Hon. James McCrae (Government House Leader): Madam Speaker, I move, seconded by the honourable Minister of Education and Training (Mrs. McIntosh), 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.
* (1450)
ENERGY AND MINES
Mr. Chairperson (Gerry McAlpine): Order, please. Will the Committee of Supply please come to order. This afternoon, this section of the Committee of Supply meeting in Room 254 will be considering the Estimates of the Department of Energy and Mines.
When the committee last sat, it had been considering item 23.2.Energy and Mineral Resources (b) Petroleum and Energy on page 47 of the Estimates book. (1) Salaries and Employee Benefits. Shall that item pass?
Ms. MaryAnn Mihychuk (St. James): Not quite. Gerry is pretty quick. I have seen him running.
Yes, I would like to ask a few Energy policy questions, and given the department's role at providing position papers and doing analysis looking at the overall future of the energy sectors, I would like to ask the minister what type of advice he has received in terms of the energy sector in Manitoba, specifically Manitoba's future in hydroelectricity.
Hon. David Newman (Minister of Energy and Mines): The question is so broad, I am trying to develop a framework answer which will give you some guidance responsive to your question. One area that is most recent and freshest relates to the climate change challenge that we have and, in addition, to the kinds of energy efficiency and conservation initiatives that we spoke to last day, both in response to questions from yourself and the honourable member for Dauphin (Mr. Struthers).
We are looking at the discipline that is going to be a consequence of the federal commitment internationally to the Kyoto agreement to place an increased focus on the importance of hydraulically generated electricity as an energy source increasingly transmitted east-west in this country. So that is one initiative that I have certainly been advised to pursue and maybe even have led pursuing. That is something that we even, I can say, brought to the table at the ministers' meeting in Toronto on Friday last. That is, the ministers of Energy, Environment, from the provinces and territories and federally.
Another area that I have been getting very considerable advice and updating on is the progress being made on the deregulation of the electrical industry, electrical component of the energy industry over the world but primarily in the North American continent. We want that updated, objective expert guidance on a regular basis, because we want to make sure that our province and its policy and Hydro, as a Crown corporation, are strategically positioned to be ahead of the developments and capitalize on them to the maximum for the benefit of Manitobans.
Somewhat in relation to that, another area that is served by strong extra provincial relationships both nationally and internationally with our American neighbour is the electrical reliability issue, also described as energy security issue in some parts of the world. That is a matter of imminent concern because the deregulation process inevitably leads to a situation as to who and how you are going to make rules in an increasingly deregulated market to ensure quality and reliability within the system, and that has several components to it. The way I look at it, one is between countries, or between the industry members in two countries, and the other is within our own country. I happen to support quite aggressively an enhanced reliability within our own country, between provinces and territories, with more federal support, and the climate change discipline is enabling us, I think, to advance that initiative with more optimistic results anticipated over the next while. But the concept between countries, or industry members in two countries, focuses on, in effect, who is going to be the referee and how do you make the rules, and that kind of situation.
Another specific emerging out of the climate change initiative, which we brought to the table on Friday in Toronto, was a very specific, practical suggestion to make a significant impact on the CO2 emissions. Given that we are looking at reducing those emissions from 19 percent to 25 percent over the period until 2008 to 2010, and given that we as a country slipped so that things got worse rather than better since 1990, that is the kind of percentage that we have to make up, so we as a province, which is not a major generator of CO2 emissions, are looking at regional ways that we can make a contribution beyond even our own population, our industrial base in itself warrants, we are looking to make a contribution in ways that our peculiar advantages allow us to.
* (1500)
So one of the things that we suggested very specifically was that hydraulically generated electricity be used to be the energy source for our compressor stations, for example, along the TransCanada Pipeline. We looked at an area at the Alberta-Saskatchewan border to North Bay, Ontario, and did an analysis of, if we replaced what is now a natural gas energized compressor stations, what sort of an impact we could make on the carbon emissions. The analysis showed that we could effect a savings of emissions, a reductions in emissions, in the magnitude of 6.5 million metric tonnes per year if we converted all of those stations within that area, which would be in the order--my understanding being that the climate emissions goal would be in the order of, I think, 200 million metric tonnes a year. So that would be a contribution to the whole Canadian obligation in the order of 3 percent a year, but another way of measuring the magnitude of that, my officials advise, would be almost equivalent to the total of Manitoba's carbon emissions from all activity within the province. So that is the kind of approach that I have been advised to take and fully support, and, in fact, I am leading together with my colleague the Honourable Jim McCrae from the Department of the Environment on a national basis.
The other kind of advice that will be ongoing over the next while is there are a number of tables that have been established pursuant to the climate change initiative. The $150 million of federal money through the Department of Environment, federally, and Natural Resources, federally, that has been set aside to invest in addressing the climate change initiative, as I understand it, will be invested primarily in a process to do the necessary analysis under different headings, the most relevant to Manitoba, including electricity as one table, and the proposal that we brought to Toronto on Friday that I have just spoken to will be--well, indeed is the first concrete proposal which would be brought to that table for consideration, and both the Department of Environment and our department will be actively involved, in kind, in supporting that initiative at the electricity table.
Another area that I am very pleased to say that we made progress in involving electrical matters and generally energy matters is we have now on a national basis been able, with our persistent persuasive efforts and because of circumstances beyond anyone's control, to contribute to a deadline date commitment by all jurisdictions now in the country to the implementation of the effective date for the creation of the energy chapter in the Agreement on Internal Trade.
Saskatchewan and Ontario were holdouts for a long time, and they have now both committed in writing to dates for them to come on board. Manitoba's, of course, position was that we were ready as soon as The Hydro Act was amended in June of 1997. That, I think, generally outlines areas where we have been focusing in terms of my getting input from departmental officials, from Hydro, from external experts.
Ms. Mihychuk: I understand that the minister suggested that there was potential for exports in both directions across Canada potentially for hydro. Is that correct?
Mr. Newman: Those were not the words that I used, but the potential for, with enhanced transmission capacities, hydraulically generated electrical power being available as a more environmentally benign substitute for fuels and other energies used in other jurisdictions to the extent that would be for the benefit of Canadians generally.
We have made the case that not only will this be of benefit to the international obligations that federal governments are likely to commit to by signing an agreement but we believe will enhance reliability and will enhance sovereignty of our own nation and also even contribute to national unity.
* (1510)
It is not well enough known, I think--I use the rule of thumb that about 60 percent of all power generated in and for this country is hydraulic, is hydro, and when we did an analysis of the relative federal support for natural gas transmission through pipelines and natural gas development and also in nuclear and contrasted that to what the federal government has invested in electrical, the figures were astounding. My recollection is a figure here in the order of 18 million for hydro, as compared--and this is from 1990--to 5.1 billion to the other much more utilized sources, so that is something that we do want to expose to public consideration and public debate, in all fairness. At this time, Manitoba Hydro does not pay federal taxes as a Crown corporation, nor would Hydro Quebec or Newfoundland and Labrador, but that is a more recent phenomenon since 1995, I guess, when the legislation changed federally, but that should be factored into the consideration.
Another thing that is not probably broadly enough appreciated is how the approach of our provincially owned Crown corporations over the years has been very parochial and very consistent with a mandate of taking no risks which would jeopardize your obligation to service the people of your own jurisdiction. What is happening in the world today with the powers of the marketplace from Manitoba outside Canada is the risks are not just within. The risks are coming in very challenging ways from outside the boundaries of Manitoba.
In doing a risk analysis, you have to understand those forces. That is why exporting--enhancing the capacity to export and at the same time enhancing the capacity for another jurisdiction to support you during an ice storm or damage done by a wind storm are very positive things in the interests of the people of Manitoba. In addition to that, of course, because of our cost efficiency, there is tremendous value in selling power, which is surplus to our needs, at prices which will enhance the revenue into the corporation in such a way that we will be allowed to charge our consumers less. I tried very hard to get the message across that all Manitobans own Manitoba Hydro. To the extent that we can benefit from exports in the ways that I have described, whether it is between jurisdictions in our own country or even beyond, there are many benefits to all Manitobans.
Another feature of this is to the extent that the world sees it the way Manitobans do and the way that I am describing it, it may very well be that in order to meet what could be increasing demand from elsewhere, we will have to look at very major capital expenditures on enhancing transmission and potentially speeding up the already scheduled capital enhanced generation plans that Manitoba Hydro publishes in its annual kinds of reporting mechanisms. So, my answer is intended to indicate that there are significant and complex implications to enhancing the export to other jurisdictions, but we see almost all of them as being very positive things for Manitobans as a whole.
Ms. Mihychuk: It is indeed an exciting time when the minister talks about interprovincial co-operation, the opening up of barriers. Manitoba's potential for the export of hydro is well known and appreciated on our side of the House. As the minister knows, we are well on the way of constructing or preparing to construct Conawapa in looking at providing energy to Ontario, and the minister knows that I was supportive of providing export ability to U.S. markets.
So I see, or we see, Manitoba Hydro and our capacity to generate electricity as an opportunity for Manitoba and Manitobans in general. I am wondering if there are plans for the department to become involved in the marketing of our hydro capacities.
Mr. Newman: I think I am doing that in the climate change initiative. I think I am doing that in the interactions I have with my counterparts in other jurisdictions. I think we are doing that in the broad policy way, in a broad motivational way, showing the advantages of going in this direction, but we have no intentions at this time of building this capacity into government. We think it is better to have Hydro build that capacity into Hydro, subject to what is I think an increasingly entrepreneurial sort of approach by Hydro with a continued direct accountability to the diverse ownerships within our own province by the concerns of all of our different citizens so that the people in South Indian Lake, the people in Cross Lake, the people in Norway House, Split Lake, York Factory, Pukatawagan, the people in Pikwitonei and Thicket Portage as well as all of the people in Southern Manitoba are owners of Hydro. They have different levels of awareness and knowledge, different cultural perspectives.
I am doing the best that I can, and my department is and I believe Hydro is, to educate Manitobans about the kinds of things we are talking about now. I think that is the marketing capacity of Hydro. That is communicating and educating, in effect, the stakeholders, all Manitobans. I speak to you as candidly as I do because I value and respect this process, and I hope that when you get the same level of understanding as I do as to what we are doing you will become communicators and ambassadors to do that job for those owners as well. Your colleagues in the official opposition will as well. To the extent it is not done, we damage our own reputation as reliable producers and suppliers of hydro power to other jurisdictions.
That is why I get so concerned really for our aboriginal Manitoba citizens when a community led by a leadership like that at Cross Lake at this time in their history have chosen to, on an international basis, disseminate information which causes me very considerable concern, because unfortunately it has not been based on facts. It has not been based on a fair or accurate account of history, and it does a disservice to I think the huge efforts of good will by this province under the government that I am part of since 1988 to reach out to resolve the damage done by Hydro development, particularly in the 70s, in ways that will cause all of the victims in the North to believe that now justice has been done, never perfectly but justice has been done and we can now move forward.
* (1520)
I look forward to the day in the very near future when the aboriginal population of the North join with all Manitobans to celebrate this wonderful Manitoba advantage that we have in the form of Hydro, and will, with appropriate scrutiny and maximum due diligence, see fit to endorse what will be relatively environmentally benign further development of Hydro. Your government supported Conawapa, for example, and it was virtually there. The advice that we get is that that will not involve more flooding. So, to the extent that the official opposition and the First Nations of the North and all Manitobans embrace that as a positive kind of thing, done in the right way, I think we will be able to demonstrate the best kind of marketing possible. That is a united universal commitment of our people to make that kind of thing, that kind of enhanced renewable energy source at low prices available to a portion of the world and contribute to reduce CO2 emissions in ways that will make the whole world happy.
So, yes, that kind of marketing we are doing. I am hoping that we can do that together, both the government and the official opposition, and in terms of the technical aspects of making deals, when Hydro needs broader policy support, the kinds of commitments that governments need to supplement, we will be there to support them.
Ms. Mihychuk: Can the minister indicate whether natural gas produces, in its burning, CO2? Is that a significant polluter?
Mr. Newman: I made that point using the replacement of the compression stations which are serviced by natural gas, so that in itself resulted in a replacement of natural gas with electrical, resulted in the 6.5 million metric tonnes per year, and that was the compression stations between the Alberta-Saskatchewan boundary and North Bay, Ontario.
Ms. Mihychuk: It is a little surprising, natural gas is always sort of viewed as a clean fuel, I guess, by the layperson, or so it is marketed. It is important to note exactly that it is a significant polluter to our environment, and that type of information I think will be enlightening and enhance our strategic marketing ability for Hydro and its clean and effective way of producing power.
Will this have an impact on the government's policy for natural gas distribution in rural Manitoba?
Mr. Newman: Let me give you a more maybe useful answer to your last question which will help me in answering the question about natural gas distribution systems in the province and their expansion.
Coal has the most significant carbon emissions per unit of energy, and natural gas is one-half to two-thirds as much as that of coal, and hydro, through an enhanced generation at Conawapa has virtually no emissions whatsoever because in that situation there will be literally no--hardly any additional flooding. That is because there is four hectares involved in Conawapa, and it is all rocks so there is not the gases that are given by flooding of vegetation areas or the products of vegetation soil.
We have short-term needs and we have long-term needs, and there are situations where natural gas maybe for--who knows?--maybe several decades--maybe--will have relatively lesser prices, it will be relatively less costly. It is actually a very interesting decision that customers have to make and the philosophy of this government is to, for the most part, let customers make their own decisions and businesses make their own decisions. The shorter-term thinkers are going to look to--who want something, in whatever time horizon they see natural gas being cheapest, they will make that decision.
Right now in Swan River, you have had Louisiana-Pacific build a plant there with the expectation that they will be serviced by natural gas. There are other businesses that would believe that you have municipal jurisdictions throughout the province that would welcome more ready access to natural gas, certainly instead of coal, and in some cases, instead of hydroelectric power because they would see it as being cheaper for certain purposes. Those are choices that they will make based on their own analysis. Then there are the longer-sighted people out there who are not as concerned about immediate viability or making a buck, and they are sort of experimenting with technology or prepared to make an investment now in the long term. That is why some people invest a significant amount in a technology like geothermal, the heat pump technology, which requires fairly significant capital investment initially, and they will be saying we do that because 20-25 years down the road we might be the winners for the next 50-100 years and, at the same time, believe that they are contributing with less negative impacts on the environment.
* (1530)
I believe that those kinds of free choices, and to the extent we can make them informed choices, and to the extent that the federal government, through the climate change initiative, chooses to encourage those longer-term informed decisions by giving a value to the negative impacts to the environment of natural gas or coal, will contribute to more people selecting hydro power--even though it may cost more--and more people selecting those alternative energy sources. That is why we also support in projects like the Ecovillage that, if they opt to experiment with natural gas as one portion of it and heat pump technology as another portion of it and they then monitor that over time, then we are going to get better answers.
We truly are in a very exciting time, because it used to be that people did not realize they had choices, and if there were choices, the relative merits of each were so different that they were not real choices. But, in this very exciting time of enhanced consumer choices, I think a lot of very conscientious citizens of the world are going to opt more for hydro and opt more for alternative energy sources that are more environmentally benign.
Ms. Mihychuk: I am prepared to move through this section and move into the Mines Branch.
Mr. Chairperson: Item 23.2. Energy and Mineral Resources (b) Petroleum and Energy (1) Salaries and Employee Benefits $1,460,400--pass; (2) Other Expenditures $491,200--pass.
23.2.(c) Mines (1) Salaries and Employee Benefits $1,370,900.
Mr. Steve Ashton (Thompson): I am in the other committee on Health, so I think our critic--
An Honourable Member: We will pretend you are here.
Mr. Ashton: Oh, I am sure the minister would love to have me here in spirit, rather than in body and spirit as well, but it is a very important issue we are debating on the other side, also very important on this side.
I wanted to ask the minister, and I want to preface my comments by indicating that if I do leave it is no disrespect to the minister. It is to get back to the debate on the other side. We actually have a motion on the floor there, so there is a debate that is fairly significant as well. I will certainly--to follow up with the minister in person and obviously with the Hansard.
My concern is with the situation of mining generally, but more specifically in my own community with Inco. Inco is in a position now where it has laid off 45 staff people, as the minister, I am sure, is aware. That is fairly significant, because it is the first direct layoffs in quite some time in Thompson. Up until now, there have been layoffs through attrition and early retirement packages, but there were 45 people--many of whom I know personally, a vast majority of whom I know personally--who were laid off.
Inco has laid off 150 contractors as well. They are currently leaving the community. I met someone that has kids in our swim club who is affected by that, so it has a very direct personal impact. Also, there are a number of hourly employees who are going to be cut. We are not sure yet how many. There is talk of 100 positions. Either way, the bottom line is there are concerns in Thompson about the situation with mining.
Now there are two sides to the coin on this: one is obviously the price of nickel is down and that is a fact of life. It is down significantly from last year. It is down from, I think, $3.70 a pound down to less than $2.50. It has been hovering around $2.40 or even less the last little while. So obviously that has a real impact on Inco's revenues, and I think everybody in Thompson respects that.
Unfortunately, there is another factor that compounds it as well, and that is Inco's major investment in Voisey Bay. That was predicated on $4 a pound nickel. When you are looking at nickel at less than $2.50 a pound, it is obvious that Inco is in serious difficulty, particularly on the cash side, and a lot of it is a combination of the low prices and the impact that has had on the Voisey Bay investment. To put it more bluntly, I think a recent analysis indicates that Inco's value as a company is now less than what it paid for Voisey Bay. You do not have to be a financial expert to figure out that is a problem.
I guess one of the concerns that people have in Thompson is about the future of the Inco operation, both on the mining and the processing side. I want to put that in context, because we are also up against Newfoundland where you have the Premier of Newfoundland who has been very active in negotiations with Inco. They are taking the position there that they want to have nickel mined and smelted and refined--full production in Newfoundland.
Obviously, we are in a situation in Manitoba where presumably that is or should be the policy of the provincial government here. What I really want to ask the minister is whether he has met with Inco? What the position of the Manitoba government is in regard to the future with Inco, particularly, if there have been any discussions around whether Inco is going to be committing to long-term exploration? I want to stress that there are plenty of reserves in the Thompson area, but without exploration and capital investment, you obviously cut back on your mining side, and that is what has happened already with the cancellation of exploration and expansion at Birch Tree?
Obviously, there are various different scenarios that people are concerned about, whether there is going to be continuing production. I think most people are--we are realists, we are in it for the long haul. We think Inco, the mine, is going to be there for quite some time. The question is, again, if there is operation in Thompson, will it include a significant amount of mineral production mining? There has been talk, for example, of bringing nickel in from Voisey Bay and other areas. That certainly gives a source to keep the smelting and refining operations going, but it raises questions about the value-added from our mineral resources here in Manitoba. So I want to get some indication on the record from the minister, what his position is and what the provincial government's position is?
If I could, just briefly, my recommendation to the government is to make sure it is directly involved and meeting with Inco. I would point out that there have been a number of significant changes made to the taxation system that have certainly benefited Inco in the last number of years. By the way, I would stress that as an MLA representing a mining community, I believe that we have to be competitive. We have to be competitive in the world arena, particularly, with some of the new productions taking place in Chile and other areas which perhaps do not have the advantages we have for infrastructure but certainly have cheaper cost, so I am not arguing against having a competitive mining industry but quite the opposite.
* (1540)
What I am suggesting is that we do have some ways in which we have worked with the mining companies in the past. I think now is the time to sit down and ask Inco for some indication of what is happening, some clear commitment to Manitoba, and at least do at a minimum what they are doing in Newfoundland, which I think is the appropriate thing, and that is making sure that they are discussing with Inco about the future of their resource. I am suggesting we do the same here.
So I am recommending the minister take a proactive role and particularly focus in on the question to my mind, not only the overall future of the Thompson operation but the mining side as well. I would add, by the way, that there has been a recently announced new development in Ontario, in the Ontario division. So they obviously are moving ahead on that end of it, on the Ontario division, but the bottom line here is we want to ensure a long-term future obviously for the Inco operation in Thompson.
I really want to just finish by saying I am concerned, too, that in some ways we are being caught here not only dealing with the price of nickel but with some bad investment decisions that were made by Inco. It has caused a lot of frustration, and a lot of people are suggesting that the people who made the decision should be paying the price rather than a lot of the people in our Inco communities whether it be here or Sudbury or Copper Cliff. There has been a lot of criticism. I know recently at the board meeting, a shareholders' meeting in Ontario took place, a lot of criticism around the stock market at those decisions, and I would stress it was not the first time we have been through this. We have a fairly thick skin in Thompson, because we faced the same difficulty in the early 1970s because of Indonesia and Guatemala.
But notwithstanding that, the provincial government does have a role. It has a role both in terms of being the steward of the mining resource. It has a role in terms of setting the economic situation, which mining companies operate, the taxation regime, et cetera. It has, I think, a responsibility at a bare minimum to be sitting down with Inco and finding out what Inco's plans are and tyring to encourage Inco to maintain full processing here in Manitoba.
My view is we can work in a very co-operative way with Inco. In fact, if you go back to the origins of Thompson, there would not be a Thompson or an Inco without the joint venture between the government and the corporation of that time. We provided the hydroelectric power which is essential to Inco. Once again our hydro system provides the cheap hydro that is fundamental to the operation at Inco. The development of the town site in the early days, Inco played a very significant role; in the latter days, the provincial government and the local government played a key role. Mining has very much been a co-operative venture between government as its owner and steward of the resource on behalf of the people of Manitoba and the private company Inco which has been a long-term player in the mining industry.
What I want to make sure is that we do not end up with some drastic decisions made over the next period of time that will impact on the Manitoba operation. I am sure I do not have to add to the minister that over the years, the Thompson operation has produced a lot of revenues for this province, both mining royalties, not so much the current time period we are in. I go back to '88, I think there was about $130 million produced in one year. We certainly provide a lot of money in terms of income tax, sales tax, other revenues outside of mining per se, so we feel we are a very significant part of the provincial economy. My arguments are really not just on behalf of Thompson but, I think, for the best interests of Manitoba.
I appreciate if I put a fair number of comments on the record. My apologies for having to go back to the other committee, but I would appreciate the opportunity to read the minister's comments.
I will certainly want to offer my assistance in any way, shape or form. I have written already to Inco. I will be meeting with the president over the next period of time to express my concerns. I can tell the minister there is a lot of anxiety in the communities. He can understand. It is not that we have not been through it before. We have been through tough times as well as good times in Thompson, but we are concerned about the very difficult situation Inco is in, and I think the minister is fully aware of that. I guess the bottom line is that people want to make sure that there are not any drastic decisions made that are going to impact on the community of Thompson and the province of Manitoba.
Mr. Newman: I will be providing quite an extensive commentary to the points you made, and they will be on record in Hansard and, hopefully, shared with the people that are part of your constituency and maybe even beyond that to anyone who has concerns about the Inco situation.
Whenever we are dealing with a private company, I like to have the private company, by which I mean a nongovernment-owned company--this is a large multinational public company, of course--but when you are in the private sector, I like to have the people who are the voice, the responsible voice of that entity, speak for themselves, and I took advantage of the opportunity to ask for and obtain a copy of the most recent remarks that I was aware of that Mel Wyshynski for Inco had made to a public event. The public event was speaking to the Thompson Chamber of Commerce.
As a past president of the Chamber of Commerce before I came into politics and knowing Tom O'Brien and the local chamber people there, I know that they wanted to bring Mel to that meeting to get from him what the story was from the company perspective. I might say it is probably very desirable that somebody like Mel Wyshynski is in this position because, as we all know, he is someone who came up through the ranks in Inco, is well known and trusted, respected by the people of Thompson who know him as a wonderful community person, human being as well as a very competent manager. So, in this very difficult time when he made these remarks, they probably have more credibility than someone coming in from the outside and giving the news. Mel, in his remarks, the transcript of his remarks which I have--I will summarize some of what he said, but I think I was invited by the honourable member for Thompson (Mr. Ashton) to put on the record some information that could be utilized by the people to judge for themselves where things were going and where they are and whether our government is doing appropriate things working with them and whether the company indeed is doing what it should.
He said that he would briefly discuss the world nickel market and ultimately how this is affecting the Inco operation and the community, and he indicated it was especially important to a frank and honest discussion with those in the room. He indicated that he was well aware that what happens up on the hill is important to the local economy and is also how important to how you as business people plan for the future. I am now just going to quote him. He said: Yes, I do believe that the Thompson nickel operations have a future. I also believe everyone must recognize that it is a future that we can and must create for ourselves.
I am continuing to quote Mel Wyshynski. He said: It may not be the same future that many of us envisioned, but it is one that will provide for a healthy nickel-producing operation in Thompson and a self-reliant community. Indeed, as you will see, the challenges faced by Inco will force us all to change our expectations for the future. We will not be the same Inco as in the past, and this will have an impact on the community. I understand that the message I am delivering is less than positive, and this, in turn, may evoke some less than happy responses.
On the other hand, I am strongly convinced that people want to be told the facts, and I also believe it would be irresponsible on my part to paint a picture that does not match reality. So what is the reality? The reality is that we must continue to take aggressive actions to secure our future, and, as much as I would like to tell you differently, these actions will create some pain for all of us. However, at the end of the day, we believe our operations here in Thompson will emerge as a much stronger, leaner and more competitive player in the world nickel market. We will not employ as many people as we have in the past; but, if we significantly reduce our costs, we will be able to invest in our future here and still be producing nickel, providing employment and contributing to the economy.
If we cannot achieve these cost-reduction goals, our future will be determined by the global market forces. We cannot allow this to happen. I have spoken to many of you over the past few months, and I believe you are in tune with much of what is happening in the nickel business. I sense that what is unfolding is a source of great anguish. Before showing you a few transparencies, allow me to paint a brief word picture of what is happening. In a few words, the problem has not been with nickel demand, but rather it has been with nickel supply and its effect on nickel prices. Demand has remained strong in most parts of the world, and, in spite of some problems in Asia, 1997 saw the highest demand for nickel on record. Prices have been negatively impacted by the much higher than expected exports from Russia, the increased recycling of nickel and stainless steel, and, of course, the emergence of new low-cost producers onto the world scene.
* (1550)
Talking about prices, on April 7, 1997, the price of nickel on the London Metal Exchange was U.S. $3.26. Yesterday, the selling price was U.S. $2.40 a pound, a drop of 26 percent. The harsh reality is that we are faced with what I call a $2 to $2.50 nickel world, and in the final analysis we do not know how long prices will be at these levels, but we expect them to be in this range for a number of years.
I want to point out that Inco's purchase of Voisey Bay has nothing to do with the problems we are experiencing in the nickel industry. It is a simple case of economics. We cannot stay in business if we produce a product at a price higher than the market will bear. Therefore, to stay in business we must continue to reduce our costs of production. Blaming Voisey Bay will only detract us from what must be done. Let us now look at some of the fundamentals in the nickel industry in 1998.
Then after going through the transparencies, he summarized his message. My message today is threefold. First, Inco has embarked on a path of major change; secondly, this change is not an option if we wish to secure our future; and, finally, this change will impact the community of Thompson. We would only be kidding ourselves if we thought these problems would magically disappear. This will not happen and turning our back on these new realities would be done at our peril.
Some of the actions we have taken and others that we will take in the future will be accompanied with some pain. As we all know any change, even ones for the better, are accompanied by drawbacks and discomfort. No matter where we are in life, we cannot ignore the need to change with the times. As I have previously stated, we are now in the midst of changing times and with this must come changing expectations. We, therefore, need the support and understanding of a wide range of stakeholders in the months and years ahead. This includes all our employees both staff and hourly, the union representing our unit employees, local and provincial government authorities, the business community, and anyone else anxious to see Inco continue as a cornerstone of this community.
Many of us have watched the community change over the years as it prepares for a future where mining activity will not be as prominent as it has been in the past. We applaud all those organizations, the City of Thompson, Chamber of Commerce and others who are working hard to diversify the local economy. The progress made has been encouraging, and I urge you to continue with these efforts.
That was presented on April 8, 1998, and, again, to put in some historic context, I had my staff obtain for me some historical statistics on monthly nickel prices in U.S. dollars per pound. Mr. Wyshynski's speech has referred to some prices, and I want to put this in a historic context. I think putting things in a historic perspective sometimes helps us to at least have the confidence that this is not necessarily the worst of the days.
The figures that I had went back to 1985 and through 1997. The average nickel prices, U.S. dollars per pound, throughout the calendar year 1985 were $2.22, and the range for that year was from $1.83 up to $2.54. In 1986, the average was $1.76, a range from a low of $1.62 up to $1.87. In 1987, average $2.20, a range of $1.60 up to--in the month of December 1987--$3.47. The rest of the year was all $2.70 or less.
In 1988, the average $6.27, a range of a low of $3.66 to begin the year; it went up to a high of $8.21. In 1989, the average was $6.05; in 1990, the average was $4.03; in 1992, the average was $3.17; in 1993, the average was $2.40 with a range of $1.97 to a high of $2.73, an average of $2.40. In 1994, the average was $2.87, which is a range of a low of $2.45 to a high of $3.88. In 1995, the average was $3.73. In 1996, the average was $3.40. In 1997, the average was $3.14, a range of $2.70 to a high of almost $3.59. So the 13-year average, 1985 through 1997, is $3.46 overall. So that is a context which may be helpful because there is a reference point. You can contrast it back in your own experience in the community to the years 1985, 1986, 1987.
So what are we doing as a province? We have shown our flexibility to work with mining companies, and just as we have been doing with Hudson Bay Mining and Smelting recently in their Project 2012, we have an ongoing communicative relationship with Inco, primarily through the Mining Association of Manitoba who is their voice in their interaction but also meet personally, people in our department, with senior management of Inco. There is just a very effective, communicative, frank exchange of factual information and relationship.
* (1600)
The kinds of things that we have been doing consistent with our approach to encourage investment in new mines, encourage exploration to find more cost-effective operations, the Thompson nickel belt has been a focal point of our efforts, mainly because that has been the focal point of the efforts of industry. They still see enormous potential in the Thompson nickel belt, so our major efforts in the Thompson region are being carried out in conjunction with the industry-sponsored Thompson nickel belt CAMIRO project, which is now entering the second year of a three-year program. The program delivery draws on the collaborative efforts of our department, the Geological Survey of Canada and five Canadian university geoscience departments and represents the first integrated study of this world-class mining camp.
Industry support for this program averages approximately $130,000 a year over a three- year time frame with matching NSERC funding. Total program funding averages $230,000 per year. Participating companies include Inco, Falconbridge, HBED, Western Mining Corp., and Teck. In addition to funding, several of these companies are also providing access to confidential data that will significantly improve our understanding of the belt. The program is directed by Manitoba Energy and Mines and will develop new exploration tools that will yield long-term benefits to nickel explorers in the province.
As part of the department's contribution to this initiative, we are funding five field programs and one office GIS compilation project. These activities comprise 20.6 percent of the total branch allocation for field activities and 33.6 percent of the total number of days to be spent in the field by branch geologists. Specific objectives include production of 1:50,000 scale geology maps for the nickel belt, definition of lithostratigraphy structure and geochronology, refining geological, geophysical and geochemical exploration methods, aid in the identification of new exploration targets. The project also targets the relatively unexplored southern extension of the Thompson nickel belt beneath Paleozoic cover. Another statistic showing our focused and supportive effort as a government is that under the MEAP program 24 out of the 190, or 12.6 percent, of our approved projects are in the Thompson nickel belt. This translates into $2.6 million of committed program funding or 24 percent of the total MEAP allocation.
Through our most recent budget, the very tangible and specific tax measures that are benefiting Inco significantly are the exemption for motive fuel tax on propane fuel used in drying mineral ore 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, which we know Inco pays, will be reduced from 2.25 percent of taxable payroll to 2.15 percent of taxable payroll effective January 1, 1999, and this reduction represents an estimated $250,000 savings to Manitoba's mining companies. Just as those measures benefit Hudson Bay Mining and Smelting significantly, they contribute significantly to Inco as well.
Those remarks are responsive, I believe, to the kinds of concerns expressed by the honourable member for Thompson (Mr. Ashton) and what would be and are, I know, concerns of members of the community.
That is why the Northern Round Table, for example, thanks to the initiative of Mayor Bill Comasky of Thompson, being the representative of the northern Urban Industrial Communities; thanks to Sonny Clyne, the president of the Northern Affairs community council; thanks to George Muswagon and then his successor, Francis Flett, for the MKO in becoming involved in the Northern Round Table and then working with my ministry on behalf of the province in looking for ways to contribute to the development of healthy, sustainable northern communities, including Thompson, in ways that are not as significantly dependent on mining and the successes and fortunes of mining and realizing that there may be a day when mining is not nearly as significant a contributor to the economy; thanks to the efforts of the Norman Regional Development Corporation and the chambers of commerce in putting together tourism programs, programs like the Mid-Canada Mining Corridor Conference to be held soon, in fact, June 1, 2, and 3, which is designed to encourage companies to be of service to mining companies generally and entrepreneurs to become more aware of and more involved in providing services to operating mines.
All of those are very healthy ways to address the challenge and that strong northern regional multifaceted leadership, representative of the communities of the North, the existence of the Community Futures program in the area that are working co-operatively with everything from our Communities Economic Development Fund to the local chambers and the municipal and other mayors and councils.
Those are all, I think, the very proactive things that are happening to address the challenges that the honourable member for Thompson has alluded to. Another very positive thing is, I think, the aboriginal community of the North with the major influx of dollars, hundreds of millions of dollars through settlement of the Northern Flood Agreement, comprehensive settlement through Treaty Land Entitlement, their enhanced land bases, their growing populations. There are new markets growing up in the North and Thompson, I know, through the northern round table and other initiatives, is responding to these changes.
The most current example of that which really makes a big point is the sale of the Mystery Lake Hotel to Nelson House First Nation and all of the implications of that. The First Nations communities, the aboriginal communities of the North are going to play an increasing role in the future of Thompson. Again, in anticipation of that and our desire to have all peoples in northern Manitoba benefit from mining, we have our nine-point mining strategy, which is to work towards an accord to provide reciprocal understanding between aboriginal people and those engaged in mining exploration and development. All of these are the proactive, change agent kinds of things that are in progress now and are addressing the Inco challenge.
Ms. Mihychuk: I want to thank the minister for that lengthy response, and I am sure that my colleague who represents Thompson will study his words carefully as many of the people in that area are very concerned about the future of Thompson and Inco and will be anxious to hear the minister's comments.
In terms of the Mines Branch, I would like to discuss some of the impacts of MEAP and its direct benefits to Manitoba. I wonder if we have, for example, seen an increase in the number of mineral leases or mining claims since the MEAP program? My statistics indicate that we have not actually seen an increase in mining claims, but my numbers end in 1996. Just for the record, mining claims in 1992, we had 6,700; in '93, 7,900; '94, 11,400; '95, 10,400; then in 1996, 6,100. Would the minister confirm those numbers are accurate and perhaps provide us with the more current numbers in terms of mining claims?
* (1610)
Mr. Newman: The number of claims may or may not be reflective of anything of significance. As you know, I just asked my staff why there were 4,724 claims in 1994, which stands out as a very large number. It was because of someone staking a very significant number in southeastern Manitoba which have not born fruit.
The numbers that I have for mining claims is 2,257 in 1993; 4,724 in 1994; 1,112 in 1995; 692 in 1996; and, 1,664 in 1997-98.
Ms. Mihychuk: The reason I ask is we look for indicators for the program's effectiveness, and it seemed to me that having people actually take out mining claims may be an indication that they were successful in an exploration program and look at making a commitment to Manitoba. The record has not born out in terms of mining claims. Has there been an indication from the MEAP programs of a significant find, and when can we expect to see a mine open because of the MEAP program?
Mr. Newman: Responding, first of all, to your comment about indicators, the indicator that we think is a very positive measure of the renewed attractiveness of Manitoba as a place to invest, induced by the enhanced goodwill factor of MEAP overcoming the negative goodwill of the past, is the number of active companies in Manitoba in exploration. In 1995, the figure was 49; in 1996, the figure was 58; in 1997, the figure was 61; in 1998, the active companies in exploration is 71. So that is an important indicator.
The other way we determine the contribution of MEAP is to ask the industry. We had a survey of the industry, and the response indicated that 75 percent of all respondents to the survey express satisfaction with MEAP and would like to see the program continue.
Ms. Mihychuk: Mr. Chairman, is there not an obligation or at least an impression that the minister should be answering my question? My question was related to when would we expect a mine to open in terms of the MEAP projects that we have funded? I do not believe that the minister is answering that. He is putting statistics on the record which are trying to, I believe, justify or make the MEAP program look good. I have mixed feelings. There are good indicators and, for example, the mining claims which I have cited would indicate that we have not seen a direct correlation, so there are statistics and statistics. But my question was: have we seen a finding, and when can we expect to see some real development in new mines in the North?
Mr. Newman: On the point of order, I am in no way trying to do anything but be helpful. If this is not the kind of information that the honourable member for St. James considers to be relevant or helpful for herself, her party or the public at large, I have no desire to persist. So I will simply respond directly to the question asked, and my--
Mr. Chairperson: Order, please. I will deal with the point of order. The honourable member for St. James did not have a point of order, and we will just leave it at that. The honourable minister to complete your response.
Mr. Newman: I feel only comfortable answering that question by sharing with you and with the public what any particular explorationist has expressed in writing to me or people in my department. We received a letter from Canmine Resources Corporation, December 30, 1997, that said: It is my opinion, being the person within our company who was largely responsible for raising of exploration and development capital, the company's growth and success would not have been possible without the availability of the MIAP or MEAP programs from the Manitoba government that were implemented during a crucial stage of our company's growth. Certainly, our annual exploration budgets would not be nearing several million dollars and the advancement of our projects would not be happening as quickly as they are today.
That letter was signed by Edward Ellwood, E-l-l-w-o-o-d, president of Canmine Resources Corporation, and that company has been saying that--and this is why it is so difficult. What do you know what a company is going to do with nickel prices as they are, but they were certainly purporting that they had a near-mine, thanks to the kind of supportive programs that this government had provided?
But I do not think it is appropriate, frankly, for me to speculate or guess as to which of the 71 companies active in Manitoba investing $32.6 million in 1995 in exploration, $41.2 million in 1996 in exploration, and an estimated $41.7 million in 1997, which of those expenditures, which of those mining companies, explorations companies, spending that aggregate amount of money is going to become a mine. That is something for prospective investors in mining companies to ascertain for themselves without my purporting to have any knowledge or expertise in this very challenging area for investment, which has befuddled even Inco, who did put a lot of money into Voisey Bay and spent a lot of money and made a lot of commitment in relation to that property. If they are not expert enough, investing that kind of money, how can you expect me to offer anything useful at all? I find it a very difficult question to deal with, and I have answered it by telling you how difficult it is, and I think how inappropriate it would be to attempt to answer it and have anyone place any reliability in anything I said at all. I would offer a disclaimer, in fact, for anything I have said that would induce anyone to invest or not invest in anything.
Ms. Mihychuk: Well, the provincial government has decided to invest in MEAP and has now decided for the past two years to invest the money from the Mining Reserve Fund into MEAP, so not only have we looked at general revenues going into MEAP to support, which we do endorse that method of financing the MEAP program. It is good and it is bad and it is effective and it is not.
However, the decision to move money out of the Mining Reserve Fund raises a number of concerns, and because the Mining Reserve Fund is so specifically identified to help the people in the North, the miners, those families, the businesses, I ask how many miners will be moving their homes from Leaf Rapids to establish in a new mining community that is going to be open? And that is not in 10 years, we are talking about people losing their incomes today. The crisis is today.
So that when we look at the effectiveness of the MEAP program, those people are not looking in the long term. They need something right now. The crisis is here today and what options are available to them because the Mining Reserve Fund was established with a specific purpose, and I know that the minister and the government, the Minister of Finance (Mr. Stefanson) have found a way to comply with the act and take the money out and use for various items.
So I think it is particularly relevant to talk about MEAP and its effectiveness because what we are searching for are real jobs for real people in mining communities and how they are going to sustain themselves and their families. So although my question was somewhat rhetorical, because it is very difficult to tell when the next mine will open, it is particularly relevant because people are losing their livelihood right now in Thompson, in Flin Flon, in Leaf Rapids, in Bissett, so it is a very troubling time for many miners, and when we look at the effectiveness of MEAP, it is in the long term. If something would even open in the next 10 years, that would probably be called a very speedy project in terms of a mining history and the amount of work that is required to get a reserve or a deposit into production.
So the questions are leading to an evaluation of MEAP, its direct impact on the workers in the North and its availability for these very trying times which have impacted on those persons. In fact, when we look at the effectiveness of MEAP, one of the other measures that we can look at is the overall exploration expenditures of companies. That is a useful tool and the minister often cites how much money has been spent on exploration, and since 1995 we have seen an increase in those three years, but when you look at the amount of exploration expenditure when compared to the percent of national total, Manitoba has been a loser.
* (1630)
In 1992, although overall exploration expenditures were $32 million, our share was 8.3 percent of the national average. In 1995 we had 32.8 percent and our share had dropped down to 4.5 percent of the national average. In 1996 it was only 4.6 percent; in 1997, this based on forecasted exploration expenditures of $41.7 million was still disappointingly low, 4.8 percent.
Can the minister explain why Manitoba is not getting its share of exploration when it is one of the, I would say, few, a minority of jurisdictions, which provide such an incentive program, and why we have seen the drop off in terms of the national average from a high in 1992, which are the numbers that I have to now, 4.8 percent?
Mr. Newman: I am well aware of those figures and made it a point of trying to get an understanding satisfactory to me as to why those figures were like that. There is a variety of reasons for it in some detail.
In any event, in my remarks I had indicated that no matter how much of an effort you make to create a positive environment for doing exploration, mining and investment, the magic of having a major find is what seems to attract a disproportionately large amount of investment. I use the illustration of Voisey Bay in Newfoundland-Labrador and why they, as a jurisdiction that traditionally has not attracted a whole bunch of investment, attracted an enormous amount after Voisey Bay. In Northwest Territories, things have gone wild with diamonds, and Alberta, recently diamonds have become big, so it is the magic of major finds. That is why the marketing effort on MEAP.
There are other reasons, and I have explored them. One of them is the habits of companies who during the period they were discouraged by the NDP from investing in Manitoba, the habits of having gone elsewhere. When you get used to something, you have to change the habits, so that is why the more active companies we get here, the more new companies we get coming in here, the more old companies coming back--because the environment now is more secure for investment and more understanding from a government perspective, the more they are coming back. So we had to overcome that handicap, and I have already shared that with you.
Another factor may very well be the concern that an NDP government might ever come back and get re-elected in the province of Manitoba and put them at risk of lack of security of investment, put them at risk of greater expropriation, the aversion that is always expressed by the official opposition to private ownership of things, the demonstrable lack of understanding of business, the one-sided and often blind support of unions and interest groups who oppose business, the identification with organizations like Choices, all of those kinds of concerns. They know that there is an option in terms of philosophy here, in terms of official opposition which has a remote possibility, perhaps, but a chance, given it is the official opposition, of replacing the current government. So that is another factor.
But in British Columbia--I find sometimes the best evidence as to whether or not we are doing the right things in terms of creating that environment is reliable third-party endorsements. In my speech in Toronto on March 9, I spoke to the excellent relationship that our government has with the mining industry in Manitoba, and I cited the Manitoba Mining Association's belief, express belief that our regulations in administrative procedures are the most efficient and effective in the country with delays unheard of and that they should be considered a model for Canada. I also take note, when I look at whether we are doing the best that we can, as to what recently happened in B.C. when it announced its new mining initiatives in a press release of April 21, 1998, headed: government announces new mining iniatives to spur jobs and investments.
I had my staff review that, as I always do, to make sure that when there are new initiatives in other jurisdictions that we are still competitive and are still doing all of those things within our control that make Manitoba the best place to invest in mining. What I found reinforcing was that the British Columbia minister, the one there responsible for mining, has--it is obvious--taken a look at our Explore in Manitoba publication used by myself and staff in promoting the Manitoba advantage, and it is very clear that B.C.'s new mining initiatives, the NDP government in B.C.'s mining initiatives, with enormous pressure from industry to change those initiatives of the past which were antibusiness, antimining, antiexploration, can be traced back to programs that have been promoted in Manitoba for the past several years. What the message is from B.C. is that Manitoba's approach to creating a positive business environment is contagious, and the NDP government in B.C. has seen the wisdom of doing it to compete with Manitoba.
In fact, what was somewhat amusing having walked the mining districts in the city of Vancouver with staff going from office to office--and there are quite a collection of mining offices in one area of downtown Vancouver, so you can do it by walking, even though it rains and the umbrellas sometimes blow inside out--but walking from office to office, you see the mining, the explorationist owners, the people on the street and in their vehicles and they wave and you get to know these people.
It is very amusing because they are so congratulatory to Manitoba for making this effort to go out and market the Manitoba Advantage, and every time we do it, a large number of them communicate with their government in B.C. and say get your act together. Manitoba is beating you guys. We have never seen the minister come to our office before and the Manitoba minister is here. So what they did, they put an enormous amount of pressure on the B.C. government to get with it, and so they have very much adopted many of the Manitoba points of the nine-point strategy and are now adopting those as policy.
When we were in Cambridge Bay at the mining symposium there, The Northern Miner was represented there by Vivian Danielson, the one regular writer in The Northern Miner and here we were, the Manitoba Mines staff and the minister--I was the only minister at the mining symposium, and at the speech to the conference, the reporter, she was the featured speaker at the dinner, at the closing feast, made reference to the fact that Manitoba continues to lead the way in the way we go about marketing Manitoba as a place to mine.
* (1640)
So having said all of that, I really do invite you, as I have every time we have met in these kinds of meetings, come up with your best and your most helpful ideas to increase investment in mining in Manitoba. My staff are here waiting anxiously and with great anticipation to the constructive ideas that you are going to bring forward. You know what, we will even give credit, I will give credit, I will give credit to you for your ideas. I will not claim ownership for any new idea you come up with that I have not come up with. My staff will give you credit and Manitobans will give you credit, so now is your chance to really list every one of your good ideas now, you put them on the table and I will celebrate them as soon as we adopt them.
Ms. Mihychuk: I have a question as to the amount of money that is being spent on MEAP. Can the minister explain why the Estimates have identified $3 million, and yet in a press release issued February 6 it announced $4.5 million. Are these different fiscal years or what is the difference between those numbers?
Mr. Chairperson: Order, please. It has been brought to my attention that that question comes under 23.3.(a) Mineral Exploration Assistance Program. So would the honourable member like to wait for that section to come up or rephrase her question or is there unanimous consent to move ahead on this? What is the will of the committee? Is there unanimous consent to proceed forward to 23.3.(a) Mineral Exploration Assistance Program with the understanding that we revert so that we can deal with this question from the honourable member for St. James? Agreed. [agreed]
Ms. Mihychuk: To repeat my question?
Mr. Chairperson: Please.
Ms. Mihychuk: My question related to the budget allotted in the department which identifies $3 million and the press release announcement of $4.5 million. So I am wondering why there is the dichotomy between the two amounts.
Mr. Newman: That is the magic of my department. They are very resourceful, and they can increase $3 million into $4.5 million with the magic of their persuasive abilities. What that is, is the $3 million is the MEAP budget. The additional $1.5 million is an approved overcommitment by Treasury Board and cabinet in anticipation that not all of the dollars will be spent by the companies and, therefore, the provincial contributions will not be utilized. Based on past experience, there has been a differential between the budgeted amount or the applied-for amount approved and the actual expenditure, but if every cent were spent, then we would have eaten--we would have exceeded the original budgeted amount by $1.5 million, which could be taken out of the next year's allotment if we continued with the program. Just a final point is that the reason it is not spent is in some cases the projects do not go ahead for whatever reasons. That has just been our historic experience.
Ms. Mihychuk: So the $6 million that was taken out of the Mining Reserve Fund will presumably cover this $3 million, and then the other $3 million would end up going where?
Mr. Newman: The $6 million was and still is the committed amount that was, whatever way you want to call it, whether it was declared redundant over the minimum or whether it was, you say, it was taken out of the Mining Reserve, the $6 million was and still is the amount committed to fund a three-year MEAP program of $2 million a year. I think I indicated last time that my information was that less than $2 million of that had actually been paid out, which means there is something over $4 million that will be paid out to all of those people that had spent the appropriate percentage on projects funded by MEAP to the percentage representing the MEAP obligation.
* (1650)
Ms. Mihychuk: I, at this time, would move, seconded by the member from Flin Flon (Mr. Jennissen), that this committee condemn this minister and the provincial government for the transferring of $6 million out of the Mining Reserve Fund into general revenues, instead of directing the funds for the needs of the miners and their families and the businesses in Manitoba's mining communities.
Mr. Chairperson: Just for the clarification of the committee, I would ask the mover of the motion if this is the motion that was read into the record verbatim that I have before me.
Ms. Mihychuk: Procedurally I was not aware that I had to have the motion verbatim. It is on the record. I have added that the monies be directed to the miners and the mining businesses but, in essence, the motion is intact and condemns the minister and this government for their actions.
Mr. Chairperson: The honourable member for St. James, I would--it has to be verbatim, so I would ask the honourable member for St. James to rewrite the motion and then read it into the record before I can proceed with it.
Ms. Mihychuk: I move, seconded by the member for Flin Flon (Mr. Jennissen),
THAT this committee condemn this minister and the provincial government for transferring $6 million out of the Mining Reserve Fund to general revenues instead of directing the funds to the needs of the miners, their families and the businesses in those mining communities.
Motion presented.
Mr. Chairperson: I find the motion to be in order.
Ms. Mihychuk: Well, I make the motion regrettably, because the minister has tried to be co-operative in many senses. However, I feel that this is a serious betrayal of the purpose of the Mining Reserve Fund, that at a time when we have seen significant layoffs in mining communities, the closure of a mine and the need for an active government that is there for the miners, the workers, the support people in mining communities, he and his government have decided to take almost 30 percent of the fund, which is there as a safeguard, remove it from the intended purpose, which is those communities that are mining communities presently, and put it into what seems to be a very ill-defined fund.
We understand that the MEAP program is actually only expending $2 million a year. They have chosen to take $6 million at a time of crisis. The need has not been established. The effectiveness of MEAP is in question. The number of direct mines as a result of it has not brought forward the availability of the transference of those workers into a new site, and there is absolutely no justification that we can see for the minister to withdraw monies from mining communities into general revenue. For those reasons, we call for the vote.
Mr. Newman: I appreciate that, in the interests of trying to get some politics out of what has been a very candid dialogue, through your approach in Question Period and through your approach with this motion, you are under the impression that, by taking this approach you are going to be representative of sufficient body of opinion in the North, in northern communities, you will somehow make them more popular and your party more popular in their eyes with a view to getting perhaps, having a better chance of getting re-elected next time round.
I am under the belief that you are dead wrong and that this approach will only serve to bring additional discredit on the policies and approaches that you and your party take. I invited you to share some constructive ideas about what should be done in relation to encouraging investment in the mining exploration and mining development in the province. You chose not to do it and rather have chosen to go through this exercise.
The MEAP program, as I have said in the House and I say here, I believe has served a very positive purpose in overcoming the negative good will engendered by the policies and practices and philosophy the NDP government passed, and it has had the effect of bringing people back into Manitoba and showing them what the new Manitoba is like under the Filmon government since 1988.
The issue about the use of these expenditures, your assertion in your motion is that the money should be spent on the needs of miners and families and the businesses in the mining communities of the North, and we respond to applications. We do not have an application that I am aware of from Leaf Rapids or communities of Leaf Rapids. We do not have applications from Thompson or Flin Flon or other communities that are expressing what you are expressing here, and the reserve responds to applications. So where are the community-based ideas that I have challenged the communities of the North and the official opposition to bring forward so that we can proactively invest in these alternatives to mining, these community development projects?
Again, what we have here is an issue of philosophy. You are saying hand out this money; give it to those families and those people and the miners or the unions, whatever you mean by that, when Inco is saying the best future of Inco in Thompson and in the North is to reduce costs and to get new attitudes, to do community development. Hudson Bay Mining and Smelting went through the same process in its Project 2012. Where is the official opposition in all of this? Where are you, as the critic of this ministry? You are just following the give us a handout. You are following, paternalistically, we will pay this money out in ways that we think are best, rather than being--
Mr. Chairperson: Order, please. The hour being 5 p.m., time for private members' hour.
When this committee resumes, the minister, with regard to this motion, will have 25 minutes remaining. Committee rise.