Hon. James McCrae (Government House Leader): Madam Speaker, on a number of matters of House business, I should inform honourable members that there have been discussions amongst representatives of the parties and House leaders, and I will suggest some matters of procedure for this particular week. Firstly, that today the House adjourn at 6 p.m.

Madam Speaker: Is there leave of the House to adjourn today at 6 p.m? [agreed]

Mr. McCrae: It is agreed, I believe, that the House not sit on Friday, May 16.

Madam Speaker: Is there leave of the House to not sit on Friday, May 16? [agreed]

Mr. McCrae: We suggest that the House sit on Thursday, the 15th of May, beginning with Prayers at 10 a.m. and sitting until noon for dealing with bills. Then we resume at 1:30 that day with Routine Proceedings, Question Period and government orders and that we sit that day until six.

Madam Speaker: Is there leave that the House sit on Thursday, May 15, from 10 a.m. to 12 noon, commencing with Prayers and consideration of bills and resume at 1:30 p.m. with Routine Proceedings and other government business until 6 p.m.? [agreed]

Mr. McCrae: I suggest that for the period of May 12 to May 15 any recorded votes arising in the House in the standing committees or in Committees of Supply be deferred until a time agreed upon between the House leaders.

Madam Speaker: Is there leave that for the period of May 12 to May 15, 1997, any recorded votes arising in the House in the standing committees or in the Committees of Supply be deferred until a time agreed by the House leaders? [agreed]

Mr. McCrae: I suggest that the quorum requirement in the House, in the standing committees or in Committees of Supply be waived for the period of May 12 to May 15.

Madam Speaker: Is there agreement that the quorum requirement in the House, in the standing committees or in the Committees of Supply be waived for the period of May 12 to May 15? [agreed]

Mr. McCrae: Consequentially, I suggest that the number of members required to request a recorded vote in the House, in a standing committee or a Committee of Supply be reduced to one for the period of May 12 to May 15.

Madam Speaker: Is there leave that the number of members required to request a recorded vote in the House, in a standing committee or a Committee of Supply be reduced to one for the period of May 12 to May 15? [agreed]

Mr. McCrae: In order to make all these arrangements work, we have agreed that the Committee of Supply ought to be divided into three parts, into the House, into Room 255 and Room 254 whenever that is possible where there is no conflict with another standing committee or other such matter, and the opposition House leader and I have signed this document. I think it is pursuant to one of the rules of our procedures and so on, tabling that now, which sets out an order of Estimates, which as we know, gets changed quite frequently.

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Speaking of such changes, Madam Speaker, I also seek leave of the House to adjust the Estimates sequence just tabled by rearranging for Room 255 the following in the order indicated: First, Canada-Manitoba Infrastructure Program; second, Canada-Manitoba Enabling Vote; third, Industry, Trade and Tourism followed fourthly by Sport.

Madam Speaker: Is there leave of the House to adjust the Estimates sequence just tabled by arranging for Room 255 the following in the order indicated: (1) The Canada-Manitoba Infrastructure Program, (2) The Canada-Manitoba Enabling Vote, (3) Industry, Trade and Tourism, and (4) Sport for today only. [agreed]

Mr. McCrae: Madam Speaker, I move, seconded by the honourable Minister of Industry, Trade and Tourism (Mr. Downey), that Mr. Gerald McAlpine, member for the electoral division of Sturgeon Creek, be appointed chairman of a third section of the Committee of Supply and that the duties performed by that member shall be deemed, for pay purposes only, to be the same as those of the chairperson of a standing or special committee.

Motion agreed to.

Mr. McCrae: For the information of honourable members, that means this afternoon, Madam Speaker, that in the House will be the Estimates of the Department of Culture, Heritage and Citizenship; in Room 255, Canada-Manitoba Infrastructure Program; and in Room 254, the Department of Energy and Mines.

I move, seconded by the honourable Deputy Premier (Mr. Downey), 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.

Motion agreed to.

Madam Speaker: Due to the unavailability of the Deputy Speaker, the honourable member for La Verendrye (Mr. Sveinson) will be chairing the Committee of Supply in the Chamber; the honourable member for Sturgeon Creek (Mr. McAlpine) will be chairing the Committee of Supply in Room 255; and the honourable member for Gimli (Mr. Helwer) will be chairing the Committee of Supply in Room 254.

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The Acting Chairperson (Mr. Peter Dyck): Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Energy and Mines. Does the honourable Minister of Energy and Mines have an opening statement?

Hon. David Newman (Minister of Energy and Mines): I do.

Mr. Chairman, I am pleased to present the 1997-98 Estimates for the Department of Energy and Mines. The mission of the department is to foster investment in the sustainable development of our energy, mineral and petroleum resources and promote the efficient use of energy. Organizationally, besides the specific responsibility of divisions and branches, the department is also responsible for a number of industry-support programs: The Mineral Exploration Assistance Program, Petroleum Exploration Assistance Program, Manitoba Potash Project, and the Acid Rain Abatement Program in Flin Flon.

Mr. Chairman, in recent years we have been very proactive in enhancing the advantages to doing business in Manitoba. We have worked with the mining and petroleum sectors to reduce red tape, increase exploration and investment incentives and generally to make Manitoba the best place for mining and exploration in Canada. I think my review and forecast of departmental activities will bear this out, and as a new minister I am impressed with the legacy I have been given to administer and lead. We have a very capable staff which has enthusiastically promoted Manitoba's mineral, energy and petroleum resources to attract new investment in these sectors in accordance with the principles of sustainable development.

The former minister, the Honourable Darren Praznik, and I with the deputy minister have personally discussed investment opportunities in Manitoba's positive business climate with the heads of over 100 Canadian and American companies. The deputy minister and I will continue to take every initiative to market and showcase the advantages of exploring and investing in mining and petroleum in Manitoba.

Land access and tenure issues are a priority for both the government as a whole and this department. My department has achieved significant results by introducing new policies, supporting stable tenure and resolving outstanding access issues. We are working closely with the Department of Northern Affairs, which is making progress in negotiations for settling treaty land entitlement issues in Manitoba.

Turning to specific departmental activities, I would like to start with a summary of matters coming under marketing. The Marketing branch makes Manitoba highly visible in the mineral sector through an aggressive outreach and advertising strategy. Our objectives are to attract new exploration and development investment to Manitoba, increase attendance at the Manitoba Mining and Minerals Convention and raise client awareness of the information resources available in the department. To make it easier to access information remotely and to promote the department's programs and services, we have just established a web page and can now be reached on-line. Clients can now access information on exploration and development, incentive programs, Manitoba properties available for option, the Manitoba Mining and Minerals Convention, publication sales and library resources to support their exploration and development activities.

In September 1996, we released a new and revised edition of Gold Deposits of Manitoba. This publication gives gold explorers a compilation of known gold deposits and significant gold occurrences in the province, four full-colour maps that locate and illustrate the geological setting of the deposits, plus a comprehensive bibliography of gold-related publications for Manitoba.

Mr. Chairman, for many years, the annual Manitoba Mining and Minerals Convention has provided an ideal forum for identifying, promoting and facilitating economic development opportunities for our mineral resources. The event has grown to be one of the premier conventions of its type in Canada and occupies most of the ground floor in the Winnipeg Convention Centre. In 1996, attendance was 676 which represented a cross-section of mineral-related disciplines in industry and government. We are already preparing a program for the 1997 convention.

A key component to attracting new junior, senior mining and exploration companies to Manitoba is a listing of quality mineral properties available for option. In this regard, the Marketing branch is organizing a workshop this spring to help Manitoba property holders develop ways to better market their properties.

We continue to have good news in the mining sector. Both interest and activity in mining are very strong, as shown by the following indicators. Last year, exploration expenditures totalled $40.1 million, compared with $32.6 million in 1995. A total of 692 mining claims were recorded. We issued five exploration permits covering an area of about 130,000 hectares, 46 quarry mineral leases were issued, and we issued 841 casual quarry permits.

As part of our efforts to make Manitoba the best province in Canada for mining exploration and development, we introduced the $10-million Mineral Exploration Assistance Program in 1995. MEAP is intended to increase exploration and stimulate activities that could lead to the development of new mines in Manitoba. Priority consideration is given to grassroots exploration, that is, exploration not associated with a producing mine.

Currently, 98 projects by 42 companies are involved, of which eight are in the target area, the Northern Superior Geological Province. As of December 6, 1996, 27 new companies had been attracted to Manitoba under MEAP. This produces an increase of 82 percent in companies exploring in the province over 1995. Program allocations were $6.4 million in financial assistance with proposed exploration expenditures at $27 million. To date, $1.8 million has been paid out in assistance and $13.7 million reported in exploration expenditures.

An interim offering for $275,000 is scheduled for May of this year and a $3-million offering in November. We will evaluate the effectiveness of MEAP and the economic benefits to Manitoba, and by next fall we expect to have the results of the evaluation which will determine the program's future.

To further facilitate mineral exploration and production, we have introduced one-window permitting to help expedite projects from exploration to production smoothly and efficiently. This simple, transparent, one-stop process provides fixed time frames for application and review and ensures that projects can progress efficiently from exploration to development of a new mine. We are sensitive to the role of the prospector and the mineral industry in Manitoba.

In the past five years the Prospectors Assistance Program has provided 179 projects. To date, 99 have been completed at a cost total to the province of $432,229. The program allows up to $7,500 for each approved project.

In gold, Mr. Chairman, we continue to have significant good news. The Blackhawk Mining operation at the new Farley Lake open pit has breathed a new life into Lynn Lake, which has gone through, as we all know, a difficult time in the past several years because of mine closures. Employing 110 people, Farley Lake plans to mine 63,000 ounces of gold in 1997.

Snow Lake continues to benefit from the now fully operational TVX Gold New Britannia Mine and its 270 jobs on site. The mine produced 68,500 ounces of gold in 1996 and plans to produce 85,000 ounces in 1997.

In Bissett, Rea Gold is continuing a major surface and underground construction and preproduction development program. Construction of the new surface mill was 60 percent complete. Production of ore from underground is scheduled to begin in mid-June, with 34,000 ounces scheduled for 1997. Annual production thereafter is scheduled at 80,000 ounces a year. A total of 160 employees are engaged on site. Rea's success is a tribute to the provincial exploration incentive program that in 1993 enabled Rea to raise the $3 million needed for initial exploration work at the Bissett property. It is also noteworthy that this particular operation is near to the Hollow Water Reserve which provides a number of employees to this site.

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

Base metal production requires the discovery of new mineral resources in order for Manitoba to be competitive in the future. This, Mr. Chairman, is another reason why MEAP and the geological survey work we are undertaking are so important for the future of our mining industry. In total, 19 companies are actively exploring for base metals in Manitoba.

Tantalum Mining Corporation continues with a strong production presence at its Tanco Mine near Lac du Bonnet.

On the exploration front, Inco continues delineation drilling of the Pipe Deep nickel deposits south of Thompson. A development decision for this project is expected in 1997 upon completion of the drilling.

Falconbridge continued to focus exploration on William Lake in the Thompson nickel belt, where exploration drilling discovered very promising nickel mineralization in 1996. A substantial drilling program started in 1995 will continue over the next few years.

Cominco conducted geophysical surveys and drilling on properties on the southern extension of the belt and Hudson Bay Mining obtained encouraging results from the deep drilling of the Callinan copper-zinc mine near Flin Flon.

Mr. Chairman, our government is strongly committed to the rehabilitation of depleted gravel pits, and the program my department implemented in the spring of 1993 is operating very successfully. Since then, 361 gravel pits have been rehabilitated, covering 1,400 hectares at a cost of $2.3 million.

In Geological Services, a new Intergovernmental Geoscience Accord was signed in September at the Mines Ministers Conference in Yellowknife. The accord outlines the respective and complementary roles the provincial and federal Geological Survey organizations will play in the future. Bilateral accords between Ottawa and provincial survey organizations will have established 3 to 5 year work plans addressing regional needs.

Manitoba's bilateral accord was signed in December 1996, and a work plan involving contributions from the federal and provincial geological surveys is being developed. Federal-provincial contributions, principally through two new national mapping projects in the Northern Superior Province and around Winnipeg, will entail federal expenditures averaging $1.3 million over the next three years.

During 1997, Geological Services will publish new maps, geological reports and electronic databases on CD-ROMs stemming from the first federal-provincial National Mapping Shield Margin Project in the Flin Flon-Snow Lake region. The flood of new information and exploration ideas stemming from this highly successful initiative has stimulated renewed exploration for gold and base metals and has attracted new companies to invest in the region feeding the Flin Flon smelter.

A major new project has been initiated in the Thompson Nickel Belt where access to hitherto unavailable exploration drillcore and confidential information is being used to develop a new geological compilation for the region, the first in over 25 years.

By 1997, we will again focus on new geological mapping programs and geochemical surveys in northeastern Manitoba. Operation Superior is a five-year commitment to attract and assist the search for new gold, base metal and rare element deposits in this relatively underexplored part of the province. Multimedia geochemical surveys will centre on the eastern part of the region. Geological mapping will continue in the Stull and Kistigan Lakes region, as well as Knee Lake and Oxford Lake. Technical assistance will continue for the titanium/vanadium/iron project at Cross Lake.

Geological investigations in the Mafeking area in 1996 will provide baseline information supporting Birch Mountain Resources of Calgary in exploring for gold.

In southern Manitoba, an inventory of near-surface sources of crushed stone, dolomite and dimension stone in the Winnipeg region will be made as part of the Capital Region Study. A second federal-provincial mapping project will boost efforts to develop a digital geoscience database for southeastern Manitoba and conduct more in-depth studies into the hydrogeology of the region.

Mr. Chairman, I am pleased to note that as of February 1997, the excellent co-operation between the federal and Manitoba Geological Surveys has led to four of the 11 new NATMAP programs in Canada being conducted in our province. This highly essential influx of technical expertise keeps Manitoba at the forefront of new database development in support of mineral exploration by the private sector.

Mr.Chairman, 1996 was an exciting year in Manitoba's oil patch. Expenditures on exploration for the year are estimated at $10.6 million, more than double the $4.4 million spent on exploration in 1995. Thirty geophysical exploration programs and 28 exploratory wells were drilled in 1996, making it the most active year for oil and gas exploration in the last 10 years.

The introduction of the Petroleum Exploration Assistance Program in 1996 was an important factor in encouraging exploration in Manitoba. PEAP provides assistance to companies of up to 20 percent of the cost of eligible exploration activities. The program has been very well received by industry and has been instrumental in attracting some of Canada's most dynamic and successful oil companies to Manitoba. Under PEAP, 23 new field wildcat exploratory wells have been drilled resulting in the discovery of up to nine new oil pools. This exploratory activity has supported our local oil field service industry and has led to the drilling of a number of follow-up development wells.

The continuing development of the Manitoba Oil and Gas Well Information System has also been an important factor in increasing exploration activity. Improvements in the breadth and timeliness of data available digitally from the system has further encouraged oil industry geologists to develop exploration prospects in Manitoba.

Mr. Chairman, one of the results of our government's work with the petroleum industry is that Manitoba has the most responsive government regulatory practices in western Canada. A prime example of this is turnaround time for application for a well licence. In Manitoba, once all required information has been submitted, a well licence is routinely issued within one working day. By comparison, in Alberta, applicants routinely must wait one to two weeks to obtain a licence.

Mr. Chairman, 1997 is shaping up to be an even more exciting year than 1996. Geophysical and drillling activity over the first two months of the year was the highest in over 10 years. In February, we completed the results of our largest Crown oil and gas lease sale ever, with over $3.9 million in new revenue collected. In 1997, we will concentrate on providing quality service to clients investing in Manitoba's oil and gas potential. In addition, we will continue to evaluate our petroleum fiscal policies and drilling incentive programs to ensure our business climate is competitive.

The Petroleum and Energy Branch will promote Manitoba investment opportunities at a number of technical meetings and industry trade shows. This includes hosting a one-day open house in Calgary to showcase Manitoba opportunities.

The branch's energy activities have focused on programs designed to promote economic investments in energy efficiency and alternative energy technology, including co-ordination of the Manitoba R-2000 program. A total of 21 new homes were completed under the program in '96-97 compared with 15 in '95-96 and just one in '94-95. Our target for this fiscal year is enrolling 60 new homes.

Working with Government Services, the branch implemented the pilot phase of the Manitoba Government Buildings Initiative. The program involves the energy retrofit of 78 government-owned buildings. It is designed to be financed over 10 years out of the energy savings realized in these buildings. After all buildings have been retrofitted, estimated energy savings are $1.8 million per year. The branch will continue technical and administrative participation in the Manitoba Government Buildings Initiative. This year six representative buildings will be retrofitted, and the funding mechanism for doing the remaining 71 buildings will be finalized. We will also investigate the feasibility of incorporating energy-efficient features in buildings constructed and operated by the Department of Northern Affairs.

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The branch will continue to work with Natural Resources Canada and the Manitoba Association of School Trustees on the school bus driver training initiative. If this pilot project proves to be economically viable, it will be expanded to all Manitoba school divisions in future years.

We are also developing a proposal to encourage the production and use of ethanol as a fuel substitute in Manitoba. Besides its environmental benefits, use of ethanol as a fuel provides a market for Manitoba grain and reduces the use of imported refined petroleum products.

Another major initiative scheduled for this year is raising the department's profile as an important source of impartial information on energy efficiency and alternative energy. This will include developing an inventory of publications that cover all facets of energy efficiency and alternative energy. We will also investigate the use of the Internet as an effective means of distributing this information.

In conclusion, Mr. Chairman, we are confident that our policies, programs, services and incentives will enhance Manitoba's position as the province to be in for activity in mining and petroleum.

I want to take this opportunity to express my appreciation to the employees of Energy and Mines for their hard work and commitment to providing quality services to our customers.

To the official opposition critic, I look forward to a dialogue during this period of Estimates which will serve to further enlighten the people of Manitoba. Thank you.

The Acting Chairperson (Mr. Dyck): We thank the Minister of Energy and Mines for those comments. Does the official opposition critic, the honourable member for St. James, have any opening comments?

Ms. MaryAnn Mihychuk (St. James): Very briefly.

The Acting Chairperson (Mr. Dyck): Thank you. The honourable member for St. James, please.

Ms. Mihychuk: I want to thank the minister for his opening comments and look forward to going through the department in some detail this year. We have seen some changes in the department. The Geochemistry Lab, for example, has been privatized, and five positions have been lost in that sector. I will be asking some questions as to the reasons for that decision. I did receive calls of concern from prospectors and small mining companies who had used the lab as an important source of information and aid.

In addition, the overall theme of the department has moved from what I would call a hands-on approach, where it focused on providing geologists to go out into the field to access information to provide a foundation of information which allowed exploration companies then to move on that and target in, into a more marketing approach based on glitz and glossy paper rather than substance. So I am going to be questioning, again, the focus of the department which has deemed the priority marketing rather than substance, I would argue, and that is putting more geologists into areas such as the Superior project. I think that, indeed, is a wise decision, to go into the Superior Province. It is difficult to access. It has generally been untouched, and I believe that is the goal of government, to provide that sort of foundation so then it can stimulate industry into making those moves into areas that otherwise would have remained untouched.

The marketing sector has grown by leaps and bounds. I will be asking the minister whether this was indeed true value. Many geologists in sectors in the mining field are quite well aware of the mining potential in Manitoba, and I am going to ask whether we have not perhaps topped out the need for marketing. The geologists involved in many of the companies know how to access materials. Some of our maps are outdated, and the question would be: Are we trying to promote outdated maps, or is it time to update the actual geological information?

So I think that those are some questions, that I am going to be questioning the overall purpose and direction of the department. When we look at, for example, the estimates of revenue that were presented during the budget for the fiscal year ending March 31, 1998, we see that mining revenues have dropped dramatically. In 1996-97, estimated revenues are $400 million. The estimated revenue from mining, mining tax, has dropped to $15 million. That is indeed a very significant and unfortunate trend. We will be exploring with the minister whether indeed these programs, the MEAP, and the emphasis on marketing is in fact producing what Manitobans hoped would occur and what this government hoped would occur.

In addition, I am going to be questioning the petroleum subsidy, the grants, which I understand are primarily being used by some fairly well established oil companies, and whether the goals of that grant are being met. Are we attempting to subsidize large oil companies, or are we attempting to perhaps stimulate our own Manitoba oil companies into further exploration? So I will be looking for some direction in that area and how this grant program in petroleum fits the guidelines or the principles of sustainable development.

This year's flood of the century, as it is called, has highlighted the value of surficial materials as we saw tons of clay being used in the Brunkild dike, and we saw tons and tons of sand and aggregate being used for sandbags. It is ironic, I believe, that we see the City of Winnipeg contemplating selling that very gravel pit, where the sand came from, next year. We are indeed fortunate in some ways to have the flood this year, otherwise we would have had to pay substantially more for that material which saved basically the city of Winnipeg. I will be discussing some of those issues of resource uses and what is available for this city of Winnipeg in terms of aggregate material.

There was a recent concern that Birds Hill would be opened up to mining, as it is a large source of aggregate material but also provides a significant recreational area for the city and surrounding areas.

In addition, I wish to explore the growing trend of urban sprawl, particularly to the north of the city. Significant limestone and construction-type material is fairly accessible when you head north of the city of Winnipeg towards Stonewall where we see several quarries. With the virtually unlimited expansion of the city of Winnipeg beyond the Perimeter, which we feel is particularly unfortunate, this will indeed have an impact on perhaps the availability of accessing those resources either though direct sterilization or conflict between homeowners and the industry which wishes to exploit those materials. In addition, I will be looking at the energy sector of the department, a component that we have seen dramatic decreases in staff and ability to address the issues of energy and look at whether indeed the time has not come for a renewal of the government's commitment to energy efficiency and energy retrofitting. The minister does point out that there can be significant savings, and I will be delving into that area as well.

So it will be very interesting to hear the minister's comments, and as we delve into Energy and Mines, I will challenge the minister as I did the previous to perhaps spend a day out in the field with a geologist who is doing real work for Manitobans and experience Manitoba's nature and exploration as it really is. I am sure that the department would be more than willing to outfit the minister and guide him in a day-long trip. I think he would enjoy it very much. Thank you very much.

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The Acting Chairperson (Mr. Dyck): We thank the critic from the official opposition for those remarks. Under Manitoba practice, debate of the Minister's Salary is traditionally the last item considered for the Estimates of a department. Accordingly we shall defer consideration of this item and now proceed with consideration of the next line.

Before we do that we invite the minister's staff to join us at the table, and we ask that the minister introduce his staff present, please.

Mr. Newman: Most of these faces would be familiar faces to Ms. Mihychuk, however I think there may be one new face here: Michael Fine, my deputy minister; Garry Barnes, the executive director of Administrative Services; Craig Halwachs, the manager of Financial Services; Jim Crone who is new, and Jim may be just single, the new director of Marketing; Bob Dubreuil, director of Petroleum & Energy; Art Ball, director of Mines; and Dave McRitchie, director of Geological Services.

The Acting Chairperson (Mr. Dyck): We thank the minister for those introductions. We will now proceed to line 23.1.(b)(1), that is Salaries and Employee Benefits $271,200.

Ms. Mihychuk: It is going to be my goal to basically go through the department page by page. I would like to start actually on page 3 which highlights the mission of the department. There were some very specific goals, targets established in 1993. Can the minister inform us how the department is doing in respect to these goals? As we can see, one goal is to increase mineral exploration in Manitoba by 40 percent, oil production by 20 percent, improve energy efficiency by 5 percent, and decrease the proportion of imported refined petroleum products by 5 percent.

Mr. Newman: First, with respect to increasing mineral production in Manitoba by 40 percent, it is noteworthy that the base line is 1993 and the benchmark figure was 27.4 million in 1993; in 1994, 40.5 million; 1995, 32.6 million; in 1996, 40.1 million. The target for the year 2000 is therefore 41.1 million, which would be a 50 percent increase even in excess of the mission target. With respect to oil production the benchmark is 1993, 706.5 million; 1994, it was 664.5 million; 1995, 857.8 million; 1996, 843.8 million and the target for the year 2000, 847.8 million.

Improving the efficiency of energy use in Manitoba, the base line figure 1993 is 10.64 megajoules in relation to a dollar value of GDP. The figure for 1994 is 10.59. The preliminary figure for 1995 is 10.71, and 1996 is not yet available. The target for the year 2000 is 10.11. With respect to the decreasing proportion of refined petroleum products, the base-line figure for 1993 is 40.9 percent; in 1994, 41.1 percent. A preliminary figure for 1995 is 41.2 percent; 1996 is not available yet, and the target for the year 2000 is 38.9 percent.

Ms. Mihychuk: Just for clarification. The imported refined petroleum products number for '95--was it 41.2?

An Honourable Member: 41.2.

Ms. Mihychuk: Looking at those numbers, it is fairly clear that the challenge lies in the second, the third and fourth goals to improve efficiency and energy use and to reduce import of refined petroleum products. Can the minister tell us what strategies we are going to use to meet those targets?

Mr. Newman: I think I described in some detail in my introductory remarks one of the things that we are doing in terms of efficiency of energy use, and that is in relation to public buildings. With respect to the theme of the other direction, it would be in terms of education. We are always looking for an opportunity to promote our R-2000 program, for example, and in that connection we are looking with some hope that, for example, as we are doing flood damage repairs that people will see fit with encouragement to upgrade the energy efficiency of their homes and buildings. In fact, we wrote a letter encouraging the City of Winnipeg and their incentive program to look at introducing some special incentive or relating the incentive to the R-2000 program.

I also made reference to the school bus program in my opening remarks and an attempt to expand that program. We are looking forward to doing that in terms of the specifics of activities that we engage in as a branch in facilitating decision making about investments, about reducing energy use, the kinds of information services that we have or activities. We provide an energy advisory service with a toll-free number and qualified branch staff to answer or direct inquiries from the general public and the construction industry on ways to reduce energy costs.

We train builders and the general public through the R-2000 builder training new home workshops and home energy saver workshops. We develop booklets and pamphlets and fact sheets dealing with individual energy efficiency considerations. As I have indicated, we administer the Manitoba R-2000 program on behalf of the Manitoba partners to that program. In the retrofitting program, we provide administration and technical support to the Manitoba Government Buildings Initiative designed as a self-financing program to perform energy retrofits in all Government Services-owned buildings.

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We are also encouraging the expansion of that program to other public buildings that are not directly owned by the provincial government, and those are schools, hospitals and other public buildings under the authority of others. We provide technical support for demonstration projects to evaluate effectively the school bus driver training on energy efficient driving techniques.

In terms of alternative energy, we have activities in support of the program designed to develop or encourage the development of alternative energy sources. They include development policies and proposals designed to increase the production and use of ethanol as a gasoline supplement in Manitoba, assisting gas suppliers and promoting conversion of gasoline-powered vehicles to natural gas. Natural gas, although not indigenous to Manitoba, its use as a transportation fuel is seen to provide some economic environmental benefits. We prepare and distribute fax sheets on alternative energy resources, including wind, solar and photovoltaics, and we have indicators for the program that are the indicators which we have already discussed.

Ms. Mihychuk: Can the minister explain to us what the program is for the public buildings, energy efficiency program? What type of program is available for public buildings?

Mr. Newman: Direct provincial government buildings, or do you mean buildings outside the provincial government?

Ms. Mihychuk: It was my understanding that the department is offering some direct-energy efficiency programs for public buildings. I would be interested in that, and then I am going to be moving into those other areas that are somewhat gray, and that is the, for instance, public school buildings. So I would like to know what the program is for public buildings first.

Mr. Newman: Just so I can develop a framework for the answer which I want to be accurate. We would take the Woodsworth Building, for example, and indicate specifics of the programming that we have put in place there as a pilot project.

Ms. Mihychuk: Absolutely. That is a good example. So you would take a specific building, and the Woodsworth Building would be fine as an example.

Mr. Newman: The focus, the concentration is on changes to the lighting system, and I can invite you and, in fact, I do invite you and other members of the Legislature to attend in my office because I wanted to find out exactly what was being done and wanted to have a demonstration in my own office so that I could show to people who came into it the kind of thing that was being done in the Woodsworth. So I have replaced fluorescent lighting with a new type of more costly initially but cost-saving kind of fluorescent lighting. I also have, rather than the standard light bulbs in lamps, halogen lights in those, and the spotlight, the pot lights are also halogen lighting. Through this means, it is believed that the savings in the Woodsworth Building are projected to annualize at $66,670.

Ms. Mihychuk: That is a significant amount of savings. Can the minister tell us what proportion of savings--I guess I am looking at what is the payback period. Also, in addition to that, who provides the up-front funding for the changing of the light structures or light bulbs? What else is included? It is light fixtures. Would it be windows, insulation? How extensive do we go in a building?

Mr. Newman: Some of the controls for heating and cooling are included, but not the insulation. The total cost of the Woodsworth pilot project was $384,593. So, with the annual savings of $66,670, it is something in the order of six years.

Ms. Mihychuk: The up-front funding for those renovations came from the department, or how was it worked out?

Mr. Newman: The up-front funding came from the following sources: The Department of Government Services $269,593, Sustainable Development Innovations Fund $100,000, and the Department of Energy and Mines $15,000.

Ms. Mihychuk: Up front funding, is that on a loan basis or is that a direct grant?

Mr. Newman: This is directly out of Appropriations.

Ms. Mihychuk: I want to congratulate the department for pursuing this program. We know that there can be significant savings, and the payback in this building is five or six years. I am familiar with public structures--and here we go into my favourite topic and that is public schools--that we could see dramatic improvements in energy efficiency. Many of the older schools unfortunately have not renovated the physical structure of their buildings for several years, and that has been a matter of priorities as they look to programs rather than the building itself. Many schools still have single pane windows, many with wood sills that are rotted away, actually wide open, so the air exchange is enormous in the building, never mind extremely uncomfortable for the people in the classrooms. Of course the biggest obstacle there is a program which would allow that type of renovation and upgrading.

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Has the department or the minister considered providing a funding vehicle to allow these essentially public buildings to be renovated and take advantage of the new technology that we, indeed, have available and is presently in the minister's office?

Mr. Newman: While I get specifics as to exactly what is being done there, I want the honourable member to know that I treat this issue very seriously and am very interested in seeing ingrained in the decision-making process, in terms of building maintenance and repair and improvements, a more energy conservation consciousness. Just to show the degree of seriousness on that, we are looking for a continuing source of funding and support for these kind of initiatives, and I might say out of petroleum revenues, so it is a more dedicated kind of situation that is under consideration now. That is all I can say about that.

In order to build this into systemic decision making, one has to do that, so we want to do that. We believe that creating an example with our own buildings is the best way to gain credibility, so that then you can use your influence to induce others, if you can do that with some funding incentive as well. It is noteworthy, I think, that a funding incentive was provided to our department by both the Sustainable Development Innovations Fund and Government Services in that kind of proactive way to prove a point. So I appreciate your point.

The specifics that I have is that we are still in the pilot stage and that we have not yet developed sufficient proof or evidence to make the case to others, but we are confident that we are on the right track and that the results are going to be quite persuasive. They have been persuasive enough internally that we are now proceeding with five or six additional buildings in this budget year within government.

Ms. Mihychuk: Can the minister elaborate on the school bus program?

Mr. Newman: The school bus driver training demonstration program is a joint federal/provincial school division program which promotes efficiency in the school bus transportation sector. It was initiated in Manitoba in September 1996 and will run for a period of two years. As part of the program, sophisticated on-board monitoring equipment will be installed on 10 buses in five school divisions to record baseline data including engine RPM, vehicle speed, braking time, idling time and fuel consumption. An independent consultant will then deliver seminars to the appropriate school bus drivers and post-training data will be monitored and compared to pre-seminar data.

The Manitoba Association of School Trustees has negotiated an agreement with Natural Resources Canada for the two-year program. If expanded to all school divisions, the program has the potential to achieve an estimated annual fuel saving of $800,000. The current status is that the Department of Energy and Mines is contributing $13,500 in the second year of the program, that is, the current fiscal year, and Natural Resources Canada is contributing $17,500 to the program in the 1996-97 fiscal year, the immediately completed year.

The Manitoba Association of School Trustees is contributing $5,500 to the program. MAST has reviewed and signed the contract between itself and Manitoba Energy and Mines and data will be provided by MAST and technical support will be provided by Manitoba Energy and Mines. Technical data acquired from the program will be analyzed to measure the positive effects of driver education on fuel consumption of the Manitoba school bus fleet.

The Department Energy and Mines is currently analyzing rural and urban winter data collected by the on-board monitoring equipment. An interim report on the project is expected to be completed soon.

Ms. Mihychuk: Does the minister have information as to energy efficiency of school buses that are significantly aged? We in Manitoba have a significant number of buses that are well beyond 13, 15 years of age. They were bought in '83, '84, and '85, and we can expect to see them on the road for some time in the future. Energy efficiency techniques have improved not only in buildings but also in vehicles. Can you tell us what sort of changes we have seen in energy efficiency just through newer, more energy-efficient school buses?

Mr. Newman: I would have to take that question as notice. I do not have that data here but, if you wish, we can provide that to you and will do so.

Ms. Mihychuk: Yes, I would be very interested. In fact, the Manitoba fleet needs significant replacement. Had we kept the policy of replacing at 12 years, and then it was extended to 13 years and then extended to 15 years of road life, but we would have to replace a significant number of buses. It is almost ironic when I look at the buses on the Brunkild dike. One almost questions whether they are going to go back onto the roads.

We have a significant number of very aged buses and the energy efficiency of these machines has to be of question. When we look at one department deciding to, again, as I believe a budget issue, they did not feel able to replace the bus fleets so they looked at perhaps extending the usage, but the costs to Manitoba taxpayers are incurred in one way or the other. I sense from the minister a commitment to energy efficiency and ask him to review whether it is rather, as I suspect, shortsighted that the use of these buses beyond the ages of 12, 13, 15 years becomes indeed very costly to the school division and ultimately to the taxpayers.

Doing some research on the issue, many companies that lease out buses consider them unviable after seven or eight years and divisions can purchase the school bus for $1,000 at that point, after their lease period, so the maintenance costs and the energy use is incurred on school divisions rather than the province, but it is all one taxpayer.

So I do look forward to seeing the information the minister puts together and hopefully his arguing the point in his position as a caucus member that perhaps the investment in school buildings and in school buses will actually save Manitobans tax money and it would be a wise investment to do that replacement.

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Mr. Newman: Thank you for that, I think, very constructive question, and I think it would be relevant and appropriate for my department to seek the considerations so far as they relate to energy conservation and the decisions that you have referred to in change in the policy in another department. I think and agree with you that decision making in some cases has to be integrated so that in trying to accomplish an objective in one department we do not have it defeated by the decision making in another department. I will have my department follow up on that and see if we can put together some useful information, for the benefit of your colleagues and mine, in making appropriate decisions in this area to fulfill the kind of objective that, I indeed, do support and obviously you do as well.

Ms. Mihychuk: I would like to now move on to the next line item. This is Executive Support, and here I would like to ask some questions as to the expenditures and the commitment of the department that was actually not in this fiscal year, I understand, but for the reallocation, the moving expenses and the other information that was raised in the House about the deputy minister. So I would ask the minister to outline what costs were incurred by the Department of Energy and Mines in the transfer or the acquiring of the deputy minister in his new position. I believe it was '95.

Mr. Newman: With a certain amount of tongue in cheek, I will take issue with the use of the word "acquired." The philosophy of any government is not to treat any human being as a commodity, and we do not own anybody. However, having said that in jest, the specifics are that the relocation costs totalled $69,985.31 out of the 1995-96 Public Accounts figure of $74,734.77.

A Freedom of Information request led to the disclosure of the breakdown of that relocation cost figure, and the breakdown is 12 parts which I will cite in an abbreviated way: Car rental $126.31; expense account $232.20; temporary accommodations $1,300; another expense account charge of $539.87; another expense account charge of $1,186.61; another expense account charge of $749.99 and six Royal LePage invoices broken down as $1,909.88, $2,748.37, $45,717.42, $140, $250 and $15,084.66. I have a more detailed breakdown of each of those expenses, if you wish it, explaining what each of them are. Would you like me to carry on, Ms. Mihychuk?

Ms. Mihychuk: My colleague the member for Thompson (Mr. Ashton) has arrived, and I would ask the committee's indulgence to defer this item and turn over questioning to Mr. Ashton and then perhaps return to this a little bit later.

Mr. Newman: If you are prepared to indulge your colleague, I am certainly prepared to indulge your colleague.

Mr. Steve Ashton (Thompson): Mr. Chairperson, certainly I appreciate the opportunity to ask some questions in this area, a number of issues obviously relating very directly to northern Manitoba, certainly to my constituents. I want to focus in on the area of energy use. I note that the mission statement outlined on page 3 of the Supplementary Estimates points to the goal of improving the energy use in Manitoba by 5 percent. We have had some ongoing debate over targets and achievability of targets in terms of energy conservation and efficiency over the last number of years. I note that we had some discussion a few years ago, prior to this minister being elected actually, and the committee dealing with Manitoba Hydro.

(Mr. Mervin Tweed, Acting Chairperson, in the Chair)

I wanted to ask the minister in terms of what the current situation is and whether there has been any consideration by the department of working with Manitoba Hydro at some of the kinds of suggestions that have been made for, for example, home and retrofit programs. The reason I am raising this is because, certainly looking at it as an economist, I find that one of the problems you often deal with when you are dealing with, say, comparing the construction of a hydro dam, where you have the ability to raise funds and amortize the dam over a period of several decades, when you compare that, for example, to decisions made by individual homeowners or property owners, small-business people, you obviously are in a different situation unless you are able to have energy efficiency added, say, to a mortgage. You are not likely to get the period of the amortization of the loan extended probably beyond the normal three, four, five years.

There has been a history of programs that have been provided which provide low-interest loans. I know in my own situation I just recently took advantage of the electrical modernization program to put in an air exchanger in my home in Thompson. I can say, quite frankly, I would not have done that if it had not been for the loan portion being available up front, just because of the simple capital cost. Obviously, when you are sitting around looking at something that costs $2,600, a straight cash purchase, no matter how you finance it in your day-to-day activities, you put it in a different category than you would as a long-term investment.

So I wanted to focus particularly on some of the suggestions made by the carpenters union, I believe it was, a number of years ago, that had detailed a submission that made the argument regardless of what you do with other forms of energy conservation--and I realize that the doors and windows programs have perhaps been fairly well taken up, and I know there has been some debate about whether they are feasibly economically beyond the point that they have been developed thus far--but I want to focus on whether there is not some way of doing some major retrofits that would get into significant changes of structure, in some cases through low-interest loans that could help achieve not only the 5 percent, an even greater amount.

I just want to finish off before giving the minister a chance to respond by pointing to the example of a lot of northern communities. I know of houses in northern Manitoba where there is virtually no insulation. I can take you to townhouses in Thompson where that is the case. Now, what happens is the tenants are in a position where they are paying the energy bills not the landlord, so there is no incentive on the landlord to fix it up. The tenants, many of whom are on fixed incomes, do not have the money to fix it up. Besides, it is not their own premise, so there is not the payback even if they could pay it back within a number of years. You will have townhouses where people are paying $400-$500 a month during the winter for heating costs.

It is a similar thing in remote northern communities. Many of the houses that were built there have totally inadequate insulation, especially the older houses. You will often find, for example--I happen to feel that energy rates, hydro rates should be equalized across the province--but even if that was done, it would only affect things to a certain percentage in northern communities.

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The biggest root in a lot of cases is the simple fact that people, once again, often do not own their own homes, and even if they do, do not have the ability to fix it up. So there is a need to deal not only with homeowners but to deal with landlords. By landlords, I use that in the broader definition, because, for example, CMHC owns many of the units, operates many of the units in northern Manitoba.

I want to ask if there has been an official response to that proposal from the carpenters, and whether the department has looked at ways of using creative financing to deal with these kind of situations, because, quite frankly, I see a large amount of waste. You have to recognize, again, that the North has high heating costs. We do not have natural gas as an alternative, so it is basically, largely hydro with a small percentage of propane consumed. You see it that much more. But I would suspect even in Winnipeg that is the case, perhaps on a lesser degree, that there are many houses out there that just do not fit the conditions, are not in keeping with the current standards in terms of insulation. I guess the question I throw to the minister: Are there any creative ways he is thinking of, of dealing with that problem?

Mr. Newman: I believe the new national building code standards are going to contribute to the solution, in that my limited understanding of the improvements in that area will raise the standards higher. I do not have the specifics at my fingertips, but I think that that kind of solution is a very important one, because that is a universal, mandatory standard which is imposed on anyone that is going to build a building in the province of Manitoba.

As you spoke, it certainly was occurring to me, and I will give you full credit for raising the idea; it is not mine. But I think in co-operation with the MMF, the Manitoba Metis Federation, MMF Inc., and the federal government and the communities who benefit from the housing services and responsibility for housing turned over to MMF might in conjunction with this department and Northern Affairs perhaps come up with some systemic ways to encourage practices which would address the kind of problem you are talking about.

I know that we do have a commitment as part of our plan for this year to look at all of our fairly meagre $2.6-million capital expenditures in Northern Affairs to make sure that what we do builds up to a responsible energy conservation standard, but I think going beyond that and multiplying that by co-operative action with the people responsible for housing and maintenance and repair is a worthy one, and educating members of the community and mayors and councils in northern communities and even the northern round-table kinds of people is a very sensible kind of way to implement the kind of thinking that you are talking about. It has to be part of the decision-making process as we discussed earlier. I will just invite my officials to find out whether there is anything specific that I might add in response.

Maybe you can verify this idea which may be more than an idea because it comes right from Thompson, and that is the idea of a municipal council actually passing a by-law that all new housing be built to R-2000 standard. That is the kind of thing that is being at least speculated about in talking about systemic ways of introducing it. There is no more mandatory way than to do it in the form of a local law. But, as I say, you may know more about that than I, but I do not have any more specifics at this time other than the general response I gave you specifically in terms of my department's involvement.

In passing, I do not want to get us off track, but, certainly, I know that Hydro, through its Power Smart programs, is supporting energy efficient retrofits, and to your colleague, before you were here, I indicated the way that our department discovers and then takes advantage of opportunities to build into decisions of others, improve standards of energy conservation.

One of those is the City of Winnipeg with its plan to have a tax incentive for new housing. We are trying to partner into that so that there is an incentive built right into that inducement, as a condition of the incentive that they meet standards of R-2000 insulation, as I say a condition of getting the benefit.

So we are looking at all those opportunities, and, frankly, any time that anyone from the North comes up with an idea for you and you pass it through to the department, I can assure you that they will treat it with the attention that it merits, given that we have a serious commitment to improve energy efficiency.

Mr. Ashton: Well, focusing in on the new housing component, there are a couple of things that are happening in the North right now which I think are of significant interest.

One is the use of log housing in a number of communities. Quite frankly, this has been something that has been kicked around for years. Part of it has been the need for people who had experience building log houses, and I understand that we are talking about not cabins, but houses. People tend to have this idea of a small trapper's cabin.

We are talking now about some of the new log structures as being every bit as large as a regular house and significantly more energy efficient in some cases, certainly as compared to the standard suburban bungalows that we have had constructed.

I always find it paradoxical that I will travel into--if you go to Gillam, for example, and drive around Gillam, Gillam could be just plucked out of the city of Winnipeg. The housing is identical; the lots are identical. I remember a few years ago, it being a Hydro community, all of a sudden the new houses got gazebos, and what was interesting was I noticed the old houses six months later got gazebos too. That was because everybody living in the older housing complained that the new houses had gazebos. So everybody living in Hydro housing in Gillam has a gazebo. Now, what relevance that has to the North is, I guess, up for debate, but people seem to be happy with their gazebos.

Mr. Newman: I must interject for a moment. I thank you for that, because, having visited Gillam, I was wondering why there were so many gazebos. Thanks for explaining that to me.

Mr. Ashton: It is one of the last remaining company towns. So, you know, if one person gets it, everybody gets it, which is fair, but it does lead to some strange results.

In terms of log structures, I would point to a number of communities where this has happened. I believe there are about half a dozen communities now. In a lot of cases it is a matter of getting the expertise, and I would point to Nelson House, for example, which looked at the cost for the development agency in Nelson House of a regular structure versus a log structure and found much to their surprise a log structure was cheaper. So you will go in and you will see these standard sort of government-type buildings, and you have this beautiful log structure across from the band office. It was largely because they were able to get some expertise in from British Columbia. So I would strongly recommend that, because the sad part is there is still a lag time. This is happening, but it is a small percentage and a lot easier for suburban houses. Ten, 20, 30 years ago that may have been understandable when we were bringing the housing stock, but we have learned a lot of lessons over the last number of years, and one of the biggest problems in a lot of cases is that the houses not only do not match the climate, but they do not match the usage patterns in aboriginal communities.

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There is a totally different cultural outlook on housing. You often have much more of a demand for open spaces. You end up with humidity problems. You know, people are used to having a stove with a kettle of tea on. The houses tend to be very humid, overheated. It is reduced somewhat because of better quality, but in a lot of cases what you do is you take a standard suburban house and you work around it. So I want to sort of agree with the minister that there is a lot that can be done.

You mentioned that things can be done in urban communities. I agree. In the North--believe you me, if I was constructing a new house, I would want an R-2000 standard. I would want it at that level simply because it is economical to begin with, let alone any other reason.

The biggest problem though tends to be with older units. The minister will know, as Minister responsible for Northern Affairs, that you have a significant number of housing units that date back to the early '70s, many of them are substandard. I know in some of the communities I represent like Thicket Portage and Pikwitonei the housing is in pretty bad condition, and even though CMHC now has taken over those units, repairs to a unit that was never built that properly in the first place is patching up the problem.

The big problem again is with energy conservation, and it becomes sort of an interesting dilemma here, because one of the biggest groups, I guess, that loses out on this is the government itself. Anybody who is receiving Income Security--who pays for the energy bills? The government does. I find it amazing, for example, that in Thompson, the biggest slum landlord is the government indirectly in the sense that if you consider that the government essentially is paying for the rent, and then individuals are living in that location. So what happens in some of those townhouses I referenced, which are in lousy shape structurally, the $300, $400, $500 a month is being paid for, in the case of those who are on Income Security, by the government. So there may be some savings, as well, for the government.

Now, I leave this as a challenge to the minister because we have some philosophical differences on such issues. But one of the things that was talked about earlier by the residents of one area, in particular, of townhouses in Thompson was either, you know, if it becomes social housing purchased by the government or to be set up as a co-op. Now the unfortunate part is both of those options have virtually disappeared because of shifts in government funding, and the advantage there is you internalize, you know, the externality, so to speak. You internalize the costs, and you can get the savings because then the government not only is in a position of paying the rents, but it is also essentially then the landlord, or you can work it out with the tenants, go into a co-op structure.

I would appreciate, coming from the minister's perspective, because I suspect that is not his approach; in fact, I would know, I know the minister well enough to know that is not his approach but a way of doing it, short of that, using the existing system where you have a private landlord and you have tenants, because this is a problem all over the North, and it is probably a situation all over Manitoba, unless the landlord is paying for the energy cost and then adds that on to the rent. If the tenants pay for the energy cost, you have a problem. That is, I think, one of the major sources of energy and efficiency in the province right now.

A few years ago, there were programs which I know applied to landlords to fix up their premises, and people did do it in some cases, but only if utilities were included as part of the rent. Otherwise, there is no incentive. So I am wondering if the minister has any suggestions coming from the department on how to deal with that element alone, not the private housing, but commercial properties where you have landlords and where the individuals are paying for the heating costs for the tenants.

Mr. Newman: I really welcome this discussion, and I hope it is the kind of discussion that would be perpetuated and enhanced in relation to the communities themselves and the tenants themselves. We are very serious in the Northern Affairs area, and certainly it coincides with what we are doing in Energy and Mines about involving the people who live in housing, whether it is public or private, to think in long-term, healthy, sustainable ways about themselves and about their homes and their communities. We are also very serious about economic development opportunities being made available and realized by more people in the North. To that end, we have an economic development event planned on June 16. These are the kinds of things that can be the product of a co-ordinated, sustained strategy that can emerge from there.

I do know that our government is looking at the possibility of new housing construction being a potential industry in northern communities and in reserve communities, and all of these would be up to the higher standard. I might say my understanding is that log homes are up to the R-2000 standard in performance measures if done the right way. So that is one solution to improving that, but in terms of creating incentives, whether real or notional, I agree that is a way to change behaviour positively, and all of those are open for consideration. I encourage that sort of dialogue.

It is up to the Energy branch and the people there to come up with ideas and arguments, and to receive ideas and develop cases so that we can influence decision-making process in government to take advantage of these kinds of opportunities to improve the standard of energy conservation in the public and private housing. With the case being made by individuals themselves who are prepared to do things, that is what I want to hear.

You raise Gillam. I must say that, talking philosophically for a moment, having a sense of ownership of those kinds of properties might induce people not to have a gazebo because everyone else has one. A sense of private ownership might also cause people to consider improving things in energy conservation ways. It might also cause them to do more things themselves in those properties to improve them without bringing in someone on call at a high price to do painting and things that one can do oneself.

Some of the programs that this government has, again, along the same philosophy, are tenants associations, encouraging tenants associations and having tenants in those associations come up with ideas for improving their premises, even if they are public. We want to listen to those and work in co-operation with our Housing department to, again, incorporate those sorts of changes. As we talk about this, I am hoping and I know that my Energy people are listening and are going to continue to listen, because I want them to make recommendations to me about every good idea that comes about, and give me arguments to advance them within government so they make long-term good sense for the people of Manitoba.

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Mr. Ashton: Just to finish off, because I do have to return to the other committee, but just a couple of suggestions. One of the problems in Gillam is you are going to have a great deal of difficulty in attracting people to Gillam if you move into a private housing market that may not really exist. That is one of the problems in the North, so I am not arguing against that aspect, but I certainly acknowledge, it is always a dilemma really in the sense that when people have a sense of ownership either through direct ownership or through co-op structure that you tend to get a lot of different approaches, and you can tell that. You can tell that in any residential area. I know in Thompson, in a lot of cases, some people in rental properties do take very good care of their properties, but not everyone does. That may be the case with owners, too, but there does tend to be a correlation of the two.

A couple of quick suggestions specifically; one way of dealing with one of the problems that I identified would be if the government was to act as an active purchaser of services. For example, you talked about requiring a certain level of insulation, R-2000, for new housing construction. What might help, for example, particularly in Thompson, would be, I believe, if the government was to sit down and require that premises meet a certain standard of energy conservation before the government would directly or indirectly rent out those premises and work with people who are on fixed incomes in doing that, the reason being, I would say, if you were to take, say, townhouses just as an example in Thompson, where in a lot of the cases you have anywhere from maybe 20 percent to 70 percent to 80 percent of people on a fixed income. Essentially, the person who is writing the cheque is the government.

It would have two impacts. One is it would save the government money, I believe, if you required that, and that can be negotiated through rents that can be passed on to a certain degree in terms of the rent level even under the existing rent controls. But it also raises the standard for everyone else, so if you are living in that townhouse and you are paying the rent yourself, you still have that higher level of energy conservation. What concerns me is, once again, we are trying to work through--I mentioned a couple of philosophical models which are perhaps more in tune with my political philosophy, but I believe in working through the market as well, and I think that may be the way of doing it, if the purchaser of the service sets certain standards.

I really believe there is a colossal waste of money going on right now, and it is no fault of the tenants, and it is really no fault of the landlords, quite frankly, because if it is not part of the bill, it is not their responsibility directly. So that is a specific example of where it could be done.

One other suggestion I will just make quickly, by the way, and this just came up in a conversation yesterday with someone who has been very active in a community service organization in Thompson with the Boys & Girls Club, as a matter of fact, who has dealt with a lot of people who have had to relocate into Thompson, being an urban community, from outlying communities. Often what happens is we tend to forget that people live in a certain environment, and when you change that environment either in the community or by moving to another community, there are often different lifestyles that go with it.

We have communities, for example, that are just getting sewer and water. They are just getting line hydro power. It has been an ongoing process the last 25 years. Every time that happens, things change. It is funny how you have to reorientate everything; I mean, even everything from the way houses are constructed--houses were not built for bathrooms, so now you have to redo that--all the way through to getting used to a sewer and water system. That has been a problem for some people, adjusting from a community with no sewer and water into, say, Thompson.

Her suggestion was to work on the relocation aspect of it. That was done a few years ago. I know MMF had a very good program on relocation. What happens partly, too, is you can build in certain practices that shift. If you are used to an isolated community where your prime source of heat is wood, that has a different impact on your lifestyle, the house, et cetera, than if you shift into a place that is constructed where you use hydro.

So you will often find, for example, in remote communities, you have to open the door because it just gets too hot. You need the venting, but when you move into a community like Thompson where you are dealing with insulated houses and electrical heat, often the doors will be left open in the same way. Now, that is a problem in energy conservation. I am not blaming the individuals involved. That is just a fact of life. In the same way, if I moved into a remote community, I am sure I would carry on certain habits that probably would not fit into the lifestyle there. So I throw that out, some specific approaches, because I think sometimes the macro works.

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

Sometimes you can have a program, you can have--by the way, I am not talking about grants; I am talking about loans. I think this kind of thing is not something that the government should be subsidizing. I do not think it needs to be. I think it can be paid off many times over. But in some cases I think you need more of a micro approach.

You know, I mentioned Income Security purchasing the units, setting up some adjustment programs, because I am certain there is a lot more we can do. I did, by the way, argue that the 5 percent was too low. I know in my own area you could probably cut energy conservation in the city of Thompson by 30 percent, 40 percent if you could build in the kind of things that I am talking about, because I just know the house I live in which was built in 1962, its insulation value versus an R-2000, what the extra energy costs are per year.

It is still more economical for me in the short run not having $5,000-$10,000 to fix up my house, sitting there in my bank account tomorrow, to actually spend the extra amount on hydro, but after a while the curve hits the payback time and I am losing myself. So I throw that out because I think we can do a lot better, but often it is with a mixture of approaches--macro, micro. I thank the minister for some of the ideas here and thank the critic for having the opportunity to raise this.

Ms. Mihychuk: Thank you very much for your indulgence. I had to go over to the other Estimates room for the Infrastructure as well. So I thank the committee's flexibility.

One more question in terms of the energy conservation, and I understand that my colleague from Thompson was discussing those areas. Are translated versions of the energy efficiency pamphlets available in Cree, Ojibway and other appropriate languages that may be particularly useful in the North?

Mr. Newman: The answer is not at this time. I think that is a very appropriate question, and what I will inquire about is to find out what the federal government might have done in terms of translating information in this respect with respect to Status Indians on reserves and also look at the Association For Native Languages and see what ideas they might have in that respect. I really appreciate this process because your colleague, Mr. Ashton, the representative for Thompson, talking about the need to adjust to change as you get different sources of power to communities, caused me to think how useful it would be to have a very simple publication communicating some of the ways of dealing with hydro power in a home for young and old alike. It would be a very useful time to look at having some of these publications available and to examine what the costs might be, or the possibilities might be, to have them translated into the indigenous native language in a given area. I think that the department is very conscious about being more accommodative to the aboriginal people in terms of the whole Energy and Mines area, and your suggestion has some merit.

Ms. Mihychuk: I got the same response from the other Estimates. The government is becoming very co-operative this afternoon. I raised an issue of a noise abatement program around the airport, and the Minister of Finance (Mr. Stefanson) was very co-operative. I take this as a new trend, and I am pleased to see we have such a co-operative minister.

In fact, with that program, there is some relationship when we talk about energy efficiency and the noise abatement program I was lobbying for because a lot of the insulation programs that Energy and Mines promotes would be useful in terms of noise abatement. It was actually a program idea that came out of an annual meeting of the Winnipeg Airports Authority, where people live very close to the airport. Apparently, we have 400 homes in Winnipeg that are within the 40-decibel range. I understand, from officials from the airport, that is like living on the runway, and we have seen dramatic improvements to houses in terms of energy efficiency.

I know that that type of retrofitting can also be useful in terms of noise abatement, and the Minister of Finance was open to looking at such a program. It is probably going to be this minister's department that will probably be involved. In fact, it was a member of Energy and Mines who was also at that meeting, from the Energy department, and was promoting the department's literature and saying that they had pamphlets that were very user friendly and saying that this may be a way to promote the program. So I agree. I think that it would be a good program, and I am pleased to see that Estimates can be put to good use. There are times when there is political hay to be made and other times where something useful and practical can come out of it, and I am going to go for both. Now I am going to move to my area that I was delving into before leaving on retrofitting houses.

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Mr. Newman: Let me know when you are shifting gears and trying to make political hay, so I am forewarned. Okay?

Ms. Mihychuk: Okay. I am going to try and make political hay right now.

We were delving into the deputy minister's travel expenses--well, his moving expenses--and probably if he had an opportunity to say, it has been two years, and both years we have seen floods and locusts and everything else. Now I do not think that the deputy minister had anything to do with that, but I say, you know, I want to welcome people to Manitoba and the weather, in particular, has been particularly unkind to the deputy minister. I do not wish to be particularly unkind to the deputy minister. I do feel, however, there have been significant questions raised in the House about the expenditures that were incurred, so that is why, in fact, I am raising the questions.

Am I right to say that you have concluded on the travel statement, or was there more information to be presented?

Mr. Newman: I will offer a more complete breakdown if you wish it. I think that the 12 points I made may not have been descriptive enough to be helpful to you, and maybe I can just go over those so that for the record they can be clearly understood. The $126.31 was an American Express invoice for car rental. The $232.20 was three days of meal allowances and incidentals for each of Mr. Fine, his spouse and daughter. The $1,300 was an invoice from Fort Garry Place for temporary accommodations. The expense account item, $539.87, included taxis of $111.25; parking of $1.50; change of address, $20.87--that is Canada Post; telephone hookup, $27.65; cable hookup, $45; four days of meal allowances and incidentals for each of Mr. Fine, his spouse and daughter, totalling $333.60. The total of all of that is $539.87.

The $1,186.61 expense account included 27 days of meal allowances and incidentals for Mr. Fine, eight days of meal allowances and incidentals for his spouse and daughter, and that totalled $1,109.40. Advertisement for home in Winnipeg, $15.28--maybe he should have spent more because he ended up getting a home on Kingston Crescent--taxis $50, dry cleaning $11.93, totalling $1,186.61.

The expense account item of $749.99--25 days of meal allowances and incidentals for Mr. Fine $645.00, dry cleaning $65.55, advertising for home in Winnipeg $39.44; total $749.99.

The next item, the first invoice from Royal LePage of $1,909.88 constituted monthly carrying charges and utilities for his home in Ottawa. The next invoice, $2,748.37, was the monthly carrying charges and utilities for his home in Ottawa. The next item, $45,717.42, was the difference between the guaranteed price and the sale price of the Ottawa home, commission, legal fees, utilities and other related disbursements and adjustments; $140 invoice from Royal LePage is yard maintenance while the Ottawa home was up for sale. The invoice for $250 is the outsource fee for a representative to meet with Mr. Fine to tour the school and other facilities relating to Mr. Fine's requirements in Winnipeg. The $15,084.66 invoice from Royal LePage is the transportation of household goods to Winnipeg, utilities, carrying charges and other related disbursements for the total expenses of $69,985.31.

Ms. Mihychuk: Can the minister tell me, the moving procedure and the expenditures claimed, is that consistent with other civil servants, or is that the policy for the executive staff? I guess I am asking whether the deputy minister's expenditures are in line with perhaps a geologist who maybe is secured, hired by the department.

Mr. Newman: When this situation arose, I went directly to Mr. Don Leitch and asked for his confirmation that these expenses were or were not consistent with the guidelines of the government. I had it confirmed to me that the expenditures were consistent with the general manual of administration policies and Treasury Board guidelines.

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Ms. Mihychuk: Then would it be fair to say that if a geologist was hired by the department, the expenditures of moving expenses for the spouse and family would be covered by the department? Would that be department policy?

Mr. Newman: I do not have an unequivocal black-and-white answer for you, but the information from my deputy minister is that moving expenses, relocation expenses, and sometimes real estate fees are covered in that situation; house-hunting trip costs I also add.

Ms. Mihychuk: When was that policy implemented?

Mr. Newman: It is confirmed by Mr. Garry Barnes, who has been in the department for some time, that that goes back to at least the mid-'80s.

Ms. Mihychuk: My question is also for the record. The deputy minister and the previous Minister of Mines did significant travelling and visited numerous companies in North America, I believe. I do not know if they went into Central America or not, but it could have been. I would be interested in knowing if I could get a breakdown of where those trips were, who attended, the costs for those, and then the results of those visits.

For example, if we saw, from that, inquiries, visits to our convention, did we see an increase in claims? So I would like to know whether this was actually a worthwhile venture, and if that is possible I would appreciate it.

Mr. Newman: The request is a reasonable one, and we will attempt to fulfill the request as soon as possible.

The visitations by the former minister and deputy minister included visits to over 100 companies based in Vancouver, Toronto, Montreal and Denver. The results in the indicators which are being relied on by staff in my department and by my deputy minister are suggesting, subject to the more complete review I already alluded to at the outset, are positive. The fact that we have attracted 27 new exploration companies to Manitoba is in significant part attributable in their judgment to the personal visits paid to those offices.

My own personal experience since I have become minister corroborates that in that I have met with a number of the companies in my office. There is no question that there is a sense of a relationship and a real interest by the department in their being successful in Manitoba. They feel that there is a transparency in the way we relate to them. The liaisons that we provide from the department develop, in a sense, a professional but personal relationship in the sense that they have a contact. They have got a human face on the department, and the relationship in many of these cases began with a door being opened by the minister and/or the deputy. It has become very clear that in some cases the initial door has to be opened by the minister, and then the deputy is, from that point on, accepted as an appropriate person for the companies to deal with. So far, I have seen nothing but positives.

The other thing which reflects on the way I think government has been done in the past, not only here but in other jurisdictions of the country, the message came out from a number of the companies that they felt that they really were not welcomed in terms of the respect and understanding of private property and entrepreneurships, which mining companies are usually very private-sector oriented, very capitalist, very free-enterprise motivated and wise.

I tell the story of the RTZ, used to be Rio Tinto Zinc, one of the largest mining companies in the world sharing with us through one of the key people heading up their exploration area with an expertise in potash as well indicating that they had really lost interest and had not followed very much the situation in the western provinces because their last experience was having an expropriation of their potash interests in Saskatchewan in the '70s, and that was the same kind of anxiety that a number of companies have had. We try and provide assurance that we do respect their need for their security of their property and security of their investment. We ask for them to be as transparent with us as we are with them in terms of their needs, and I think what is developing is a mutually respectful relationship between many of these companies that are coming in and the provincial government.

We invite them, once the initial relationship has established in this, to follow it up with follow-up visits periodically to show how they are progressing, and we monitor, we look at what they are doing to the province's bottom line. Are they contributing now in a net way to the provincial wealth through taxes? They share with us what the impediments are to their being more successful, and we listen. We do not always agree, but this is relationship building. It is building trust and confidence in a community out there that had become very suspicious in Manitoba and felt, in large measure, unwelcome, and I have seen that in many conversations. I do not think they are just trying to win my friendship. I think that it is a very genuine sharing of the value of this, I guess, popularly called, marketing approach, but really what I call it is relationship building and earning trust and respect, and showing that we really do welcome your making an effort to find mines and then develop mines in this province, and we are proud of what we have here.

We also emphasize that we are also proud of our natural advantages, and that is why we preach sustainable development and support the Whitehorse accord approach. That is why I think it is a proud thing if we can achieve a B-plus rating in the big World Wildlife Fund and at the same time aggressively pursue exploration and mining development and other kinds of developments in the province.

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Ms. Mihychuk: In addition to the deputy minister's travelling with the minister, would it be possible for the department to also include the Marketing department's or section's travels? I understand that they went to several trade shows, conventions, symposiums and exhibitions. Who went? Where? The cost and what type of benefits we saw from that. I think it would give us a handle on whether it is more beneficial to send the minister off visiting or the marketing approach. Quite frankly, I appreciate and I would sense that a mining company would probably prefer to have a visit from the minister. It is a significant outreach process. I congratulate the minister and the deputy minister for doing that. I have talked to many mining companies at the convention and elsewhere, and it was a significant step, and it did encourage several companies or sectors to relook or come back or perhaps for the first time come into the province. But I think there are initiatives that we have been supportive of and others that I am more suspect of, and for that reason I am asking for whether the investment in marketing has paid off as well as the travel show by the minister.

Mr. Newman: First, in response to your question, we will provide information to you. I would like clarification from you. I trust it would be adequate if we go back the full last fiscal year? [interjection] Okay.

The second point I do make is that, again being respectful of the value of this Estimates process, we are not here just to toot the horn of the government of the day or the department and the staff which I am very proud of. But there have been learning experiences as we are embarking on this approach in earnest to encourage exploration and, hopefully, get new mining development. But there have been lessons learned in some instances. I know that I am asked for approval from time to time about going to particular areas, particular conferences, and on these occasions that I am asked, I certainly am conscious of being concerned; is there any one that is better, how did it work the last time you went, that kind of approach. In some cases, I get the answer very candidly that, no, we went to that one last year, and that did not turn out at all to be what we expected, and we are not going there again, so we are going to try this one.

So that sort of approach is a learning experience. I know that we had an experience last year in relation to doing the mining operators' conference in Thompson. We have gone about it a different way this year, and we hope it is more successful this year than it was last year. So we are trying different things and doing things in different ways.

This whole business of mining on an international scale which I am becoming increasingly familiar with is not a simple business, and if we are not wise and knowledgeable about how it works, there is no question a lot of effort and resources can be wasted. It is very clear that there are some very sophisticated people, and you would know this with your background, who run international businesses which sometimes have revenues and expenditures that are larger than this province who control large chunks of the world marketplace in given minerals. We are learning this in potash, for example, and how we address that has to be very business-smart.

You have to learn these things and I believe that my staff are, and we are improving all the time, but it will not be without errors along the way which we can only answer to by saying our people did their best.

Ms. Mihychuk: The Marketing section saw the change of the senior management of that section in the past year. Can I ask, is that a symbol of a new direction of marketing? Are we looking at another approach?

Mr. Newman: No.

Ms. Mihychuk: Okay, we will have an opportunity to discuss more fully the Marketing section further on, but in general terms I wanted to ask the minister what he sees for the future of mining in Manitoba. In '96-97, the estimates of revenue indicated mining taxes of $40 million and projected revenue for '97-98 to fall to $15 million. That is outlined in the budget document, the '97 Manitoba estimates of revenue.

Can the minister inform the committee as to why we are going to see such a dramatic fall in mining taxes?

Mr. Newman: A major factor in those figures would be commodity prices, something over which we have no control, and there is no question that companies like Hudson Bay Mining and Smelting which endure the copper and zinc prices as they may be, and Inco, nickel prices, influence tremendously, of course, the figures that you are talking about and similarly gold and other precious metals.

We are influenced significantly by things totally outside the control of Manitoba, and that is why those kinds of indicators are less important than the indicators showing the amount being invested in exploration and the volume, rather than the dollar value, the actual volume of production relative to prices at that level in the past.

Those are figures that we very much hope will improve in the months and years to come because those factors will play major roles in whether or not we have an expanded or even continuing presence in Manitoba of some of our major mining companies. Another major factor which is something that is not readily known to the public, but I certainly saw it first-hand, and it was brought to my attention when I was underground at the Inco mine in Thompson and looked at what was an open pit that was operating into an open pit that is empty and not operating, and that results in the more difficult and costly process of underground mining at great depths, rather than the easier and less costly process of removing ore from the surface.

That has been a factor when I look at the relative nickel production from 1993 versus 1996 from 116 million pounds to 78 million pounds in 1996.

Ms. Mihychuk: Can the minister enlighten us as to how we can determine then the effectiveness of the strategies of the MEAP program, the marketing initiatives, the minister's visits? They have a factor, of course, to promoting mining in Manitoba, but the overall factor in mining stimulation is commodity prices. We talked about that last year, and very little of what we can do can overall change things in that sense.

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We saw mining prices or commodity prices on a high, and we saw a great deal of stimulation. So, when the department reviews the effectiveness of the programs, I would caution that the formula must also take into account commodity prices, which is the overriding, I believe, driving force in the mining industry. I would just ask that we keep that in mind when we look at these numbers.

Mr. Newman: Being a career student of the workings of the marketplace, I am a great believer that a willingness to invest in a jurisdiction in more substantial ways is a pretty strong indicator of confidence. The other thing is that there is a human face to all investment, and no matter how sophisticated a distant analysis can be of different jurisdictions in the world, the value of a comfort level of having been in a jurisdiction and worked in a jurisdiction is not readily measurable, but there is a great value in having that personal familiarity with a jurisdiction. The mining area, which I am an early student of, appears to be common to many other areas of industry in terms of the importance of that kind of familiarity.

It is very interesting, really, the lack of knowledge, sometimes at the highest decision-making levels in some of these multinational companies. I know that I have found it of great interest to be able to speak to some of the top officials in Manorco and share with them that the aboriginal population in Manitoba was not nomadic in the traditional sense that they pictured it. They pictured them like the Inuits moving from hunt to hunt and so forth in the ways, of course, that they did in the past. Bringing them up to date on where we were at in treaty land entitlement, and at the time the kind of relationship we had with our aboriginal people. These are very important considerations, but they just had it all wrong at some of the most senior decision-making levels of the company.

It certainly confirmed, in my mind, the importance of having these relationships and sharing this kind of information. It is very interesting, too--there is a tendency in these companies to bring in the person that has been to a jurisdiction to the meetings so they have a local knowledge, and that person may never have had that exposure to that lofty a decision-making body. So you are doing, internally, them a favour by exposing them to the big decision-making bosses, and some of them proudly talk about their history in the province of Manitoba.

I think a willingness to invest and be here is a very strong indicator that the program is being successful. Again, there are always exceptions. This is where we have to be cautious as elected officials and cautious as potential investors. Sometimes you will get a junior exploration company that is more interested in having a puff to induce investment and are prepared to put some money into things and, then, try and get some investors to put their money into very limited prospect. That is why it is important for decision makers in applying criteria and evaluating applications to exercise considered judgment that these are worthy applications and make good sense in accordance with the internal knowledge that our own mining experts have.

Ms. Mihychuk: The last area I am going to delve into today is affirmative action. Mining and the mining sector does not have what I call a gold star for encouraging and promoting women in particular. When we look at the senior level here in the department, all marvellous people but unfortunately all male. Now, I do not wish to get--it is, indeed, a sector of our society where we have seen, what they call, the glass ceiling become impenetrable by women. We did have one management position, female. Unfortunately, that person is no longer in the senior management. I am not aware of others. Can the minister tell us what strategy the Department of Energy and Mines, particularly the mines side, is going to develop to actually encourage and promote women in the department?

Mr. Newman: Let me, just by way of background, say that I very much support Affirmative Action policies and programs for the department. As a result of that and the kinds of observations that you have made, there is a renewed emphasis on the gender issue; also on aboriginal involvement in the workforce and as beneficiaries of policies and programs with the department. It is part of the policies of the department and the business commitment, the business plan.

The Acting Chairperson (Mr. Dyck): Order, please. The hour being 5 p.m., committee rise.