FINANCE
Mr. Chairperson (Marcel Laurendeau): Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Finance.
Does the honourable Minister of Finance have an opening statement?
Hon. Eric Stefanson (Minister of Finance): I have a very brief opening statement.
I am prepared to mostly dispense with it because I think we are only allocating today, is my understanding, so I am prepared to get on with questions fairly quickly, but I just want to make a comment or two. Mr. Chairman, it is my pleasure to present for consideration and approval the Estimates of Expenditure of the Department of Finance for 1996-97, for the fiscal year.
I do have a brief opening statement, but I am pleased to respond to any questions that members might have obviously. The department proposes to spend some $794.6 million in '96-97, and this represents a decrease of 8 percent or $68.6 million over the '95-96 Estimates. Reduced Public Debt expenditures account for almost the entire net decrease and are made possible due to lower borrowing requirements, as a result the province's improved fiscal position and a decrease in Canadian and U.S. interest rates.
These very positive developments have been offset to some degree by the cost associated with a weaker Canadian dollar. Notwithstanding the expenditure reductions for '96-97, Public Debt remains the single largest component of the department's spending and represents 10.7 percent of the entire provincial budget.
The magnitude of this cost continues to underscore the importance to Manitobans in balancing the provincial budget. The department's expenditures include $12 million for the new Manitoba Learning Tax Credit. As previously announced, Manitoba will become the first province in Canada to provide a refundable learning tax credit to encourage students to invest in their own education and training.
While expenditures in the other main appropriations of the department are declining modestly, these reductions are not hampering the essential work of the department. Some of the department's planned activities for '96-97 include improvements in the timeliness and content of the public accounts, the implementation of corporate e-mail, process enhancements to provide better taxpayer service and reduce the costs of administration, and the design of seven new special operating agencies for 1996-97. As well, we are involved with the review of possible changes to the Canada Pension Plan. Some examples of prior year accomplishments are, in the last year, we had the direct deposit of employee pay cheques, a central payroll office located within our Comptroller's division implemented the direct deposit of employees pay cheques effective with the first payday in the current fiscal year.
We are pleased that this significant change was implemented with no disruption for employees and that the participation rate is in excess of 98 percent of the payroll. One of the greatest benefits to employees is that their pay cheques are no longer subject to postal disruptions or even the postal delivery problems that have occurred from time to time. Employees will also personally benefit because they can avoid the bank line-ups that do tend to happen on paydays.
We also led the preparation of the Balanced Budget, Debt Repayment and Taxpayer Protection Act which has been described by independent observers as the best balanced budget legislation in all of Canada and a model for other jurisdictions.
We completed negotiations with the federal and other provincial governments on a series of major initiatives and changes.
Mr. Chairman, those are my very, very brief opening comments, and I look forward to responding to questions from members opposite.
Mr. Chairperson: I thank the minister for his opening comments. Does the critic for the official opposition party, the member for Brandon, have an opening statement?
Mr. Leonard Evans (Brandon East): Brandon East, thank you, although I feel like a member for Brandon, period, sometimes. But it is MLA for Brandon East.
I very briefly welcome the opportunity to review the Finance Estimates for the 1996-97 fiscal year. It gives us an opportunity in the opposition to ask a number of policy questions about major changes, major proposals. The minister touched on some of these, some of the major financial problems facing the Treasury of Manitoba. Of course, it also gives us an opportunity to ask some details about the administration of the department, ranging through Treasury, Comptroller, Taxation, Federal Provincial Relations and Treasury Board. There are a lot of specific questions we will have about some of the specific programs, some of the specific activities of the department.
I would say, by and large, my experience in dealing with this department over the years, on both sides of the House, is that it is a very well-run department; it is comprised of a lot of competent people, very capable people, and very dedicated and loyal people. They serve the people of Manitoba well. They serve government well. They serve the Legislature. They serve the people of Manitoba well, and we are fortunate to have the quality of staff that we do have in the department.
Having said that, Mr. Chairman, I think we should perhaps just get on with the details of the Estimates review.
Mr. Chairperson: I thank the critic of the official opposition party. I remind the honourable members of the committee that the debate on Minister's Salary, item 1 (a) is deferred until all other items of the Estimates of the Department are passed. At this time we invite the minister's staff to take their place in the Chamber.
Is the minister prepared to introduce his staff present at the committee at this time?
Mr. Stefanson: Yes, I am, Mr. Chairman. Starting down to my immediate left here is Pat Gannon, the Deputy Minister of Finance. Next to Pat is Erroll Kavanagh, the director of Financial Administration Services. Across from Erroll is Mr. Neil Benditt, the Assistant Deputy Minister of Treasury Division, and to my immediate right is Mr. Don Potter, the associate secretary to Treasury Board.
Mr. Chairperson: The item before the committee is item 7.1.(b) Administration and Finance Executive Support (1) Salaries and Employee Benefits.
Mr. Leonard Evans: Mr. Chairman, as I indicated just prior to the staff coming in, I think the people of Manitoba have been well served over the many years by a dedicated, loyal staff in the Department of Finance. As I have said, I have been on both sides of the House, in government and opposition, and it is my experience it is usually very well run, and it does perform an important service to the people of Manitoba--people with talent and loyalty, and we are well served by this department.
I want to take the opportunity, as I understand that we now have new a deputy minister, to congratulate Mr. Gannon for his appointment. He served for many, many years in the civil service and in the Department of Finance, in particular. I certainly appreciate the fact that we have someone with a lot of experience and talent and dedication in that position, so my congratulations to the new deputy minister.
Perhaps this is more on a light note than anything else, but my first question is--and I do not know whether this is the appropriate place to ask this question. That is always the challenge in Estimates. It is where is the appropriate place to ask questions, but my question is, I notice that the provincial cheques are now signed by the minister and not by the deputy minister. Now, I do not know, it seemed to me for years and years it was the deputy minister. This is not a constitutional crisis or anything like that, but I am curious as to why there was a shift from the deputy minister's signature to the minister. It is not a life-threatening decision, I realize, but I am sort of curious.
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Mr. Stefanson: As the member for Brandon East I believe knows, Mr. Charlie Curtis, our previous deputy minister who served us well for many years, retired at the end of March, and really this was as much a timing and a transition issue, that we had not announced and filled the position by mid-March, and it requires at least two weeks to change the plates for the preparation of cheques, so the obvious alternative was to allow the minister to also sign.
We are now putting in place a plate for Mr. Gannon's signature, as well, and we will have the opportunity for either the minister or deputy minister to be signing cheques. It really arose as a result of the transition and the changeover, and from here on, we will have the ability for both to sign cheques.
Mr. Leonard Evans: Mr. Chairman, I thank the minister for that explanation. I guess the important thing is that the banks continue to cash the cheques, continue to accept them. I guess our credit is pretty good.
Just passing on, I have been studying the Supplementary Information for Legislative Review provided by the minister who tabled this a few days ago, and I think that it more or less coincides with the Estimates lines that we have before us. What I would like to do as we proceed through the Estimates is just touch on those areas that we have some questions on, because we do not have questions on every line, not that we could not have questions on every line, but time does not permit it. There is agreement, as I understand, for a limited amount of time for this department. I am not quite sure how many hours we are dealing with at this point. We will subsequently learn this, I suppose, but time is limited, so we would like to just concentrate on some of the highlights and some of the particular problems, not problems, but program areas we would like to get some information on.
I am looking at your Supplementary Estimates Review. I am looking at subappropriation 07-1(c) Management Services. Among other things that this area is responsible for is co-ordinating departmental records management program, including applications made under The Freedom of Information Act, and I was wondering if the minister or the department could tell us, just what activity is there under Freedom of Information? Are there a lot of inquiries and what is the nature of the inquiries? I do not necessarily want the specific inquiries but the kinds of inquiries that the department gets.
Mr. Chairperson: Before the minister answers the question, I notice that the member has moved to line 1.(c) Management Services. Are we going to be dealing with resolutions as a whole, or are we going to pass line by line? I am just asking the committee for advice here.
Mr. Stefanson: Mr. Chairman, if I could suggest that we do it line by line, but then at the end when we wrap up the Minister’s Salary--I mean, I am certainly prepared. I am not trying to muzzle debate, I guess what I am saying, but to sort of systematically move through it. If there is no question on individual lines, if we could at least pass them, deal with the question line by line, and at the end if there are any general questions, by all means.
Mr. Leonard Evans: As far as I am concerned, Mr. Chairman, whatever is most expeditious--as long as we have the opportunity to ask the questions, and the discussion, whether it is resolution or line by line, whatever is easiest actually.
Mr. Chairperson: So to facilitate the matter then, as soon as we are done with the resolution we will pass everything within that resolution except the Minister’s Salary and move on to the next one, then we will have the staff present during those resolutions, if I am correct. Okay.
Mr. Stefanson: That sounds fine. In response to the question, for the calendar year 1995--well, first of all I should say, Mr. Chairman, that this area is responsible for Freedom of Information requests as they pertain to the Department of Finance. I just want that to be clear, that there is not a misunderstanding that this is government wide Freedom of Information requests. This area of our department handles Freedom of Information requests for the Department of Finance. So when I am responding now, I am referring to requests that our department has received.
For 1995, we received approximately 25 Freedom of Information requests. Year to date in 1996, we have approximately eight. The requests are generally from either the media or political parties like the member’s political party and, occasionally, they are from individuals, and if they are from an individual, it is sometimes related to their own personal or business tax file. So they are generally dealing with requests around expeditures, around contracts. In 1995 we had some requests related to the Winnipeg Jets and so on. So I hope that gives the member a sense of the number and the types of requests that we receive as a department.
Mr. Leonard Evans: Has the minister and the department denied any of the requests for Freedom of Information, because there are some conditions, and not all requests are granted. I am not really being critical of that, I am just saying, you know, are there some that have been denied because of the nature of the request?
Also, while the staff is looking into that, if we could get an indication, how much staff time does this take in a year, roughly, in the department? I am just talking about the department.
Mr. Stefanson: Mr. Chairman, the answer is yes. Some have been denied because of the legislative requirements. I do not have a number here today, and I certainly do not have any problem providing that information to the member for Brandon East. Again, in terms of the staff time spent, if he is looking for an example of how much time was spent in '95, how much time was spent in '96, again, I do not have that here today, but that certainly is information I do not have a problem providing, so we will undertake to obtain that as soon as possible and provide it to the member for Brandon East.
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Mr. Leonard Evans: That will be fine. We will look forward to getting that information in due course. I would like to pass onto another item under Management Services relating to redeployment of employees impacted under the workforce adjustment program, and I wonder if the minister could elaborate on that just what is happening in this redeployment of employees, how many people are involved, is it working well, just what are the challenges in this particular area of redeployment?
Mr. Chairperson: Could I ask the member to identify the pages as he is going through the supplementary information? It might make it easier.
Mr. Stefanson: Supplementary page 28. This is still under subappropriation 07-1C.
Mr. Chairperson: I thank the member for that.
Mr. Stefanson: Mr. Chairman, again, this section pertains to the re-employment of employees impacted in the workforce adjustment within the Department of Finance. If we want to talk government-wide when we get to the workforce adjustment category later this morning or this afternoon, we can discuss that. In terms of the Department of Finance, employees impacted were 8.26 permanent staffyears have been impacted. Out of those numbers, seven were placed in other positions and one employee remains without an employment opportunity. Efforts are continuing to place that remaining individual. Out of the 8.26, all but one were redeployed elsewhere, and the other one has received a letter of layoff but is on a redeployment list and will continue to be worked with to see if there is an opportunity for that individual.
Mr. Leonard Evans: Obviously we are talking about permanent employees that have been laid off, not term employees. This excludes term employees, does it?
Mr. Stefanson: Mr. Chairman, the member is basically correct. These are permanent employees, permanent staff years, and term would just expire at the expiry date of any term.
Mr. Leonard Evans: I wonder if the minister could identify which part of the department or which line in the Estimates relates to the co-ordination of redeployment throughout the whole civil service?
Mr. Stefanson: There really is probably a split jurisdiction. The Civil Service Commission and Labour Relations is directly responsible, as the member knows, but the funding is provided on page 140 of our Main Estimates. Number 27.5 6. Internal Reform, Workforce Adjustment and General Salary Increases. That is where we provide funding to deal with voluntary separation, incentive plans and so on. I am certainly prepared, when we get to that section, if you want to talk about government overall to spend some time on that. Even though it is split, this is the funding. The Civil Service Commission is directly responsible. That is where the funding is provided for programs like our voluntary separation incentive program.
Mr. Chairman, I know that is a line that we have allocated to us to deal with as part of the review that we will be doing.
Mr. Leonard Evans: That is an important observation, because on the list to be reviewed by this committee, not only the department per se, but there is a list of other programs--community support programs, Canada-Manitoba Enabling Vote, Allowances For Losses and Expenditures Incurred By Crown Corporations, Emergency Expenditures, Internal Reform Workforce Adjustment and General Salary Increases, that is the one, yes.
I do not know how this works, but after we conclude the department, we then go to these other votes and then go the Minister's Salary, I would assume.
At any rate, just passing on from that to the next item, I raised this last year or perhaps the year before where payments under the Soldiers Taxation Relief, it is a very small amount of money, $3,000. One wonders why it is in this department and also why it is such a small amount of money, given the fact, as described in the material, it provides some kind of a property tax relief for qualifying individuals, for veterans of the two world wars as well as the Korean War. Is there any money actually spent under this program? The grants are up to $50 and, if so, how many people were accommodated?
Mr. Stefanson: Mr. Chairman, just to give an example, yes, there are some payments from here, and, for the 1995-96 fiscal year, there were 29 claims from various locations in our province with a total value of $1,450. Now, just to give a little bit more history, for the year '94-95, there were 32 claims with a total value of $1,600, and, for '93-94, there were 35 claims with a total value of $1,750. That gives the member a sense of the number of claims and the dollar amounts.
Mr. Leonard Evans: Is the government doing anything to make the potential applicants aware that this program exists?
Mr. Stefanson: Mr. Chairman, no, we do not do anything directly as a department to promote this program, so to speak. It really has been, certainly in the last many years, the veterans association themselves that provide that information, but looking at the time lag for the period of eligibility, I am assuming that there was probably more of a seeking out shortly after the war and the wars that are applicable in this case when the individuals would become eligible, but, no, we do not promote it as a department. We rely on the veterans associations to provide that information.
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Mr. Leonard Evans: I would not be surprised, if we took a survey of the various legions and army and navy clubs around the province, the executive members even would not know of the existence of this program, and, of course, I am not quite clear how restricted it is because it may be so restrictive that very, very few people could qualify anyway. I gather you are only eligible if you do not receive income from sources other than military and old age security programs. So whether that includes CPP, for example, or not, I do not know. It seems to be very restrictive.
The basis of the program, the genesis of the program, was, I am sure, very good to assist veterans of the wars who are low income and particularly to help them pay their property tax bills. I have no problem with the intent of the program. It just seems to me that it is very tiny, and one wonders why it continues to exist as an appropriation in this department in this way.
I would not be averse if the minister said, I am going to write to all the legions and the army and navy clubs in Manitoba and tell them, yes, there is a program that exists. Under certain conditions, some veterans may be helped. I suspect it will not be too many out there because time is passing. Veterans have been dying and so on, and other things have happened. At any rate, that is a suggestion.
Mr. Stefanson: Mr. Chairman, I know we discussed this at length last time, but based on the member's comments, maybe I will just take one moment to outline the eligibility. It will only take a moment.
In order to be eligible, a person must have served in the navy, army, aviation or auxiliary forces raised by Canada or any member of the United Nations in World War I, World War II or the Korean War, and must be in receipt of a military disability pension. So eligibility also extends to the pensioned widow of a soldier and the pensioned widowed mother of a deceased soldier or a totally disabled soldier confined to a hospital or sanatorium. This $50 exemption from taxes applies to the property of these persons when, as the member mentioned, their only source of income is the military disability pension and the old age security pension, and they are a resident in Manitoba. That is the eligibility and the criteria.
Certainly, it is provided, as we know, under The Soldiers' Taxation Relief Act which was proclaimed on March 14, 1919. We will certainly take note of the member's suggestion in terms of it might be appropriate to at least communicate with some of the veterans' organizations to remind them.
Mr. Leonard Evans: I thank the minister for that information. I do hope that he does take an opportunity to write to the various legions and army and navy clubs. It could be that very few people can qualify over and above those who have already applied because of the restrictions of the program, and I would also observe that this is sort of a program that you would expect in Family Services today rather than the Department of Finance, but I am not trying to be critical in that respect.
Just passing on to the Tax Appeal Commission, I had asked questions about this previously, in previous years. I gather that this is really a commission that is made up of staff ultimately who can review appeals from persons who believe they have been treated unfairly for whatever reason.
Am I correct? This is really an internal body. There are no commissioners as such appointed outside of the government. If I am wrong in that, I would like to be told that, Mr. Chairman.
Mr. Stefanson: Mr. Chairman, the Tax Appeals Commissioner is independent, does not report obviously back into the Taxation Division or even to the Deputy Minister of Finance. Under the act, taxpayers who disagree with a tax assessment that they have received are allowed 90 days to file an objection with a commissioner appointed by the minister. The current commissioner is Mr. Glenn Russell, who is a chartered accountant.
The notice of objection process is similar to but is less formal than the federal income tax procedures. A commissioner, upon considering the matter that is appealed, either affirms, rescinds or amends the assessment and notifies the appellant, the director and the minister. If the taxpayer or the director disagrees with the commissioner's decision, either party may appeal to the minister. Beyond that, of course, the taxpayer always has the recourse ultimately to the courts.
Mr. Leonard Evans: Mr. Chairman, I wonder if the minister could indicate how many appeals were received in the past year or some past appropriate time, and what are the appeals dealing with mainly? Is it retail sales or is it the payroll tax or corporation capital tax?
Mr. Stefanson: As I mentioned, just to make it clear, the areas of taxation that can be appealed in this area are the retail sales tax, the payroll tax, the corporation capital tax, the mining tax, not personal income tax, that is dealt with separately.
This act was proclaimed on March 1, 1993, so to give the member a sense of the numbers, for the fiscal year '94-95, we had a carryover of 10 from when the legislation was first introduced, and we received 25 in that year. So for 1994-95, we had 35 appeals before the commissioner, and how they were dealt with is, 12 were denied, three were partly denied and 12 were referred to Taxation which were deemed not to really be an appeal issue. That makes a total of 27. Eight were carried forward to the next fiscal year '95-96. So in '95-96 we had eight carry forward and we received 25 more appeals again for a total now of 33 in '95-96. What has happened in '95-96 is, 12 were denied, five were partially denied, two were referred to Taxation as they are not an appeal issue, and three of the appeals were upheld for a total of 22, leaving us with 11 outstanding appeals at the end of March '96, and I obviously do not have any current information from March 31, '96 on.
Mr. Leonard Evans: Mr. Chairman, that gives us an idea of the activity level of the Appeal Commission. Obviously the bulk of them, from this information, seems to be either, assuming they do apply and they are not referred to some other division of the department, most of them are being denied. At any rate, I wondered, to what extent does the department make people aware that they have this independent appeals process now available to them for whatever tax that they happen to pay? Do you send out an information sheet to say, some of the retail businessmen or business people, for instance, or just what does the department do to make the public aware of the Tax Appeal Commission process?
Mr. Stefanson: Mr. Chairman, I would prefer to deal with that question when we have some of our taxation staff. My expectation is, individuals are notified of a process whenever they have a notice of reassessment, but, I think, in terms of getting very precisely how that notification is done and what the process is, when I have one of our taxation staff, perhaps we can go that question.
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Mr. Leonard Evans: When the appropriate staff come in, then I will just assume someone will take the initiative to just give us that bit of information. The minister referred to the right of appeal to the courts, but, as I read the manual that I have here, it says that the expected results of this commission, one of the expected results is resolution of appeals with fewer appeals to the Minister of Finance, so it implies there that there is a provision for an appeal to the minister as well. So what do you do, you go up from the commission, and, if you are not satisfied with that decision, you go to the minister and then from the minister to the court?
Mr. Stefanson: Mr. Chairman, that is correct.
Mr. Leonard Evans: I look forward to getting a bit of the information when the appropriate staff come in.
So that is all I have under this area, and I would like to pass on to Treasury, which is another Resolution 7.2.
Mr. Chairperson: In that case, we will pass Resolution 7.1 at this time, everything except for Minister's Salary.
7.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $337,700--pass; (2) Other Expenditures $69,200--pass.
7.1.(c) Management Services (1) Salaries and Employee Benefits $405,600--pass; (2) Other Expenditures $66,400--pass.
7.1.(d) Payments Re: Soldier's Taxation Relief $3,000--pass.
7.1.(e) Tax Appeal Commission $20,000--pass.
We will now deal with Resolution 7.2. Treasury (a) Administration (1) Salaries and Employee Benefits.
Mr. Leonard Evans: Mr. Chairman, in this area, there is responsibility to investigate and be knowledgable about the various markets in the world that are relevant to the province for our borrowing purposes. I was wondering, and there is reference in the manual to maintaining close contact with the world financial community, so I wonder if the minister could tell us, just how is this achieved? Is this where he and staff take off for New York or Tokyo or whatever? Just where are the markets, and how is this achieved presently?
Mr. Stefanson: Mr. Chairman, the contact is primarily and almost totally from the staff in this area, mostly through computers and virtually daily contact by telephone. As the member could appreciate, it is an ongoing process, so our senior staff in this area are in contact with the investment community literally daily by phone, assessing the market, all of the factors affecting the market, and so on. Certainly occasionally there are trips by either senior staff or the minister, usually about once a year to New York to meet with the investment community there or at least once a year to Toronto to meet with the investment community. Usually if there is a trip outside of North America, it is usually tied in if we are doing a particular issue or a borrowing at that time--most often is when we will tie in both being there for the launching of the issue, but also then taking advantage of meeting with the investment community whether it is in London or in Tokyo or elsewhere, which happens probably at most on average once a year, if that.
Mr. Leonard Evans: Just where are the markets? The minister made reference to New York, Tokyo and so on, but basically where? This is a fluid situation. Interest rates change, the value of currencies changes, opportunities change, so just which markets are prevalent today for Manitoba?
Mr. Stefanson: Certainly in the last couple of years our market has been primarily Canada. Manitoba represents a good market, as the member knows, through both our Builder Bond and our HydroBond programs, in fact, on average probably about 20 percent of our requirements for Manitoba.
Another significant element comes from Canada, and over the last couple of years we have only used the non-North American market for maybe 10 or 15 percent of our total borrowing. But again, I think, as I think the member knows, when we do borrow outside of North America, whether it is in Japanese yen or some other currency, we do swap it back to either a Canadian or a U.S. exposure, so that today, all of our debt servicing here in Manitoba is either in Canadian currency or U.S. currency. We have no debt servicing in any currency other than U.S. or Canadian, and the breakdown on that debt servicing is, about 68 percent Canadian, being serviced in Canadian dollars, and about 32 percent being serviced in U.S. dollars.
I wanted to point out, when I gave that percentage breakdown of the 68-32, that is our total debt, our tax-supported debt, but also the debt on behalf of our utilities, primarily Manitoba Hydro. Again, I think the member knows that at least a significant portion of that U.S. debt is basically hedged because Manitoba Hydro sells, I believe, about one-third of what they produce to the United States. That provides a hedge against some of that U.S. debt servicing.
Mr. Leonard Evans: Well, certainly it makes life a little simpler, less trying, to have your debt held in fewer rather than many, many countries. Of course, we live very close to the United States, and we are more aware of what is going on, I guess, in the United States than we are in Japan or Switzerland or whatever.
At any rate, the minister mentioned HydroBonds. Could he comment at this time how the current issue is going? What is the take-up? I know we are in the middle of it, there is advertising going on and so on, but does he have any comment to offer at this time?
Mr. Stefanson: Mr. Chairman, to date, and, as the member recognizes, we are still fairly early in the campaign, we are running at between 50 percent and two-thirds of last year's rate, but recognizing that, even looking at last year's sales, we did the vast majority of our sales in about the last three or four days. That has been the traditional pattern of Builder Bonds and of HydroBonds; most individuals do wait till near the last day to make that final decision where they are going to place their money. That will be the ultimate test how much we end up issuing here in the Province of Manitoba.
I should point out that, in terms of the information I provided the member just a few moments ago on the debt servicing, those ratios I gave him, the 68-32 percent that I gave him, are correct ratios, but I said they included all of our debt, and that is wrong. That only includes our tax-supported debt. It does not include the debt of Hydro and our utilities, and I could certainly provide him with the overall percentages if we were to take the full combined debt of our utilities and our tax-supported together, if I were to roll them all together, so I would gladly provide him with that combined revised number. So the 68-32 is only our tax-supported debt, not combined, but the rest of what I told him is accurate that Hydro does hedge a significant amount of what they have because of the U.S. sales and so on. I will undertake to provide that revised information.
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Mr. Leonard Evans: I thank the minister for that undertaking. Grow Bonds, to what extent is this department involved in that program? I appreciate a lot of the administration probably is through the Department of Rural Development; nevertheless, I would think the Ministry of Finance has some role to play here. I wonder if the minister could explain that at this time very briefly.
Mr. Stefanson: Mr. Chairman, we do not play any direct role in the Grow Bonds Program. As the member knows, it is an area of responsibility for Rural Development. Our involvement takes place if there is a call on any of the guarantees because, again as the member knows, the principal of Grow Bonds is guaranteed by the government of Manitoba, so when we get involved is if there is a call on that guarantee against the Grow Bond.
Mr. Leonard Evans: I would ask the minister, have there been many calls for guarantees?
Mr. Stefanson: To the best of my knowledge, what I am being informed here now is I believe there has been one call on a guarantee, but, again, that is information I will gladly provide in terms of whether it is one, or if there are more, and the name of the company. I am fairly certain that there was one call on one guarantee.
Mr. Leonard Evans: Just passing on again under this area, another area of responsibility here is establishing interest rates for loans to Crown corporations, government agencies, school boards and so on. I was wondering if the minister could explain, what is the current method of establishing those interest rates? What is the procedure used, and, more or less, what are the rates now being offered or required of these various agencies that I referred to?
Mr. Stefanson: Mr. Chairman, the process is at the start of every month we take the Canada rate for different issues, whether it is five year, ten year, depending on the term of the issue, what Manitoba's spread is from the Canada rate, whatever our borrowing spread would be at that particular point in time in the market, to come up with a rate, and then that rate is also adjusted for a service charge because, obviously, we have costs for providing financing.
That becomes then the rate at the start of each month that we lend money to the Crowns and so on at. That becomes the rate for the month. Unless we see a significant swing, we continue as we discussed earlier. We watch the market on a daily basis, so if there is a fairly significant adjustment, then we will even adjust that rate during the month, but it is done automatically at the start of every month as I have just explained.
Mr. Leonard Evans: I will also ask, what current rates are we looking at? Say, if a hospital or school or whatever wanted guidance from the department, what interest rates would they be looking at?
Mr. Stefanson: Mr. Chairman, the simplest way maybe to give it is to give the member some examples of what we could have borrowed at as of May 29. Now, this does not include the service charge that would be tacked on. The service charge on average would maybe be about a quarter of a percent or thereabouts, so to give the member an example, we could have borrowed a 10-year bond at 8.06 percent, Manitoba T-Bills were 4.7 percent, prime rate 6.5 percent and so on. So using the 10-year as probably a good benchmark, it would be 8.06 percent, plus on average for hospitals maybe another quarter of a percent or thereabouts.
Mr. Leonard Evans: Could you indicate the level of activity of loans to some of the agencies, school boards, hospitals and municipalities in particular. Is there a great deal of lending activity occurring at this time? I know this is just a general observation I am asking for. I do not expect a lot of numbers.
Mr. Stefanson: Mr. Chairman, there is some activity every month. What I can undertake is certainly to provide that information before the day is out in terms of what the total activity would be for a year, as an example to give the member a sense of the magnitude.
Mr. Leonard Evans: I thank the minister for that offer and we look forward to getting that information also. Strategies for investment of Sinking Funds, there is a lot of money involved here, I gather approximately $4 billion. It is a pretty broad reference here, establishes strategies for investments, but just what are the strategies? I mean, security, safety is obviously one element of a strategy but, nevertheless, is there something we should know here. Is there something unique in Manitoba regarding investment strategy of Sinking Funds?
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Mr. Stefanson: Mr. Chairman, as the member can appreciate, one of the main functions here is to co-ordinate that our funds in our Sinking Fund are available and come due at the same time as the debt. So that is obviously a key strategic objective, that that money has to ultimately grow to an amount that is equivalent to the debt that we want to retire with the Sinking Fund, so that is one objective, the timing of it. Number two, of course, is to try and maximize our return on the money that is invested. The investments are primarily in either government of Manitoba bonds, other provincial government bonds, or Government of Canada Canada Bonds. That is the primary area of investment with the Sinking Funds that are available.
(Mr. David Newman, Acting Chairperson, in the Chair)
If I could take just one moment on a previous question the member asked on the Grow Bonds, again, to the best of my knowledge there is the one company, and the one company is Mass Technologies in Morris, Manitoba. I think that was made public some time ago. They had a bond issue of $150,000 and that was the one area that the guarantee was called on back some time ago, I believe in 1995.
The other issue I said I would get some information on when I talked about the debt servicing, if you combine the tax supported with all of the utilities, 58 percent of it is serviced in Canadian dollars and 42 percent in U.S., so obviously the U.S. portion grows because we have some U.S. debt, primarily for Manitoba Hydro.
Mr. Leonard Evans: I gather from the material the minister supplied us, Supplementary Information, that investment accounts aggregate approximately $4 billion. On the other hand, I know on a subsequent page, the aggregate amount of investments outstanding is March '97, will approximate $6 billion. Are we talking about the same investments or do we have just two different estimates as to the amount of the investment?
Mr. Stefanson: Two completely separate issues. The $4 billion referred to on page 36 is the money that has been set aside in the Sinking Fund as we have already discussed. The bottom of page 38, the $6 billion that the member is referring to, really represents the advances to the Crown corporations, the advances to Hydro, to Manitoba Telephone System, to Manitoba Agricultural Credit Corporation, and so on, so they are two completely separate investments.
Mr. Leonard Evans: Again, as I say, looking at this Supplementary Information guide which is very useful and incidentally did not always exist--I guess the supplementary material is a creation of the last four or five years. It has not always been around.
At any rate, I thought I was looking at the Activity Identification. It looked fine, and then I came to the very last line under Activity Identification on page 36 and it says, operates the Treasury division effectively and efficiently. I said, my golly, there is nothing immodest about the person who wrote this one. I thought it was rather self-congratulatory. I think I know what they mean but, at first glance, you might think, well, we are doing a pretty good job here. So we assume they are correct.
Okay, just asking another question in this area, under Treasury again, under Capital Finance, what is the province’s current rating? We are forever concerned about our ratings because it obviously affects the interest rates that we have to pay to borrow. Could the minister give us sort of a rundown on how we are now rated and how are we comparing with some other comparable provinces?
(Mr. Chairperson in the Chair)
Mr. Stefanson: There really are the four credit rating agencies that are the most commonly referred to--Moody’s, Standard and Poor’s, Dominion Bond Rating Service, and Canadian Bond Rating Service. I will not read all of the ratings for the member. I will gladly provide him with a summary, but Manitoba does fare well within that rating category. I will just use one example. I will take Moody’s, which is one of the more known. Recognizing that AAA is the best you can have, AA the next best, and then A the next, and within each of those you have various ratings, so to give you an example, Moody’s rates Canada as a AA1. They rate Alberta as a AA2, British Columbia as a AA1. They rate Manitoba as an A1, New Brunswick as an A1, Newfoundland as BAA1; Nova Scotia as an A3, which is lower than Manitoba; Ontario a AA3; Prince Edward Island, A3, which is lower than Quebec, an A2, which is lower than Saskatchewan, an A3, which is lower. So it gives you a sense that the only provinces that are really rated higher than Manitoba would be Alberta, British Columbia and Ontario, I believe.
What is really interesting is when we looked at our borrowing last year, Manitoba was able to borrow at the third-best borrowing rates in all of Canada. Only Alberta and British Columbia were borrowing money at lower interest rates so even though we have a lower credit rating than Ontario, we were trading through them. We were borrowing money at better interest rates than Ontario. To me, that is the true test of the market and the confidence, is what people are prepared to pay; they are prepared to accept a lower return on Manitoba paper obviously because of the combined confidence in our province, in our economy. I could get very political with all of this but I will not bother. But that is the true test, what investors are prepared to accept as an investment.
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I want to share with the member that many of the assessments of Manitoba in recent months have been very positive in terms of the expectation of our credit rating outlook because we are really trading like a AA. We are trading better than Ontario which is a AA, so we are trading like a AA. So many of the investment dealers, whether it is Merrill Lynch or whether it is Salomon Brothers, in their analysis of our province, are really suggesting and almost recommending that Manitoba deserves an upgrade. I would like to see that day come but the good news is, even though we are an A, we are trading like a AA, so we are getting the benefit of that kind of lower interest rate.
Mr. Leonard Evans: So in effect, Mr. Chairman, the minister is saying that a credit rating is but one guideline or guidepost for the real interest rate that we have to pay. In other words, people who are prepared to buy Manitoba paper, yes, they will look at the ratings of the agencies but still look beyond that as to what they perceive to be the risk factor in lending in Manitoba and that sort of thing, so we are getting the AA impact even though we only have an A1 rating.
Mr. Stefanson: Mr. Chairman, that is basically correct. There are the two elements. There is what the investors themselves are judging, particularly the larger investors, and that is what the member referred to, that they are making that decision themselves saying they are treating Manitoba basically like a AA, but it is also what the investment community itself, what the investment dealers are saying. I cited a couple, and really that trend is fairly common with most of the investment dealers, that they are speaking very positively about Manitoba, so that also helps us in terms of the recommendations to investors and what the investment dealers are saying about Manitoba and about the quality of our paper, of our bonds.
Mr. Leonard Evans: People who buy our bonds or any bonds, of course, from government want to look at the fiscal policies, and if a government is determined to cut back on spending, especially cutting back on spending--I do not think they are so enamoured when governments say they want to hold the line on taxes because the agencies are quite happy for you to increase taxes because that is another step in assuring them that the government will have the revenue flow in order to pay off the debts, to pay off the bonds.
I was wondering, what rate are we looking at at the present time? You say, effectively, we have sort of a AA type of interest rate being offered. More or less, what is the rate now that we are looking at?
Mr. Stefanson: As of today, we are basically trading at about 23 basis points above Canada. Canada is the benchmark as we all know. We are trading at about 23 basis points, so just under a quarter of 1 percent above Canada. To give the member some examples what that would translate into today, if we were to do a 10-year issue, we would be at approximately 8 percent on a 10-year issue. If we were doing a five-year issue, we would be at approximately 7 percent. Our Hydro Bond issue, which is really a one-year issue, is at 5 percent, as the member knows. As the term goes down the interest rate goes down; as the term goes up, the interest rate goes up. That gives the member, I think, a sense of what it would be costing us if we were borrowing today.
Mr. Leonard Evans: I thank the minister for that information. Just as an aside, I rather smile at the rating agency's determination of federal debt because, as long as the federal government has the power to tax its citizens, which I think is an ongoing power, and as long as the federal government is as responsible as it is for the central bank, for the life of me I do not see how anyone would want to rate a government unless it was facing some sort of a revolution maybe, rate the Canadian government less than the very top, AAA.
They say they are worried about the level of--the reliability of Canadian government loans. I think this is hilarious. They do not understand people who talk in those terms. I surely do not understand that ultimately the Government of Canada controls the money supply through the central bank. It can print all the money we want. I am being a little facetious here, but, I mean, it can and will pay its bonds; it has that ability. At any rate, that is just an aside.
Just passing on to the money management and banking area here, just a quick question. There was reference made to the branch arranging 1,500 short-term investment transactions, over $25 billion of investment purchases. Who are you dealing with? Could you just elaborate a bit on this, who were you dealing with in this area?
Mr. Stefanson: This really represents the aggregate of all of the investment done on behalf of, primarily the Crowns, MPI, any surplus cash at any given point in time, Manitoba Hydro might have surplus cash, similar to Manitoba Telephones, even our special operating agencies, and so on and so forth. So this is the aggregate of investing all of that money throughout the year. It is primarily invested in areas like Government of Canada bonds, various provincial Treasury Bills and so on. That is the nature of the types of investments where this money is primarily placed.
Mr. Leonard Evans: I thank the minister for that information. Who are we dealing with? I guess we are dealing with one, two, three, or a set of brokers on most of these? Could the minister tell us who do we deal with usually?
Mr. Stefanson: The vast majority of this activity is with the major Canadian banks and the major Canadian investment dealers--Wood Gundy, Dominion Securities, ScotiaMcLeod, and so on. That is virtually the vast majority of who we are dealing with. Of course, we are looking at the market as we discussed earlier, basically on a day-to-day basis and we will place it where we can get the best return. Those are the organizations that we are working with and utilizing to provide the service.
Mr. Leonard Evans: I thank the minister for that information. In this area of responsibility, too, I gather, we negotiate banking agreements and various process changes are going to occur through these renegotiations, and I understand--and I think this is rather interesting to read--a reduction in banking service charges of approximately a third, and this is excellent. I wonder if the minister could tell us, how much money are we saving here? Can he elaborate on this at all?
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Mr. Stefanson: I think we touched on this last year, and I believe the member knows that this past year we put out our banking for proposals again and received proposals from most of the major banks in terms of providing our bank services. As a result of going through that proposal again and some reduction in volume, we are now saving about a third as indicated here, which represents about $l00,000 reduction in costs overall through less volume and through lower costs. The successful bank, as a result of that search, was the Royal Bank again for our main banking, who had been our banker. At that time they had the best bid package again, and again have the main banking of the Province of Manitoba for--I would have to confirm the duration, whether it is a three or five years contract, again similar to what we have had in the past. That has served us very well and as a result we have $100,000 less costs for our banking services.
Mr. Leonard Evans: I thank the minister for that information. It seems to me that the Royal Bank has been the province's bank forever. I think it is appropriate that we give other banks an opportunity at least to bid and open it up and see what is out there, what services other banks are prepared to offer. Having said that, I am not trying to be critical of the Royal Bank at all. We have to go through this process, it seems to me; we have to be prepared to renegotiate from time to time.
Just passing on to another area--this is Treasury Services--just a question about Sinking Fund investments. Apparently this Treasury Services section that services the Sinking Fund investments of the province, Hydro, MTS, MHRC and the University of Manitoba, I do not know why MPIC is not included. That is one question.
My other question is--it says, providing safekeeping operations at a number of locations around the world.
I wonder if the minister could explain that.
Mr. Stefanson: Mr. Chairman, the reference to Manitoba Public Insurance is in the very next paragraph: Safekeeps and services the long-term investments of major accounts such as the Manitoba Public Insurance Corporation.
So MPI is also included along with those other Crowns.
In terms of the reference to the number of locations around the world, if we were to buy any Province of Manitoba bonds or other provincial government bonds that were a U.S. bond, that would be kept in New York. If we were to buy a bond that is on the Euro-Canadian market, a Manitoba bond or another government bond, that would be kept in London. We still do have some bonds in some other countries even though we have swapped them back, and if for whatever reason we were to invest in a Swiss bond or Japanese yen or whatever, it would be kept in that place of origin, in Tokyo or Zurich or whatever, the actual documents, although there is much less paper than there was in the past.
So that is the reason for that reference, is that the Canadian bonds are kept in Toronto and U.S., New York and so on, so that is why that reference is made.
Mr. Chairperson: At this time we will pass Resolution 7.2(a) Administration (1) Salaries and Employee Benefits $128,200--pass; (a)(2) Other Expenditures $123,100--pass.
7.2.(b) Capital Finance (1) Salaries and Employee Benefits $268,300--pass; (2) Other Expenditures $37,300--pass.
7.2.(c) Money Management and Banking (l) Salaries and Employee Benefits $441,000--pass; (2) Other Expenditures $278,900--pass.
7.2.(d) Treasury Services (1) Salaries and Employee Benefits $443,100--pass; (2) Other Expenditures $43,300--pass.
Mr. Stefanson: Mr. Chairman, could I just ask, because we have Treasury division here now, further on in the Estimates, page 62 is Public Debt. Now we have had some questions, discussions around Public Debt, around what we borrow at, what our borrowing rates are, so on and so forth. I am just wondering if it would be appropriate if there are any other questions around the whole issue of debt, whether we could deal with that now, and then Treasury division could be through for the morning and get on to investing our money and checking the markets.
Mr. Leonard Evans: Specifically, are you asking that we deal with the Treasury Board now?
Mr. Stefanson: Mr. Chairman, just the Public Debt issue which is on page 62 of the Main Estimates. It is just our total debt servicing, the $575 million of debt servicing.
Mr. Chairperson: That would be under Resolution 7.8 and it would be S9?
Mr. Stefanson: That is correct, Mr. Chairman.
Mr. Chairperson: In the blue book. Are you looking for it in the Supplementary Estimates?
Mr. Leonard Evans: Mr. Chairman, where is this in the Supplementary Estimates?
Mr. Chairperson: Page 99 of the Supps. Would that be agreed to by the committee then, that we move to Resolution 7.8S to deal with the Public Debt (Statutory) line at this time?
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Mr. Leonard Evans: Yes, we could, Mr. Speaker. I do not really have too many questions. This is an area of policy that we debated many a time in the House. I had a lot of questions and answers on the level of debt and what has happened to it and so on. Obviously the statutory debt is showing a decrease here, a fairly substantial decrease between '95-96 and '96-97, as I read this. At any rate, this gets you into a general area of policy. I cannot but be concerned that, in spite of everyone's--
Mr. Chairperson: Order, please. We are going to move to that line. Can I just finish off Resolution 7.2 then. I will just finish Resolution 7.2; I just had not finished passing the resolution yet.
Resolution 7.2: RESOLVED that there be granted to Her Majesty a sum not exceeding $1,763,200 for Finance, Treasury, for the fiscal year ending 31st day of March, 1997.
Mr. Leonard Evans: Mr. Chairman, what we are dealing with here specifically is the interest on the public debt. I note that the more interesting way of looking at these numbers is to relate them to the ability of the province to pay the debt and to see to what extent it is a burden on the taxpayers. One way of doing that as shown in the budget document is to calculate the percentage of each dollar spent by the province that goes towards interest on the debt. I was wondering, has the minister any information for us about this interest burden? I mean, what percentage of the public debt--pardon me, what percentage of total spending is interest on the public debt? There are some numbers in here, although they are always subject to revision and so on.
Mr. Stefanson: Mr. Chairman, our debt servicing as a percentage of our total government expenditures is approximately 10.7 percent, and on a per capita basis, that is the second lowest debt servicing cost in all of Canada.
Mr. Leonard Evans: Well, the 10.7 is lower than the figure shown in the budget document, which for 96-97shows 11.5. That is public debt cost as a percentage of operating expenditure, and I guess what the minister is giving me is a revision of that number. Is that correct? Are we talking about the same numbers, same type of numbers? Page 26 of your financial review and statistics in the 1996-97 budget.
Mr. Chairperson: I am just going to clarify it. So there was leave then to move to this line. Leave was granted.
Mr. Stefanson: Mr. Chairman, the difference can be clearly explained. I guess if you were to look at page 18 of our main budget document under the financial review and statistics, you will see the Public Debt costs at the 10.7 that I referred to, and that is as a percentage of our total government expenditures at 10.7 percent. The reason that the 11.5 the member referred to on page 26, that is as a percentage of operating expenditures, which would not include the capital expenditure. So that is why it is a higher percentage, because it is based on a percentage of only the operating expenditures, not including the capital. If you add in the capital expenditures, then as a percentage of our total expenditures, public debt is 10.7 percent. Okay.
Mr. Leonard Evans: I thank the minister for that clarification. I understand that, but referring to public debt cost as a percent of operating expenditure per se, showing 11.5--one can use either statistic, I suppose, but I refer to that because you have historical information.
What you can see is that back in 1987-88, it was 12 percent, then it dropped down to 10.4 percent in 88-89, but generally it has been almost constant. I mean, if you put it in a line, and looked at it over a period of years, in a ranging from 9.9-something to 12, there has been some variation, but generally, you know, give or take roughly 10 percent of the total of operating expenditures, and I think if you go back beyond that to--I do not have those numbers with me, but if memory serves me correct--that percentage number was not much different back in the early 80s. Now, if I am wrong, maybe the minister could correct me. I do not want to mislead anyone, but my recollection is that this number has not wavered that significantly over a long period of time, and it seems to me that is the relevant way of looking at public debt costs. I mean the number per se is important of course, but to put it into context, we should look at it, what is the burden to the taxpayers in terms of percentage of expenditures.
Mr. Stefanson: Mr. Chairman, that is not entirely accurate because if you do go back, as an example, to 1981-82, the percentage of expenditure servicing debt was 4.7 percent. By '89-90, that had grown to 10.2 percent. I am talking now, the total expenditures, the equivalent of the 10.7, so this is on total expenditures, but that shows you basically a doubling in that seven- or eight-year time frame.
If you go back historically to the early '80s, it was significantly lower; in fact, if you want to go back to '75-76, which I do not think is all that long ago, the debt servicing costs were 1.3 percent. So there has been a fairly dramatic increase certainly during the '80s in terms of those debt servicing costs. I am prepared to discuss this at length in terms of the concerns I have around that growth in debt servicing costs and what that does to our ability to provide all of the other services that government should be providing, because the reality is governments are going to have ongoing capital requirements on an ongoing basis.
We have to spend at least $300 million a year to maintain our infrastructure, our roads, our schools, our health care facilities and so on. So I think the argument that one could take on more debt for those capital facilities is an incorrect one, and what we have to be doing is stopping the growth in debt and actually start paying down the debt so that we can free up that $575 million that is now going in interest only to do other things here in our province. So that gives you a sense of the historical information on debt servicing in Manitoba.
Mr. Leonard Evans: Nobody wants excessive debt; no party would suggest that and there are reasons why debt increases, a lot of reasons. Often it reflects the economic situation and I would only observe that the pattern that the minister describes--I had the handicap of not having the numbers back to early '80s; I was going from memory. It seemed to me for a long time we have been around this 10 percent, and of course we have been, at least according to these numbers back to '87-88.
But I dare say if you looked at all the provinces and the federal government, you would see this pattern of increased debt burden in the past, this period of time that we are discussing, and it does reflect in some ways the economic situation and it reflects the bank interest rate policy. When you are looking at double digit interest rates back as we were earlier in the '80s, this does impose a big burden and it does contribute to the escalation of debt. But surely no government, no party, wants to have excessive debt.
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I was with an administration under Mr. Schreyer and I believe--and again I have to go back and look at the numbers--the burden of debt was relatively modest, and I do not believe it really changed much after being in office for about eight years. I think the number was about the same, maybe even lower than it was--this is a percentage of operating expenditures, I guess, or maybe percentage of total spending, one or the other--that it really did not deteriorate. Even though we engaged in many big programs, including housing programs and investment in commercial enterprises, et cetera, plus additional money spent on social programs, health care programs, bringing in Pharmacare, bringing in dental programs for children in rural Manitoba and northern Manitoba, et cetera, we were able to sustain this high level of expenditure without worsening the debt situation relatively, and the main reason for that is because we had a strong economy. There is nothing like a strong, growing economy providing additional revenues to the Treasury for maintaining your relative fiscal health. I just make that as an observation.
Of course, we have our sister province, Saskatchewan, here. The New Democratic Party government in that province has had a long record of balanced budgets and surpluses and so on. At any rate, I do not want to get into a big political debate here because what we could do is say, well, look what we have seen in the last 10 years under this government, or eight years under this government, is that the debt per capita has gone up by roughly a third, which I gather is the case.
If we look at '88-89, the debt per capita was $9,580. As of '96-97 budget, it was $12,102, a fair increase per person. So there has not been a lessening of the debt burden in terms of using those kinds of figures. In terms of total spending, it seems to me that you have not had a dramatic change in public cost spurt.
Mr. Stefanson: The member is right. He and I could get into a long political debate on this issue, and I know there is limited time for all of our Estimates review, and we can save that for other days and other forums. I would welcome us having a good--whether it is a public or private discussion at length about debt servicing, performances of various governments, and so on. I think that would be an interesting discussion that the two of us could have on that issue.
Mr. Leonard Evans: This is fine. I gather the minister does agree, though, that the best solution to debt problems is a fast, strong, growing economy. There is nothing like a good economy providing increases in taxes for success.
Mr. Chairperson: I think you are getting baited into a debate.
Mr. Stefanson: I think you are right. I think the member wants to get into a debate. I would agree that that is one very important element, but I also would suggest that another very important element is that government's control their expenditures, set the right priorities, and so on. I do not think enough of that happened from governments for many years, particularly during the late '70s and particularly in the '80s.
Since I am taking the bait for 30 seconds, the member is right. If you go back to l969, our debt servicing in Manitoba was almost nil, but by the late '70s that had grown to about four percent. Our debt servicing is a percentage of our expenditures. I guess if I have a period of concern where our debt servicing exploded, it was the period 1981 to about 1988, that is where our debt servicing costs more than doubled, and we have been able to, as the member for Brandon East suggests, at least during our term now, to hold that flat. In fact, we are now starting to see a reduction in our debt servicing costs, so I would say that is positive.
The period of time that I would view as the period of greatest concern was that period in the 80s, Mr. Chairman.
Mr. Leonard Evans: Again, we do not want to get into a big debate on this because it is very easy and very interesting actually. I would just comment that what happened in Manitoba by way of this pattern is what happened throughout Canada. It is a function of a) recession, b) the determination of the government at that time to fight the recession deliberately with some deficits to get Manitoba out of the recession, and I think we were the first of the Canadian provinces to get out of the recession. Of course, it is also a function of the very high interest rate policy of the federal government at that time. It did not help anyone in that respect.
What it does reflect is a concern by government for engaging in social programs and health care and education, and so on. Then you get down to the sense of values, and I guess this is what politics is all about, what is important and what do you want to do as a party, what do you want to do as a government in terms of health care, education, and social services?
I can only say that governments I have been associated with have been very active and positive in that respect, but there is a challenge, there is a problem. Manitoba's economy is not that strong and we do--I am using this in a historical sense--I regret that we have almost become the Newfoundland of the West in a sense. We should all regret this. Our economy has not been as strong as it could be or should be. It is difficult, therefore, for provincial governments who are being squeezed by the federal government--I would observe that as well--but also squeezed not only in terms of transfers but also in terms of the economic policies of the federal government, that it is a very great challenge for whoever is in government. I would say that, to be honest and open about it, those are the factors that we have to deal with.
Having said that, Mr. Chairman, I think we should just get on doing the regular review. I do not have any further questions. We could ask a lot of detailed questions administratively and so on, but I do not think we have any, unless the minister wants to explain something that he thinks is worthy of attention of the committee.
Mr. Stefanson: Not really, Mr. Chairman. I think the fact that our debt servicing costs are going down is something that we could all say is positive. It is primarily driven by the fact that we are not adding to our debt and also that interest rates over that period of time did reduce. So that is obviously helping us as well, so those two factors are leading to us having lower debt servicing costs, which I think is certainly a positive for all of us.
Mr. Chairperson: This will conclude S9 then. There is no need to pass any of the items; they are statutory.
We will now revert to 7.3.
Item 7.3. Comptroller (a) Comptroller's Office (1) Salaries and Employee Benefits $124,400.
Mr. Leonard Evans: On page 52, there is reference to a Senior Financial Managers Council, SFMC. I was wondering if the minister could tell us, just what does this council do? Who is this council? This is under Appropriation 7-3 (b) Financial and Management Systems.
Mr. Stefanson: Mr. Chairman, I am pleased to also introduce Mr. Eric Rosenhek, who is our comptroller in Finance and who I believe the member from Brandon East knows. What the Senior Financial Managers Council is, is really a group of the senior financial people from all of the various departments who meet to discuss, obviously, financing issues, accounting issues and so on. It is a grouping of the senior financial people from the various departments within government.
Mr. Leonard Evans: How active is this council? Does it meet when specific problems arise, or is it meeting regularly? Just how active and how effective is this council?
Mr. Stefanson: They meet on a regular, monthly basis. If something critical comes up and they are required to meet, they will meet, but it is on an ongoing regular monthly basis that they meet.
Mr. Leonard Evans: Just passing on, because we are limited for time. I gather we are going to conclude at twelve o'clock. I understand other departments are to be reviewed, so we have to pass along here.
Looking at appropriation 7.(3)(d) Legislation Building Information Systems, here we are talking about computers among other things. I wanted to know whether this is the area of the department that relates to monitoring the agreement with what used to be called Manitoba Data Services. It was subsequently sold, the Crown agency was sold to the private sector and the name has changed several times. I am not sure what the latest name is.
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Mr. Stefanson: No, this is not the section; the Treasury Board is the section. We can certainly deal with that issue when we get to Treasury Board.
Mr. Leonard Evans: In that case, I think I will just pass on from Comptroller to Taxation. I mean, we could spend more time but we do not have the time so we will just go to the Taxation section.
Mr. Chairperson: Resolution 7.3(a) Comptroller's Office (1) Salaries and Employee Benefits $124,400--pass; (2) Other Expenditures $11,000--pass.
7.3.(b) Financial and Management Systems (1) Salaries and Employee Benefits $517,300--pass; (2) Other Expenditures $84,100--pass.
7.3.(c) Disbursements and Accounting (1) Salaries and Employee Benefits $1,991,000--pass; (2) Other Expenditures $1,072,200--pass; (3) Less: Recoverable from other appropriations ($526,600)--pass.
7.3.(d) Legislative Building Information Systems (1) Salaries and Employee Benefits $554,900--pass; (2) Other Expenditures $309,700--pass.
7.3.(e) Internal Audit Services (1) Salaries and Employee Benefits $1,390,200--pass; (2) Other Expenditures $162,300--pass.
7.3.(f) Information Technology Services (1) Salaries and Employee Benefits $729,600--pass; (2) Other Expenditures $68,500.
Resolution 7.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $6,488,600 for Finance, Comptroller, for the fiscal year ended the 31st day of March, 1997.
We will move on to Resolution 7.4 Taxation (a) Management and Research (1) Salaries and Employee Benefits $915,900.
Mr. Leonard Evans: A couple of questions in this area, one not so much relating to administration but more to policy. I would like to take this opportunity to raise a question of what has been called the payroll tax originally and still legally, the health and education levy.
I recall very vividly when the now-Premier (Mr. Filmon) was Leader of the Opposition, where he categorically stated that his government, his party, if elected, would abolish the payroll tax, not increase the level of exemptions only--and there is nothing wrong with that. As a matter of fact, I am sure if the previous government had maintained office, there would have been further raising of the exemption levels so that more and more smaller enterprises would be omitted or eliminated.
Nevertheless, this is shades of GST, you know. Mr. Chretien said, elect me and we are going to eliminate the GST. Mr. Filmon said, elect me and we will eliminate the payroll tax. Well, here we are eight years later and the payroll tax is thriving. As a matter of fact, the numbers are rather interesting in spite of the increased exemptions. Over the years the levy still maintains a fairly high level of funds for the province.
This year it has increased from $193 million in 1995-96, it is increasing, according to the Estimates, to $206.5 million in 1996-97. My question is, is the Minister of Finance now prepared to admit that his government will never, ever get rid of the payroll tax simply because he needs the revenue and it is just too lucrative a source of revenue, of funds, to be able to give up?
Mr. Stefanson: I think the member from Brandon East is baiting me again. That was quite a stretch to try and relate the payroll tax to the GST, I have to tell you, because if you go back to 1988, the thresholder, the exemption level was either $50,000 or $100,000. It was no more than $100,000 for sure. It might have been $50,000 back in 1988. We have increased that exemption seven or 14-fold so that the exemption today is up to $750,000 and by increasing that exemption we have eliminated the payroll tax for over 90 percent of the businesses here in Manitoba.
So in terms of our commitment to eliminate it, we have worked towards eliminating it so that now over 90 percent of those businesses do not pay that payroll tax. We will continue to assess the threshold every budget, which we do. We have consistently over various budgets, out of our nine budgets and many of them increased this exemption, will continue to look at that in terms of what we can do in that area and the day might very well come when the exemption is such that everybody is exempt.
Mr. Chairman, make no mistake. Our commitment to work towards the elimination of the payroll tax has been fulfilled to the level of in excess of 90 percent today, which is a major accomplishment during a period in time when we are also dealing with controlling expenses, not increasing any other major taxes, reducing personal income taxes, having one of the lowest provincial sales tax rates in all of Canada, and so on.
The member for Brandon East and I have got along quite well so far this morning, but that was an enormous stretch to even attempt to relate the payroll tax to the GST. There is absolutely no comparison, whatsoever, to the very unequivocal commitment made by the federal Liberals during the last federal election, and the fact that we all know all that they came back with was the same proposal that the previous Conservative government put forward which was full harmonization.
That has not been the case with what we have done with the payroll tax where we have consistently increased the exemptions from 90 percent of businesses, and I deal with many of the business groups and many of the businesses, and if you talk to organizations like the chambers, the Winnipeg Chamber, the Manitoba Chamber, the Canadian Federation of Independent Business that represents 4,000 to 5,000 small businesses, really the payroll tax is now not an issue with them because most of their members do not pay it. Because 90 percent are not paying it, it is no longer a priority issue with the vast majority of those business groups or those business entities.
Mr. Leonard Evans: Well, the minister can try to wiggle out of this one if he can. He does a pretty good job on a lot of issues, but the Premier's (Mr. Filmon) statement at that time, and I refer you to Hansard, was not to say, elect us and we will eliminate the payroll tax for 90 percent of Manitoba businesses; he said, elect us and we will eliminate the payroll tax.
Of course, that was stated by Mr. Manness, as well, when he was in the opposition, many a time, many an occasion, and if one had the time, you could take all these--and it was an issue in the election too. I think the people understood there would be an elimination, not a reduction, in the number of firms paying.
On that point, Mr. Chairman, I would like to ask the minister just how many firms, approximately, are now paying the payroll tax, or the health and education levy?
Mr. Stefanson: Mr. Chairman, I was remiss at the start of this section that I should have introduced Mr. Barry Draward who is our director of Taxation Management and Research within the Taxation Division.
Today there are approximately 2,200 to 2,400 firms, or organizations, paying the payroll tax.
If I could just take a moment on that previous question that we deferred til this section in terms of the tax appeal, there is a notice of the ability to appeal printed on every assessment notice that is provided, so in that way, individuals or organizations are automatically informed.
Mr. Leonard Evans: Mr. Chairman, well, okay, for at least the major companies, corporations, 2,200, 2,400, the payroll tax continues to exist, and it is an important source of revenue. I can understand any Minister of Finance being very reluctant to say, hey, we can afford to give this up.
The other advantage of the tax, as I understand it, if you can call it an advantage, it does tax national agencies, federal agencies and so on, hopefully, without putting an additional, or too much, burden on our economy as such; that it is a source of, and, therefore, a very important source of revenue for Manitoba.
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Mr. Stefanson: Well, the member is correct in that we do end up taxing some of the national entities, particularly the federal government does pay this tax, I think, as the member knows. Included on the revenue side, of course, is the levy against municipalities, school divisions and so on, but that is also rebated back to those organizations through the funding we provide. So even through the revenue shows the gross revenue of the payroll tax, certainly some of that is rebated directly to the municipalities through our funding provided and to school divisions and so on, but it does include the taxation of the federal government in some of those federal entities, Mr. Chairman.
Mr. Leonard Evans: Without taking too much time, or any very precise number, of the $206.5 million expected from this source this year, just roughly how much would be rebated back to the municipal governments, these other, I think, school boards, he said?
Mr. Stefanson: Mr. Chairman, I will provide that information to the member for Brandon East; that is certainly information we can compile and provide.
Mr. Leonard Evans: Mr. Chairman, talking about the harmonization proposal, for a minute, on the GST, I think this is as an appropriate area as any to discuss this. We have read about the efforts of the federal government to bring in a harmonized program in Atlantic Canada, short of P.E.I., I guess, and, of course, Quebec.
Can the minister advise us whether there is continuing pressure from the federal government to move in the direction of harmonization in Manitoba?
Mr. Stefanson: Mr. Chairman, technically, this falls under federal-provincial relations--which we will get to in a minute--and the only reason I say that is if there has been any recent contact with some of our senior officials. Certainly, over the last few weeks there has been no contact at the political level in terms of the GST. I believe that even discussions at our official levels, there really has not been any discussions of any significance.
As the member for Brandon East knows, a few months ago we were into discussions with the federal government at the same time as the Maritimes, at the same time as Saskatchewan and some of the other provinces. He and I have discussed--and I have said it publicly--that the proposals that were coming forward from the federal government were not acceptable to our government and we do not believe they are in the best interests of Manitobans in terms of the fully harmonized GST.
The concerns were that we do lose revenue under a fully harmonized GST. In the first year alone, we lose some $105 million in revenue. That starts to reduce, but we continue to have a revenue loss for many, many years. Now the federal government does have this formula that would provide some bridge funding for about a four-year period of time but, over the long term, we continue to lose revenue so that has been a concern. But probably the more significant concern that we have--and I know many provinces have--is the shift from business to consumers, that there is a significant shift of anywhere up to as much as about $270 million from business to consumers. That has been the fundamental issue that has been a concern of Manitoba, and our government, and I believe is a similar concern for the provinces from Ontario west.
So for those reasons, harmonization is not in the best interest of Manitobans. We do not support the proposal put forward by the federal government and I have not had any recent discussions. I am sure it will be an issue the federal government will raise probably on an ongoing basis. They now have this Memorandum of Understanding with the three Maritime provinces. It remains to be seen what happens as that Memorandum of Understanding is dealt with over the next--what--three to six months I believe is the time frame. But the proposal that they have put forward is unacceptable to our government and not in the best interest of Manitobans.
Mr. Leonard Evans: Well, this is one area that the minister and I agree on. I commend him for his efforts in fighting this move by the federal government. It is obviously not in Manitoba's interest and also, from sort of a moralistic or a political point of view, I do not see why the federal government should be left off the hook, because that was a clear commitment made to the people of Canada to eliminate the GST, not to harmonize it. Although some people would refer you to the red book where there are qualifications, nevertheless, verbally, orally, the now Prime Minister and Sheila Copps, and others, have stated categorically, equivocally, that their government would eliminate--not harmonize--but eliminate the GST and, for the reasons the minister has stated, is simply not in Manitoba's interest to go along with the harmonization proposals.
I believe that the--and I can appreciate that the federal government is being challenged by debt and deficits--but I believe that there are other ways the federal government could secure additional revenues. Maybe the minister would not agree with me, but there has been suggestions put forward by economists--I know in both the United States and Canada--about a financial transaction tax, something that would be very minor in terms of percentage, say a quarter or 1 percent on financial transactions that could occur--the sale of shares, the sale of bonds. I cannot describe the detail but, in principle, this is what it would involve. Those who advocate it argue that it would raise--virtually zillions of dollars is a great deal of money that could be brought in from that type of levy and that it is a possible tax.
There is a Professor Tobin, who is one person who comes to mind from the United States--I think he is from MIT--who talks about, in terms of global transactions. Now, that is a different element. I am talking about domestic as such.
I know the argument will be, oh, this will ruin the stock market or ruin the bond market or whatever but I rather doubt it, and I rather think the reason the government would not move in that direction is because it does not want to harm some of its friends in business who would be unhappy with that type of a move. But I am just saying, I am just using that as an example. There are other options that the government can follow to provide additional revenues to help it get out of its debt situation. It need not continue to levy this GST that is a real burden. I really think it is very detrimental to the economy. It is detrimental to consumer spending without question. But this is beyond, I appreciate, the minister's particular responsibility.
Mr. Chairperson: Okay. We will pass Resolution 7.4 at this time.
Mr. Leonard Evans: There is another area under Taxation that I would like to ask a couple of questions on, skipping along here. On the question of the big program to interfere with free flow of goods among provinces, I am talking about tobacco interdiction. We all believe in free trade except in terms of tobacco, cigarettes and the like. We had quite a debate about this last time, and I was just wondering if the minister could update us on some elements of the program, just how much--and I guess it is very difficult to make some of these estimates but I wonder if perhaps by way of introduction he could just describe how is the program working. Is this a really effective program? How many staff do we have involved? It says 10 staff years but I am not sure where all the staff are deployed. I know you liaise with the police agencies and so on, but just how is this program functioning at the present time?
Mr. Stefanson: Firstly, in response to that previous question about how much of the federal tax is paid back to school divisions in municipalities, approximately $28 million is paid back to school divisions in municipalities.
In terms of the tobacco initiative, we are very proud of that. I think as the member knows, we have done an excellent job in that area, and the true test is our ability to basically sustain our revenues. Revenues have been going down slightly but that is in keeping with what Stats Canada has been saying just in terms of smoking habits, and on average they have been going down about 3 percent to 3.5 percent. So the real test of the success of our program has been that our revenues are basically hitting our budgets and are on target.
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In terms of the issue of internal trade and free trade, there really is free trade of cigarettes, but all we are expecting is that when they come into our province that they pay the applicable taxes. Now, you can bring in additional quantities of cigarettes into Manitoba but you have to pay the Manitoba provincial taxes on those here in our province where they are going to be consumed. So that has been addressed. In fact, there was a constitutional challenge, I think, as the member knows, to our ability to do that and we won that court case. That has been upheld. That issue has been addressed.
In terms of the program to date, our Taxation special investigations has seized some 21,438 cartons of smuggled cigarettes and brought 164 infractions related to tobacco smuggling to court. Our own staff in co-operation with the RCMP, City of Winnipeg Police and the federal government in part, it has been a very successful program. I think we all agree that we disagree with the decision of the federal government to reduce tobacco taxes in the way they have done it on an uneven basis across Canada, reducing it in some of the eastern provinces and not in the western provinces.
While we are not happy with the decision that they have made in terms of dealing with the whole issue of tobacco smuggling in eastern Canada, I think we can certainly take pride with the job that has taken place here in Manitoba. At the end of the day, Mr. Chairman, the most significant aspect of this entire issue is the attitude of Manitobans, because that really is the telling tale that Manitobans are abiding by the laws and are continuing with their traditional purchasing patterns. That to me is the real compliment here to individual Manitobans who have recognized this issue, recognized what has happened and, of course, through all of this we have had the support of various organizations like the Manitoba Lung Association, the Heart and Stroke Association and so on because they point very directly to the correlation between smoking habits, particularly amongst young people, and the price of cigarettes. It has been a very successful program, with the support of most Manitobans.
Mr. Leonard Evans: I certainly do not disagree with the objectives of the program and it seems to be fairly well managed. Just to comment, you say, well, there is free trade, you just have to pay the tax, but my understanding is ideally when you have free trade there is no tax. It is when you put--you can trade goods, but if a government says, well, you have to pay a tax to bring that good into the country, then that is a form--we usually call it a tariff. The customs duty, and I know this is not per se a customs duty but it is a tax and there is some similarity, so ultimately it is not free in the sense that you bring it in and you do not suffer any tax penalty. Americans or other countries would be glad to have Canadian goods come into the country, depending on the tariff situation and depending on the commodities, providing they paid the customs duty. It is only really free trade if there is no tax incidence, if there is no tax burden levied on the commodity.
Mr. Stefanson: Mr. Chairman, not to prolong this, but I think the better comparison is the retail sales tax, because the retail sales tax across Canada, there are different rates within different provinces and the way the tax is assessed is you pay it in the province where you consume or utilize the product. That is what happens if you bring a product in from elsewhere, from another province into Manitoba. You pay the applicable retail sales tax here in Manitoba so that to me is the more direct comparison when I am referring to the application of the tobacco tax. Every province has a tobacco tax. There are various levels and all we are saying is you can bring the product into Manitoba but pay the applicable taxes in Manitoba.
Mr. Leonard Evans: I have often wondered--there are other ways of coming into Manitoba than by road--you can come in by boat, I guess, from Churchill but what about air smuggling. Is there any attempt to check whether tobacco goods are being brought in by air?
Mr. Stefanson: Mr. Chairman, again we discussed this at length last year. As the member knows I am not about to get into all of the steps that we or the law enforcement agencies take, but we definitely do take steps at airports and all the various points of entry into Manitoba in terms of dealing with this issue. All other provinces in western Canada are also taking various steps, and we work co-operatively with them to obviously share information and learn from each other the kinds of things that we are doing.
I guess, as I said at the outset, the real test of all of this is in our revenues, that our revenues are basically holding and so on. We are very confident that there is very little illegal activity being allowed to take place here in our province. I could not stand up and say absolutely, unequivocally there is none, but I think with the co-operation of all of the law enforcement with what we are doing that it is certainly kept to an absolute minimum.
Mr. Leonard Evans: I do not want to rag this around or delay this. I do not have serious concerns except for the life of me I do not see why people who travel in and out of the province often by air could not easily bring a suitcase of cigarettes. I mean we do not have customs officials opening suitcases on domestic flights. That is a possibility. Even if it was for the person's own consumption, he or she may feel that they get a bargain by bringing an extra suitcase and filling it with cigarettes.
Mr. Stefanson: You are right. Without prolonging this, again, there is signage at the airport in terms of the legal requirements here in Manitoba. There is I think a fair degree of knowledge throughout Manitoba on this issue because of all the controversy and some of the initial explanation that government provided when this whole change first took place. As I said, I am not naive enough to suggest that there might not be some isolated incidents, but I firmly believe they are isolated incidents.
I guess I go back to my original comment about Manitobans, that I think Manitobans know what the laws are. They are law-abiding citizens. They know this issue, and they are respecting it. So I would suggest that there is very little of the kind of activity that the member is suggesting could take place.
Mr. Leonard Evans: Mr. Chairman, I hope the minister is right and he may very well be. As I say, I do not have a major disagreement on this but it seemed to me that this was one loophole that could be serious. But as you say, it depends on Manitobans or the people of Canada to be law-abiding, and it is our responsibility for them to know what the laws are.
I am prepared to pass this section and go on to Federal-Provincial, but I would also like to make a suggestion we take maybe a two-minute break and then renew starting with Federal-Provincial Relations. We just have about 40 minutes left.
An Honourable Member: Do you want to pass that section first?
Mr. Leonard Evans: Yes, pass this section. Okay.
Mr. Chairperson: Item 7.4. Taxation (a) Management and Research (1) Salaries and Employee Benefits $915,900--pass; (2) Other Expenditures $101,800--pass.
7.4.(b) Taxation Administration (1) Salaries and Employee Benefits $2,201,400--pass; (2) Other Expenditures $3,258,200--pass.
7.4.(c) Audit (1) Salaries and Employee Benefits $4,897,300--pass; (2) Other Expenditures $711,100--pass.
7.4.(d) Tobacco Interdiction (1) Salaries and Employee Benefits $543,100--pass; (2) Other Expenditures $256,300--pass.
Resolution 7.4: RESOLVED that there be granted to Her Majesty a sum not exceeding $12,885,100 for Finance, Taxation for the fiscal year ending the 31st day of March, 1997.
We will now move on to Resolution 7.5 Federal-Provincial Relations and Research (a) Economic and Federal-Provincial Research (1) Salaries and Employee Benefits $1,053,100.
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Mr. Stefanson: Mr. Chairman, just one of the questions I took as notice a little earlier on the whole issue of Freedom of Information requests for the calendar year 1995, there were 22 applications. I think I indicated 25 previously, and what happened with them is eight were granted, two were denied, nine were withdrawn or abandoned and three were carried forward to 1996. The staff time spent during the calendar year 1995 on Freedom of Information requests was approximately 45 hours.
Mr. Chairperson: Did the honourable minister want to introduce the new staff present at this time?
Mr. Stefanson: Yes, Mr. Chairman, Mr. Ron Neumann, he is our director of Intergovernmental Finance in our Federal-Provincial Relations and Research.
Mr. Leonard Evans: Well, moving right along because we are getting a bit short of time. This is a very interesting part of the department and, of course, has a great challenge of helping prepare Manitoba to fight the good fight with the federal government and, I guess, prepares the government ministers in terms of financial and economic matters in dealing with the federal government and indeed other provinces.
I understand there is a Premiers' conference coming up shortly and I wonder if the minister can advise, what does he see the major policy areas that affect Manitoba that would be brought up? Can he just briefly tell us what Manitoba has to face?
Mr. Stefanson: Mr. Chairman, I do not think it is appropriate for me to be speaking about the issues that the Premier (Mr. Filmon) and Premiers across Canada and the Prime Minister will be addressing at their meeting in June. That is certainly an issue that our Premier can and will be speaking to in terms of what the agenda will be, what the items will be and what Manitoba's position will be.
Obviously, within this section, within our areas of responsibility there are issues that are important to the province and the government of Manitoba. One of the most immediate issues is the whole issue of the Canada Pension Plan. I think, as the member for Brandon East knows, that is an issue that has to be addressed during this calendar year in terms of what changes, if any, are going to take place with the Canada Pension Plan. The whole issue of the change now to the Canada Health and social transfer is an issue before us in terms of the future funding formulas, arrangements under that . . . formula because they replaced two previous programs, the Canada Assistance Plan and the established program financing program.
Those are some of the issues. Obviously GST, as we have already discussed, will continue I am sure to be an issue that surfaces periodically over the next weeks and months and possibly even years. Those are some of the kinds of issues that are facing us as a government and have a direct impact on this division of the Department of Finance.
Mr. Leonard Evans: I appreciate it is a Premiers' conference but usually financial matters are among those discussed, and I would imagine the Prime Minister will take the opportunity to again attempt to persuade provinces such as Manitoba to engage in harmonization. I just hope, if the minister is there or if he is briefing our Premier, that we should hang tough on this whole area of opposing harmonization.
On transfers, is there any hope of--do we have any proposals, and again, I do not want to put you in an awkward position, but is there any hope that we can get the federal government to back off its cuts in social transfers to the provinces? Will there be an opportunity for the provinces, Manitoba perhaps with other provinces, to make a plea to increase and maintain social transfers as opposed to the program that is now laid out which is disastrous for most provinces?
Mr. Stefanson: That certainly has been an issue that we have continued to press the federal government on, as the member for Brandon East (Mr. Leonard Evans) knows. We support the federal government getting their own financial house in order, but we obviously disagree with the priorities that they have established. Again, as we all know, over three-quarters of their reductions in spending in their last budget have been in the areas of transfers to provinces for health, post-secondary education, and support to families. So we have consistently pressed the federal government. We will continue to do that.
We are in the process of preparing a western Finance minister's report which will be provided for the Western Premiers' Conference which is coming up next week. I am sure that will be an issue that will be addressed and referred to in that report. We have consistently referred that report to the national meeting of Finance ministers, and actually we are meeting as Finance ministers later in June, primarily with Canada Pension on the agenda, but I am sure we will have some discussions again about the Canada Health and Social Transfer. So we will continue to press the federal government on that issue in terms of the fact that we disagree with the decisions they have made, the magnitude of reductions that they have made in those areas, and encourage them to continue to reconsider.
Having said that, Mr. Chairman, we saw in Mr. Martin's last budget that he has now laid out a funding proposal to the year 2000 and certainly indicated what their intentions are, but that is not to say that we will not continue to press them to indicate that we think it is wrong and that they should be making some adjustments in that funding area.
Mr. Leonard Evans: Yes, well, the budget document, last year, the '96 Manitoba budget document does outline the reductions that we face. I do not know whether there is any hope whatsoever in getting the federal government to change its position in this matter, but it seems to me that one has to continue to put the case forward. It is so convenient for the federal government to do this because they are effectively hurting health and education programs in this country, but they are way behind the front lines, and many people do not understand that it is, in many cases, federal cuts that are hurting these programs delivered by the provinces across the country.
Specifically about the CPP, just briefly, what is Manitoba's position on the CPP issue?
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Mr. Stefanson: Mr. Chairman, we are in the process of some consultations and preparing our position on the entire issue. We participated in some of the hearings that took place here in Manitoba, here in Winnipeg and out in Brandon. The concerns are that under the current funding arrangement in the actuarial projection is that by the year about 2010 or 2015 what minimal surplus is there of about $40 billion might very well be used up. But probably the greater concern is that under the current projection of what will happen to rates by about the year 2020 to 2030, the projection is that the combined rates--as we know, right now employees and employers contribute to Canada Pension, and today the combined rate, I believe, is 5.6 percent. The actuarial projections show that by the year about 2025 or 2030 that would go up to a combined rate of in excess of 14 percent. Clearly, that is something that we do not believe is fair for future generations and would be something that probably is not sustainable. If you add that on top of unemployment insurance programs, income taxes, everything else, it would be an onerous pressure on individuals, on businesses, and so on.
So the view has been, certainly of our government, and I believe of other governments, to look at all elements of Canada Pension Plan. I think we would acknowledge that Canada Pension Plan has gone from being a retirement pension plan to being a disability fund, to being a death benefit fund, and so on. So we are looking at all aspects of the benefit package, where benefits can be adjusted as being one element to pull down the future rate increases that are required. We are also looking at ways of maximizing the returns on the money that will be accumulating as money ideally accumulates in the Canada Pension Plan.
So we are really looking at all aspects of minimizing this growth in rates because we do not support allowing rates to go up to in excess of 14 percent and clearly believe that rates have to be kept down to a much lower level than a combined 14 percent. We are also looking at other areas within that whole issue of indexing and the Canada Pension Plan, the whole issue of the relationship to the unemployment insurance program and what is happening with that program because that is another program that employers and employees contribute to. So we will be formulating a much more definitive position over the course of this year as we gather information from Manitobans, our own assessment, and so on.
We will be meeting in June as Finance ministers, but we will not be making any definitive final decisions until the fall of this year. This next meeting is a chance to share some information in terms of where we are at on the entire issue.
Mr. Leonard Evans: Well, I have not had a chance to read the document, but I understand the Winnipeg Chamber of Commerce is coming out with some very strong statements that would water down the CPP. I was wondering if the minister has had a chance to see their position and whether he agrees with it or not.
Mr. Stefanson: Mr. Chairman, I have not read the Winnipeg Chamber report yet. I certainly will read it, and we are being provided with a copy of it. We have been encouraging all kinds of organizations and individuals to give us their comments. I mean we have really been encouraging Manitobans to take an interest in this very important issue and to give us their views on the issue. But what we have been hearing to date is that there is an awful lot of support for the Canada Pension Plan, but there is also an awful lot of support for making it sustainable in the long term--plain and simple.
Mr. Leonard Evans: Well, at the extreme end, of course, there are people in this country who would like to see the CPP totally eliminated, and I think that is absolutely unacceptable, and I believe the minister has stated publicly that he does not agree with that position. It has been put forward by many organizations, the insurance industry, certain financial businesses are very interested in being able to offer private plans, some RSPs and so on, if no CPP, but this would take a long time to analyze and discuss. I do not think it is in the national or the provincial interests to have this very important pension plan, which has also become a disability plan, whatever, to be eliminated. Changes, I suppose, if necessary, but hopefully allowing it to maintain its role as a very key element in providing people with pension funds.
The minister touched briefly on the question of indexing. I hope the minister will not take a position against indexing of the benefits to protect against inflation. Without that indexing, what you are doing is virtually reducing the real benefits of any pension plan if you allow inflation to erode the pension. I have a friend, an elderly gentleman, I think he is about 92 now, and he had a very senior position with Hudson Bay Mining and Smelting, I think he was the general manager. He said, Len, when I retired at 65, I had a real good pension, and I was sitting on top of the world, Hudson Bay Mining and Smelting pension, he said, but you know he was blessed with longevity. He has lived almost 30 years from his retirement period, and that pension means very little to him. I guess he is more dependent now on the Old Age Pension, and he may even be getting some Guaranteed Income Supplement, if you can believe that. Here is a senior person with a good pension, but that was 30 years ago, and look what inflation has done to it. I think it is very vital to maintain an indexing system for any pension plan.
Mr. Stefanson: Mr. Chairman, well, the member for Brandon East, in his first comments, is right that we do support the Canada Pension Plan and recognize the benefits and the need for it and are committed to working towards fixing it to be sure it is sustainable for future generations. I referred to the issue of indexing, and I am not for a minute suggesting deindexing the Canada Pension Plan, but I am saying one of the many issues that is referred to or touched on in that report on Canada Pension Plan at this point in time that has to at least be one of the issues we are considering is whether or not it should be fully indexed or partially indexed because the reality is right now the Canada Pension Plan has an unfunded liability of in excess of $500 billion that has to be addressed and right now--
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An Honourable Member: Billion?
Mr. Stefanson: $500 billion--and that is something that because of the pay-as-you-go system right now is geared to be paid by the future generation. So I think there is an argument that at least that issue, the issue of maybe whether it should be partial indexing as opposed to full indexing, should be one of the issues that is on the table.
Similarly, the federal government put out the issue of changing the retirement age from 65 to 67. We have talked about changing the disability benefits, changing the death benefit. I think all of the issues have to be there, and we have not in any way formed a final position as to what is the best blend of adjustments that will make the plan sustainable. I mean our commitment is to make the plan sustainable and fair not only to those that are receiving it today but also for the future generation. I think if I have a criticism of some of the previous governments, it is that this issue probably should have been addressed 10 years ago. I know our Finance minister five years ago pushed aggressively to address it then, and there was not the will or support of many other provincial governments to do that. Finally, there seems to be the will and the recognition that we better get on with addressing this issue to make the plan fair and sustainable.
Mr. Leonard Evans: Well, we have to make the plan sustainable, Mr. Chairman, but there are many, many ways of doing it. I would just hope that the minister will, any suggestions he comes up with will be based on equity and fairness to people because the people who are most dependent on CPP are the average people, people who do not have an opportunity to put a lot of money aside in terms of lifetime savings. The typical working family, I think, their lifetime savings usually ends up in a house. When they are 60, 65 they own a house and that is about it.
Regardless, I just want to repeat that even partial indexing does go a way to effectively reducing the pension in real dollars, in constant dollars, even partial deindexing will do that. So to that extent the benefits begin to diminish through the years. At any rate, this is a big topic, and we do not have the time to get into it all, but I just urge the minister--I am pleased he has got the position that he wants to sustain the CPP, but I trust that any suggestions he makes are based on the principles of fairness and equity.
We do not really have time to get into other areas in this. I would like to talk about economic forecasts and methods of projecting the future of the province, but we do not have time for that, so I would just like to pass on now to the Treasury Board.
Mr. Chairperson: Item 7.5 (a) Economic and Federal-Provincial Research (1) Salaries and Employee Benefits $1,053,100--pass; (2) Other Expenditures $295,200--pass; (b) Manitoba Tax Assistance Office (1) Salaries and Employee Benefits $272,100--pass; (2) Other Expenditures $56,500--pass.
Resolution 7.5: RESOLVED that there be granted to her Majesty a sum not exceeding $1,676,900 for Finance, Federal-Provincial Relations and Research for the fiscal year ending the 31st day of March, 1997.
Item 7.6. Insurance and Risk Management (a) Salaries and Employee Benefits $215,800--pass; (b) Other Expenditures $31,300-pass; (c) Insurance Premiums $1,330,000--pass; (d) Less: Recoverable from other appropriations ($1,330,000)--pass.
Resolution 7.6: RESOLVED that there be granted to Her Majesty a sum not exceeding $247,100 for Finance, Insurance and Risk Management for the fiscal year ending the 31st day of March, 1997.
Item 7.7. Treasury Board Secretariat (a) Salaries and Employee Benefits $2,544,200.
Mr. Leonard Evans: I have a very specific question here. What is the salary of the secretary of the board? I do not think that is delineated, and I can see the salary of the Deputy Minister of Finance, I think, here somewhere, but I am not sure whether I can find--maybe it is here and I have not spotted it, but could the minister enlighten us?
If it is too difficult, we can get that some other time. It is not that critical.
Mr. Stefanson: Mr. Chairman, I am pleased to be joined by Debra Woodgate from the Treasury Board, our manager of Fiscal Planning, and the salary for the secretary to Treasury Board in our '96-97 Estimates is $111,300, which is in line with our senior deputy minister levels of compensation.
Mr. Leonard Evans: The Treasury Board, is this the area that deals with MDS, Manitoba Data Services? I had asked earlier, yes. I wonder if the minister can give us an update then on where we stand. As you know, it was a controversial issue in this House a few years ago. We opposed the sale of MDS. We thought it was a very effective Crown corporation, and it has been privatized. I believe the private ownership has changed, but there was some responsibility, some commitment to the province to maintain jobs, to keep the head office here. I am concerned about those. I do not believe the head office is here anymore, but I thought that was supposed to be in the agreement.
Also, I am particularly concerned about the rates that we are paying MDS, or whatever it is called, STM, for its services, because it seems to me it has a monopoly in this area and we have to be concerned that we are getting value for the money we pay. So I wonder if the minister could comment and update us on this area.
Mr. Stefanson: Mr. Chairman, because of time, I will provide the member with full details on the economic side. ISM, with all the information I have had, have met or exceeded all of the commitments in terms of job creation, in terms of investment in a building in downtown Winnipeg, in terms of investment in research and development at the University of Manitoba, in terms of acquisition and relocation of other companies, all of those kinds of things. They are an excellent corporate citizen and they are contributing very significantly to our economy. So that is the economic side of which I will gladly provide all the details.
On the issue of the contract and the rate, the member will recall that the long-term contract expired December 31 of '94. The province has been extending that on a month-to-month basis pending renegotiation of a longer term contract, and what we have done now is secured terms that link our pricing to declining market rates. So our pricing is directly linked to the market rates. It assures flexibility to migrate existing mainframe applications to new environments, that we can change our mainframes to a new environment, and it ensures that the province's standards regarding liability and confidentiality are not compromised. The new contract, with provision to amend the rates annually--so on an annual basis, we have an independent assessment of the rates and we can adjust the rates annually. We also have no commitment to volume, that we can adjust the volume on an as-needed basis.
So that is the arrangement that we now have with ISM, and that independent assessment that was done--to give the member an indication of what has happened to rates for the year '95-96--we have a rate reduction of approximately 25 percent. So we now have a contract in place that allows for that rate adjustment, allows for volume adjustments and to meet our needs.
I think it is an excellent arrangement, Mr. Chairman, that will serve us very well.
Mr. Leonard Evans: But as I understand it, what we have done is given virtual monopoly to this company, virtually as a monopoly in providing these kinds of services to the Manitoba government, and it seems to me it is very important, therefore, that we continually look at other options in terms of getting service from other companies.
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The rate reduction you talk about, of course, is essentially a function I think of technology. Technology improvement enables a rate reduction. I am not an expert in this area. I stand to be corrected if I am wrong, but you know, if you have a given monopoly and a given guarantee of revenue, you can do a lot of things, you know. It is easy to give grants to the university and so on when you have a customer that you can rely on who is supplying you with a good chunk of your revenue.
On the part of the building, Mr. Chairman, that building--there was going to be a new building anyway. MDS was about to put up a new building, and it had to be put up for physical reasons. So I do not look upon that as any sort of additional gain because we privatized this system. At any rate, I am glad that the government is seemingly paying attention to the contract, that it has renegotiated, that it has obtained rate reductions. So this is fine, but I really worry when a company is given virtually a monopoly of an area, and therefore it is like giving the banking services to one bank. It seems to me critical the government should be looking around for other companies.
Also, it is not beyond the realm of possibility that some of this could be done by other parts of the government as well. I mean other agencies in government can buy equipment. Manitoba Data Services used to be part of MTS. It was the Lyon government that carved off MDS from the MTS corporate structure and made it a separate entity, a separate Crown agency, which worked very well. It paid its way, because it served the government departments, the government departments paid it, and it seemed to work well. It seemed to be very efficient. I ask, therefore, is it not beyond the realm of possibility that the government could do some of this work in-house, if not all? Could some of this not be done in-house by some other agency of government?
Mr. Stefanson: Mr. Chairman, on the point of the building I will not belabour it, but, obviously, ISM built the building with their own finances without taxpayer support.
Mr. Leonard Evans: The taxpayers are paying.
Mr. Stefanson: The government of Manitoba is one customer, but we are only one customer. I think that is important to recognize as well, and I think that is why to pull any of this internal to government would not be as cost-effective as dealing with an external company, that we are one client and then they have the economies and scale in terms of providing the service.
I want to just remind the member, which I touched on, our clear objectives are to significantly reduce our mainframe processing costs and to establish a mechanism where prices could be adjusted annually to reflect changes and declines in market. So he seems to be in support of that principle. Also, to build in the flexibility that allows the province to migrate applications to new client-server systems with advance notice on a tender basis, so the province does intend to move away from the mainframe technologies to client-server technologies on a competitive basis, but obviously that is something we will do systematically and sequentially over a period of time to be sure that we sustain the services we require. We are getting the best rates available through this independent assessment. We will be able to adjust volumes and we are able to move away. I would say at the end of the day, as I have said, I think we have a very good arrangement with them, and we also have the economic benefits here in our province of what they are doing.
Mr. Leonard Evans: Yes, specifically, would the minister know, of the revenue earned by this company, what percentage is from the Manitoba government?
Mr. Stefanson: Mr. Chairman, our total payments for services approximate $5 million as a government. I do not have ISM's financial statements in terms of what that represents as a percentage of their total revenue, but our contractual arrangements approximate $5 million. They, obviously, have contracts with Crowns and other organizations and so on.
Mr. Leonard Evans: Well, if a financial report was available from ISM, we could just look at its total revenue and maybe make a calculation.
Could the minister verify that the headquarters of ISM is not in Manitoba now, it has been moved out of Winnipeg?
Mr. Stefanson: Mr. Chairman, I know ISM is owned by another entity. It is a subsidiary of another entity outside of Manitoba. I believe the ISM division is still headquartered here, but I will confirm that issue and get back to the member for Brandon East.
I think that more importantly--and I will provide him with all the economic numbers--is that there were certain job targets and so on and investment targets that were put in place when the deal was transacted with ISM. Again, the best information I have is they have not only met all of those, in many cases, they have exceeded them, and that at the end of the day is the most important issue. If the member is thinking that we have lost some jobs because of a company owning this subsidiary, that is not the case. I mean, the jobs are here in Manitoba and the job targets are in fact being met and, in many cases, exceeded.
Mr. Leonard Evans: Mr. Chairman, I wonder if the minister--because we do not have time to discuss this further--could give me a report or some summary of the relationship between the Manitoba government and ISM explaining the degree of business they do for us, the type of business, what other options we are looking at for other alternatives and so on. The minister touched on some of these, but I wonder if he could undertake to have the staff do this. We are not asking for any state secrets or anything, but I think it is in the public interest that we have a report on this area because it is a large amount of expenditure and it is an area of change. I would appreciate that type of a report.
Mr. Stefanson: Yes, Mr. Chairman, I will provide that for the member for Brandon East.
Mr. Chairperson: Shall the item pass?
Mr. Leonard Evans: Because we are running out of time, I think we may have to go just a few minutes over 12. Could there not be agreement--
Mr. Chairperson: At 12 noon, the committee rises.
Mr. Leonard Evans: At which time?
Mr. Chairperson: At 12 noon, the committee will rise whether we are completed or not.
Point of Order
Mr. Leonard Evans: On a point of order, Mr. Chairman. I thought, by arrangement, you could not see the clock for a few minutes because there is--the only other option is we would come back at 2:30 is it, or whenever the question period is over.
Mr. Chairperson: Well, this committee does not return again until it is back in the order. This afternoon, we will be dealing with a different department--[interjection] The committee does not have the power to do that except on Friday under the new rules.
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Mr. Leonard Evans: Well, I am prepared to pass this section. This is regrettable, Mr. Chair, because I think the minister and I both thought that we could spend another five or 10 minutes and conclude the entire department.
Mr. Chairperson: The committee was only granted leave to sit from 9 a.m. till 12 noon. We do not have any other ability to change those rules unless it is Friday.
Point of Order
Mr. Leonard Evans: On a point of order again, is it possible for the Chair to consult with the government House leader (Mr. Ernst) to see whether an allocation of a short period of time can be allocated this afternoon before the next department begins?
Mr. Chairperson: The House leaders will have the opportunity before we come back to make that decision. He will be making clarifications before we go back into committee.
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Mr. Chairperson: The hour being 12 noon, committee rise. Call in the Speaker.
Order, please. I would like to make a little correction here. We are dealing with Friday rules at this time. Is it the will of the committee that I not see the clock? [agreed]
Mr. Leonard Evans: I guess we could pass this area then, Mr. Chairman.
Mr. Chairperson: Item 7.7. Treasury Board Secretariat (a) Salaries and Employee Benefits $2,544,200--pass; (b) Other Expenditures $523,500--pass.
7.8. Tax Credit Payments $192,500,000--pass.
Resolution 7.7: RESOLVED that there be granted to Her Majesty a sum not exceeding $3,067,700 for Finance, Treasury Board Secretariat, for the fiscal year ending the 31st day of March, 1997.
Resolution 7.8: RESOLVED that there be granted to Her Majesty a sum not exceeding $192,500,000 for Finance, Tax Credit Payments, for the fiscal year ending the 31st day of March, 1997.
This concludes the Department of Finance other than the Minister's Salary. We will move to the Minister's Salary, Resolution 7.1, at this time.
Point of Order
Mr. Leonard Evans: A point of order. Before the Minister's Salary, what about the various programs here that are listed? Would these not be done prior to the Minister's Salary? I guess it does not really matter, but there are half a dozen important items here that have to be--
Mr. Chairperson: The other items will come forward after the Minister's Salary has been concluded. Those are separate from the Department of Finance as such. We will come back to separate resolutions for those other items.
Point of Order
Mr. Leonard Evans: Also, on a point of order, we had some questions on special operating agencies. Those are not listed as a separate item, but before we proceed then--and I could ask this under the Minister's Salary I suppose--but I believe special operating agencies are co-ordinated by the Treasury Board. Is that correct?
Mr. Chairperson: That we will have to get clarification from the minister on.
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Mr. Stefanson: The member is partly correct. There is a special operating agency co-ordinator housed in Treasury Board, so if he wants to talk sort of conceptually about SOAs and so on, that is fine, but the individual SOAs are all line items within individual departments. If he were to want to get into the specifics of fleet vehicles or any of the individuals, really those all fall within the individual departments. The concept, financing ideas, that is fine, but individual questions about each of the individual SOAs really are appropriate for the individual departments.
Mr. Leonard Evans: As I read the documents that the minister tabled in the House, there is this responsibility of co-ordination by his department of these agencies and there is an overview that they have to take. I am wondering, because of the time constraints, whether I could simply ask this, whether he would undertake to give us a report on the extent to which the agencies that now exist have met their key targets in 1995-96. They are listed here. Those are the targets. Could we get a report to what extent has each agency met those targets. If he could undertake to do that, then we could pass on.
Mr. Stefanson: Yes, we will undertake to provide that.
Mr. Chairperson: At this time we would ask the minister's staff to leave the Chamber and we will deal with the minister's salary.
7.1.(a) Minister's Salary $25,200. Shall it pass?
Mr. Leonard Evans: A couple of questions that I would like to put to the minister and, again, we have many, many more but we are getting out of time here. One that I am concerned about is spending taxpayers money for government advertising. There is a line there, it is quite legitimate and ethical to inform the public of new programs or changes in programs, you know, we have established Pharmacare, we are changing Pharmacare, so people have to know about it.
But there are other kinds of advertising that are more general, almost political or quasi-political, and this became an issue a couple of years ago, and I recall the Minister of Finance undertook to prepare guidelines on advertising by this government. My question is, have these guidelines been prepared for the public?
Mr. Stefanson: The member is partly correct. Yes, I did undertake to review the whole issue of the establishment of guidelines. The difficulty is, they literally do not exist anywhere else within government. They do not exist with any other provincial governments across Canada that I am aware of and they do not exist with the federal government, so in many respects we are wading into new areas and new territory. I guess the ultimate judgment, the ultimate test in many respects of whether a government crosses that line is right here in this Chamber. We are held accountable by the member and members opposite on expenditures that we put in place for informing the public. This is an area that we can be questioned on that, obviously through the media and so on, whether or not we have crossed a line.
At this particular point in time, we have continued to look at what other jurisdictions are doing, trying to compile some information, determine whether or not guidelines are required and or needed and, if so, what type, but we have obviously not in any way finalized anything that is deemed to be appropriate. As I say, there is no model to be following, so to speak, in that area.
If the member has examples that he is aware of, of other jurisdiction, other provinces, other governments, I would welcome looking at them, but I think the ultimate judgment is the member and members opposite and the public in terms of whether or not we cross the line. I do not believe that we have. I think we have not done an awful lot of advertising or promotion of all kinds of government programs. I think we strike a reasonable balance in that area, but we could be held accountable in this Chamber, Mr. Chairman.
Mr. Leonard Evans: Mr. Chairman, I can, if I had the time, bring forward examples of what I would consider political advertising. I remember specifically the GWE announcement in Brandon, this telemarketing company, big front-page story, big headlines, nice picture of the Premier (Mr. Filmon) shaking hands with the president of the company and then, a few days later, a great big ad in the Brandon Sun, the same picture almost, the Premier and that shaking hands--you know, Filmon brings jobs to Brandon or to Manitoba. I mean that was paid for by the taxpayer. That was pure political advertising. There were other papers around the province that similar types of ads occurred in the area of industrial development announcements, and I think that is regrettable.
So I gather what the minister is telling us is that there will not be any guidelines prepared on this question of political advertising.
Mr. Stefanson: Not at this time certainly. I would not necessarily say not at some point in time, but as of now, I am not at the point that I have any guidelines to recommend to my colleagues or to this Legislature that would be appropriate, but that is not to say that might not be the case as we continue to look at it, as I think some governments at least are starting to look at it. I would really encourage the member, and I know we are all limited in terms of how much time we can spend on various issues, but if he has any examples of governments that have anything in place, to provide them to me and I would gladly take a look at how reasonable they are or how they might apply. So at this particular point in time, no, Mr. Chairman.
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Mr. Leonard Evans: Well, we have not got time to pursue this further, but one way of starting is to look at what actually has happened and ask yourself whether those were appropriate. Regardless of what is going on elsewhere, one could, it seems to me, come up with some guidelines. However, suffice it to note that we will not be getting any guidelines, which is regrettable.
Just one other area. I, for some years, served as Chair of the Public Accounts committee and for various reasons decided to step down from that position. I may be attending these committees regularly in the future, even though I may not be an official member. Like any member of the Assembly, I can attend committee meetings. I would like to know, when will the Public Accounts committee meet again?
Mr. Stefanson: I have to admit I was sorry to see the member step down from Public Accounts because I personally felt that he did a good job chairing that committee and was fair, reasonable and balanced as a Chair of that committee. That is not a reflection on the new Chair by any means; I do not want to leave that impression whatsoever, but the member for Brandon East did a good job of chairing that committee I thought.
As he knows, I am sure, and one of his colleagues is well aware, we have met twice in the last handful of weeks. There is a little bit of controversy over when and whether we should have our next meeting. That will be an issue that will be decided and resolved as has always been the case between the House leaders. I do not anticipate that there will be another meeting while we are in this session. We are due to adjourn next Thursday. I do not anticipate we will have another meeting prior to then, and most likely I would expect that it might very well be when we return for the start of our fall session, but ultimately it is a decision of our House leader in conjunction with the official opposition House leader.
Mr. Leonard Evans: I would just like to make this point that my understanding is that most other provinces have more active Public Accounts committees than we do. They meet more frequently; they meet extensively. Also, the Chair of the committee in some jurisdictions has the right to call the meetings.
I know this has been discussed in the past. I discussed it with Mr. Manness, the former minister, of the right of the Chair, who by custom and tradition is from the opposition party. I am not suggesting call it in an irresponsible fashion, call it in consultation with the House leaders and so on. I also pleaded with members to come up with a written agenda so that we could have an orderly, rational discussion of items so that the committee could do its job.
I felt that we in Manitoba--it does not matter who is in government--I think this is one committee that has not been utilized, and it goes back to our administration as well. I do not think it has been utilized to the extent that it can and should be looking carefully at detail. And it need not be political in the sense that we are always--I mean it is so easy to get into the hot political issue of the day, funding of the Jets or whatever, but beyond that, I mean there are important questions of holding the whole government apparatus accountable for specific programs, spending millions of dollars in various ways.
I guess all I am doing is making a plea for more, rather than less, meetings of the Public Accounts committee and to utilize that committee in a more thorough fashion for the benefit of the taxpayers of this province. I say that regardless of who is in government. So on that basis, Mr. Chair, I think we could pass this item and then go on to the various Enabling Votes.
Mr. Chairperson: Shall the item pass? The item is accordingly passed.
Resolution 7.1: RESOLVED that there be granted to Her Majesty a sum not exceeding $927,100 for Finance, Administration and Finance, for the fiscal year ending the 31st day of March, 1997.
What is the will of the committee at this time? Are we going to just pass all the Enabling Votes?
Point of Order
Mr. Leonard Evans: On a point of order, Mr. Chair, which page are we looking at in the Estimates book for Community Support Programs, right? This is all at the back.
Mr. Chairperson: The first one is on page 23 of the Estimates book. It was Resolution 33.1. So we are on 1. Community Support Programs (a) Administration and Grants (1) Salaries and Employee Benefits.