Mr. Gary Doer (Leader of the Opposition): Madam Speaker, in testimony produced to the CRTC over the last number of weeks, the telephone system and Mr. Nugent described the dividends that are paid by the existing nonprofit, publicly owned corporation to Manitobans in the form of accessible service and low rates across the province of Manitoba. We know that a private corporation will have additional costs because it will have to provide dividends to private investors. We know the example of Telus in Alberta where the rates are going up $6 in 1996 per month and $6 effective January 1, 1997, and according to the CRTC that is partially due to the return to private investors.

I would like to know from the Premier, what is the projected rate of dividends over the next five years in the Manitoba Telephone System to the private investors and what is the impact on the rates for the consumers in the province?

* (1340)

Hon. Gary Filmon (Premier): Madam Speaker, I know that the member opposite is running out of material, but that is something that has been asked numerous times in this Legislature and the same misinformation has been put on the record numerous times by the Leader of the Opposition.

I have indicated to him that if you look at rate comparisons, particularly for exchanges in Rate Groups 1 and 2 which basically represent rural communities and smaller service areas, at the present time Manitoba Telephone System is right in the middle of each of the rate groups, and in each case there are four telephone systems that provide service at lower costs in those same similar rate groups across Canada in their provinces, and in each case every one of the four that provides cheaper rates is a privately owned telephone company in other parts of Canada.

Madam Speaker, I also indicated to him that with respect to the return on investment, certainly no final decision has been made with respect to what the dividend rate might be--that is something that will follow with the prospectus--but I can indicate to him that it is very, very likely that the rate of return by way of dividend will be less than the interest that is being paid on the debt that will be replaced by equity in the sale of Manitoba Telephone System, which would be an advantage obviously to the ratepayers of the new privatized telephone company.

Mr. Doer: Madam Speaker, I would ask the Premier to listen to the question instead of just opening his briefing book to yesterday's question, and perhaps he should stop using examples of party rates in British Columbia to nonparty rates here in Manitoba. Perhaps he should do his homework and look at a recent edition of ECHO bulletin from the Manitoba Telephone System that outlined the lowest rates in Canada right here in Manitoba, and perhaps he would like to look at what his own department and Crown corporation are saying.

Madam Speaker, it has been reported that on an $800-million issue, there will be a possible 6 percent guarantee in the first year which would be between $48 million and $50 million in terms of a dividend to the investors. Now surely the government has information over the next five years about how much money will be paid out in dividends. The Premier alleges that this will be lower than the interest rates.

Can the Premier tell us and table with Manitobans, what will the dividend be for the private investors? The only people whom the Premier is interested in are investors and brokers, not the people of this province. Can he tell us how much we are going to have to pay for the speculators, and can he give us those numbers in terms of what it means to rates here in Manitoba? We know what has happened in Alberta. It has gone up $6 a month. The Premier has a responsibility of tabling those numbers here for dividends in the province of Manitoba.

Mr. Filmon: Madam Speaker, the only echo is the constant repetition of the same questions from the member opposite. I keep hearing an echo day after day, week after week in this House as the member echoes over and over again the same questions.

Madam Speaker, if the member opposite will listen I will tell him that if the MTS pays a dividend rate of 5 percent, that would compare to paying currently between 7 and 7.5 percent interest on the debt, so obviously there is a saving of over 2 percent of paying a dividend on the equity versus paying interest on the debt. That is cheaper. That is an advantage to the ratepayers of MTS, and that is what is expected to happen with the privatization.

Mr. Gary Doer (Leader of the Opposition): You will understand why we have a great deal of difficulty in trusting the Premier on anything to deal with the telephone system, because he is the very same person who promised that he would not sell the telephone system before the last election campaign. His candidates were promising that they would not sell the phone system and the only way, perhaps the best way for the Premier to keep his word and have some legitimacy, is to have a referendum but the members opposite do not have the guts to do it.

Madam Speaker, I have asked a question. Can the Premier today table the five-year projections for dividends for the private investors and can he table the facts today, that surely he has in front of him and all Manitobans are entitled to, of what the impact of those dividends to his good friends, the private investors, what those impacts will be on all Manitobans rates? We do not want his words; we want the facts. The Premier has a responsibility to table those. Why will he not table them today?

* (1345)

Hon. Gary Filmon (Premier): Madam Speaker, I reject totally all of the dishonest information that is put forward by the member opposite in his preamble. I will tell him very straightforwardly that one cannot say with any certainty what the exact rates are going to be, because they are normally in a relationship to what the interest rates are.

But what I can say is that the dividend rates invariably are less than the interest that would be paid on the same amount of debt, so instead of having 7 to 7.5 percent interest on the debt, they may be paying 5 to 5.5 percent return on equity by way of a dividend, which is a saving to the ratepayer which implies less cost to the ratepayer. I think he should get it through his head, and he should listen instead of chirping away as he always does.

Madam Speaker: Prior to recognizing the honourable member for Thompson, I would like to draw the members' attention very quickly to the public gallery where we have 25 students from Keystone Christian School under the direction of Mr. Ray Gunther and David Remple. This school is located in the constituency of the honourable member for Wellington (Ms. Barrett).

On behalf of all honourable members, I welcome you this afternoon.

Mr. Steve Ashton (Thompson): Madam Speaker, it is becoming increasingly clear that there will be winners and losers out of the sale of MTS. The winners will include the stockbrokers, the Conservative MLAs who want to buy shares, even though that is a clear conflict of interest, and experience has shown that in areas such as Alberta, senior management. Losers will be Manitobans and many of the existing employees and people who are retired.

I would like to table some information to the House, including the expense transactions for the four newly hired presidents which indicate that, in the case of one of the newly hired presidents, $38,000 was spent on moving expenses between December and May 31 and a total of $66,000 in expenses for the same five-month period. I would like to ask the Minister responsible for MTS if he can indicate whether he feels those expenses are legitimate and also whether he could confirm that one of the big winners under the sale of MTS will be the senior managers at MTS who in other provinces, including Alberta, got dramatically increased salaries and expenses as a result of the privatization.

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, approximately a year ago the Manitoba Telephone System went through a reorganization and divided itself up into three different companies with a holding company. A nationwide competition was held to hire the respective presidents that they hired and entered into contractual negotiations on salary and moving expenses. I would interpret those figures as being within what we might call industry norms for those kinds of actions and negotiated between the respected people that were hired and the corporation.

Mr. Steve Ashton (Thompson): Madam Speaker, if the minister is suggesting that $38,000 moving expenses is within industry norms, I am also wondering how he justifies the fact that 91 former employees, in this case the losers in this equation--

An Honourable Member: Is there a question here?

Mr. Ashton: Yes, there is a question. I hope the minister will answer. Ninety-one employees were laid off, were given a severance package, were told at the time in 1995 there would be no further severance package. How does the minister explain that those 91 people found out within five months there was a further package which would have resulted in a severance package of 100 percent higher in many cases? How does he explain to the many losers, the 91 former employees--

* (1350)

Madam Speaker: Order, please. The question has been put.

Hon. Glen Findlay (Minister responsible for the administration of The Manitoba Telephone Act): Madam Speaker, in the course of the last five or six years the telephone system has reduced its workforce by some 1,400 people with very significant packages that allowed them to retire in some dignity, and the total employment level at MTS is very similar to SaskTel at this time.

Madam Speaker: The honourable member for Thompson, with a final supplementary question.

Mr. Ashton: As a final supplementary, Madam Speaker, I want to ask again to the minister, on behalf of the 91 former employees, the victims of this preprivatization exercise at MTS, how the minister can justify the fact that they made that decision to retire early based on a memo from the vice-president of Human Resources, Denis Sutton, that stated there would be no further severance package, when in fact five months later there were severance packages offered that were 100 percent higher. How does he explain how that is fair?

Mr. Findlay: Madam Speaker, the telephone corporation has made decisions over the last number of years and offered packages, I believe, on an annual basis, to assist people who reach a certain age or want to move on to another career to leave the telephone system in a very responsible manner.

Mr. Tim Sale (Crescentwood): Madam Speaker, when a member puts on record information that is incorrect time after time after time, either he is deliberately misleading the House or he does not understand.

Madam Speaker, will the Premier admit that dividends are paid on after-tax income, after the implications of tax, and return in the form of debt payments is paid with before-tax dollars, but he has persistently and repeatedly confused apples and oranges in order to confuse Manitobans?

Madam Speaker: Order, please. I would remind the honourable member for Crescentwood to pick and choose his words carefully. Words used in his question have been ruled unparliamentary on several occasions.

Hon. Gary Filmon (Premier): Madam Speaker, then given the fact that we have probably just in this session of the Legislature found the member for Crescentwood to be wrong on at least a half-dozen occasions, we have to assume that he was either deliberately misleading or that he was ill-informed or ignorant. Of course, we can take our choice as to which; they probably all apply in his case.

Madam Speaker, yes, indeed, I am well aware of how dividends are paid on after-tax income. I am also aware that I have placed before this Legislature a response that indicates that because of the favourable tax ruling they have received, the Manitoba Telephone System in a privatized form will not face income taxes for a considerable period of time.

Madam Speaker: Prior to recognizing the honourable member for Crescentwood, I would also remind the honourable First Minister to pick and choose his words carefully.

Mr. Sale: Madam Speaker, is the First Minister then admitting that he has consistently used apples and oranges in this particular exchange and that, in fact, he is now recognizing that return in the form of dividends is with after-tax dollars, that the payment for debt service is pretax and that this has been a specious comparison all along? In other words, is he admitting what I--

Madam Speaker: Order, please. The question has been put.

Mr. Filmon: No, Madam Speaker. If the Manitoba Telephone System is making profits on which it does not have to pay taxes, it will be able to use that to pay dividends at a lesser rate than it currently pays interest on the debt. Now, that may be difficult for the member for Crescentwood to understand, but the fact of the matter is it is accurate.

Mr. Tim Sale (Crescentwood): Madam Speaker, will the First Minister admit that MTS debt costs after privatization are about $52 million, dividend costs are $48 million and that the impact of taxes and other costs of privatization will require rate increases of at least 12 percent even with the favourable tax ruling that has been given by Revenue Canada? Will he put evidence on the record either--

Madam Speaker: Order, please. The question has been put.

Hon. Gary Filmon (Premier): Madam Speaker, in addition to the information that I have put on with respect to the dividends, I will point out that the best advice available from the financial community is that Manitoba Telephone System on its borrowings will save approximately a half of 1 percent on all of the borrowings, so a half of 1 percent on $800 million would be $40 million a year in savings with respect to its borrowing costs. We have talked about that as well, and that is the kind of thing that the member opposite does not take into consideration.

An Honourable Member: Four million dollars.

Mr. Filmon: Madam Speaker, I apologize, $4 million would be the saving less cost in borrowing than the current circumstances of the Manitoba Telephone System.

* (1355)

Madam Speaker: The honourable member for Wellington.

Ms. Becky Barrett (Wellington): Thank you, Madam Speaker.

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please. The honourable member for Wellington has been recognized to pose a question.

Ms. Barrett: Madam Speaker, as a result of a Freedom of Information request that we received recently, there are several very serious questions that we have about the role that IBM played in the Premier's trip to the Atlanta Olympic Games this summer.

I would like to ask the Premier, first of all, why did he make it appear in his comments in the media on August 1 that it was only a chance encounter with Premier McKenna that led to his accepting IBM's hospitality when he knew as early as May and June of 1996 that he was going to participate in the Olympic program sponsored by IBM?

Hon. Gary Filmon (Premier): At no time did I make it appear that it was a chance encounter with Premier McKenna, Madam Speaker.

Ms. Barrett: I would like to ask the Premier if he could perhaps clear up another apparent discrepancy when he explained in the House on September 17 that, and I quote: "I asked for an individual bill" from IBM, when in the Freedom of Information material given to us on October 3, two weeks after the statement in the House, there is absolutely no request from the Premier to IBM for such a bill. I would suggest either the Premier withheld--

Madam Speaker: Order, please. The question has been put.

Mr. Filmon: Madam Speaker, because I knew that this kind of mudslinging would be occurring, I phoned directly to the vice-president of IBM and requested the bill. It was sent and I paid it in full.

* (1400)

Madam Speaker: The honourable member for Wellington, with a final supplementary question.

Ms. Barrett: Thank you, Madam Speaker. I will table a letter from the IBM office of the president and chief executive officer of August 9 which states, and I quote: I understand from press reports that you would like us to provide--

Madam Speaker: Order, please. I interrupted because the honourable member was not abiding by the rules. There is to be no preamble on a final supplementary question.

The honourable member for Wellington, to quickly pose a question.

Ms. Barrett: Thank you, Madam Speaker. I would like to ask the Premier if the chief executive officer of the International Business Machines company was misrepresenting the situation when he wrote on August 9 that as a result of a press statement, obviously from the Winnipeg press, he was going to prepare a bill for expenses incurred for the Premier and Mrs. Filmon for their time in Atlanta as IBM's guests--an unusual word, I might add, "guests."

Mr. Filmon: Madam Speaker, clearly everything was very well canvassed publicly. I had interviews with people at which I openly stated what had happened and also gave all the information to all the questions. I also spoke directly to the vice-president of government relations for IBM. An invoice was sent out, and I paid it in full.

Mr. Neil Gaudry (St. Boniface): My question is for the First Minister. In light of what the First Minister said in this House yesterday and since there is no extra cost to Manitoba taxpayers for placing the word "Bienvenue" on the new Manitoba licence plate and as a sign of good will towards the great debate of national unity, does the First Minister accept to introduce a motion to have the word "Bienvenue" on the new Manitoba licence plate and to hold a free vote on it in this House?

Hon. Gary Filmon (Premier): Madam Speaker, I have indicated to the member opposite, and I indicate it publicly in the course of this discussion, that our government has done more to provide services to our Francophone minority than any government in the history of this province. In doing so, I listed off, I think, something in the range of seven or eight different major areas in which this government has acted, acted I would say to the great, great benefit of our Francophone minority in this province.

With respect to the request that is there for the licence plate, I pointed out that it is not something that is required of us under any of the court settlements that have been entered into and that have been responded to from the Supreme Court and other judgments. I indicated to him that it does not fall within the ambit of the policy decisions that we have made with respect to extension of French language services. After considerable discussion both amongst my colleagues, with the SFM and with others who have expressed interest in the issue, we came to the decision, which I know will probably not be acceptable to members of the SFM and their supporters, but regrettably we felt it was the right decision to be made.

As I pointed out, Manitoba's requirements are absolutely the mirror opposite of Quebec's under our Constitution. Quebec's is a unilingual licence plate and ours is a unilingual licence plate.

Mr. Neil Gaudry (St. Boniface): My question is for the First Minister. In the context of the national unity debate and in light of Section 23 of the Manitoba Act and based on the statement he made yesterday in this House, would the First Minister now give his definition of a bilingual province?

Hon. Gary Filmon (Premier): Madam Speaker, the Constitution gives that definition, and New Brunswick is an officially bilingual province by virtue of its Constitution. It states that and, therefore, everything that is done in that province under provincial government in all areas of its responsibility in every area of the province is in bilingual format. That is not the case here. He knows that our obligations are with respect to the courts--this Legislature, all of our laws being in both languages--and, as well, we have defined language service areas that are not the entire province but are the areas in which there is a significant concentration of Francophone population. In those areas, we have chosen to offer bilingual services to the people who require them, and I think that they have been of considerable benefit to our Francophone minority.

Mr. Neil Gaudry (St. Boniface): Madam Speaker, my question is again for the First Minister.

As an open gesture towards Francophones, as did Premier Bouchard towards the Anglophones in Quebec last weekend, and since the First Minister compared this issue to unilingual licence plates in Quebec yesterday, would the First Minister apply the same logic by personally reviewing this issue?

Hon. Gary Filmon (Premier): Madam Speaker, if what he wants to do, the member for St. Boniface, is to make comparisons with Premier Bouchard and what is happening in Quebec, we do not have any laws that prevent people from having French-language-only signs in this province.

In fact, when I was being extensively interviewed during the days of Meech Lake, I took hundreds of photographs of our Francophone communities, particularly St. Boniface, on Tache, on Provencher, of all of the stores that have unilingual French signs. I took them pictures of all the unilingual Chinese establishments we have, Portuguese, Filipino, Ukrainian, German throughout our province where we have unilingual signs that are other than English, including extensively French. We do not have anything like that that prevents people from their freedom of expression by having their signs in the French language. This is not a situation that in any way parallels to what Premier Bouchard is saying where he is going to allow people to have signs in bilingual format, let alone unilingual format as we do allow in this province. So I do not think that the comparisons are valid.

Mr. Dave Chomiak (Kildonan): Madam Speaker, yesterday the Minister of Health indicated that the Department of Health is hiring a new CEO to head up Home Care, presumably a privatized home care. So we will have CEOs at all the hospitals; we are going to have a new CEO hired for the superboard to look after the hospitals; we are going to have a new CEO hired to look after the new superboard of continuing care and now we are hiring another CEO to look after Home Care.

In light of the fact that this government has laid off hundreds and hundreds of direct caregivers in the health care field, hundreds of workers, hundreds of home care workers, how does the minister reconcile hiring more CEOs and complicating the administrative costs and paying for administrative costs versus direct patient care?

Hon. James McCrae (Minister of Health): Since the day the honourable member was appointed critic for Health in the New Democratic Party caucus, he has been working against improvements in our health care system ever since. It would be time for him to review his role in the whole health reform process. Every step of the way, the honourable member has done his best, his level best, to try to destroy, to continue to destroy the health care system, which is the path that was initially embarked upon by the Doer-Pawley administration prior to the present government.

Madam Speaker, the honourable member wants to work against carrying out the report that his own colleagues commissioned, the Price Waterhouse report, which identified problems with respect to consistency of service, efficiency of operations, management gaps, all of those things that we are attempting to address. True to form again today, he works against successful reform which will lead to better services for the clients of the home care system and he should be ashamed of himself.

* (1410)

Madam Speaker: The honourable member for Kildonan, with a supplementary question.

Mr. Dave Chomiak (Kildonan): Thank you, Madam Speaker. Will the minister, who has refused to answer the last eight questions I have asked, attempt today to answer what I asked yesterday, and that is, can the minister confirm that the nurse employees of the government Continuing Care, Home Care will lose their jobs after April 1 in a privatized version of nursing care to be offered by the government's Home Care, 100 percent, as we have indicated before in the House? Will the minister at least say yes or no to that question?

Hon. James McCrae (Minister of Health): Madam Speaker, as the service delivery model changes in the city of Winnipeg pursuant to agreement with the Manitoba Government Employees' Union--and we are pleased to have that support from the union on this--we are talking about contracting services for new long-term care clients only. The honourable member does not build that into his question, that those who were worried that there might be some inconsistency or change in their service providers due only to the contracting-out provisions, those concerns have been listened to. I think that is one of the hallmarks of the reforms that we are undertaking in health in Manitoba, is that we are listening.

Bill 49 is a perfect example just recently passed by this House as a result of concerns raised in various quarters. We brought in four major areas of amendments to deal with those concerns, so I think more than anything else the honourable member's question today gives us the opportunity to underline just how much and how inclusive and consultative we are in the changes we are making.

Mr. Chomiak: Madam Speaker, can the minister therefore confirm what he said in his previous answer, just so it is clear and so that those 150 nurses out there will know whether or not they are going to have jobs after April 1, that the only service of nursing from Continuing Care that is going to be contracted out is new clients and that the 150-some-odd nurses who are employed by Continuing Care to provide nursing service will still have their jobs after April 1 and continue?

Mr. McCrae: The honourable member would do well to take the time to get himself briefed on what the changes are proposed with respect--flowing from the agreement with the Manitoba Government Employees' Union. [interjection]

Madam Speaker: Order, please.

Mr. McCrae: The honourable Leader of the Opposition (Mr. Doer) very rudely today interrupts the proceedings of this House to heckle rather loudly from his seat, and it detracts from the opportunity for honourable members opposite to hear the answer that I am providing to the honourable member for Kildonan who asks a very legitimate kind of question about what the future is.

The arrangements we are entering into provide for the home care attendant service not to exceed 20 percent of contracting out, and as new clients come on to the system to the extent of the areas in which this contracting out will be happening, all services including nursing services will be affected.

The honourable member seeks to scare nurses out there working in the system, and he ought not to do that.

Mr. Leonard Evans (Brandon East): Madam Speaker, today's Brandon Sun has reported that at a prebudget consultation meeting in Brandon, Mr. Jules Benson, secretary to the Treasury Board and a civil servant paid by the taxpayers of Manitoba, according to the Sun: offered a well-rehearsed lecture on the merits of privatizing the Manitoba Telephone System. He also presented charts extolling the benefits of privatization.

The use of a civil servant to put forward a political agenda is totally unacceptable to the citizens of this province and defies the standards of proper behaviour for a civil servant. My question to the Minister of Finance is, will the Minister of Finance now apologize to the House and to the people of Manitoba for using a civil servant to give political speeches?

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I would very much have personally liked to have been in Brandon last night to do the prebudget consultation, but obviously pressing business of this House kept me here in Winnipeg.

I want to assure the member for Brandon East and all members of the Legislature that Mr. Benson does a financial presentation that presents the state of finances here in Manitoba, and at each of these prebudget consultations there have been some questions about Manitoba Telephone System, and as well Mr. Benson provided information on the Manitoba Telephone System.

So I say to the member for Brandon East and all members of this Chamber that Mr. Benson provided the facts and information for all Manitobans.

Mr. Leonard Evans: Why will this minister not acknowledge that Mr. Benson did engage in a political function that was not proper for a civil servant whose salary is paid by the taxpayers? Indeed, Mr. Benson himself, he prefaced his conversation with one reporter by stating that he really should not be giving interviews because he is a civil servant.

Mr. Stefanson: Madam Speaker, one part of the prebudget presentation is information on internal reform of government and a portion of that is privatization, whether it has been privatization taking place in Manitoba where it has been in the best interests of Manitobans. I cite examples that I think members are familiar with, although I know members opposite oppose some of them: McKenzie Seeds in Brandon, Manitoba, a privatization that has turned out very well; the privatization of Manitoba Data Services, a privatization has worked out very well here in Manitoba.

Manitobans still remember the days of the Crown corporation fiascos of the NDP where in the late '80s they were losing hundreds--

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please. The honourable Minister of Finance, to complete his response.

Mr. Stefanson: Madam Speaker, we all recall the mid-'80s when the Crown corporations under the NDP were losing hundreds of millions of dollars, whether it was in the forestry industry business, in the oil business, and the list goes on and on. So privatization is an issue that is addressed as part of the budget consultation process and the most timely privatization issue is Manitoba Telephone System, so it was an opportunity to provide information to the citizens of Brandon.

Madam Speaker: The honourable member for Brandon East, with a final supplementary question.

Mr. Leonard Evans: Why will this minister not acknowledge that Mr. Benson went far beyond simply providing data and clearly entered into the political arena when he said the need for the presentation was justified by the amount of misinformation that has been passed on by the opponents of the MTS sale? This is pure political debate, Madam Speaker, and--

Madam Speaker: Order, please.

* (1420)

Mr. Stefanson: With the amount of misinformation and scare tactics used by the NDP, I am amazed that the member for Brandon East can actually stand in this Chamber and say that with a straight face. What was presented by Mr. Benson was factual information giving reasons why the government is supporting the privatization of Manitoba Telephone System.

Members cannot have it both ways; I know they want to all the time on all issues. Here was an opportunity for some hundred citizens of Brandon to get additional information on Manitoba Telephone System and the reasons for privatization. That opportunity was used last night, and I would hazard to suggest that most people who were there appreciated receiving that information.

Madam Speaker: Order, please. The time for Oral Questions has expired.