole new initiative of marketing. So we look forward to the development of this branch, and wish you all the best of luck.

Mr. Praznik: Mr. Chair, I very much appreciate the comments of the member for St. James and, I know, the members of the Liberal Party who have been supportive of the initiatives we have taken, and I again extend invitations to them tonight to be at the mining event, celebrating Mining Week, and for our convention in November, because I think it is important to industry to know that we as Manitobans have a united view on this industry, as much as one can in a partisan political realm, and that again builds, I think, the kind of confidence to be in the province. So I very much appreciate her comments.

Ms. Mihychuk: Just on an aside, the reception today at the Art Gallery, which I understand is being catered by Amici, seems to be so different from the world of mining and industry that I am familiar with, which is more likely to be a cold sandwich on a rock outcrop, so we are looking at a vastly different world. It seems appropriate in marketing when we are talking about glossy brochures and the reality of trucking through a swamp is clear when we go to this reception at the Art Gallery, and I will be there and many of my colleagues will be there tonight.

Mr. Praznik: Mr. Chair, I did not note the member for St. James (Ms. Mihychuk) saying she still would not eat any of the food from Amici. So let us say we will all enjoy this evening's fare. But the member does make a point that I want to comment that is worth noting. As part of this strategy, we recognize that if you want to have mines you have to have ore deposits. If you have ore deposits you have to have exploration, and a key to exploration is grassroots exploration. That is why we have the Prospectors' Incentive Program. We have also developed work with Cross Lake Band and Split Lake Band where we are doing a prospector training program, and we have also targeted, in our number of companies, a lot of very junior exploration companies.

I have been in offices where I can tell you it was more like a McDonald's Arch Burger, or whatever the thing is now, than Amici. Because, again, those grassroots companies whose strength is being out in the bush on the rock outcrops doing the work is where the new discoveries come from. So our strategy has been really a blended one to go after the full range in the mining sector, not just obviously the large, very successful mining companies. So I appreciate the opportunity to make that comment.

The Acting Chairperson (Mr. McAlpine) : 23.2. Energy and Mineral Resources (a) Marketing (1) Salaries and Employee Benefits $787,000--pass; (2) Other Expenditures $437,200--pass.

2.(b) Petroleum and Energy.

Ms. Mihychuk: In this sector, I am going to be asking several questions. We see a change in the structure of the department. We now have what looks like an amalgamation between petroleum and energy. Can the minister provide us with some elaboration of the administration of those two very diverse sectors?

Mr. Praznik: Mr. Chair, a very good question, given the very dramatic change we made in our Energy Branch. Every minister who comes into a department, and particularly in times when money is always difficult to obtain out of Treasury Boards, has to prioritize what the department is going to take on and be successful at. Departments I have seen that have tried to be all possible things to every issue that possibly can be there tend to do everything poorly and nothing well. We, in going to our Treasury Board over the last year, to seek the support for the Mineral Exploration Incentive Program, additional dollars for geology--by the way, the MEIP is significantly funded out of the mining reserve fund. We have been challenged by Treasury Board to re-evaluate our own priorities within the department.

As a minister, in the first six months of my tenure, you know, you have an opportunity to test staff. You have an opportunity to test areas of the department and, you know, are they fulfilling a role that needs to be filled? My deputy and I, in reviewing the department, came to the conclusion, quite frankly, in reprioritizing that our Energy branch, which was about 10 or 12 people in total, that their mandate to a large degree had arisen and they were a creature, to some degree, of the oil shortage of the 1970s and the whole push in energy conservation of the '70s, early '80s, and that many of the things, in essence, that were going on there, it was time for review and some more focusing. There were also a variety of energy sector positions in there which we were to advise the minister on certain sectors of energy where we had analysts.

In the case of electricity, for example, that is so much under discussion between myself as minister and Manitoba Hydro. The department itself was virtually out of that loop in terms of the discussion. I do not say that to take away from the staff who did the work. It was just simply that so many of the regulatory issues that we are now having to follow and figure out where we are going to fit in as we see massive deregulation around us in Ontario and United States, these were being dealt with by a whole cadre of people we have at Hydro who study these things through the board and president and myself, the Crown Corporations Council. One lonely analyst in the Department of Energy and Mines quite frankly was virtually impossible to get into that loop, let alone keep up with everything and have access to the information. So it was not fulfilling really a function anymore. The same is true in some of the other particular positions.

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So we thought that given the fact that the priority really in our department has been pushing this mine development that this was very important to get this industry going, that the province needed the economic development. I see in yesterday's Free Press the story of Manitoba doing very well in the nation, our growth to exceed the nation's average, one of the contributions manufacturing, construction and the mining sector being a part of that, that we needed to put resources in there. Quite frankly, we knew we needed more geological resources. Dr. McRitchie needed more money due to the programs we were asking of him, and that money we felt was better spent there.

We went through, then, the development of options on how to still maintain sort of the core energy programs, the key, high priority areas that we wanted to keep--the R2000 was obviously part of that, which has a working relationship with the Department of Labour, who does the building codes, the new home workshops which are important in what we are doing, our energy advisory services, the ventilation indoor air quality program, home energy savers workshops, renovation contractor training, publications reviews, our government building initiative, school bus driver training with the reduction of fuel costs, our own participation in TransPlan, Plan Winnipeg, capital region, promotion of ethanol as a new fuel source in the province, which is very important for diversification of agriculture as well.

These types of things, and responding to the public industry initiatives for ground source heat pumps, photovoltaics, wind biomass, these kind of things, we thought that we could reduce our staff who manage these. I think we got down to six or seven, basically--eight. Well, for eight people we did not need a director to manage eight people, so we thought administratively we could combine those eight and those functions under the director of the Petroleum branch because in terms of our cadre of administration, that individual could probably absorb those people as an administrator. So that is the logic of combining those particular branches, although Petroleum and Energy are loosely related, but it was an administrative decision because of the time availability.

What we did cut out was the national air issues co-ordinating committee activities. Environment will now take the lead on that. We were sort of doing that with Environment. The western electrical utility co-operation, quite frankly, this department had in practical terms little to do with that. That is Hydro's purview, and Hydro is managing that. Monitoring activities, we no longer look after propane gas pricing or Public Utilities Board or any B activities. Those are all done by Consumer and Corporate Affairs anyway, so it was not a function we really needed. Gasoline standard development, again, Consumer and Corporate Affairs, this was appropriately housed in their department.

The Sustainable Development energy strategy, we are still working on it but with a little different resource allocation, and the energy code and regulations, quite frankly, was not an initiative that we wanted really to be in. That was better dealt with through the regular building code. I do not think, as a government, we wanted to enter into a complete new energy code on top of the building code, but wanted some incorporation.

There were also problems, quite frankly, with the energy code as the Northern Affairs minister and just practical application in northern Manitoba with a host of issues. We thought that was an area that was not of high priority to us and could be dealt with more appropriately, administratively, elsewhere, i.e., with the building code process and Department of Labour.

So that is what we eliminated, those particular functions, as well as some of the monitoring and advisory ones that I have indicated and put under one administrator.

Ms. Mihychuk: There was basically the elimination of the energy management component of the Energy Division, as I understand it. My major concern is, who was advising the minister on energy policy? Who was advising the minister on the aspect of sustainability of energy resources? These are important broad-spectered issues that require expertise. If we rely on the industries themselves to basically provide advice to the minister, I would caution, as Hydro regulating or developing a hydro policy or, for example, would Centra Gas develop a natural gas policy?

Clearly that is not in the benefit of Manitobans as the whole, and government needs to define who it is, who is being responsible, and who is going to lead in terms of energy and sustainability policy.

Mr. Praznik: First of all, the department still does have some expertise on the energy side that it has to offer. Certainly, from time to time, as issues have arisen, we have some very capable staff that we have put onto those issues. Mr. McVicar was here today, was working on the ACL issue for a period of time when he needed work, so we do have some ability to move onto specific issues as they develop.

On the energy side, our two prime sources of energy consumption in the province are obviously petroleum products and electricity. With respect to petroleum products, I know, in her opening remarks, the member for St. James (Ms. Mihychuk) talked somewhat about the sustainability, and one could argue whether the same should apply to minerals or not. There are differences.

The reality of it is, Manitoba's oil supply produces only the equivalent of about 25 percent of what we consume. It is a very small resource. I would be hard pressed to think that any Manitoban actually burns an ounce of gasoline in their vehicle that comes from a Manitoba oil field, unless they visited Chicago.

The reality of it is, our oil patch is not significant enough to even support a refinery. So, quite frankly, all of that crude is put into the pipeline system which is moving oil from Alberta into Montreal and to Chicago and other places where it is refined, so it gets into the batch. In fact, it has even been suggested to me that if we did not have the pipeline going through Manitoba, most of our oil patch would be hard-pressed to be economical at all.

In terms of preserving that for another day, quite frankly, just on the standards of production that is very unlikely to happen. It is not a significant enough oil deposit that would be of long-term benefit to the energy needs of the province. We are, whether we like it or not, firmly connected to the whole North American energy situation, and ultimately even if one did have a significant shortage, the federal government's power about how that would be distributed would kick in and we would be governed by that anyway. So it is not really a strategic reserve for Manitobans from that point of view.

With respect to electricity, that is where the greatest amount of work is now taking place; 25 percent of our revenue now, 25 to 27 percent of our billion dollars worth of revenue is derived from sales into the United States. We also are a significant purchaser of power from the United States which we--it gets into very complicated things that I am only beginning to understand that we do. We have to, as I said in the House before to the member and her colleagues, be very cognizant of the deregulation program that is going on in the United States right now to ensure we have the ability to still sell into that market, that it is not lost. If we lost it, quite frankly, we would either be bankrupt or you would be paying a significant increase in hydroelectric rates.

We also see opportunities opening up for us in Ontario and Saskatchewan as deregulation takes place. Our biggest challenge is going to be, as a government and as a utility, how do we adjust our own regulatory framework over the next few years to ensure reciprocity and our ability to have access to what is in essence a changing North American market? That is good management of our utility. The real good news in this is this is not an opportunity to protect ourselves from competition that will beat us down. We are the ones who will do the beating down of others given the opportunity; it is, how do we get access to get into other people's markets?

The member may be interested to know that Manitoba Hydro was approached by a major electrical user in Saskatchewan recently to sell them power directly and wheel it through SaskPower's lines. We had an interest in doing that if it was a wheeling relationship, and we would sell directly rather than through a utility. I suspect the person who was talking to us was more interested in getting a price from us with which to negotiate with SaskPower, but it just underlines how competitive we are.

So I appreciate her question about advice. The comment I make to her about it is, it is such an evolving area right now, the majority of U.S. states do not even have legislation in their houses. Ontario has not decided what it is going to do or how it is putting it together. This is one that we are having to watch regularly. The Crown corporation's counsel, Mr. Doug Sherwood, one of their senior people, is onto this in a very significant way. He and I meet regularly to discuss this; we are plugged into a number of monitoring agencies in terms of companies that do this are providing us information freely as part of their information sourcing.

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We also have accessed some briefings from the national conference of state legislators in the U.S. I have had an individual here some months ago who brought me up to date on their regulatory situation, so this is something that is also maybe going to have to be dealt with at the highest levels within government. We are watching it; we want to get a lay of the land before we decide what we have to do, but one or two analysts in our department are not necessarily going to solve that.

Ms. Mihychuk: Can the minister tell us if he expects to see any more changes in the energy part of the department?

Mr. Praznik: At the current time, and I do not say that just to say the current time is today, no, I do not envision any significant changes. That is not to say that as we develop new working relationships, there will not be some need to move a bit of resources here or there within the department next year's budget, but I would think nothing is significant as we have seen this year.

The Acting Chairperson (Mr. McAlpine): Item 2.(b) Petroleum and Energy (1) Salaries and Employee Benefits $1,319,800--pass; (2) Other Expenditures $532,000--pass.

2.(c) Mines (1) Salaries and Employee Benefits.

Ms. Mihychuk: We are moving along into the regulatory components of the mineral operations of the department, and we see considerable challenges, more regulations, more programs, and we have a new rehabilitation program that, hopefully, is successful in moving along. There are certain inspections required, monitoring, identification, and presumably this department has something to do with the MEAPs and other programs that are going on. I do not see any change in staffing. I am wondering if the minister can explain if there has been a reorganization in the branch to handle these changes of duties. These new programs are being handled in what manner?

Mr. Praznik: As has just been pointed out to me, in about 1991-92, Treasury Board provided for an increase of one staff year in our Inspection branch, or inspection area, and the department filled that last year. They really quite were not in the need to do that to manage within their budgets, but that position has been filled so we now have four inspectors where we used to have three, so that is added.

As well, we are spending a fair bit of money, about $190,000 over two years in our computerization program, and that provides us with a host of administrative efficiencies that allows our field staff to be more effective and better use their time. That is how we are handling some of this increased load.

Ms. Mihychuk: As the minister probably is aware, any massive computerization is labour intensive and also technical. Are there supports put in, in terms of getting the department on line, which I must say has been, in my opinion, long overdue?

(Mr. Chairperson in the Chair.)

Mr. Praznik: Her question is a good one. I understand part of that $190,000 includes contract work--pardon me--in addition to that $190,000, the department is doing some contract work for that short-term additional staff and labour that is required to get us up to where we have to be.

Ms. Mihychuk: This may be the appropriate time to ask, what is the relationship of this bringing the department on line and the Linnet system?

Mr. Praznik: Everything that we are doing, I am advised--a very important point--is designed to piggyback or overlay and the Linnet systems would be part of it, and this becomes very important to us, as you can appreciate, as we are going to be dealing with land claim settlements and specific land selections. One of the problems that we have encountered on some that we have taken on to date is that interests or uses are not always registered or are not registered and accessed when we are doing these things and we get into some difficulty. So the Linnet system is very critical to where we are heading on two policy fronts, so the work we are doing has to and will be dovetailed with it.

Ms. Mihychuk: How much of this--I understand that the minister indicated that there was contract work being given out to bring the department on-line. Are these contracts going to Linnet, and if not, why not?

Mr. Praznik: Yes, I am advised one has gone to Linnet. Generally speaking, the ones that are appropriate and work will, and if there are others that are more appropriate to do the work, they will. I must admit to the member the technical work and how we do this is not something that I am greatly familiar with. I have to rely on the work of Mr. Ball and his staff in putting this together and ensure that it is ultimately properly done, but Linnet, I have been advised, has met with all of our branches to indicate what they do and are capable of doing. Where it is appropriate that we use them, we will; and where there are others that it is more appropriate we use, we will as well. I want to make sure the work is done.

Ms. Mihychuk: It is my understanding that the department virtually uses none of the Linnet services and that there is a serious problem with compatibility. The base map system for Linnet and some of the detailed information required for claims and other detailed geological mapping may not, at this time, be the most appropriate system. So I am asking the minister, is it that we are more efficient at using different systems? Does there need to be a re-evaluation as to how we are going to have an overall government computerized system? How much, if I misunderstand, does the department co-operate with Linnet or not? Is that system going to be viable for the mineral sector?

Mr. Praznik: As a virtual computer illiterate, I am going to try to answer the member's question. My staff's understanding of the Linnet system is it is a government-wide system that provides a general framework for government use and that the Mines Branch or the components that plug in will be compatible and fit within that and workable within that whether they are developed by Linnet or not. That is one of the criteria for development.

We have used Linnet--in which branches? They are currently working with us on the Mogwis Information System in the Petroleum branch. They just completed the work for the Mining Recording office, and they are being considered by our geological branch. With respect to maps specifically, the topographical maps that we are using are those supplied by Natural Resources Canada and are to be consistent across the country. Now, what relevance that has to your question I am not entirely sure, but my staff sort of insisted I point that out to you because it would have some significant meaning.

I must admit I feel like a translator on this issue at a technical meeting of physicists. Actually, I think what I should do at this point is, Mr. Chairman, the member for St. James, having worked in the branch at one time and having a very good understanding of some of these aspects and these details, I would like to extend an invitation to her and any members of this committee who have an interest to meet with some of my senior management and get a more complete detail and technical update of these issues.

The only caveat I put on it is that, if she asks me a question in the House about it, I will just have to take it as information.

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Ms. Mihychuk: Well, it is a fairly complex topic, and generally I am looking for a policy directive here. Linnet is supposed to be providing this overall massive system that you will be able to push a key and get your information from. If I had a piece of property, I would be able to know if there are any mining claims. Are there any significant deposits on it? What are the sanding gravel resources? Is there a forestry permit? And all of this in this ideal world will one day be at your fingertip.

Now the practicality of that is that we are, I think, a long way from getting there, and the government is attempting to move in that way. It is an overall larger issue because of the difficulty of merging all of those different departments, and I would recommend to the minister at some time, if he has an hour, to get a briefing from Linnet. I did have an opportunity to see some of the programs that they have done, and, as I say, it is something that I think government needs to perhaps re-evaluate, to determine if this is the best procedure, the best way for us as a province to proceed.

We can look at other jurisdictions who have tried to have a massive central system. Some have tried and some have given up, and it may be appropriate to review where we stand with that program. I have no further questions in this area.

Mr. Chairperson: We are at 2.(c) Mines (1) Salaries and Employees Benefits $1,383,000--pass; (2) Other Expenditures $495,700--pass.

23.2.(d) Geological Services (l) Salaries and Employee Benefits.

Ms. Mihychuk: I have several questions on geological services. I am going to start with basically thanking Dave McRitchie for coming out. It is a very busy time of the year as we are probably getting crews prepared to go out. It is unfortunate we actually did not have many more hours. We are not at the same priority as Education obviously.

My question concerning the crews going out, every year the department has brought on temporary staff, usually university students who are taken out into the field, and this is a practical way of getting training. I am interested in knowing what type of safety courses and training are provided to the staff members. I will go into a little bit of the reason for why I am asking that. Because you are a geology student does not necessary mean that you know how to operate, perhaps, a firearm, how to save someone's life, how to operate an outboard motor, how to construct a temporary shelter. All of these things are suddenly within your purview, and you may need to do it tomorrow if the senior geologist suddenly becomes unconscious or something. Sometimes, unfortunately, we have to rely on those skills.

In the past there have been circumstances where a field crew has gone out with virtually no training, so I am asking if there has been some changes to the policy in the department. Do students get, do all staff members have a current first-aid training, do they have wilderness training and survival courses, and do they get training on basic equipment, operation and maintenance, including boat safety?

Mr. Praznik: I feel somewhat caught between a former geology student who probably was out in the bush and forced to build her own shelter.

Ms. Mihychuk: No, carry a gun.

Mr. Praznik: Carry a gun.

Ms. Mihychuk: Just thank God we never had to use it.

Mr. Praznik: That is right, in this post Allan Rock Canada, though, we use clubs now and we have to register them.

Ms. Mihychuk: Shove your tooth up there, that is one strategy.

Mr. Praznik: That is right. I feel so caught between someone who has been in that experience and the person who has been responsible for that job. The rules of this committee require that I reply to these questions, and I do admit that I feel somewhat awkward in doing so, Mr. Chair, because of this relationship and situation, but I will endeavour. I will endeavour.

Mr. Chairperson: Is the minister suggesting I might bend the rules just slightly for this one time? I might consider that.

Mr. Praznik: Mr. Chair, I would ask the committee's indulgence, perhaps, to have Dr. McRitchie answer that question directly because we are dealing with an issue that I think is important. Last year under my first tenure as minister we lost no students in the bush. This has not been flagged as an issue with me, but I think given the member for St. James' intimate knowledge of this issue and Dr. McRitchie's, if the committee would indulge us, I would like Dr. McRitchie to answer directly.

Mr. Chairperson: I will allow it.

Mr. Praznik: Thank you, Mr. Chair.

Mr. Chairperson: For the committee, on the record, we will allow the Director of Geological Services Branch to answer.

Dr. W.D. McRitchie (Director of Geological Services): Dave McRitchie. In addition to the fact of not losing any students during the tenure of our present minister, I would say that our track record has been good over the last 20 to 30 years that we have been with the department. The department has a safety committee which you may be familiar with, and the safety committee has focused a large portion of its attention on the field activities. There are a series of guidelines on working in isolation. Those guidelines have been updated and are made available to all of the students that we employ.

In addition to that, each student that joins us gets a copy of a camp and field guide, which is a guide that deals with all of the conditions, extraordinary conditions, that students might encounter when they are with us during the summertime. That camp and field guide has existed for the last 10 or 15 years, and we have undertaken at the request of the safety committee to revise and update that guide more recently to include descriptions of the use of such new safety devices as pepper sprays, bear repellant pepper sprays, including very explicit instructions not to use it on fellow students.

During the initial week of involvement in the field, the party chiefs pay specific attention to training the students and giving them a good idea on what sort of actions or safety concerns they should practise once they are in the field.

There have been some complications introduced in the context of using firearms, and these are complications that I think have been introduced by the federal government more recently. We, in the past, required that each student take a short course and get a firearms safety certificate, and we also provided a St. John's Ambulance training course for the students.

I could not tell you what we have done this year, but those courses and that training have been provided in all previous years.

Ms. Mihychuk: I will ask the minister to perhaps consider providing a bit more resources in this area. It is one thing to have a small booklet outlining the guidelines, and another one to actually attempt to start a 40 horsepower outboard motor and hop into an inflatable boat and then haul sheets of plywood, and God knows what else, to wherever your base camp may be.

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It does provide for many, many stories, and, hopefully, the minister will have an opportunity to share with the staff some of those stories, but on a more serious side you are sending a group of individuals, some with no field experience, into wilderness environments. I would suggest strongly that, in terms of safety for these young people and the geologists, that significant hands-on safety training be provided before the students and the staff are put out into the field.

This year we are looking at a major initiative into areas that are basically unexplored, and many times we have been very fortunate not to see more serious accidents occur. I am grateful for the opportunity to talk briefly about safety as it is an important issue to me and, I know, to the director and the minister.

Mr. Praznik: I appreciate the experience and advice of the member for St. James, and I will undertake, with my deputy minister and Dr. McRitchie, to review what we are doing on the safety side. I know that field work in the bush can be a very dangerous issue. I do not think Mr. Rock fully appreciated that with his current legislation. I know my special assistant, Mr. Hood, out cutting field lines, was almost one time consumed by a bear and spent several hours up a tree wondering if he had provided sufficiently in his will for all his family members. That is a true story in which he was almost killed, so we know these things and we all do.

All I can, in conclusion, say to the member, on a more humorous note, is that her experience in toting boats and motors and all of those things, I am sure, have prepared her well for experience in the Legislature of all the difficulties, and I just hope she never shot herself in the foot with her sidearm.

Ms. Mihychuk: I am going to invite the minister to perhaps join a field crew this summer. I know the minister is fairly daring, and he is Minister of Northern Affairs. I know that the crews would be thrilled if the minister would take the time to actually come out and see what exploration is all about. I would probably invite the director of Marketing, for example, who has not had hands-on experience, to come out and see what mining is all about.

I challenge the senior administration of the department to take that step, hopefully in the boat or on dry land, and go out this summer and see what your staff are doing as they are trying to promote the mineral exploration of Manitoba.

Mr. Praznik: If there is one lesson in this for my senior staff, it is, be nice to all your students, you do not know which ones will get elected to the Legislature and get to question at committee.

I understand I am going to be up around in June in the Gods Lake area. We may have an opportunity to drop by and, if not, later on in the summer. I almost detected, Mr. Chair, the member for St. James and some of her colleagues asking for an invitation to join us on that as well and perhaps bring along a fishing rod. I just almost detected that and, perhaps, I know the member for Point Douglas (Mr. Hickes) who is here, whose home is in northern Manitoba. I say that in the larger sense of heart and home and background and experience out on Hudson Bay, and I have had the opportunity to be hosted by his son, who is a member of the fire service in Churchill, on occasion, and I am sure if perhaps there might be a reason for all of us to assemble in the North and check out those field crews. I know the member for Point Douglas would want to be part of that, as well as my colleague from Sturgeon Creek (Mr. McAlpine), who, I think, is looking on with some envy to this interest here today.

Ms. Mihychuk: I want to now go on a more serious note--[interjection] It was serious, I always take mosquito repellent. The branch's decision to spread its resources to traditional exploration areas, for example, Flin Flon, the Thompson area, and do the new initiative was one, I presume, that was based on historical and perhaps the need to find more resources in those areas.

However, I would like to share that, having met with the administration of Hudson Bay Mining, he was very supportive of the new initiative, urging government to take those steps, to provide the basic mapping programs and basically suggesting that with some changes to tax law allowing for geophysical work to be done more effectively, that that area would be covered by them. So in those large areas like the Flin Flon belt and Thompson, we still see a component of the department based there.

My question to the minister is, why was the decision made to remain in those traditional areas? Why did we not look at a massive new program?

Mr. Praznik: Mr. Chair, the short answer to this question is the work that we are doing in the more well-established areas of probably northwestern Manitoba have to do with depth, that a lot of our efforts in those areas have been to provide the database, as best we can in our purview, for areas that are deeper, far deeper than we had before. Part of the issue there, of course, is that there are a fair number of deposits, good geology, that suggest that there may be more mineral resources at greater depth, so that is why we still have some involvement in that area.

As well, one should appreciate that to date 95 percent of exploration undertaken by the private sector in the province has gone on in those traditional areas. We have been wanting to move that into the northern Superior, and that is why that has become the high priority for our work in developing the database, but you cannot abandon one area when there is still some need to be done there to get into another one. As the member I know appreciates, her colleague the member for Flin Flon (Mr. Jennissen), it is in his interests and in the interests of other northern MLAs to ensure that there are sufficient and adequate ore reserves to extend the life of those mines.

I know discussions we have had with Hudson's Bay Mining and Smelting and others, that there is still some work to be done there, that we want to make sure, and there is a balance. There is a balance.

As well, and my deputy makes the comment to me, there are still a fair number of our smaller operators, exploration companies, individual prospectors, who are doing a fair bit of work in those traditional areas and have properties there to develop, so it is not just Hudson's Bay Mining and Smelting. If you look at the three drill rigs that are operating now in the city of Flin Flon, I think one is Hud Bay--two are Hud Bay and the other is Consolidated Callinan, and then there are a lot of other smaller companies that are still in that area, so we have a larger clientele than just Hud Bay in that area looking for projects.

In our coming year with our approvals under our program, 47 percent of the work is being done in the northern Superior Province, and 21 percent is being done in the southeast section of Manitoba which is the Tanco Bernic Lake up to Bissett and northward area. Nineteen percent is being done in the Flin Flon-Snow Lake region and about 14 percent in the Thompson region, so you can see the lion's share of our efforts are being spent in the northern Superior and in the southeast which, in essence, had a whole new life with Rea Gold and some of the additional work that Tanco has been doing with Cabot resources, their new parent.

Ms. Mihychuk: How many field crews are going into the Superior Province this year?

Mr. Praznik: I assume the question is with respect to our own database field crews. We have four, I am told, going into northern Superior.

Ms. Mihychuk: How many field crews are in southeast Manitoba and in the Flin Flon-Thompson area?

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Mr. Praznik: Two are going into the southeast, of our own crews, and I understand we have six going into that Flin Flon-Lynn Lake area, and their efforts are by and large to complete work that has been undertaken in the past, to finish them off. So we will see the real push. We have seen the shift this year into southeast and northern Superior, and next year we will see that in even greater numbers.

Ms. Mihychuk: Does the six include the Thompson belt, as well?

Mr. Praznik: Mr. Chair, I am advised there is only one crew completing mapping in the Thompson area this year. The major effort there has to do with compiling the information that has already been gathered from past exploration.

Ms. Mihychuk: One of the goals is to, of course, do the mapping and then produce both the preliminary information that is released at the meeting with industry that the minister was at in November, as well as the final report.

Can the minister tell us what is the turnover rate? How long does it take to produce the final report from the time of initial fieldwork to production of the report?

Mr. Praznik: I am advised that we have made some very significant improvements in the last few years that now we can produce preliminary coloured maps within the same year as the field work is undertaken. With respect to final maps, I am advised that it depends on the size of the project and all the usual reasons I am sure the member for St. James remembers.

Ms. Mihychuk: I am not going to dwell on this area too much. I have two more questions, fairly simple. I understand here under Activity Identification, the branch provides assays for claim holders. How much work is involved with that and how much staff time is included in that?

Mr. Praznik: We do about 2,000 commercial assays a year at our lab for the private sector.

Ms. Mihychuk: Has there been a change in the number of assays over the years? Is that relatively stable, or going up?

Mr. Praznik: I am told it has been relatively stable.

Ms. Mihychuk: Overall, the department not only provides the grants for exploration but basically the supports for additional field exploration near Flin Flon and Thompson, even in the southeast, can sometimes be interpreted as a form of aid or subsidy to industry. I think that we need to recognize the value of the department and the amount of effort and information that it generates. It seems to me that we often ignore or at the minimum not recognize the efforts put out by civil servants to promote the mineral resources of Manitoba. I just want to indicate that with those types of supports we are indeed helping industry to develop our resources.

In terms of the branch as a whole and exploration more generally--and the minister was being fairly liberal with his ability to ask questions--[interjection] Liberal, well, we have been wondering--in this area of exploration, projections indicated that there would be approximately $40 million of exploration this year. The minister in his opening comments suggested there may be $50 million. The question here is, do we have an actual number? Do we expect to see significant increases in the amount of exploration? With these new programs, hopefully the investment is wise and will see a significant increase.

Mr. Praznik: Mr. Chair, in terms of gathering the information, what we are able to do of course is through our own program we know how much work we have generated through our MEAP program. It gives us an idea we can document. Second, we canvas the existing industries, obviously the big players, to get a sense of their expenditures and programs that are going on. The permitting process gives us information from which we can canvas. So our numbers are not an accurate-to-the-penny recording. They are a best-guessed estimate based on what we gather and are told. At the end of the day, we will have a better idea at the close of the year. We base our estimates on what we have been told by companies. Obviously, as they go through their year things can change for them. Weather plays a role in it. Fires can cause a significant decrease in exploration dollars if they make it impossible to get into areas. There is a host of factors.

We do know that there is a greater increase, greater willingness, greater interest. In looking, we estimate $45 million, $50 million we are hopeful this year we will see happen in exploration in our province.

The key for us in our view is that we have at least five new companies which this year will be active in exploration which traditionally have not been in Manitoba. Those I think are largely the result of the kind of efforts we have made in attracting them and convincing them. We have others which are looking for properties which have not been able to work out arrangements yet. So it is an incremental growth, and we continue to build on it.

Ms. Mihychuk: Recently the minister and I were both reported in the papers as supporting the initiatives for the exploration program. My support will be dependent on how effective this program is. If we do not see companies, the traditional as well, expanding their exploration programs, I will be very disappointed and would ask the minister to review that program.

We do not give away very scarce public money without seeing significant improvement. So I would ask the minister to monitor and ensure that we see expanded exploration even with the large mining companies in Manitoba.

Mr. Praznik: Mr. Chair, her concern is a very, very valid one. That is why this program is a three-year program, and we monitor it as we go through it and we will make decisions as we move along. I know one of the reporters who covered the story--and I appreciated the member's comments--was talking to someone who indicated at one of the companies that, well, we would do our exploration programs with or without the money. In the case of the larger companies, we have had a mix of who has got money because we are trying to develop a nice, broader strategy of exploration.

When we talk to those people, I know the criticism is, some of these companies are very significant, have significant profit levels, et cetera. The reality of it is they make decisions where they are going to spend their money on exploration, and if this stretches their dollars or if this makes a difference in them doing exploration here as opposed to Ontario or Quebec or Chile or somewhere else, then it is added to our exploration base.

Her caution is very valid. It is one that I very much want to keep on top of because pumping money into something without results, which to some degree was Manitoba Mineral Resources--and we did not get a mine out of it. We may have some philosophical disagreements about that purpose, but the results are there and I expect to be judged by the same thing here. If we do not ultimately get results, then this program should not continue, and I think that is the way all government support programs should be.

So I am sure next year we will have this conversation again. In the interim, it is achieving the results we want. It has spurred on some additional exploration incentive. Quite frankly, it is the hook to get some of these companies back into Manitoba and interested in being here, and if they are finding the geology that works for them, we will not need this program in the future.

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Ms. Mihychuk: Just to wrap up, I would ask the minister if it is possible to provide a report on the success of the rehabilitation program for sand and quarry sites, the amounts expended, which locations have been done, who got the contract in which municipality. Secondly, if possible, how is the MEAP or whatever it is called now--I am sorry, it was so close to the first one--[interjection] Yes, the industry support program. Which companies are picking it up to what amount? I would appreciate that.

I have no further questions so we can move right through the department. Thank you.

Mr. Chairperson: Thank you very much. Would the minister want to make a comment?

Mr. Praznik: Yes, Mr. Chair, I will undertake to have my staff provide the member with that information and thank her for this opportunity to have a good exchange.

Mr. Chairperson: Thank you very much. Item 2.(d) Geological Services (1) Salaries and Employee Benefits $2,702,700--pass; (2) Other Expenditures $1,017,400--pass.

Resolution 23.2: RESOLVED that there be granted to Her Majesty a sum not exceeding $8,674,800 for Energy and Mines, Energy and Mineral Resources, for the fiscal year ending the 31st day of March, 1997.

Item 3. Industry Support Programs (a) Mineral Exploration Assistance Program $3,000,000--pass; (b) Petroleum Exploration Assistance Program $1,000,000--pass; (c) Manitoba Potash Project $304,900--pass; (d) Acid Rain Abatement Program - Flin Flon 0--pass.

Resolution 23.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $4,304,900 for Energy and Mines, Industry Support Programs, for the fiscal year ending the 31st day of March, 1997.

Then, consideration of the minister's salary--

An Honourable Member: They are all gone.

Mr. Chairperson: They are all gone. The last item to be considered for the Estimates of the Department of Energy and Mines is item 1.(a) Minister's Salary $12,600--pass.

Resolution 23.1: RESOLVED that there be granted to Her Majesty a sum not exceeding $1,327,100 for Energy and Mines, Administration and Finance, for the fiscal year ending the 31st day of March, 1997.

This completes the Estimates for the Department of Energy and Mines.

The next set of Estimates to be considered in this section of the Committee of Supply is the Department of Culture, Heritage and Citizenship. Should we briefly recess for a few minutes? We will be back in five minutes.

The committee recessed at 11.14 a.m.

________

After Recess

The committee resumed at 11:20 a.m.

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