Hon. James McCrae (Government House Leader): By leave, the sequence for Estimates consideration in Room 255 as set out on the document tabled on March 27 is to be amended by introducing the Estimates of Consumer and Corporate Affairs immediately following completion of the Decentralization Estimates. This is one of a number of accommodations that get made in the conduct of the business of the House, in this case so that the Minister of Government Services (Mr. Pitura) can carry out his responsibilities in light of the present flood circumstances.

Madam Speaker: Is there leave to adjust the sequence for Estimates consideration in Room 255? [agreed]

Mr. McCrae: Madam Speaker, yesterday the House gave leave to waive the quorum requirement in the House and in the Committee of Supply, and I simply today seek leave to extend this waiver to standing committees that sit as well.

Madam Speaker: Is there leave to waive the quorum requirement in the standing committees? [agreed]

Mr. McCrae: Madam Speaker, I move, seconded by the honourable Minister of Labour (Mr. Gilleshammer), that Madam Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.

Madam Speaker: I will entertain the motion by the honourable member for Gimli (Mr. Helwer) before I leave the Chair. I believe it is committee changes.

Mr. Edward Helwer (Gimli): Madam Speaker, I move, seconded by the member for Turtle Mountain (Mr. Tweed), that the Standing Committee on Public Utilities and Natural Resources be amended as follows: the member for River Heights (Mr. Radcliffe) for the member for St. Norbert (Mr. Laurendeau); the member for Gimli (Mr. Helwer) for the member for Emerson (Mr. Penner).

Motion agreed to.

Motion agreed to, and the House resolved itself into a committee to consider of the Supply to be granted to Her Majesty with the honourable member for Sturgeon Creek (Mr. McAlpine) in the Chair for the Department of Rural Development and for Decentralization; and the honourable member for Turtle Mountain (Mr. Tweed) in the Chair for the Department of Agriculture

Madam Speaker: Because the Deputy Speaker (Mr. Laurendeau) and the Deputy Chairperson (Mr. Sveinson) are unavailable today, I am requesting that the honourable member for Turtle Mountain (Mr. Tweed) chair the section of Committee of Supply meeting in the Chamber, and the honourable member for Sturgeon Creek (Mr. McAlpine) chair the section meeting in Room 255.

When the committee last sat, it had been considering item 6.(a) on page 118 of the Estimates book. The item considered was 6.(a) Grow Bonds Program (1) Salaries and Employee Benefits.

Mr. Tim Sale (Crescentwood): Mr. Chairperson, can the minister indicate whether there are any Grow Bond companies that are also in receipt of vision capital loans from Vision Capital?

Hon. Leonard Derkach (Minister of Rural Development): Mr. Chairman, I do not think there are any, but we will double-check to make sure that, in fact, what I am indicating to the member is true. We will double-check that.

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

Mr. Sale: Mr. Chairperson, are there any Grow Bond companies that are in receipt of provincial farm improvement loans? If so, if you could indicate which ones; that is the point.

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Mr. Derkach: Mr. Chairman, there is one project, as I understand it, that has an FIL or a farm improvement loan.

Mr. Sale: Mr. Chairperson, could the minister indicate which project and the amount of the loan?

Mr. Derkach: It is the RCS Greenhouses project, and the farm improvement loan, as I understand it, is for approximately $250,000.

Mr. Sale: Mr. Chairperson, would it then be correct to say that the government exposure on this one is a sum of $280,000 for the Grow Bond and $250,000 for the fill, plus perhaps some other amounts we have not yet identified?

Mr. Derkach: Mr. Chairman, I think it should be noted that a farm improvement loan is a federal improvement loan--it is not a provincial loan--and the security on some of that, of course, would be the farmland that was involved in the project.

Mr. Sale: Mr. Chairperson, could the minister indicate what the--I will wait for the minister if he is wishing to provide further information.

Mr. Derkach: Mr. Chairman, I may have misled the member. I would like to just correct the information, and that is that the security on the $250,000 is not the farmland. It is the land and the buildings that RCS Greenhouses is situated on.

Mr. Sale: I thank the minister for that information. Could the minister then just provide us with an outline of all of the funding that was involved in bringing that project on line?

I believe he has indicated to date $280,000 of a Grow Bond, $250,000 from a farm improvement loan which he is indicating is a federal loan secured against the business land and property. What other organizations or programs, federal or provincial, are or were involved in supporting this project?

Mr. Derkach: There is no other provincial money in this project. My understanding is that at some point in time after the initial project was launched there was an investment by Community Futures in the project, as well.

Mr. Sale: Could the minister indicate the Community Futures investment level?

Mr. Derkach: I do not want to misquote the figure, and we do not have that information here with us today, but I will get that information for the member.

Mr. Sale: Mr. Chairperson, a rough figure is fine. I am not going to hold the minister to an absolutely accurate number, but was it in the $50,000, $75,000, $100,000? What is the level?

Mr. Derkach: I think the maximum Community Futures investment is $75,000, and I think this was between the $50,000 and $75,000.

Mr. Sale: Then it would seem that the Virden Credit Union would have been the entity that would make up the balance between the $708,000 that was identified or $705,000 that was identified as the rough amount invested in the project to begin with and the total which we have identified so far here today which is approximately, well, perhaps $600,000; $250,000, $280,000 and $60,000 is approximately $600,000.

So is the Virden Credit Union the only other creditor, or are there other major creditors that decided that they could not any longer live with the project?

Mr. Derkach: Mr. Chairman, although we do not have that, you know, the breakdown sheet, with us on that particular project, I can give the member just an approximate number. I believe this one is fairly close in that there was approximately $175,000 of equity that was put into the project by the proponent, and I do believe that there was a flexible line of credit that was provided for the operating side by the Virden Credit Union.

Mr. Sale: Mr. Chairperson, then was it the Virden Credit Union pulling its line of credit, operating line of credit, that precipitated the company failure or were there other creditors who pushed them over the edge?

Mr. Derkach: Mr. Chairman, I guess the crunch came down when there was a requirement for additional operating monies for putting in a new crop, and the credit union--or the line, I guess, was at its limit--did not feel confident that they would want to invest any further funds in the operation based on the performance of the company in the past six months, and that is basically what caused the beginning of the breakdown of the company.

Mr. Sale: Mr. Chairperson, this took place some time from--I suppose, September roughly was when the real crisis began. The company was seeking new equity investors through the fall. I think they got a brief lifeline thrown out to them in the late fall, and that, unfortunately, did not stabilize the company, did not allow it to continue. What steps did the department take to try and put this company back on a sound footing or to enable them to put themselves back on a sound footing? Were there other resources of the department--staff? What was done to try and support this company?

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Mr. Derkach: Mr. Chairman, as I indicated yesterday, throughout that period of time many meetings were held between the company, the Virden Credit Union, the federal government and the Department of Rural Development. I think in total, as I indicated at our last sitting, we had approximately 25 meetings. We also sought the assistance of the community to see whether or not we could find equity investors who would be prepared to come to the table. In addition to that, we looked outside the province for equity investors, and it was through combined efforts of the proponent and the department that we were able to identify some potential, perhaps, interested parties. Through this process there was a party identified in Ontario who was prepared to come in and put the crop in. However, we were quite optimistic that in fact that would allow the company to continue to operate, but in the end the deal fell through. The individual who was proposing to put the crop in felt that he needed more security than what was being provided to assure him that he could sell the crop after it was produced.

The WEDA organization, the regional development corporation in the Westman area, was also involved in many meetings in trying to find solutions and look for equity partners for this company. We also involved other departments of government to try and stabilize and see whether or not there was any opportunity to allow this company to survive. In addition to that, the bond corporation was approached and worked with to ensure that we had I guess exhausted every possible avenue in terms of trying to keep this company afloat.

We felt very encouraged by the product that this company produced and the fact that this was a new technology in the way that the environment was controlled in the greenhouse, and the product was of such excellent quality that we really tried to do everything possible to allow this company to continue. Unfortunately, none of the efforts that we pursued resulted in a positive result, I guess.

Mr. Sale: I believe this project was essentially a joint project of WEDA, Western Economic Development Authority and Grow Bonds, certainly with local economic development assistance too. Was there consistent staff support to this project during this time? Did the same people work with it all the way through? How did we support these people?

Mr. Derkach: I should also have added to that list that I just had included for the member that we also worked with the farm debt review panel to give the plant an extended period of time to find equity partners for the plant.

In terms of staff, we had a Grow Bond officer who was located in Brandon who worked with this organization from Day One I guess and worked with the WEDA organization as well. Later, as the project came under greater difficulty, we put more resources into the area by including senior staff from the department to work with the organization and to see whether or not there was any possibility of recouping the losses and allowing this company to continue. So yes, indeed we did. However, our role was not to go in there and manage the company because this is a private enterprise, but we did offer to the community, the bond corporation and the proponent all the expertise that we had.

I guess there was not anything else that we could see because we did not deal with this as a single department either. We did bring in other departments of government to give us their advice, to give us their expertise in whether or not there was anything else that could be done to save this particular company. We worked with the company right through. We also used the staff from--well, the three departments that we worked with were Agriculture, I, T and T and our MACC people. In addition to that, we did meet with the federal people. We met with the bank and also investors in the community and outside the community. We assembled a meeting of people in that region who are community leaders to see whether or not they would have some interest in investing in this company and, once again, we were not successful.

Mr. Sale: Mr. Chairperson, a woman from WEDA--I do not have her last name, but her first name is Brenda, probably a familiar name to people. I do not know who the staff person from the minister's department was--but my understanding was that some time in the fall, early winter--I do not know when--essentially the project was told to stop dealing with those people and somebody else was put in place. The project indicated to us that they felt that the rug was pulled out from under them in regard to staff support at that time. Now I do not know who these people are. I have never met either of them, and I am not raising their role from a point of view of either being critical or supportive of the work they did, but from the company's point of view they felt that they were getting excellent support and that support was taken away from them.

I would like to know when the two staff people who have been most involved were removed from the project and why at that point. If you were going to add resources, that makes some sense, but why take away the resources the company had confidence in and had supported them through this whole process?

Mr. Derkach: Well, Mr. Chairman, the individual's name that the member referred to is Ms. Brenda McKinney who is, I think, the executive officer of the WEDA corporation. She is the economic development officer there. It is true that she was very instrumental in sort of the beginning of that company and worked with it right through and worked with our department. Our Grow Bond officer out of Brandon also worked with that company, as a matter of fact, even to the extent that they went in and physically helped pick tomatoes with staff at one point in time to fill the orders. So it was quite a hands-on kind of role that we had there at one point in time, but staff were never pulled from that project. As a matter of fact, we added another person to work with the company in addition to those staff.

I do not know whether WEDA ever pulled their staff away from there, but I can tell you that even in the last hours I personally met with the chair of WEDA and with Ms. Brenda McKinney to discuss the issue. As a matter of fact, they were passing through my community one day, and we made a point of sitting down and talking about that particular project. So staff were never pulled. I do not know why there was a feeling about that, but I have to also say that at the same time we are dealing continually with other projects as well. So it is not as though we can devote 100 percent of anybody's time to one particular project.

Mr. Sale: Mr. Chairperson, the minister did not indicate who his staff was. I guess he said he was in Brandon, but I do not know the person involved. I just would say to the minister that my information from the company is that these resources were replaced by others at a critical point in the whole process and that the company felt that at that point they suffered from the withdrawal of support from the department and from WEDA and felt that was quite critical. Now, again, I say I do not know these people, so I do not know whether there was a good reason for withdrawing or changing the staff at that point, but it seems a strange time to change resources.

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Mr. Derkach: As I indicated, the resources were not changed. We simply added to those resources, and the name of the individual from Brandon who worked with the Grow Bonds Program is Mr. Allen Peto, and later on a Mr. Cam Thompson from the Department of Rural Development was assigned to the project as well.

Mr. Sale: Mr. Chairperson, in the process of trying to find new equity partners, presumably the old framework for the company, I guess you would call it a business plan for the company, probably was not very adequate for that purpose. Did the government do anything to try and assist this company to get in touch with investors with something that they could actually market or were they just kind of cold calling around the country saying come and invest in tomatoes?

Mr. Derkach: Mr. Chairman, we were just trying to trace back the steps that had been taken with regard to the company. It was an ongoing kind of process with the company from I guess the time that markets became a difficulty, and from that point on several approaches were taken in an attempt to gain back the market, in an attempt to ensure that a different marketing approach would be undertaken with future crop. The proponent's accountant was involved in a plan as well, so many resources were used during that time in an attempt to get more market share, in an attempt to gain back the market that perhaps was lost.

In addition to that, the member might know that there was some difficulty between the wholesalers and the proponent in terms of marketing the product, and that area was also explored to see whether or not we could, I guess, recapture that method of marketing the product as well, and there was some success that was achieved in that way. So I believe staff did everything possible to try and keep this company afloat. It was in no one's interest to shut it down. For that reason, under the Farm Debt Review Board, I guess, or the Mediation board, there was a period of time allowed for the company to try and get its house in order.

Mr. Sale: Maybe the minister can answer this question; although it is a Farm Debt Review Board question, he probably knows the answer. Is the home quarter exempt from bankruptcy proceedings, in other words, to save the Contzies' home? Currently, I believe, they have had to leave their home; they are facing personal bankruptcy. So what is the status of that?

Mr. Derkach: Mr. Chairman, no one asked the family to move from their home. My understanding is that the home quarter section is exempt from bankruptcy proceedings, but the greenhouse is on a separate piece of land on the home quarter. So that would be involved in the bankruptcy, but the home quarter, as I understand it, would be exempt from bankruptcy. My understanding is that the spouse did get a job in Portage and is working there presently, and I think that is where the family has moved, although I am not sure. That is only hearsay.

Mr. Sale: The reason that obviously the husband had to try and get a job was to pay the ongoing bills of the family's food, and I believe the reason that they had to leave the home quarter, their farm, was that they could not afford to keep a residence in Portage for him to live in while he worked and to keep the house going at the farm as well. So they obviously have no resources and they are trying to minimize their living expenses, and I hope that will not jeopardize the rights they have to protect the home quarter given that they are not formally residents there now, although I suppose they could say that they have been there within the last six months. I just hope that the minister will use all his good offices to ensure that this family does not face any further penalties as a result of their attempts to become successful entrepreneurs. I am sure the minister can give us that assurance.

Mr. Derkach: Mr. Chairman, I would tell the member that if there is any hope of anything, we will continue to work as hard as we can to do what it is we can to salvage as much as possible for the family. We are not in the business of taking families out of communities. As a matter of fact, our aim is the opposite. It is tragic when something like this happens, because this family did make an honest effort in diversifying their family farm and diversifying their operation. For one reason or another it did not work, but if there is any chance of salvaging anything our staff will certainly be there to support them.

Mr. Sale: Mr. Chairperson, were there any other aspects or branches of the minister's department that were involved in trying to salvage this operation to assist them with funding or support of any kind?

Mr. Derkach: Mr. Chairman, I guess in the final months of the company's operation, there was an application that was put before the REDI office for--it was termed a feasibility study to attempt to find equity partners for the plant. Although it was difficult to deal with because the evidence was on the wall in terms of the direction the company was going, nevertheless, we made a decision that we would support the company in one last attempt to try and find equity partners. There was approval given by the REDI office for a feasibility study to be undertaken to find equity partners perhaps from outside the province for the company.

Mr. Sale: Mr. Chairperson, could the minister indicate the amount of the grant and whether the grant has been paid?

Mr. Derkach: Mr. Chairman, the total feasibility study was for $12,000. Our share of that would be $6,000, and prior to paying the money the office requires some evidence that in fact, No. 1, the study was undertaken. So we have to have some evidence that in fact a feasibility study was done, and, secondly, that in fact the bills for the feasibility study were paid by the proponent. In other words, you do not just simply send the cheque and do not do any follow-up.

I am told that the $6,000 contribution is in process, and I think there has been communication, either with the company or the principal, to ensure that in fact that feasibility study was done, and the money to the individual who did the feasibility study was paid.

Mr. Clif Evans (Interlake): I know we will be dealing with the REDI branch, but the minister indicated that, in this case, out of $12,000, $6,000 the government covers, or half. Is the proponent made fully aware that if the total bill is $12,000, that they have to pay that $12,000 up front, and then present the government with the full $12,000 amount of bills, and then, through the REDI program, the $6,000 would be paid? Is that what the minister is saying?

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Mr. Derkach: Mr. Chairman, when a feasibility study is approved, a letter is issued to the proponent indicating that the feasibility study has been approved. In this case, I believe there was even a phone call placed to the proponent indicating that the feasibility study was approved, but there are conditions under every feasibility study that have to be met.

As the member can appreciate, because of the condition of the company we had to be very cognizant of the fact that, first of all, the feasibility study would be done, and, secondly, that in fact the individual or individuals who were doing the feasibility study would be able to be paid and would not be caught up in a potential bankruptcy.

Mr. Clif Evans: During the application process, and if the proponent was made aware, was in this case any other arrangement made with the proponent, between the proponent, the government, and the feasibility study consultant? Was there anything at all, any agreements made to offset what the government has said under the REDI program that the full $12,000 would have to be paid first? Was there any kind of an agreement?

Mr. Derkach: No, Mr. Chairman.

Mr. Sale: I have the letter from the minister committing the study, and as he points out, the third paragraph indicates that when the study is a done, forward a copy of the receipted invoice indicating payment in full, a copy of the business plan prepared and a written confirmation that you are satisfied. Can the minister indicate whether they have received the business plan and the confirmation that it meets the objectives that Mrs. Contzie had for this?

Mr. Derkach: I am advised, Mr. Chairman, that, yes, that has been received. The business plan has been received. I think there is a still an outstanding invoice that is being in process right now.

Mr. Sale: Could the minister just clarify what he means by "in process right now"? Is the $6,000 going to be paid or not?

Mr. Derkach: The feasibility study was for $12,000. As soon as the invoice is received by the department indicating that the $12,000 for the feasibility study has been, in fact, paid, then we issue a cheque to the proponent for $6,000.

Mr. Sale: This is what I was afraid I was going to hear from the minister. Surely the department, the minister, must realize that the Contzies do not have any assets. They do not have $12,000 to plunk down to pay for a study that gets $6,000 back. The agreement that they had with their consultant was that he was prepared to invest his own funds, which I think is a suggestion, very strongly, of his belief that this company could be successful. He was prepared to invest his own funds in the amount of approximately $6,000 and thereby, in effect, cover the Conzi's part of the cost. He is quite prepared to verify that the study is worth $12,000. I do not think that is the issue at stake. The issue is how the invoice will be paid.

I would ask the minister to be as understanding as he has said he is at this point and recognize that Contzies do not have $6,000 at this point. They are waiting for the $6,000 that they were promised. Nor have they asked that the money come to them. So it is not a question of an attempt to get $6,000 out of the government that they might walk away with. They are asking that the money be sent to the person who prepared the acceptable study, as agreed upon, to discharge that particular part of the obligation.

Surely what we have got here is a local accountant who is, himself, prepared to invest a modest sum at least in the future of this company because he believes that he has at least a shot at finding some equity partners which the minister says he wants to see happen.

So surely this is a situation where we should be facilitating, rather than spending time on what might be called bureaucratic requirements. There is no question that the work was done. The study is in. It is acceptable to her; I presume it is acceptable to the department. The department said it would pay $6,000 towards the cost of it. For heaven's sake, let us find a way to get that done so that the Contzies are not further behind the eight ball as a result of doing something that was agreed to in January of this year and agreed to formally in March.

Mr. Derkach: The member has to understand that the agreement that was entered into between the proponent and the department was a legal agreement, one which said that the proponent was prepared to put forth her $6,000 on the basis that the government would inject $6,000 into the feasibility study.

There is a standard process that takes place. Now I know that the consultant has intervened and wants to be paid directly by the department. That is not the agreement, because if we pay the consultant, we still have an agreed-to obligation to the proponent. Now, if the proponent wants to discuss some changes, then that has to come forward from the proponent, from the owner of the company, and not by a consultant, because our agreement is with the proponent. So I am prepared, and I am sure staff are prepared, to be flexible as you possibly can be as long as we are legal, but I think the obligation has to be on the individual, on the owner of the company, to come forward to the department and say here is what has transpired. I do not have $12,000, but we have made accommodation for $6,000. We need your $6,000, and I am sure that somehow we will arrive at an agreement. We do not want to see the consultant out the money, nor the proprietor, because we made a commitment that provided those conditions were met, we would pay our share, and we will.

Mr. Sale: Mr. Chairperson, I am really glad to hear the minister commit that he will see that their share is paid.

The minister has a letter dated March 19, not from a consultant, but from Candice Contzie, saying: I have reviewed the plan. I am satisfied with the plan. Mr. Summersfield will forward to you a copy of the business plan along with a copy of the receipted invoices. Please pay payment in full to the business connection, Mercus Summersfield.

So it is not Mercus Summersfield that has asked for the money to be paid; it is Candice Contzie, who is your client in this situation. I think it is transparent what has happened here. She has provided me with copies of correspondence between herself and her consultant in which he indicates that he is prepared to make the contribution of the cost of the development plan in the amount of 50 percent, which is what you require. All he asks, is that he, in effect, become their equity locator for a fee which is a very modest fee. Mr. Chairman, 1.5 percent of the total raised is not a very large amount. Most equity finders would want a lot more than that.

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He clearly believes in the plan. There is an agreement here. If there is any hope of resurrection after a virtual death, then let us not spend time on bureaucratic niceties about who is paying whom when we have all agreed that you are going to pay $6,000 for something that has been done satisfactorily. The requester client has written to you and told you what is requested. You are not being asked to put $6,000 in the bank account of a bankrupt. You are simply being asked to fulfill the agreement which I hear you saying you will do, but having worked for you and for other ministers in government, I know how long sometimes those wonderful agreements can take. At this point, I do not think we have that amount of time. So let us get on with it, and get on with the real issue here.

Mr. Derkach: Well, Mr. Chairman, how do I begin? First of all, the member knows full well that if I went ahead and paid this particular bill without invoice and then the consultant were not paid, and the consultant went to the member opposite, the first question in the House the member would ask, well, why did you break the agreement by forwarding money before you had the documentation in hand?

That is all we are asking of the proponent. Yes, we received the letter. We are asking the proponent to supply documentation that, in fact, this amount of money was forwarded and paid to the consultant, and then we will be happy to process the claim.

I am not trying to hold this up, but I am telling the member that he has asked questions in the House and has made statements about the inappropriateness of the way staff moved on other projects, in his opinion. I know that if we did this in this case, he would have justification to do the same. All I am saying is that we are waiting for the proper documentation, and if it can be provided this afternoon, we will process the claim.

Mr. Sale: The request from the proponent is not to pay the proponent. The request is to pay the person who did the study. That is what is being requested here. They are not asking that you forward money to them. They are saying, please pay direct, essentially.

I think that the minister has indicated it is his intent to fulfil this agreement. The family is hurting badly. The consultant has put out the time and energy. The study has been done. What specific doable documentation needs to be provided at this point?

If the documentation includes the payment of a cheque from the Contzies to Mr. Summersfield, that is not doable. It is not going to happen because they do not have $12,000. You have a commitment from Mr. Summersfield that he considers 50 percent to be virtually an equity contribution.

You have your own contribution of $6,000. That clears the matter up. You have got the correspondence. What is the additional requirement here that we can get done?

Mr. Derkach: Well, Mr. Chairman, the application that was submitted by the proponent indicated very clearly that the cost of the project would be $12,000. Now, that is the basis that the agreement was struck on, and out of the $12,000 we would pay $6,000.

Now, we have had a lot of correspondence from Mr. Summersfield, and I understand he is a little frustrated because he would like to have his money. However, the Provincial Auditor would not look very kindly at us, and I am sure that the member opposite would find issue with it as well, if, in fact, we were to move ahead with payment of $6,000 to Mr. Summersfield. The agreement is between the proponent and ourselves.

Now, if, in fact, the proponent can show documentation that the $6,000 share has been paid and is receipted and that there is direction for us to pay the $6,000 from the provincial government to the consultant, then I am sure that we could probably accommodate that because that would not be breaking the spirit of the agreement, because there would be documentation that would be signed by the proponent, confirmed by the consultant, that her share or the proponent's share will have been looked after.

Mr. Sale: Mr. Chairperson, just so that we can be very clear, and, in fact I think it would be better if Mr. Maksymyk [phonetic] or--I am sorry, that is not the right name, the director of the overall program. [interjection] Melymick. Sorry, Melymick, John--it might be better if he did this rather than one of us doing it.

But is the minister saying that what he wants is a fax or a letter from Mrs. Contzie saying, attached is correspondence from Mr. Summersfield indicating his contribution for, in his view, a reasonable accommodation, 1.5 percent of any equity money that he would raise for the company, that he considers his share to have been paid, and therefore, her share, in effect, to have been paid?

So all you need is a letter from her attaching the letter from Mr. Summersfield, which she has from, I believe, January 20, which actually I can supply the minister with if he would like. Is that all we need?

Mr. Derkach: Mr. Chairman, may I just maybe try to clarify a little bit of why there is confusion over this?

First of all, an invoice was received by the REDI office for $12,000, confirming that a payment to Mr. Summersfield in the amount of $12,000 had been made in full. Now, if that confirmation were there, that meant that our cheque needed to go to the proponent, as it should. But the proponent also told us that we were now to pay the $6,000 to Mr. Summersfield, as I understand it.

So we have confirmation that $12,000 was paid. Now we are being asked to pay another $6,000. So what we want is a clarification that would show that, in fact, there is either a receipt or something for $6,000 from Mr. Summersfield with an outstanding amount of $6,000 that the province has to pay, because we have a different message coming at the present time which needs to be clarified.

That is what staff are dealing with. It is not something I deal with, but it is something staff have to deal with, and we have to be assured that, in fact, Mr. Summersfield either received $12,000, or did he receive $6,000, or has he forgiven $6,000? In either case, there has to be some sort of documentation and receipt that shows that some money or half of the money or all of the money has been paid, and then we would be happy to proceed.

All we need is either a cancelled cheque that shows that $12,000 was paid to Mr. Summersfield, that that is done, or if that was not done, then let us have an invoice and a receipt that shows that so much money was received by Mr. Summersfield and so much is outstanding.

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Mr. Clif Evans: I understand what the minister is saying. There is obviously some confusion. Now, in the letter dated March 11 to Mrs. Contzie, the minister indicates that the money is available for her. Now, it asks also that all the documentation be provided to the REDI office prior to March 31, '97.

In a letter from Mrs. Contzie to Mr. Prince, indicating she has received your letter, her letter states that Mr. Summersfield will forward to you a copy of the business plan along with a copy of the receipted invoices, and please make payment in full to the BIZ connection.

So there is confusion, because in this letter she is telling Mr. Prince that that will be provided March 19. The minister is saying there is not any of that, or there is not that specific outline of what concerns the minister has.

Mr. Derkach: Yes, the bottom line is we have an issue here of confusion about what the reality is, and we want to clear it up, because as the member has indicated, that letter says one thing. I just indicated to him what has been received by the department.

All we want to do is clear it up, so that we know that, in fact, we are doing the right thing. You see, there is correspondence on this now, and if, in fact, there is an invoice that was presented for $12,000 confirming that payment was made in full to Mr. Summersfield, and then we are requested to pay Mr. Summersfield $6,000, then we have a problem. All we want to do is clear it up.

I am not trying to hold this up. I am not trying to put her in a difficult situation. All I want is some clarity in what has transpired and what we are to do. We have the consultant's report. That has been done. There is no argument about that. All we need is a clarification of invoices, who got paid for what, so that we can process the claim.

Mr. Clif Evans: I understand what the minister is saying, and we will attempt--myself and my colleague--to have this brought forward to them and explained. But I wonder whether on the file at all there was a letter enclosed from Mr. Summersfield to Mrs. Contzie explaining how half of the cost would be undertaken by him, by, as my colleague had said, I am prepared to make a contribution of 50 percent to the cost of the development and business plan.

The minister is saying that there is no indication, there is no specific invoice saying: Here you are, Mrs. Contzie; the whole bill is $12,000; here are the invoices; I can consider myself paid by making a 50 percent contribution; outstanding invoices $6,000; please remit.

Mrs. Contzie can then go and she can get an invoice or any kind of a cheque, and it can then be submitted. Would that be illegal?

Mr. Derkach: Mr. Chairman, first of all, the member just illustrates the confusion of this issue, because I think--and I can speculate, and I guess we should not speculate, but I am assuming that Mr. Summersfield has written off the first $6,000 that the proponent was to pay--I am assuming that--because he wants to get the $6,000 from government, and he says, consider the other $6,000 paid.

But I am telling the member that we have two messages here, and all we need to do is clarify them. Now, I do not think I should be calling Mrs. Contzie. Neither should the member opposite be calling Mrs. Contzie about how she should clarify this. That is something that Mrs. Contzie should do with the REDI office.

The REDI office has tried to explain this on a couple of occasions and will do it again: Just send us an invoice that says that the matter of $6,000 that you owed has been looked after, and then we know that we have to pay our $6,000.

It is not complicated, but I think that the messaging from the proponent has changed. [interjection] Well, it has changed in that, first of all, there was confirmation that $12,000 was paid, and then the consultant got into the middle of it and indicated that we need to pay him $6,000. Well, I am sorry, we have to have one message.

Mr. Clif Evans: Mr. Chairman, my conversation with Mrs. Contzie--and I have not seen anything here that indicates at all--if the minister does or the department has--

Mr. Derkach: You just read me something.

Mr. Clif Evans: Yes, but this does not say that anything has not been paid or paid. All this letter to Mr. Prince indicates is, this letter is to inform you I received the minister's letter, or I have reviewed the business plan. I have received the minister's letter that a portion of the program has been accepted. Mr. Summersfield will forward to you a copy of the business plan, along with a copy of the receipted invoices.

Mr. Derkach: That is all we need, are the invoices.

Mr. Sale: Mr. Chairperson, I mean, this is the confusion. The minister indicated not very long ago that he had an invoice, $12,000. So what has he got? Specifically, what has he got in writing from either Summersfield or Contzie.

Mr. Derkach: Mr. Chairman, I indicated previously that invoices that were presented were for $12,000, confirming that payment in full was made to the consultant.

Mr. Sale: All right. That would be the standard REDI approach of, we have paid our bill; now give us our contribution which we have already paid. So that would have meant a cheque issued to Mrs. Contzie.

I am sure what she was trying to do was to provide the fulfilment of the agreement, but I think, a reasonably clear and honest error, she realized that, no, she is not going to get $6,000 from you. She is also worried that if $6,000 goes through her bank account, there may be some people who would like to just get their hands on that real fast, because when people are in that kind of situation, there is often a credit watch on their account, so you try to clear something through your account, and it does not work. So the government's $6,000, instead of going where it is intended, gets grabbed by a creditor and disappears; again, legitimately, but the spirit of the agreement then is obviously broken. She does not want that to happen, so she says please pay my account indirectly.

I think this is pretty easy actually to clear up. I do not want to take any more Estimates time on it, but I do want to say that I believe that a phone call and a very clear direction, followed by a very quick issuing of this cheque, would be a very appropriate and compassionate action on the part of the minister, who has said over and over again that he neither wants the Contzies to suffer more pain and anguish, nor is he unsupportive of the last-gasp attempts. I commend him for being supportive of the last-gasp attempts to see if there might be an angel somewhere that would come in, although I am just as doubtful as he is that when a company is bankrupt, anybody who is interested in it is going to wait for it to be available at 10 cents on the dollar; they are not going to rescue it at 50 cents on the dollar.

Could he give the commitment that Mr. Melymick could get in touch and be unambiguously clear, in case that is a problem on the other end, exactly what is required to get this cheque issued to Mr. Summersfield, so that it does not clear through her bank, which, I suspect, is the main concern that she has? It is certainly a concern that people in this kind of financial situation often have, that somebody has got a watch on their bank account.

Mr. Derkach: Well, I will give the member this commitment, that provided that we follow an accepted process that has to be followed in government, that, yes, indeed, we will make another attempt--and I will commit that on behalf of staff here--to get in touch with the proponent and to indicate very clearly what it is that we require so that this amount can be processed.

We have no intention of holding on to it or trying to make life miserable for the proponent or anyone else, but we also have to protect the integrity of the department and the program and the branch. We have to ensure that when the Auditor looks at our books that he does not find any flaw with it, and I know the member can appreciate that. But, again, I will commit to having staff from the department get in touch with her and to try and clarify this ASAP.

Mr. Sale: I thank the minister for that. Would the minister's staff already have a copy of the January 20 letter from Mr. Summersfield? This is the letter in regard to writing off 50 percent or accepting. Would that be helpful?

Mr. Derkach: Mr. Chairman, I do not know whom the letter was addressed to, but my staff indicate that they have not seen that letter, and any correspondence that would be helpful in resolving this would be appreciated.

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Mr. Sale: Mr. Chairperson, for the record, Mrs. Contzie indicated that we were free to use-share that correspondence as seen necessary to try and get this thing speedily resolved.

I have some questions on some of the other issues related to this program, Mr. Chairperson. I just would like to thank the minister and his staff for tussling through this and clarifying what the difficulty was. I think, often when companies are at the point of failure, there is a lot of both stress and confusion, and if my involvement with Woodstone was any indication of what the minister was going through, I can certainly vouch for the stress and confusion in terms of information because there was lots of it.

Mr. Chairperson, if we could just talk briefly about the Acrylon project. Grow Bonds is one of the more recent ones. I think maybe it might be the most recent one formally issued, the Tin Lizzie was before that, I think. Acrylon is $1.2 million. Was the initial prospectus amended?

Mr. Derkach: Mr. Chairman, yes, there was an amendment made to the prospectus, and specifically, with regard to interest rate. The interest rate was increased from 6 percent to 7.5 percent.

Mr. Sale: In the new prospectus as issued, did the company indicate that it had gotten--and I am not sure what the proper term would be, but--a surety of some kind that would guarantee the interest as well as the principal?

Mr. Derkach: As part of the agreement, the company was able to obtain approval from their bank in the form of a letter of credit securing the interest on the bond. Now this has to be in hand before any money is released to the company by the bond corporation and by the department, and that has to be filed on an annual basis. My understanding is that letter of, I guess, credit, or equivalent, has to be filed on an annual basis. All it is, Mr. Chair, is more security for the bondholders who are investing. Not only to them, not only is the principal then completely secured, but so is the interest on the basis of the letter from a financial institution.

Mr. Sale: It seems to me to go against one of the fundamental issues that gave rise to Grow Bonds in the first place. I must say on a very selfish basis, if I had known, I could get a 7.5 percent, five-year bond with guaranteed interest and principal, no risk and at 7.5 percent in today's interest rate environment, that is a pretty nice rate of return. Long Canadas are yielding about that; 30-year Canadas are yielding about that right now or a little less, a little more, depending on the day. You certainly cannot get anything that is coming out in the form of Grade A bonds that would give you that kind of a yield on a five-year basis right now. So, if we guaranteed principal and we guaranteed interest and we guaranteed it at a pretty attractive rate, what is this program? There is no risk here for anybody except the government. There is certainly no risk for investors.

Mr. Derkach: First of all, the guaranteed interest was not a part of a request made by the department or the Grow Bond corporation. This was something that was brought forward by the company, and the interest is not guaranteed by the province. The interest is guaranteed by the bank.

Mr. Chairman, I guess that, if any other corporation or any other companies could secure that kind of line of credit or that letter of credit from a financial institution guaranteeing the principal to the bond investors, that would be a plus for the company and the bond investors. We still have bonds out there that are paying more than the 7 percent, and that is just the way the interest rates have gone in the past.

When I heard that there was a letter guaranteeing the interest, I thought it was just another way to assure the community that this was a solid company, that the bank had faith in this company, that in fact this was going to be a company that would make good on its commitments to the community, and I think it reflects some strength in the company. I cannot criticize them for that because, my goodness, we want strong companies that are investing in this province and are taking advantage of the Grow Bonds Program, because that is the kind of the success stories that will motivate others to continue to invest in the program and in their communities.

Mr. Sale: My understanding of venture capital is that venture capital means that there is a venture involved, and, at this point, there is no venture for the investors whatsoever. There is a guaranteed rate of return, guarantee on the interest and guarantee on the capital. That is not a venture; that is a Canada Savings Bond. If the company has that kind of stability and record with its bank, then why does it need a Grow Bond? Presumably, if it has that kind of capacity, it could do a normal kind of debt financing with its banker. Clearly, this a good company. That is great. I am really glad, but why are we giving them a Grow Bond?

Mr. Derkach: Mr. Chairman, when we get applications for a Grow Bond, what we do is a normal process of ensuring that the company, first of all, has some chance of success, whether it is an expansion or whether it is a new company. This company clearly showed us that their expansion had significant potential. But there is also, as the member knows with any company, a down side. There is no security. There is no assurance that this company will succeed in an economy that could turn down at any time. We have a buoyant economy right now, and we hope that will continue.

It is a rural company. It is a company that wanted to take advantage of a Grow Bonds Program. It wanted to see the community invest in this company, because this is a community that has a close-knittedness to it. The company operating in this community feels that it is important to have the community involved in its company. I think I saw that when I toured the company, and we had the opportunity to talk to people who worked on the floor, talked to the management. There is a community spirit there, I think, that speaks loudly and probably can be used as an example to other communities.

There is a significant amount of equity that the company brought to the table. As the member knows, when we started the Grow Bonds Program we were not asking for security of any kind. We learned very quickly that, wow, that is exposing the taxpayer of Manitoba substantially, so we amended the Grow Bond policy to take security to protect the taxpayer, if you like, because although the investor was protected, there was no protection for the taxpayer at the other end. So we have tried to balance it.

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Now, I am happy to have a company like this in our mix of Grow Bond programs, because I do think that if this company is successful it will be an example that can be used by other companies. I was happy to see the letter of support from the bank, or at least to know that there was a letter of support coming from the bank guaranteeing the interest on the Grow Bond. I think this shows that the bank or the credit union or the financial institution has confidence in that company as well, and I think it speaks volumes to the people in the community who want to invest.

The company feels it can afford 7.5 percent. Now, I do not know what interest rates are today in the bank for borrowing money. I have not been there for a little while, but I am sure that they are up in that range anyway. [interjection] Yes, but I know I will be there soon, knowing the season that is coming, you see. I think that, even at 7.5 percent, this company is probably able to withstand that and come good on its guarantee to the bondholders.

Mr. Sale: Mr. Chairperson, I am not quarrelling with the ability of the company. In fact, if it can get that kind of agreement, then clearly the bank believes it is capable, because banks do not generally want to volunteer money to pay interest on bonds.

My point is, the problem with a venture capital program is the one that the minister has pointed out lots of times: You start out exposing too much; you lose too much; you do not get enough winners. Then you get real cautious, and you do not take enough risks. So you tend to go between these two poles, and the only guarantee of keeping at it appropriately, I think, is a very clear set of program guidelines and goals at the staffing level. So you continue to take real risks, because that is surely the point of the Grow Bonds Program. It is not to become a replacement for the local credit union or the bank. On the other hand, it is to manage those risks as carefully as possible so that you win as many as you can and you lose as few as you can. That surely is the right goal. Why I am raising this is because I think this one illustrates the danger of moving over in the other direction in which the company probably is glad to have a Grow Bond. I am sure they are.

I have talked to David Friesen about taking advantage of government programs, of D.W. Friesen and company. They say, well, we will take advantage of them, but we do not need them. In fact, he said to me, to our caucus, when we asked him what he would do if he formed government, make him Premier, he said he would close down I, T and T. I am sure the minister would be glad to know that because that is a competitor department. I mean, he does not need this money, and that is the difficulty governments have. We had it; you have it. When do you take a risk and genuinely try and help something happen which you think is possible, and when are you simply providing free capital to people who do not need it? I raise this one not to be critical of the company or the community but just to say that at some point you are simply providing free capital to folks who do not need it. At other points, you are throwing capital away, and it is really hard to walk down in between those two, and that is where I wanted to wind up my questions on this area.

Mr. Derkach: Well, just to respond, Mr. Chairman, and I appreciate where the member is coming from. We do try to take, you know, a balance between a silly risk that will end us in an insolvent company and then just being a bank. I do not think we just want to become another bank or credit union. That is not our objective. I think the policies and the principles of the Grow Bonds Program are correct. I think they are solid, and they have been amended. It is true, they have been amended. I think it has to be a balance between taking no security and taking some security. We have paid attention to things like stacking and things like equity, and we know that undercapitalization is a problem and we are addressing that.

This company did need a Grow Bond. If we had not provided a Grow Bond there was a danger that the expansion would have either been delayed and the jobs would not have been created, or the proponent would have had some difficulty. So all of those things are examined, and I do not get involved in this personally. When this comes before the various due-diligent committees they try to ascertain whether or not this is the type of venture that a Grow Bonds Program should be involved in.

In terms of what comments are made by business, I hear this all the time. I hear businesses say government should not be involved in financing businesses except for my business. You see. We have heard even Chambers of Commerce around the province say governments should get out of programs, but could you give us a grant to hold our annual meeting. So there is some different messaging going on about these kinds of things. What we as a government, I think, have a responsibility to do, not unlike what was done in the past when we were not government, you know, the former government also tried to inject some interest in investment in this province through job creation and investment-type programs, and I think we are doing the same. Will we have failures? Sure, we will have failures, and unfortunately I think that will be with us as long as we are here, but we will try to minimize those and try to ensure that we have the highest level of staffing that we can to address the issues as they arise.

With regard to my sister department, I, T and T, they are not competitors. We complement each other and work together very well, I might say, and as a matter of fact, much more closely now than we did even five years ago when I first came to this department, and so I am proud to say that as well. So that is about all I can say about that particular issue. I am confident that Acrylon will do well, and any time that a company wants to get a letter of credit to guarantee the interest, I am not going to stand in their way.

Mr. Sale: Mr. Chairperson, along those lines, I have a couple of final questions in this area. Last year we raised, and I want to raise again this year, the concern that we have that prospectuses ought to go through the Securities Commission. We talked about this before. Clearly, we are issuing an investment vehicle. They are relatively complex. They are not as complex as the MTS one, but they are relatively complex.

Now the benefits of doing this are substantial. First of all, the criteria for an investment are the same then across the whole province. Anything that is an investment has to pass that kind of level of scrutiny.

Secondly, the minister must recognize the political advantage of being able to say, this prospectus has been cleared by the Manitoba Securities Commission, and it meets those criteria, those due diligence tests. If this had been in place, we would not have had the Woodstone fiasco because the Securities Commission would not have allowed a prospectus to be issued without an audited financial statement covering the period immediately prior to the issue of the prospectus.

The Securities Commission would not have allowed that prospectus to go forward when in the possession of the department was written evidence that the monies were not going to be used as claimed. It would not have gone forward without the minister knowing that the Securities Commission had seen the going concern note from the Auditor. The minister, I am sure, knows that a going concern note is only put in by an Auditor when there is some issue about whether this company is a going concern or can be a going concern under the circumstances of the financing that was put forward.

So I do not think there is any sense anymore pretending that there were not material problems in that prospectus. The Auditor has said so. The minister has said that there were errors pointed out and that changes have been made in the program, corrections have been made. I am glad that has happened, but we would secure a lot higher credibility for this program, which, I hope, is in place when we form government in the near future, because I am looking forward to more of these kinds of Grow Bonds in rural Manitoba taking place. I would just say to the minister, if I were in his shoes, which, goodness knows, might happen some day, I would want to know that a prospectus that I was offering to people had been passed on by the same people that pass on every other prospectus in Manitoba and that there was not an exemption here which says, oh, you shan't make a false and misleading statement, but if you do there are no penalties.

That is not acceptable because it is very clear to me, and I think it is pretty clear to the minister and his staff, that the proponents of the Woodstone proposal made false and misleading statements. They did not reveal the going concern note. They did not put in audited statements for their most recent period. They did not reveal to the investors, though they revealed to the government, that the monies were not going to be used as advertised. So, if that happened in a Manitoba Securities Commission situation, it is a million dollars and two years in prison are the penalties. That is the range, a million dollars and less, and two years and less.

That is usually a fairly good incentive for directors of companies not to lie. At this point, we have no incentive because there are no penalties that have any real force under the act. So will the minister agree that it would be in his interest, investors' interests and the program's interest to have prospectuses cleared by the Securities Commission and not internally by a route that could be seen--may not be--but could easily be seen to be open to political manipulation.

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Mr. Derkach: Mr. Chairman, I guess we have been around this horn before, and I would simply say it to the member, that some of our Grow Bonds, for example, RCS--there are others that are small Grow Bond ventures because the Grow Bonds Program starts at $100,000. If you were to impose the cost of a prospectus going through a securities commission for a $100,000 Grow Bond or a small company, that is a very costly process for the company.

That is why the Grow Bonds Program in its inception had built in the various types of due diligence processes that were to be undertaken. As the member knows, the Securities Commission does not do due diligence on projects. As a matter of fact, there is a disclaimer whereby it exempts them from having to do a due diligence process. However, there are some benefits to a securities commission, and that is why it is in place. But, by and large, I think I have to say that staff in this department have worked extremely hard and have done a fairly good job in terms of the projects that we have on the books.

There are some that are not easy, and there is no question about that. We have learned, there is no question about that either. In the 1994 audit, in the 1996 audit, we learned things that we needed to implement in our processes, and the Auditor was very clear. But I think also it should be mentioned that the Auditor did commend management for the kinds of steps that they had taken to ensure that proper processes were followed.

We will continue to work at it. The member says, maybe when he takes over the department and, my goodness, that is many years away, we will not need a Grow Bonds Program by then, by the way. [interjection] The member for Interlake (Mr. Evans) says that he wants the job. In seriousness, that is something that I think, as the program matures, we are not going to ignore it or I am not going to discount that suggestion. That is something that certainly can be considered for large projects. We do have a limit on the Grow Bonds Program, which, I think, is also good. But, as the program matures, some of the suggestions that are coming forward from individuals, whether they are in opposition or from companies or consultants, will be looked at seriously. If we can improve the program by instituting some of those processes, I am not opposed to doing it.

Mr. Sale: Is it the minister's intent to catch up on all of the financial statements that should have been issued under the program that have not to at least a number of the companies? Will bondholders receive not just future statements, but all the past statements that they have been entitled to? The reason I ask that question is not to highlight the failure. I know the minister has acknowledged that there has been a problem because Grow Bond corporations do not have any independent funding. The mailing of prospectuses and photocopying, et cetera, if the company does not do it--which actually I think is where it should come from--is a job that the Grow Bond corporations are not really well set up to undertake.

The reason I ask it is that quite a number of these companies, within the next year, are coming up to their five-year stage, and investors need to have information in order to decide whether to convert, extend or redeem, which is the privilege. So what is the minister's intent on this?

Mr. Derkach: I thank the member for bringing that point up because I did neglect to address it. I should have informed him that we have undertaken to allow some funds to each of the bond corporations to allow for the mailing of the statements to the bondholders. These are volunteer bodies, and they do not have any administrative funds to be able to mail out the annual reports and the financial statements.

So we have allocated a small amount of money--I think it is $1,000 per bond corporation--to assist them in the mailing out of these financial statements. In cases where they cannot do it and we want to catch up with the process, we are mailing those directly from our office until such time that the process can be put into place. I can indicate to the member that we have already mailed out the statements to Keystone Seed Coaters, Quarry Oaks and to Dyck Seeds.

But we will be working with the corporations over the next year to ensure that they undertake to do this rather than the department doing it.

Mr. Sale: Mr. Chairperson, I appreciate that information. So just to be clear, the department will ensure that all past statements that have not been mailed will be mailed over the next period of time to bondholders of existing companies and that in future the companies are covered under regulations 20 and 23--in the case of 20, it is 20(b), and 23, it is 23(2)(a)--which require that the eligible business do the mailing, not the bond corporation. The eligible business must provide the information to the bond corporation but also to each bondholder and to the manager of the rural development bond office.

So it should be seen as a cost of doing business on the part of the company. I am not quite sure why we would subsidize companies to do that, although I understand that it would be nice of us to do that, I suppose, but it is certainly not required in the regulations. What is required is what has not been done.

Mr. Derkach: Mr. Chairman, as the member knows, these are all individual companies, and, yes, we try to hold them accountable to the agreement that is signed and to the regulations of the bond, but as the member knows, it has not been happening, and so to try and bring all of the statements up to current status, what we are doing is mailing the most current financial statements. If members would like the previous statements, we will certainly make those available as well.

Then we will work with the bond corporations and the companies to ensure that the regulations are, in fact, adhered to, but I think there is a period of time right now that we want to ensure that we settle the issues and we get the information out to bondholders and that the bond corporations get a feeling of more confidence in what they are doing.

So we will work at it in this way and then try to implement the regulations in a proper way for the future. The member has identified very clearly that we are approaching the five years, and so some of this information is required or needed by the bondholders to make some decisions.

Mr. Sale: Mr. Chairperson, I appreciate the minister's assurance on that. While I accept that the intent is to catch up to the most recent year immediately, if I were a bondholder in any of these--which I am not--and were facing that decision, I would like to see all of the relevant statements for the period I have held the bond, not just the most recent one, even though most of them contain two years of information.

Will the letter accompanying the statements indicate that earlier statements are available on request at least? I believe they should be sent out as a matter of course, not on request, but the minister said he is not going to do that, at least not immediately. Will the letter indicate clearly those statements are available on request?

Mr. Derkach: I am advised by staff that the letters that went out to the three corporations that I had identified did not include that, but I can give the member my commitment that future letters will indeed have a paragraph that indicates very clearly that previous statements are available at request.

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Mr. Sale: The last question in this area, Mr. Chairperson, Care, Rimer, I think one of the Sterlings, although I am not sure about that, are all coming up this year.

Will the minister undertake to ensure that those bondholders have all of the required statements rather than just the most recent statement before the date at which they have to make the decision to convert, extend or redeem?

Mr. Derkach: I am advised by staff that should not be a problem. The Rimer Alco one is done already, but Care--and I do not think Sterling is due yet--but for any that are due this year, we will assure the member that statements will be made available.

Mr. Clif Evans: I just want to make some comments still with the Grow Bond branch, and it is with respect to Gilbert International. I know that we had discussed it during the Estimates process. I must say that the exchanges that we have had here this afternoon about the whole Grow Bond and yesterday, I think my colleagues and I will agree that the minister has been fairly up front.

Mr. Derkach: I would not just say fairly. A little better than fairly.

Mr. Clif Evans: Better than fairly up front. I appreciate that. I think my colleague does too because I think--and I have said this to the minister before--we are dealing with a very important part of rural Manitoba with Grow Bond issues. I think it is important that we all are aware of what is going on when it comes to Grow Bond issues, as well as those that are investing in it, so that we do not come across more of this type of back and forth that we have had for the last couple of months, perhaps over a year now with respect to Woodstone and some of the others.

But I want to put on record that as far as Gilbert International goes, I have had some conversations with some of the Grow Bond investors, and, as we mentioned earlier, there is concern that perhaps the vast majority of the investors are hoping that we can find a solution and get Gilbert International on full track as was promised.

I was at the official announcement in Arborg and toured the plant at that time. I myself was very upbeat, and I am still upbeat about it. However, it is hard sometimes to be upbeat when I travel through Arborg one day of a week and see no vehicles there, travel another week and there is one vehicle there. You wonder whether these products that they are marketing or making themselves somehow, I do not know, on automatic pilot. Other people in the community see that too.

That building is a very important link to the community of Arborg, and to lose the Gilbert International people out of there would be a devastating blow to the people of Arborg, not only just with the jobs but just straight economy. Again, it took them so long to provide a tenant, get a tenant for that building. I would put the minister on notice. He said he has been dealing with them and his department has. I would really be pleased if the minister would keep me informed or provide me with anything that is going on with Gilbert, so that I am fully aware that when people come to me, I know what is going on, I can give them answers. So I can give them some positive answers if that is the route we are going and not have to say that No.1, I do not know; or No. 2, the government will not tell me; or No. 3, nobody wants to talk, because the people in the community know there is a problem.

They know there is a problem. They do not know everything, of course. As I said, they are so supportive. It would be a positive if this member whose constituency has the Grow Bond issue--it is over $700,000; it is a lot of investment from the community and surrounding area--that I be kept abreast of what is going on with Gilbert and, if at any time possible, be able to sit in or discuss with the minister or his staff just what is going on, what it is going to take, how we are going about it, who is helping, how we can help. I know the community would be appreciative. This would be not necessarily--and I would tell the minister this is not for the sake of the local MLA wanting to jump on the bandwagon to gain political support, because it is not, because it affects--I know what the opening of that plant meant to the business communities and to the people. I know that at the time when it was put in place there were other spin-offs and benefits that this member, this person realizes, and so I put it on record that I would really hope to be kept abreast with Gilbert International.

Mr. Derkach: Mr. Chairman, and to the member, I would like to put on the record that the member for Interlake has been patient. He has come to me from time to time and asked a few questions about Gilbert. He has not made it a political issue and certainly that is to his credit, I think, but let me just talk about the equity partners in Gilbert. I think it is very important that Manitoba Pool has become a partner in a value-added processing industry. This is their first venture, I believe, into that field in a major way and--

An Honourable Member: Can-Oat.

Mr. Derkach: Well, that is right, second, I guess. Well, Can-Oat is a bit of a different product, though, but in terms of a table-ready product this is probably their first venture into that kind of a market. I think they probably did it for several reasons because the Arborg area also lost its major elevator in that community, and I believe--no?

An Honourable Member: They did not lose their elevator. They expanded their elevator.

Mr. Derkach: I am sorry. My information on that was wrong, but I believe that they wanted to show a presence in that area in terms of participation in the rural economy. We are working very closely with Manitoba Pool, with CEDF, with the company to try and secure greater market share for their product, to try and stabilize the company; and, although they are operating on a sporadic basis at the present time, we are hopeful that will change and there will be a more consistent, I guess, workload for the people who are working at the plant and that the company will operate on a more consistent basis.

Can we be assured that will happen? I guess time will tell, but if the member has any suggestions that he wants to come to me privately with, I would certainly be prepared to listen. In addition to that, I think it is important that his community encourage Manitoba Pool to stay with the project.

I do believe that the director from that area is supportive of the project. From discussions with him, it appears that he is supportive of the project, which is a very positive thing, and I know that we have been in touch with the mayor of the community, with the bond corporation, and they have been very patient and very encouraging in ensuring that this plant has every possible chance of survival.

So to the member we will continue working with this company, with the community, prepared to work with the member in trying to ensure that we give every possible opportunity for this plant not only to stay in operation but to expand, to grow, and to provide those much needed jobs in the community of Arborg.

Mr. Clif Evans: Mr. Chair, I appreciate those comments. I guess, as far as the minister is saying, if this member would provide any sort of advice or assistance in any way, I would be more than willing to attempt that if, of course, seeing more about its operations since it has been going, understand it more, perhaps understand it a little bit more as to why it did not take off besides, of course, the marketing of the product. I know that Manitoba Pool--and I am pleased that they did get involved and are major stakeholders in it. I do hope, and I know that they are doing whatever is possible from their level to be able to keep it going.

But I certainly would probably appreciate just some background if possible from Gilbert International. If the minister has anything that I could look through and see if there is--maybe there is some. I have met with the Manitoba Pool people who discussed this issue. When I asked them about it, they said they had the opportunity to get involved and wanted to expand into that field; were perhaps not really, really satisfied that things were done properly prior to their getting involved, but I think they have attempted or are on the road to changing all of that and have made every effort to do that.

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Of course, as I have said earlier, I was very surprised that the issue would go ahead and without a real stable marketing plan in place. Thinking that you have something to sell and having the opportunity to do that, even though the product might have been top quality prior to jumping into such an investment and such a production, I just found it rather strange that would happen, but that is in the past. Hopefully, we can maintain Gilbert and expand it, expand it even to what it was supposed to have been already for the past two or three years and get it going to that level. After that, hopefully, we can see some positive results and go with it, so I appreciate those comments.

The Acting Chairperson (Mr. McAlpine): 13.6. Rural Economic Programs (a) Grow Bonds Program (1) Salaries and Employee Benefits $425,400--pass; (2) Other Expenditures $1,227,000--pass.

13.6.(b) Rural Economic Development Initiatives (1) Salaries and Employee Benefits $264,800--pass. (2) Other Expenditures $102,100. Shall the item pass?

An Honourable Member: No.

Mr. Clif Evans: No. I just want to ask one very, very short question on the Objectives. Can the minister explain--he has listed: To give communities and businesses tools, et cetera, Strategic Initiatives. What do his department and he mean by "Strategic Initiatives"?

Mr. Derkach: Mr. Chairman, there is a strategic initiative component to the REDI program, which means that if a project is of strategic importance in strengthening the base or the foundation of a community, and by funding it, if that increases the economic development or the diversification of the rural economy of that community or that region, we would be prepared to fund it on a strategic basis.

In other words, for example, if we have a project that will be attracted to a region--and I think we can use all kinds of examples--but if it is a significant project and is a strategic project for the economic development of that region, then we could use this source of funding to assist it, either in its infrastructure or in its feasibility work or its business planning or just in straight support to getting the company kick-started in a particular region.

The Acting Chairperson (Mr. McAlpine): Item 13.6. Rural Economic Programs (b) Rural Economic Development Initiatives (2) Other Expenditures $102,100--pass. (3) Programs - Operating $8,210,700.

Mr. Clif Evans: Mr. Chair, if I may, I want to indicate to the minister and his staff that I would be finishing today. I would appreciate if we might--and we will expedite to get it done today. If we could take a five-minute break so that we could get wound up, rested and ready to go for the last bit of the Estimates and fight on.

The Acting Chairperson (Mr. McAlpine): Is it the will of the committee to proceed with this Section 13.6 and pass this section first--two lines--and then we will pass the resolution?

Mr. Clif Evans: Mr. Chair, I did want to ask questions on the Operating Programs after the break. Is that the line you are indicating? Yes. I would like to get back--when we get back--to that.

The Acting Chairperson (Mr. McAlpine): Is it the will of the committee to take a recess for 10 minutes? So we will return here at 4:45 p.m. Agreed? [agreed]

The committee recessed at 4:36 p.m.

The committee resumed at.4:48 p.m.

The Acting Chairperson (Mr. McAlpine): We are on item 13.6. (b)(3) Programs - Operating.

Mr. Clif Evans: I want to say that I sort of support this program, the REDI program, and what its mandate is to do. I would like to ask the minister a few questions on this section about some of the programs that are within this branch.

I believe I found an annual report in my office, amongst everything else, and there was some identification of the REDI program that had been done through the communities. Can the minister enlighten me with some of the up-to-date REDI programs that have been initiated? In other words, what I mean, through applications and some of the major applicants to the REDI program that have been approved, and how they are doing and what they have?

I am sure that there are probably many, and we do not have the time to go through, but some of the major programs under the Feasibility Studies Program or the infrastructure side of it, some of the major ones that we have seen in the last couple of years.

Mr. Derkach: Mr. Chairman, this would be a fairly lengthy session because we have almost 300 applications that have been processed under the REDI program, approved projects. If you were to ask me which ones were the major ones, I am not sure. But they have varied from larger projects where we support infrastructure, for example, Canadian Agra, McCain, projects of that size, to smaller projects whether it is a local business starting up, a small manufacturing business. As the member knows, we are involved in Winkler Tire. We will probably be involved in the strawboard plant, and all of those kinds of projects we are involved in.

Our programs vary from providing feasibility studies--as the member knows, we just did Gromar for feasibility studies--to infrastructure support for the provision of utilities or services, such as either road access, perhaps gas or hydroelectricity, or whatever, water and sewage kinds of projects to new businesses that are starting or new companies that are starting.

Gosh, tourism projects, we support them. For example, in the city of Brandon, we have been involved in many of their tourism development projects. As they prepared for the Winter Games, we were involved in support for some of their infrastructure there. We were involved in the infrastructure support to, for example, the trailer park that was developed by Brandon.

No matter where you go in the province, I think, we have probably covered the province with the REDI program much more extensively than one would ever believe, and 300 projects is a significant number to be involved in across the province. I have to say that if you look at the distribution, we go from the very south part of the province to the northern parts of the province, not as many in northern Manitoba as I would like to see, but certainly there is a greater awareness and a greater understanding. I try to make sure that I travel to northern Manitoba at least once a year--I try to do it twice if possible--to go to their communities and at least meet with their councils and their chambers to let them know that we are interested in northern Manitoba. We want to see them participate in our programs because they certainly have a right to, and it would be exciting to see them diversify their economies. I think if you look at what is happening in Thompson and in Lynn Lake, those communities are really thinking about diversification and finding alternatives of economic development other than the mining industry that is a single industry for those communities.

So I do not know. It is difficult for me to try and answer the member's questions specifically because there are so many projects. But if he has a specific one that he would like me to identify and talk about, I would certainly be prepared to do that.

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Mr. Clif Evans: The minister mentioned Gromar, and I mentioned the peat moss industry. When a company like Gromar--and of course there was at the time that the application was made, and I can tell the minister this. I do not know, he may have heard, but some people were not too pleased with the fact that a company outside of Manitoba, even with the feasibility study and the potential of them coming to Manitoba for industry, people were not happy that the government would provide 50 percent of a feasibility study to be done in Manitoba for Manitobans, and for the future economic--[interjection] Well, no, I am just saying that there are people that were not happy. Why? I do not know. Probably because they never thought of it first. But with Gromar's feasibility study now being done--and I appreciate the copy of the letter the minister sent me indicating that REDI's share has been sent to them--when they request this feasibility study, do they provide an update or some sort of a prospectus as to what they are going to proceed with after this feasibility study is done? Do they inform the department and the minister?

Mr. Derkach: Mr. Chairman, once the feasibility studies are done, they are submitted to the department, but when they apply for the feasibility study, of course, we assume they are going to proceed with the project, and if they do not proceed with the project, I think we have about a year's grace where we are patient with them to begin the project. If they do not, then we take possession of the feasibility study, and we have the right then to share it with another company who may want to start that project.

Mr. Clif Evans: So what the minister is saying is the department has this completed study within its walls and cabinets and can deal with it after a year. So basically, what we are hoping, what the minister is saying that we are hoping in our area is, of course, that they will proceed and hopefully within that year. Of course, the community itself is getting rather antsy about the whole project. I know that all that peat moss is there, and we do know that Sungro is--the availability of the peat moss in the area right now is dropping rather quickly because of the market they have had, increase in market. So Sungro's availability of peat moss in their Elma area, as it was told to me when I visited the plant, is dropping, so they are looking at, instead of, I believe they told me that it was a 12-year plan a few years ago, now they are looking at a six-year plan.

So what I am saying too is, I am hoping that Gromar gets the others moving. With the feasibility study and their moving ahead will get the others going. We could see, like I said earlier, a potential of over 200 jobs in that area, besides full-time jobs, besides spin-off for just north of Riverton. I am pleased that they did come to the government and to the department to get this feasibility study underway. I am hoping for positive results and hopefully soon, so I appreciate that.

If I could, the Entrepreneur Assistance program, how much in a year does the department provide for entrepreneurs under this section of the program on a yearly basis? Do we get 100 applications? Do we get 50? How much money is allocated to that?

Mr. Derkach: By application, in this last fiscal year since the program started, we have 98 approved applications, I guess it is, for the REA program. Once again, they are projects that vary right across the province; southern, northern Manitoba, all types of projects. They do not have to be manufacturing projects. They can be projects that--for example, we have flower shops that have started, we have shoe shops, we have a variety of enterprises that have started under the REA program. As the member knows, it is the banks that provide the money. They do the due diligence, always supply the guarantee.

Mr. Clif Evans: Now I know the minister has told me before and I have forgotten because I would not be asking again, is there any financial input from the entrepreneurs, any financial resources put in and how much is the minimum?

Mr. Derkach: Every entrepreneur is required to have at least 20 percent equity in a project. The reason for that low-equity level is to allow those who cannot access capital from the banks to be able to get started. It is a way to get a business kick-started in a community.

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Mr. Clif Evans: As the minister has indicated, it is for any type of business. First time? Does it have to be first time? Can people who have been in business before, gotten out of business and want to start or get back into the same type of business, apply through this?

Mr. Derkach: Yes, any business is eligible for it. It does not have to be a first-time business. It can be an expansion or someone who was in business previously and wants to get back into it, has trouble raising capital, he or she can apply through the REA program.

Mr. Clif Evans: The community development corporation, Community Works Loan Program, I know there was some issue raised with this program when the minister brought it in. I understand that some communities that I have talked to have put in and applied for this program, under this program. I would like to ask the minister how many communities have actually applied for this since its inception.

Mr. Derkach: Mr. Chairman, just to go back to the last question that was asked by the member on the REA program, I would like to just indicate to him that under the REA program, the total investment that has been spent on REA is $3.3 million. The total capital investment is $7.5 million, and the employment numbers out of that investment are 236.

With regard to the last question on CDCs, we have a total number of 40 CDCs--no, I am sorry, the number of applications is 40, involving 68 municipalities; 21 of these have been approved, involving 42 municipalities. Under review at the present time, we have 19 CDCs involving 26 municipalities.

Mr. Clif Evans: Mr. Chair, all these applications and the communities, are they all being supported by a local financial institution? Is it basically a little bit of both? Is it perhaps entrepreneurs or businessmen or people around forming the CDC?

Mr. Derkach: Mr. Chairman, there is a mix. In many of our communities, I have to compliment the credit union movement for becoming involved in the CDCs, but also, we have private investors who have contributed to the CDCs, municipalities, community groups. So there are a variety of investors in CDCs.

Mr. Clif Evans: The minister, of course, when the program came in--it is a five-year, interest-free loan to the community, and hopefully, of course, it is money that the department or government will hopefully be paid back, and it will also be eligible for further funds if they obtain the funds. Is that correct?

Mr. Derkach: The member is correct. As a matter of fact, we have one community that has now applied for its second tranche of money under the CDC program. It is a five-year program. At the end of the five years, the money is to be paid back to the province, but once again, we are going to be monitoring the program as it goes on, and hopefully, at least my personal hope is that we can reinvest that money into additional economic development in the province.

Mr. Clif Evans: The Green Team, I remember the announcement--

An Honourable Member: Oh, you did not like it.

Mr. Clif Evans: We did not say we did not like it. We were not too sure how it was going to be done. However, the program--the minister can provide me with some numbers as to how many youth have obtained jobs for the summer. Is it a two-month period? Does it sort of tie in with the CareerStart program that was put in place?

Mr. Derkach: Mr. Chairman, in terms of numbers of youth that have been employed under the program, since 1992 the Green Team Program has provided close to 2,500 rural Manitoba youth with employment opportunities. The program is split into a Hometown program where municipalities can apply for assistance for students that they want to hire for their own communities.

The other component of the program is the original one where students work at our provincial parks. It is a little different than the urban Green Team Program because we do not have provincial parks in urban Manitoba per se. I think there might be, but there are not very many, so it is more of a community program in urban Manitoba.

(Mr. Peter Dyck, Acting Chairperson, in the Chair)

In rural Manitoba, as I said, the youth work either in a community, or they work for Natural Resources under the Parks program. The employment period goes from May up until the end of August to accommodate university students, and then when the high school students complete their high school programs, they are eligible to come onto the program. We try to split the program so that indeed there are opportunities for both university and high school students. Many times Parks uses the university students as the senior people of the program who then probably supervise a few of the other high school students under the program.

The program has been extremely successful. It seems that the comments that we get from young people are extremely favourable. Now, the program is still evolving, it always will, but we find that it is a way to keep our parks green, it is a way to keep our parks looking smart for the tourists, and it is also a way for our young people to act as hosts and hostesses for visitors to our parks. I have been to several locations and have experienced the work that these people do and the hospitality that these young people provide for our parks. They are truly good ambassadors for our province, there is no question about that.

Mr. Clif Evans: I am also pleased to hear the other aspect of the program, and that is with the municipalities or communities. With the communities or within the municipalities? I thought the minister said the municipalities. [interjection] Both.

Mr. Derkach: Within municipalities, communities may apply. Also, if you have a tourist operator within a community, he may apply for that program. You can have community organizations, whether it is a local Chamber of Commerce, a Lions Club, a Kiwanis Club, a Kinsmen Club. Nonprofit organizations may apply for the program, provided that the employment will meet the criteria that have been set out by the Green Team Program.

Mr. Clif Evans: The notices, applications have been sent already for this upcoming year, I would hope, being April.

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Mr. Derkach: The applications for the Hometown Green Team are being mailed by the end of this month, or perhaps have gone out already. Other community organizations that require applications can call a number that has been included in the mail-out. There will be advertisements going out in the papers, I believe, indicating that the Green Team Program is now available for taking applications, so the process has already started.

Mr. Clif Evans: Mr. Chair, I am also interested in the Partners withYouth program, how it is done. How much financial input has been put into that branch of the department? How many applications have been put in and approved? What is the success rate of that?

Mr. Derkach: The department puts $200,000 towards the program through the Department of Education and Training, who have responsibility for administering the program. My assessment of the program is that it is very successful.

It is again another opportunity to provide youth in our province with an ability to work on specific projects that are identified under that program. That program is more project oriented than it is job oriented, so that a student or a youth can in fact write a project. Then, if it is beneficial to a community or his area, it can be applied for under the Partners with Youth program. Also, under the Partners with Youth program, I think, one of the criteria is that these young people do not have to be students. They are young people between the ages of 16 and 24.

I see the Minister of Industry, Trade and Tourism (Mr. Downey) here with us today. He is actually the godfather of this program and should be given some acknowledgement for having the vision to implement a program like this.

Mr. Clif Evans: The minister said 16 to 24, and the book says 18 on this program, Partners with Youth program. Who made that mistake?

Mr. Derkach: I do not know. I thought it was 16 to 24. We could check those numbers out, but in the past we have always talked about this program being eligible for students or for young people from 16 to 24.

Mr. Clif Evans: Has the minister's department been involved with, through REDI, any feasibility studies or anything at all with natural gas issues that we have been seeing in the past few years?

As the minister is aware, there was an announcement made by the feds. I do not know whether that comes through or not. I do not know, but I am hoping that it is. As the minister is aware, the Interlake area, Interlake region, both on the west side, the east side and in the middle have all been working very diligently and have had a study done. What is the department's participation with that, if any?

Mr. Derkach: As the member knows, we were involved in the first tranche of rural gasification under the former infrastructure program. Our department is a partner in the delivery of the program. We are also involved in, or will be involved in, this upcoming expansion of natural gas to the Swan River Valley, as well as to the Interlake area. However, I think the Interlake area still has some homework to do, together with Centra Gas, our department and government. Although the member says the feasibility work has been done, there are some communities that have been added through the federal government's announcement that were not included in the first, original feasibility study.

I want to indicate on the record that we were opposed to using WGTA funds for these types of purposes. Those monies were, in our view, meant for road reconstruction which was impacted because of the removal of the Crow and also the elimination of many of the rail lines and elevators in rural Manitoba.

However, having said that, the federal government unilaterally decided to spend the money in ways that they saw fit, political as could be I might add, and so therefore they were the ones who said, we will spend X number of dollars in Swan River, so many dollars in the Interlake region.

Our approach is different. Our approach is one where we have to look at the total provincial picture and try to service as many people in the province as we can, rather than specifically targeting regions. Having said that, we will work with any community and since the Interlake communities have been given the indication that this money is being made available to them, we will work as co-operatively as we can to either, I guess, see the natural gas projects in that area a reality through a co-op program or through Centra Gas. To us, we will go either way. As the member knows, Gladstone did theirs through a co-op program. It was just another way of being able to get the project done, so, yes, we are participants.

I would also say to the member that we are also looking forward to the expansion of natural gas to other communities, such as the communities in sort of the southern part, south of Portage. A lot of those municipalities do not have gas today. Starbuck does not have natural gas, and if you look to the west side of the province, there are communities there that do not have natural gas. As communities come forward with their plans and their feasibility studies and their monies, I guess we will be prepared to work with them to ensure that they have access to natural gas.

Mr. Clif Evans: Would the natural gas initiative, now, in a support from under the capital program part of REDI, or would that come from general revenue? Where would we see any provincial money towards a natural gas project come from?

Mr. Derkach: Once a project is approved, then we would look at where the funding sources should be. In the past it has been done under the infrastructure program, but when you do not have an infrastructure program, you have to look for other sources of funding to accommodate the expansion. It could very easily come under the Rural Economic Development Initiative, because whether it is under the infrastructure component of our programs or under the strategic initiatives, those are two areas that you could probably justify doing natural gas from because it does help the economic development of a particular community.

The Acting Chairperson (Mr. Dyck): 13.6.(b)(3) Programs - Operating $8,210,700--pass. (4) Programs - Capital $3,520,000.

Mr. Clif Evans: The amount which is $600,000, almost $700,000 from last year to this year, where did we see the move to? It says of various rural economic programs. So you are talking $700,000. Did it go to any specific other area of the department for something or just distributed for some of the other programs?

Mr. Derkach: As the member knows, last year we supported the infrastructure to Portage la Prairie to accommodate the McCain expansion by $1 million. This year's requirement is down to $300,000, I believe. So there is a shift in there. The remainder of the money has been, I guess, reallocated to other areas. For example, the Community Works Loan Program increased from $1 million to $1.5 million.

The Acting Chairperson (Mr. Dyck): Okay. 13.6.(b)(4) Programs - Capital $3,520,000--pass.

6.(c) Unconditional Grants - Rural Community Development.

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Mr. Clif Evans: Has the formula changed at all from last year within this area--$5,012.70 a head, is that what it is?

Mr. Derkach: No, the formula has not changed, but what may change is the fact that now we have new census data, so that will impact on the per capita to various communities. That is basically the only change that will result this year because of the census.

Mr. Clif Evans: Mr. Chair, the minister and his department have always, at my request, provided me with an update, the latest, whatever numbers that he has as far as the distribution to all the communities, amounts. I appreciate having that again. I do keep it; it is very handy when it comes to communities or people talking about this grant, what, who is getting and why. So I would appreciate that, especially when you get more.

The Acting Chairperson (Mr. Dyck): 13.6.(c) Unconditional Grants - Rural Community Development $5,500,000--pass.

Resolution 13.6: RESOLVED that there be granted to Her Majesty a sum not exceeding $19,250,000 for Rural Development, Rural Economic Programs, for the fiscal year ending the 31st day of March, 1998.

Moving on to 13.7 Expenditures Related to Capital (a) Transit Bus Purchases $180,000--pass; (b) Water Development $944,100--pass; (c) Sewer and Water $3,910,000--pass. (d) Canada-Manitoba Partnership Agreement on Municipal Water Infrastructure $3,300,000.

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

Mr. Clif Evans: Of course, the minister has been notified, I am sure, and we talked about it, I believe it was yesterday or the day before about the Arborg invitation to attend their opening of their facility. Is the minister available to go tomorrow?

Mr. Derkach: I am not able to go because the House is sitting, Mr. Chairman, and our attendance is required here.

Mr. Clif Evans: Did the minister have intentions of going? Is there something specific--that he has to be here to accompany, perhaps, the member for Interlake?

Mr. Derkach: Mr. Chairman, I have to indicate that the member for Gimli (Mr. Helwer) will be attending on my behalf because when we were required to respond to the invitation, we were in Estimates and, also, because the House was sitting. As minister, it is incumbent upon me to be here, especially when Estimates are called. Therefore, I declined the invitation and asked the member for Gimli to attend on my behalf. So there will be representation there.

Certainly, I would love to be there, but unfortunately, as the member knows, we cannot get pairs for attending events like that. Therefore, it is difficult for a minister to attend. Even though it is a very important event, and it does not happen that often in the community of Arborg, I would love to attend the opening, but we are in this type of a situation. Perhaps he could impose his will on his House leader to ensure that we, in fact, can get pairs for events like this.

As a matter of fact, Mr. Chair, I just received about three responses back this morning from the opposition denying me pairs for other events; therefore, that is sort of the reason why I cannot attend this event.

Mr. Clif Evans: We have--what do you call it? We are paired for three days.

Mr. Derkach: No, we are not. It is in the letter of understanding.

Mr. Clif Evans: Well, what do you think, that just because I am Ukrainian, I do not understand? You are Ukrainian, too.

An Honourable Member: Yes, you both are.

The Acting Chairperson (Mr. McAlpine): Order, please. We tend to be straying from the topic here.

Mr. Clif Evans: Can the minister just tell me, under the PAMWI agreement--of course, you know the communities of Ashern and Fisher Branch are having difficulties. I understand that in Ashern this program has been in play with the community, at least assisting in some way--I am not sure of all the details, if they are--and Fisher Branch is going ahead with their water development. Is this program in place for those communities, the assisting?

Mr. Derkach: Mr. Chair, those communities are not proceeding under the PAMWI program. It is under our regular water services program.

Mr. Clif Evans: Pass.

The Acting Chairperson (Mr. McAlpine): 13.7.(d) Canada-Manitoba Partnership Agreement on Municipal Water Infrastructure $3,300,000; (e) Conservation Districts $2,300,000--pass; (f) Downtown Revitalization $132,500--pass. (g) Infrastructure Development $1,000,000.

Mr. Clif Evans: Mr. Chair, just a quick question. Last year, nothing allocated, so the department did not provide any resources to this Interlake industrial park. This year, they are to the tune of $1 million. My question is: Why not last year? Why this year? Is it going to be more than the million dollars after?

Mr. Derkach: The million dollars identified this year is for the infrastructure development at the Canadian Agra site.

The Acting Chairperson (Mr. McAlpine): 7.(g) Infrastructure Development $1,000,000--pass. (h) Less: Recoverable from Rural Economic Development Initiatives $2,250,000--pass.

Resolution 13.7: RESOLVED that there be granted to Her Majesty a sum not exceeding $9,516,600 for Rural Development, Expenditures Related to Capital for the fiscal year ending the 31st day of March, 1998.

The last item to be considered for the Estimates of the Department of Rural Development is item 1. (a) Minister's Salary $25,700. At this point, we request that minister's staff leave the table for the consideration of this item.

Mr. Clif Evans: While we are preparing for the minister's salary, I just want to extend our thank you to the staff and their due diligence in putting up with some of the questions and preparing everything. We thank you very much for that.

* (1730)

The Acting Chairperson (Mr. McAlpine): The last item to be considered for the Estimates of the Department of Rural Development is 1. (a) Minister's Salary $25,700--pass.

Resolution 13.1: RESOLVED that there be granted to Her Majesty a sum not exceeding $1,329,900 for Rural Development, Administration and Finance, for the fiscal year ending the 31st day of March, 1998.

This now concludes the Estimates for the Department of Rural Development.