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Mr. Chairperson (Gerry McAlpine): Good afternoon. 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): Mr. Chair, I am pleased to present the 1998-99 Expenditure 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. Our vision is to make Manitoba the best place in Canada to invest in mining, provide the best business climate in Canada for the sustainable development of petroleum resources and be recognized as the best source of impartial information on energy efficiency in alternative energy in Manitoba.
We have established long-range measurable goals that flow from our mission and vision and strategies and objectives to help us progress toward goal achievement. I would like to take a moment to discuss this government's efforts to create a positive business climate in Manitoba for investment by the mineral and petroleum industries. These are messages that I believe are of great interest to companies that we would like to attract to Manitoba or to those that are already here.
These are messages that I have personally conveyed to companies at various conventions and meetings. I have told companies to think of our government as a silent partner operating within the context of a relationship in good faith wherein we partner on the basis of consultation. We share in success through taxes, royalties and fees. We share in losses and risks through exposing our natural resources and living things and infrastructure to impacts of development without certainty about the consequences and through investing in infrastructure to support exploration and development. As government, we encourage success.
Mr. David Faurschou, Acting Chairperson, in the Chair
Over the past 10 years this government has been driven by three guiding principles to help achieve success: first, our fiscal or economic agenda culminating in the 1995 balanced budget legislation in four consecutive balanced budgets, including the most recent 1998-99 budget; second, the long-term investment in our social agenda is intended to decrease dependence on government--you might say the best form of social assistance is a job--third, the commitment to the sustainable development of our economy through a balanced approach between environmental protection and economic development. We are committed to designating areas for environmental protection, while at the same time celebrating economic development opportunities to serve current needs without jeopardizing the needs of future generations.
However, it is important to temper these positive aspects with the fact that the mineral and petroleum industries are feeling the effects of volatile market conditions. Low prices for precious and base metals and petroleum are making headlines throughout the world and are playing havoc with producers in exploration companies. Clearly current prices are on the downside of the cycle. Although we cannot control these price cycles in Manitoba, we can influence the competitiveness of our province in attracting exploration in mining and petroleum activity.
We appreciate that industry must continue to be competitive globally, and we in government must continue to do our part to offer competitive business environment. We cannot be content to sit back and list our successes, achievements and advantages. There are new challenges that government and industry must meet, and our most recent budget reflects this commitment to meeting the challenges.
On the tax side, this budget extends Manitoba's overall tax freeze for an 11th consecutive year. It increases our debt payment to $150 million, which is double the required payment. Manitoba's basic personal income tax rate, currently 52 percent of basic federal tax, will be reduced to 51 percent for the 1998 tax year and further reduced to 50 percent on January 1, 1999.
An exemption from motive fuel tax will be allowed on propane fuel used in drying mineral or concentrates and for heating processing plants and underground mines. This exemption represents an estimated savings to the mining industry of $1.3 million on a full-year basis.
The payroll tax rate will be reduced from 2.25 percent of taxable payroll to 2.15 percent of taxable payroll effective January 1, 1999. This reduction represents an estimated $250,000-savings to Manitoba's mining companies. Custom-developed software and custom computer programming services became exempt from sales tax effective midnight March 6, 1998.
In terms of expenditures, over a $170 million will be spent on improving the province's roads and highways, $10 million more than last year, and $3.6 million, or $1 million more than last year, will be spent on capital projects related to infrastructure development in a number of northern communities.
A major contribution is being made to develop the potential of Canada's only major arctic port at Churchill. Manitoba will contribute $6 million to harbour dredging over the next two years. A commercially viable arctic port will further enhance Manitoba's position as the northern gateway to the mid-North American trade corridor, and this has potential benefits for the mining industry.
This budget continues the Mineral Exploration Assistance Program, the Prospectors Assistance Program and Petroleum Exploration Assistance Program.
Now, dealing specifically with the Department of Energy and Mines, Mr. Chair, the department has two divisions: Administration and Finance, and Energy and Mineral Resources. The Administration and Finance division has two branches, Executive and Administrative Services. The Executive branch, which comprises my office and that of my deputy minister, provides policy direction for the department, along with overall program management. Administrative Services provides centralized management services for the entire department, comprising financial, human resource and computer services. The Energy and Mineral Resources division has four program branches: Marketing, Petroleum and Energy, Mines, and Geological Services.
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Mr. Chair, we have made four senior management changes in the past year. Oliver Boulette, who formerly served as assistant deputy minister, Local Government Development Division for the Department of Northern Affairs, is now the deputy minister for both Energy and Mines and Northern Affairs. Garry Barnes, who was formerly executive director of Financial and Administrative Services is now assistant deputy minister for Energy and Mines. With the retirement of David McRitchie in September 1997, Christine Kaszycki is acting director for the Geological Services Branch. Craig Halwachs, manager of Financial Services, is now acting director of Financial and Administrative Services.
The department is also responsible for a number of industry support programs: the Mineral Exploration Assistance Program or MEAP, the Petroleum Exploration Assistance Program or PEAP, the Manitoba Potash Project, and the Acid Rain Abatement Program in Flin Flon.
In support of the department's mandate and goals, the role of the Marketing branch is to market and enhance mining and exploration investment opportunities in Manitoba. The branch's role is carried out under two main program areas: information production and distribution and business development. It should be noted that marketing is more than simply promotion of Manitoba's mineral products and the Manitoba advantage in a shotgun approach.
Our marketing approach is that of a systematic path which clearly identifies the industry's clients and their needs. Mr. Chair, we constantly enhance and promote a complete investment package to mining and exploration companies throughout North America. It focuses on reliable and timely geological information, the competitive cost of doing business, land access and tenure and streamline and practical permitting and regulatory processes.
Our approach also entails providing high quality service to companies already operating in Manitoba with the intent of keeping them in the province. The outcome or results of this approach cannot necessarily be measured in one or two years, although Manitoba's experienced growth and exploration expenditures and the number of new companies working in the province since 1995--by the nature of this industry, the ultimate goal of finding an economic orebody or developing a new mine is most often a long-term endeavour and influenced by outside variables, many of which cannot be controlled by the Manitoba government. However, Mr. Chair, what we do control and provide is an investment package with the necessary-based geological information, plus an environment conducive for doing business.
Some of the main accomplishments achieved by the Marketing branch during the last year are: under MEAP, $3.5 million in assistance funds were allocated to companies proposing 65 exploration projects estimated at $13.1 million. This brings the total assistance allocated since inception in 1995 to $10.7 million for 190 proposed projects by 65 companies. Of the 65 companies, 35 are considered new to Manitoba. During the 1997-98 fiscal year guidelines were developed for MEAP project inspections and company office audits to ensure program integrity. Six inspections and two company office audits were completed. As well, a formal evaluation of MEAP was completed. The evaluation consisted of an economic impact assessment and industry survey and review of the department's MEAP statistics since inception in 1995. Results indicated that the program has been a success in terms of attracting and keeping exploration investment in Manitoba.
The 1997 Manitoba Mining and Minerals Convention held in November was the largest in its 29-year history. The convention provided a venue for industry to learn of the latest geological information releases, exploration and mining services and business issues and opportunities. A distinctive aboriginal theme was also woven throughout the event to help further facilitate relationship building between the mining and exploration industry and Manitoba's aboriginal peoples.
To help individual prospectors market their properties to more advanced exploration companies, a series of nine property workshops were held throughout Manitoba. A spinoff of these workshops was a free property showcase space made available at the convention for property holders to promote properties for option or investment. As well, properties for option or investment listing was co-ordinated by Marketing branch in print form and on the departmental website. This service gives participating property holders a broader exposure to exploration companies throughout the world.
Several Business Development outreach programs were instrumental in promoting investment opportunities and gaining feedback from mining and exploration companies not now operating in Manitoba. Business Development team members, including the minister and deputy minister, visited over 80 companies, several investment and mining exploration conventions were attended to further profile the advantages of investing in Manitoba. The branch's Business Development team provided ongoing service to companies operating in Manitoba and those that are considering coming to the province. The team provided technical and business advice and
acted as a liaison between clients and other government departments. Through participation on government industry committees, it also monitored and provided ongoing input on a variety of issues that affect investment. Issues included taxation, land access and tenure and permitting and regulations.
The industry-government mining taxation committee successfully lobbied for the removal of the sales tax on motive fuels helping to reduce the cost of doing business. A redesign of the Energy and Mines website was completed. The new site provides greater opportunity to conduct business on-line by enabling clients to access databases, download maps, order publications and contact key staff for technical and business development support. Since the launch of the new website in November, monthly contacts or hits have increased over 100 percent. Nine new geological reports were published including the six-volume set of operation superior multimedia geochemical survey results. These results provide important information on the Northern Superior Geological Province considered to be a new frontier for exploration in Manitoba.
A variety of exciting promotional material was produced, including the Explore in Manitoba/Discover the Advantage promotional binder. The binder was designed to highlight Manitoba's geology and the positive business climate for mining and exploration investment. It has become an important tool which I and the marking staff use when meeting with exploration companies not familiar with Manitoba. This year, Marketing branch will continue to focus on promoting and enhancing investment opportunities for the mining and exploration industry. We will place additional emphasis on working with the industrial minerals industry, given the positive market conditions associated with certain commodities in this sector.
Specific priorities for the fiscal year are: to continue updating the Energy and Mines website making it more effective for conducting business on-line; increase emphasis on digitizing geological information and making it available on the website; complete revisions to MEAP and seek approval for funding for an additional three years; co-ordinate an industrial minerals advisory committee and begin formal liaison with the industry; investigate ways to provide financial assistance for market development of key industrial mineral commodities; work co-operatively with mineral property holders to market properties available for option or investment; plan and stage the Manitoba Mining and Minerals Convention, 1998; focus on base and precious metals and industrial minerals and continued promotion of investment opportunities in Manitoba through a variety of business development outreach programs; examples are conventions, conferences, company visits and special events; continued provision of high quality promotional material and information services to profile investment opportunities in Manitoba; continue to monitor issues affecting investment. This means issues related to the cost of doing business in Manitoba, land access and tenure and permitting and regulatory processes. We will also provide input to government industry committees associated with these issues, track the impact of the mining and exploration industry versus government investment through socioeconomic impact assessments.
Turning to mines, Mr. Chair, the principal responsibility of the Mines Branch is administering legislation governing the dispositions of mineral rights--permits, claims and leases-- exploration, development and production of our nonfuel mineral resources and rehabilitation of mines and quarries. The branch administers The Mines and Minerals Act, Mining and Metallurgy Compensation Act, quarry minerals regulation, mineral disposition and mineral lease regulation and drilling regulation.
Mr. Chair, we have mixed news in several areas of the province as far as the mining industry is concerned. The industry has encountered declining metal prices throughout the year resulting in difficult conditions for mines operating in Manitoba. We are sensitive to the role of the prospector in our mineral industry. In the past five years, the Prospectors Assistance Program received 219 applications of which 167 were approved. To date, 124 have been completed at a total cost to the province of $534,584. The program allows up to $7,500 for each approved project. The program is continuing in 1998-99 and a formal evaluation is being undertaken.
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The gold mining industry, Mr. Chair, is suffering the effects of very low gold prices. At the present value of gold, it is very difficult to operate successfully. Nevertheless, the Black Hawk operation at Farley Lake ,near Lynn Lake, continues to perform strongly and produced 63,067 ounces of gold in 1997. Their target for 1998 is 63,000 ounces. Snow Lake continues to benefit from the TVX New Britannia Mine now fully operational. Currently employing 270 people onsite, the mine produced 91,400 ounces of gold in 1997 and plans to produce 92,500 ounces in 1998.
Mr. Chair, I would like to insert a point about the Bissett gold mine. As the appointed receiver for the Bissett gold mine company, KPMG has accepted an offer to purchase the idled Bissett gold mine subject to government and court approval. The accepted offer is from 16703 Yukon Inc., which is controlled by Harmony Gold Mining Co. The offer accepted for $14,310, 000 Canadian was one of five, and the only offer free of any financial conditions. Harmony has indicated that they intend to put the mine back into production and hire as many local residents as possible, including the former mine management team. We are now awaiting court approval of the transfer of ownership before we transfer the mineral lease.
The base metal segment of the mining industry is suffering with the low metal prices being experienced and all participants are having to examine their operations very carefully with a view to cost reduction. Tantalum Mining Corporation continues with strong production at its TANCO mine near Lac du Bonnet. Hudson Bay Mining and Smelting continues to operate in Flin Flon, Snow Lake and Leaf Rapids, while Inco operations continue in Thompson and at Birch Tree.
With specific regard to Hudson Bay Mining and Smelting, the province fully supports the company's Project 2012. HBM&S is a valuable corporate citizen and its impact on the provincial economy cannot be overstated. We have had several discussions with the company on how the government can contribute to the successful implementation of Project 2012. To date we have advised the company that we could declare two potential mines under Project 2012 as "new mines" eligible for the new mine tax holiday and new investment credit under The Mining Tax Act. As well, subject to the analysis of additional information, the proposed zinc plant expansion could qualify for the new investment credit. Other items, such as potential government loans are still under consideration.
I am pleased to advise you that our recent budget has also had a positive impact for HBM&S. The reduction in the payroll tax will result in savings for the company of approximately $100,000 per year. The motive fuel tax exemption will result in savings of approximately $500,000 per year with one-quarter of this benefit realized in 1998.
Turning to exploration, Mr. Chair, Falconbridge continues to focus its Thompson nickel belt exploration specifically on William Lake where exploration drilling discovered very promising nickel mineralization in 1996. Falconbridge announced recently that Hudson Bay Mining and Smelting will also participate in this project.
I am pleased to report an active year in the area of staking new claims with 1,664 mining claims and 10 exploration permits recorded in 1997 covering an area of 386,243 hectares. In addition, 70 quarry mineral leases, 780 casual quarry permits and 801 registration certificates for private pits and quarries were issued during the same period.
Mr. Chair, our government is strongly committed to the rehabilitation of depleted gravel pits, and my department developed a program to deal with the problem. Since the program began in April 1992, we have rehabilitated some 446 gravel pits, covered 1,896 hectares at a cost of $2.9 million. This year we will develop a strategy to increase the rate of rehabilitation.
Mr. Chair, I would like to outline some additional goals for the Mines Branch in 1998-99. The first is an aboriginal mining accord. We will facilitate discussions between the mining industry and aboriginal organizations. We hope this will lead to the development of a code of practice whereby aboriginal people take a much more active role in the development of mines in their vicinity with the opportunity to reap more of the benefits of mining operations.
Speaking of relationship building, at the PDAC--that is, the Prospectors and Developers Association--meeting in a conference in Toronto this past March, I had the opportunity to meet with many mining and exploration companies to discuss the advantages of investing in Manitoba. I also offered these companies some advice. By the way, I offered this advice to all civil servants employed by Manitoba Energy and Mines, as well, in terms of the changing expectations and indeed culture of the North. Just to qualify this, I had switched hats to my Northern Affairs responsibilities and was speaking as a partner in a good-faith relationship with the people and ecosystems of northern Manitoba. I dare say those people and those ecosystems expect the following from civil servants in my government and from companies given the privilege of entering their traditional territories and communities: (1) humility, not arrogance; (2) respect, not intolerance or discourtesy; (3) honesty and good faith, nothing less; (4) genuine ongoing communication, not just give notice, and expect no surprises; (5) maximum opportunities to participate in the jobs training, education and wealth generation potential associated with mining exploration and development.
Is this a new culture to adjust to? You bet it is. Those civil servants and companies who adjust first and best will be the most successful for themselves and for the benefit of all Manitobans.
Secondly, a mine closure regulation will be introduced early in the fiscal year. It will set standards for mine closures and require that a closure plan be registered with the department. The regulation will also require that the mine operator provides sufficient financial security to pay for all of the costs of rehabilitation at the time of registration of the closure of the plant.
The third is rehabilitation of orphan sites. Four former mine sites have been identified as major sites requiring rehabilitation and are called orphan since there is no associated company that can be approached to cover the rehabilitation cost. Funding has been found to rehabilitate one site during this fiscal year. Every effort will be made to find additional funding to take care of the other three.
We will also consult with Natural Resources regarding protected lands throughout this year and next. Finally, we will complete the process of digitizing claim maps. Digitized claim maps at a 50,000-to-one scale will be available for the entire province by next November.
Mr. Chair, I would like now to turn to my department's very active Geological Services program. A major thrust to the program focuses on providing an enhanced geoscience knowledge base for the province which will facilitate positive investment decisions and exploration and development and provide the basis for sound land-use decisions. The challenges in meeting this objective are many, not the least of which is maintaining a balanced approach that will not only foster new exploration opportunities in frontier areas but provide continuing support in the established mining camps.
Mr. Chair, we have been facing these challenges in a variety of ways, including looking for opportunities to enhance program delivery through collaboration and/or partnerships with industry and other federal and provincial agencies. Over the next two to three years, collaborative projects with the federal government, industry and several Canadian universities will produce expertise and opportunities for technology transfer with direct operational expenditures averaging approximately $1 million per year. This is in addition to our current program allocation. These programs will significantly increase our current geoscience knowledge base and provide a solid framework for future work in the province.
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This type of innovative operation was successfully employed in the Shield Margin NATMAP project, which contributed immensely to our understanding of the controls on mineralization in the Flin Flon-Snow Lake greenstone belt, the richest greenstone belt of its age in the world in terms of historical production value per square kilometre of greenstone. The newly mapped extensions of the greenstone belt beneath the cover of Paleozoic rocks to the south provide some of the most active exploration targets in the province. Final maps, reports, and digital data releases on CD-ROM and the Internet are scheduled for this year.
In 1995, the department identified a need to upgrade the level of geological information available for the Northern Superior Province in an effort to promote exploration opportunities in this underexplored part of Manitoba. Accordingly, Operation Superior was launched in 1996. This successful program now entering its third year was recently linked to the Western Superior NATMAP project sponsored by the geological service of Canada, which will augment work being carried out by the department. This year, the very successful multimedia geochemistry project will continue in the near east-central portion of the region. Industry-anticipated results of this past summer's work will be released in May in time for explorationists to develop follow-up programs for the 1998 field season. Bedrock mapping and mineral deposit studies will continue in the Knee Lake, Island Lake and Stull/Kistigan lakes areas.
The recently launched Thompson Nickel Belt CAMIRO project is another example of innovative program delivery. Industry support for this program averages about $130,000 a year over a three-year period. The program is operated through the collaborative efforts of our department, the Geological Survey of Canada, and five Canadian university geoscience departments. It represents the first integrated study of this world-class mining camp. The project also targets the relatively unexplored southern extension of the Thompson nickel belt beneath Paleozoic cover. This program directed by Manitoba Energy and Mines will develop new exploration tools that will yield long-term benefits to nickel explorers in the province.
Geological Services is also developing new exploration and development opportunities in southern and central Manitoba. Work in the Mafeking area suggests the potential for previously unrecognized metallic mineral deposits hosted within or beneath carbonite rocks overlying the Churchill/Superior boundary zone, although in the preliminary stages of development, this work could potentially lead to the identification of new deposit types in Manitoba. Mr. Chair, the branch is in the process of hiring an additional industrial minerals geologist to help foster the development of these important commodity-specific mineral resources. To further consolidate these efforts, responsibility for the aggregate and quarry mineral resources program was shifted to the branch in January. Over the short term, aggregate activities will continue to focus primarily on assessing aggregate potential in wildlife management areas that are under consideration for inclusion in Manitoba's network of protected areas.
In the Winnipeg area, the first phase of the Capital Region study is nearing completion. In this effort, crushed stone, dolomite, dimension stone and other potential industrial and metallic mineral resources were inventoried to provide a framework for effective land use planning in the region. The second phase will provide an overview of the sand and gravel aggregate resources in the region and forecast supply and demand scenarios. This phase will likely be deferred until evaluation of wildlife management areas has been completed. Again, work in this region is being augmented by collaborative projects with the federal government.
A new NATMAP project in the greater Winnipeg area now entering its second year will provide enhanced mapping of surface minerals in the region, including a study of flood frequency in the Red River Valley, as well as development and integration of digital databases. In addition, a new federally sponsored hydrogeology initiative now underway will focus attention on aquifer mapping and ground water dynamics in the Winnipeg region.
The Geological Services branch has been actively involved in the review and consultation process for candidate sites for Manitoba's network of protected areas. Through extensive consultation with our client groups, we are working toward meeting our provincial objectives for the Endangered Spaces campaign in a way that is consistent with our sustainable development strategy. The process to date has identified a set of candidate sites agreed upon by our industry clients, Parks Branch, Mines Branch and Geological Services. The challenge this year will be to put forward an action plan that will allow further evaluation of those sites for which there is a potential conflict with mineral potential values. To this end, our clients have recommended completion of mineral resources assessments within candidate sites and the need to more rapidly expedite the development of fully digital databases that will allow rapid access to assessment files, mineral deposits, aggregate industrial minerals and quaternary and geological databases.
In petroleum and energy, Mr. Chair, the Petroleum and Energy Branch fosters the sustainable development of Manitoba's oil and gas resources and promotes investment in efficient energy use and the development of economically viable alternative energy in Manitoba. Last year was a banner year for the oil and gas industry in Manitoba. Highlights were a record level of revenues, $6.3 million from the administration of Crown oil and gas lease rights, increased exploratory and horizontal drilling activity, increasing oil production and the designation of two new oil fields, Mountainside and Birdtail, and an expanding Manitoba-based oil field supply sector, which included the launching of Manitoba's only oil well drilling rig operated by CanAM Drilling of Steinbach. Clearly, this level of activity was in large part driven by the price of oil. However, the activities and policies of the department have also been instrumental in promoting and facilitating investment opportunities in Manitoba's oil patch. In addition, we have taken an active role in minimizing the environmental and safety impacts of development of these resources.
Mr. Chairperson in the Chair
The branch promoted Manitoba oil and gas investment opportunities at a number of forums throughout the year, including the international Williston Basin horizontal drilling symposium in Regina, the annual general meeting of the Petroleum Society of the Canadian Institute of Mining in Calgary and a one-day open house and trade show that we organized and presented in Calgary.
Mr. Chair, I had the pleasure of attending the Calgary open house, and I can tell you that all our industry clients expressed praise and appreciation for the branch's clear, logical and businesslike approach to promoting and regulating this important industry.
Mr. Chair, well information is the lifeblood of the oil and gas industry, and convenient access to reliable information is a critical component of any jurisdiction's efforts to attract investments. I am pleased to say that through development of our Mogwis System, Manitoba has taken great strides to improve industry access to this critical database. In addition, the branch's presence on the Internet has been enhanced as we continue to explore this new and effective medium of information dissemination. I invite the members here to take the opportunity to visit our web page; probably the Chair already has, knowing his interest and capacity in using his computer. I think you will be very impressed.
As well, the branch has made strides in electronic exchange of information and electronic transfer of funds for payment of fees, especially for Crown lease bonuses.
On the environmental side, the branch completed the abandonment of Manitoba's only historical orphan well in 1997. In addition, a new orphan well, resulting from the bankruptcy of the operating company, was also properly abandoned. I am pleased to note that the branch has taken a pro-active role with oil companies to ensure that their abandonment and rehabilitation responsibilities are honoured. I am pleased to note further that the incidence of oil and salt water spills in Manitoba in 1997 is down and that the total volume spilled dropped by 43 percent from the previous year.
Mr. Chair, much of this improvement can be attributed to the diligent work of our petroleum inspectors in our district offices in Virden and Waskada. The Petroleum and Energy branch administers the PEAP program providing for grants of up to 20 percent of the cost of eligible exploration expenditures. PEAP has been instrumental in revitalizing Manitoba's oil patch. Before PEAP was introduced in 1996, only two significant oil discoveries had been made in Manitoba since 1986. By contrast, at least three significant new oil discoveries have been made since 1996, and I must note that a number of other plays are being evaluated by development wells. A total of 17 oil and gas companies, previously inactive or with insignificant activity in Manitoba before PEAP, have conducted exploration under the program.
Mr. Chair, since 1997 saw the proclamation of the new Oil and Gas Production Tax Act, replacing a previous act of the same name, with this, the modernization of Manitoba's oil and gas legislation was completed. This has resulted in Manitoba legislation being among the best written and most effective legislation of its type in the country. World oil prices have declined sharply since late 1997 to a current level of under $20 Canadian per barrel as of April 7, compared with over $33 a barrel in early 1997. This has resulted from a number of factors, including overproduction by OPEC states, notably Venezuela, and the economic meltdown in East Asia.
Our challenge in this area of reduced prices will be to continue to attract a significant level of exploration and development investment in Manitoba's petroleum resources. In addressing this challenge, the department is undertaking a comprehensive review of the effectiveness of PEAP, together with the appropriateness of the current petroleum fiscal regime, unchanged in almost 20 years.
In addition, enhancements to Mogwis and internal information processes will ensure that the branch continues to provide the best service possible to its industry clients and to Manitobans. The branch will be represented at a number of technical and trade symposia, and will continue to promote investment opportunities in our oil patch. Notably, the department is the co-sponsor of the second Manitoba oil show to be held in Virden on May 12 and 13. I would certainly invite members opposite to participate in this event, which is designed to inform the public about Manitoba's oil and gas industry and provide a forum through which Manitoba-based businesses can exhibit their wares.
The branch will continue its efforts to ensure that operators of inactive, uneconomic wells fulfill their obligations to properly abandon and rehabilitate these well sites. Backed by effective legislation, including the well abandonment to preserve account, the branch will continue its campaign to address all environmentally suspect operations in Manitoba.
On the energy side, the branch operates programs designed to increase the efficiency of energy use in Manitoba. Noteworthy is the Manitoba R-2000. A total of 35 homes were enrolled under the program in 1997-98, an increase of some 20 percent over the previous year. For this fiscal year, we are targeting at least 70 new enrollments.
Of note in the R-2000 Program is the BrieCrest Estates Project of Horizon Custom Builders in Brandon. This will be the first seniors condominium project in Manitoba to be constructed to R-2000 standards. To date, 16 of the 35 units have been completed and are undergoing final testing. I invite my opposition colleagues to join me on the weekend of April 24 and 25 to attend the open house for this project and, of course, all of my colleagues on the government side are always welcome to attend any of these kinds of events.
The branch is working with Government Services to implement the second phase of the Manitoba Government Buildings Initiative. During this year, monitoring of the pilot building, the Woodsworth Building, has confirmed that the retrofit investment has led to substantial energy savings. The second building retrofitting is at the Portage Provincial Building and has just been completed. This project includes installation of heating equipment and controls to improve environmental control, as well as a lighting retrofit.
Mr. Chair, I reported last year that a major scheduled initiative was to raise the profile of the department as an important source of impartial information on energy efficiency and alternative energy. We have made considerable progress in this area as a result of our participation in the re-entry and reconstruction effort after the great flood of 1997. As a result of 17 workshops attended by 247 people in the flood-damaged area and fielding of some 500 technical inquiries--
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Mr. Chairperson: Order, please. The hour being 5 p.m., time for private members' hour.
When this committee reconvenes, the honourable minister will have 20 minutes to complete his opening remarks. Committee rise.