4th-36th Vol. 28--Oral Questions

Madam Speaker: Prior to Oral Questions, I would like to draw the attention of all honourable members to the public gallery where we have with us firstly, 25 journalism students from Red River Community College under the direction of Mr. Donald Benham and twenty-nine Grades 9 and 11 students from Elm Creek School under the direction of Mr. Dave McGill. This school is located in the constituency of the honourable Minister of Agriculture (Mr. Enns).

We also have forty-five Grade 11 students from Churchill High School under the direction of Mr. Ed Lenzmann. This school is located in the constituency of the honourable member for Osborne (Ms. McGifford).

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

Mr. Gary Doer (Leader of the Opposition): Madam Speaker, my question is to the Premier. On April 6 and 7 of this week the Premier and Minister of Finance (Mr. Stefanson) and minister responsible for the golden share of the Manitoba Telephone System stated that Mr. Tom Stefanson was not one of the appointees of this government on the board of the Manitoba Telecom Services.

Madam Speaker, we have an Order-in-Council dated January 7, 1997, which is signed by the minister responsible for the golden share, one Mr. Stefanson, and signed by the Premier that appoints Mr. Tom Stefanson to the chair of the board of the Manitoba Telecom Services.

Will the Premier now confirm that he was misleading this House, and in fact he was the one who signed the Order-in-Council appointing the first private board at the Manitoba Telecom Services?

Hon. Gary Filmon (Premier): As the member knows full well, that was the case previously but is not the case today. There are only four members who are appointed by the government at the present time, and they do not include the gentleman to whom the member refers.

Mr. Gary Doer (Leader of the Opposition): Madam Speaker, the Order-in-Council clearly appoints Mr. Stefanson, signed by Mr. Stefanson, signed by the Premier on January 7, 1997. I would like to further ask the Premier then, on this board appointed by the Conservatives, friends of the Conservatives, relatives of the Conservatives initiated a massive stock option plan that would provide significant funds for their own personal use. They proceeded to initiate this plan almost immediately, and by April 14, 1997, the same board, with the same chair, appointed by the same government and the same minister, had initiated a massive stock option plan for themselves, had had it already approved by the Toronto, Winnipeg and Montreal stock exchanges. Does the Premier think it is appropriate for this Tory board to start initiating increases in salaries and stock options for themselves by April 14 in a circular long before the shareholders' meeting?

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I encourage the Leader of the Opposition to go back to the minutes of the first annual meeting of MTS back in 1997, and he will see very clearly that the board of directors was elected by the shareholders. Out of the 11 board of directors, seven are elected by the board of directors, four are appointed by the provincial government, and I have indicated to him before who our four appointees are. Mr. Robert Chipman, Ashleigh Everett, Don Penny and Sam Schellenberg are the four provincial appointees. The other seven were elected by the shareholders at that meeting in 1997.

Later in that same meeting the shareholders again ratified a stock option plan in concept which allowed for the issuing of up to $3.5 million of additional shares under a stock option plan. Going forward now to the 1998 annual meeting, the board of directors of MTS has come forward with the details of that plan, which includes an allocation to board members and an allocation to many senior executive officers. That is the sequence of events. Those are the facts.

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Mr. Doer: Yesterday the Minister of Finance, who is responsible for the golden share and also responsible for the Order-in-Council appointing his brother and other Tories, stated that he became aware of the stock option plan just weeks ago. Madam Speaker, I have the circular dated April 14, which was initiated by his chair, by this government's slate of Tories, Tory friends, Tory relatives, that initiates the stock option plan that virtually makes members of the opposite side's relatives millionaires. That was initiated and circulated on April 14, 1997, prior to the shareholders' meeting that the Minister of Finance is talking about today. Is the Minister of Finance saying that he did not read the circular, he was totally unaware of the stock option plan that was initiated by his Tory board and his Tory relatives? Is he saying today that as a responsibility of holding the golden share, he pays no attention to the Tory greed that is going on at the new telephone system?

Mr. Stefanson: Madam Speaker, I encourage this member to pay attention when he sits in this House, and go back and read Hansard of two days ago, on Monday. I indicated very clearly that there was a circular issue, that a stock option plan was approved by the board back in 1997, so read those minutes from Hansard. To the member opposite, I encourage him to do that. So the plan in concept was approved back in 1997.

What we are talking about now are the details of the allocation which have just been released in the last 10 days. I was just made aware of the details of the allocation, as I indicated in this House yesterday, within the last couple of weeks, so there is a big difference. There is the approval of the concept of a plan which I referred to on Monday, which is outlined very clearly in the circular. I offered to the member for Crescentwood (Mr. Sale) to provide him a copy of that circular. It was ratified by the board back in 1997, by the shareholders back in 1997. The detail allocations have now been provided within the last 10 days, and those are what I was referring to. So I encourage him to pay attention when he is in this House and go back and read the minutes.

Mr. Tim Sale (Crescentwood): Madam Speaker, is the Finance minister, the minister responsible for Manitoba Telecom Services trying to tell the House that a stock option plan which was approved by three of Canada's stock exchanges, regulatory bodies that had to receive substantial detail, substantial information about those plans, that that information which must have been submitted to those exchanges about six weeks after his board was appointed--these people were beavering away at their own compensation immediately on appointment--is he saying he is so totally unaware, so out of touch with the appointees and the board he appointed that he did not know anything about this happening? When he realizes that the stock exchanges that approved this, they must have had it six weeks before this circular went through; they were lining their own pockets within weeks of approval of your board, your brother.

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I can see how I will have to provide things in writing to the member for Crescentwood, because he too does not pay attention. I indicated very clearly on Monday in this House; I read from the information circular that very day that in 1997 a stock option plan was approved. I referred to the fact that the plan allows for up to $3.5 million of shares to be issued under the stock option plan.

The detailed allocation was referred to the human resources committee of the board of directors. They came forward to the board, and those details have just been made public and released within about the last 10 days, the detailed allocation to the board members, the detailed allocation to senior executive officers. So we are well aware. We have been well aware that there was a plan approved in concept, in terms of the detailed allocation within that plan. That has been made public and brought to our attention within the last couple of weeks. So again, that is exactly the sequence of events.

It is the same information I gave this House on Monday, the same information I am giving members opposite today. I encourage him to pay attention and, if they need to, go back and read Hansard.

Mr. Sale: Madam Speaker, is this minister responsible for the Telecom Services asking this House to believe that never in the past 14 months has he had any contact with his brother, the chair, with the four appointees, with Sam Schellenberg, the chair of the compensation committee, that never was he aware that by April 14, 1997, all of the substantive details of this plan had to have been in place, that in fact all of the details were in place by that annual meeting, and that he should have known that if he was exercising any stewardship or any ethical consideration for what had been going on with his appointed board?

Mr. Stefanson: Madam Speaker, this member for Crescentwood is clearly confused. I have indicated on many occasions that this stock option plan was outlined in a circular that was dated April 14, 1997. The same stock option plan was approved by the board of directors and by the shareholders of Manitoba Telecom Services on May 30, 1997, so the plan in concept was approved. What is happening now in 1998 is the details within the allocation, within that plan have been made public and have been provided.

So we are certainly well aware and have made it very clear to this House that a stock option plan was approved back in 1997. All telecommunications companies, I believe, in Canada today have stock option plans. It is nothing new; in fact, it is a requirement to register with some of the stock exchanges in Canada. The issue is the allocation within that stock option plan, and that is what has become public and what we were made aware of within the last couple of weeks.

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Mr. Sale: Madam Speaker, will this minister not simply acknowledge the truth and that is that well prior to the annual meeting, that is at least by April 14, 1997, the board of directors, including his brother, appointed by him on an O/C of January 7, 1997, had already approved this stock option plan? They already had it registered with the stock exchanges. That must have taken place in February if the time lines were going to be met. They had already put this in place; they had already approved it. Will he not simply acknowledge that?

Mr. Stefanson: Madam Speaker, we have never denied that a stock option plan was approved in 1997. I said in this House on Monday, and I referred to the information circular that members opposite are finally referring to today--I referred to that circular on Monday--that it was circulated back in April 1997 outlining the concepts of the plan, the amount of shares that would be available, 3.5 million shares, the equivalent of 5 percent of the total shares of MTS. That was all approved in 1997. It was ratified by the shareholders of MTS, some 70,000 shareholders, many of them, the majority of them Manitobans. That was all done in 1997.

What has happened subsequent to the plan is the detailed allocation to individual board members and individual senior executive officers. That is happening in 1998. That was made available in a document referring to the 1998 annual meeting. That will be information that is available to the shareholders at their 1998 annual meeting. That is the sequence of events, and again, those are the facts.

Mr. Steve Ashton (Thompson): The more that one looks at this, the more it stinks. The more one looks at it, it is clear that the minister responsible for MTS has not been telling the truth to this Legislature and Manitobans.

Will the minister confirm that in an Order-in-Council dated January 7, signed by him and the Premier, they appointed not four directors, as he indicated yesterday, but 11 directors, of which one was Tom Stefanson and the remaining of which was the slate for the actual board of directors that was adopted at the annual meeting in May?

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I tell the truth at all times, and I tell the truth every single time I am in this House, unlike some people in this Chamber.

When it comes to the issue of the board, as we have indicated on a number of occasions, the board of directors was elected in the 1997 shareholders' meetings that are referred to on May 30, 1997. That is when the shareholders elected seven out of the 11 board members. We as a government have appointed four of the members, and I have outlined on many occasions who our four members are.

Mr. Ashton: Why will not the minister for MTS acknowledge that he not only appointed his own brother, he appointed all of the directors that were currently in place, the Stefanson slate, as well as the individual that recommended this stock option, and that it was a fait accompli before it went into the shareholders' meeting in May? Why will he not tell the truth that he set his brother up for a million dollars at the expense of Manitobans?

Mr. Stefanson: Madam Speaker, I do encourage this member for Thompson to look at the minutes of the first shareholders' meeting of Manitoba Telecom Services on May 30, 1997. He will see the election of seven of the directors. He will see subsequent--later in that meeting, he will see the approval of a stock option plan by the shareholders, some 70,000 shareholders of Manitoba Telecom systems, approving the stock option plan. That approval approved a plan in concept. In fact, it goes on to talk about: the board of directors of the corporation shall administer the plan, determine participants to whom options shall be granted, and so on and so forth. During 1997 and 1998 the board did just that; it provided that information within the last 10 days. I was made aware of that allocation within the last couple of weeks.

So the issue of the plan was approved back in 1997. I believe every telephone company in Canada has a stock option plan. It is certainly very common in all kinds of businesses right across Canada, and the detailed allocation was provided in the last couple of weeks.

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Mr. Steve Ashton (Opposition House Leader): Madam Speaker, I rise on a matter of privilege, and it relates directly to the contempt shown to this Legislature not only by the minister responsible for MTS but by the Premier (Mr. Filmon).

I would like to table a copy of the Order-in-Council that was signed by Eric Stefanson, the minister responsible for MTS, also signed by the Premier. It outlines, contrary to what the Premier said on Monday when he pointed to four government appointees, the current four, and what the minister said yesterday when he tried to use the same line to duck the fact, that on January 7 he appointed by his signature a board of 11 directors, the interim board, which included his brother, which included one D. Samuel Schellenberg, the person who was responsible for the compensation committee.

I also want to table a copy of the information circular that was filed by Manitoba Telecom Services Inc. which indicates that as of April 14, well before the meeting that they keep referencing, they already had agreement to the compensation package and it had been approved by the three major stock exchanges. I want to table that as well and point to the fact that this minister responsible for MTS still does not get it. He appointed his brother to the interim board. He appointed by his own signature. The First Minister signed that. He appointed the 11-person board which became the slate, the interim board, also people that they are very well aware of. This slate, this board, the interim board was the board that developed the compensation package which, surprise, surprise, ended up with Tom Stefanson getting a million-dollar stock option program. If the Minister of Finance and the Premier do not understand that is unethical, Madam Speaker, they do not understand what ethics are about.

We asked on Monday; we asked on Tuesday; we asked again today, and we gave the minister responsible for MTS the opportunity to clarify the record, to tell the truth to Manitobans. I say, Madam Speaker, we have no choice as a Legislature other than to find that minister in contempt. If he does not understand what is wrong with being the minister responsible for MTS appointing his brother, who ends up getting a million-dollar benefit at the end, we have serious problems.

That is why I move, seconded by the member for Concordia (Mr. Doer), that the matter of the Premier (Mr. Filmon) and Minister of Finance (Mr. Stefanson) showing contempt for the House by deliberately making misleading statements concerning the unethical appointment of Thomas E. Stefanson to the board of directors of Manitoba Telecom Services, allowing Mr. Stefanson and other directors to enrich themselves through a multimillion-dollar compensation plan, be referred to the Committee on Privileges and Elections.

Hon. James McCrae (Government House Leader): Madam Speaker, the honourable member for Thompson has for I do not know how many times raised questions of privilege in this House related to the privatization of the Manitoba Telephone System. He fails on both the grounds that are required to be met with respect to questions of privilege. The issue of timeliness, it is clear he has failed on that one. With respect to a prima facie case, it is a common occurrence in this House that honourable members on each side of the House see things in a different light. That in no way amounts to a question of privilege. In fact, it is a good thing. If we did not have that, we would not have the kind of democracy that we have in our country.

But that said, on the prima facie matter of making a case of privilege, the honourable member has totally failed to prove anything except--or to bring forward prima facie anything other than a difference in the way he sees things and in the way the honourable Minister of Finance (Mr. Stefanson) and honourable members on this side see things.

What we are involved in, and I think honourable members opposite sometimes show some expertise in this area, is a matter of spin, and the honourable member for Thompson has spun every which direction he could ever since the fall of 1996. He is in a time warp. He cannot get over the events of those days. When this House agreed on certain courses of action, and just because the honourable member's party thinks that it should be able to rule this House and cannot, they feel they have to raise a question of privilege on every occasion they can. They simply do not get it, to repeat the honourable member for Thompson himself, they do not get what democracy is all about. Democracy allows Legislatures to speak and honourable members would like to stifle this Legislature.

Some Honourable Members: Oh, oh.

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Madam Speaker: Order, please. A matter of privilege is a very important matter, and I would ask for the co-operation of all honourable members in listening to the advice that is being provided to the Chair. I am experiencing great difficulty in hearing some of the comments of the honourable government House leader. Was the honourable government House leader finished?

The honourable government House leader, to complete his remarks.

Mr. McCrae: I had virtually concluded because there is business that needs to be done in this House, and the honourable members opposite cannot seem to get over the circumstances in which they find themselves. I know that the honourable Minister of Finance has something to say as well, and I have indeed concluded.

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, the member for Thompson has no matter of privilege and I want to remind him and his Leader and members opposite of some of the things I said on Monday. The suggestion about the awareness of the circular on April 14 and the annual shareholders' meeting in 1997 on Monday in this House, in response to a question from the member for Crescentwood (Mr. Sale), I said very clearly: "I am certainly prepared to undertake to provide members opposite with information from the circular providing information on the stock option plan, obviously minutes of the shareholders' meeting that was held on May 30, 1997, ratifying a stock option plan for MTS." I am certainly more than prepared to provide that information, which is public information, by the way.

I go on again in responding to the same member, again referring in fact in that circular that was distributed almost a year ago: "it says very clearly in the circular, for the benefit of the member for Kildonan (Mr. Chomiak)," at that time, "that on the recommendation of its human resource and compensation committee, the board of directors of the corporation has approved the implementation of a stock option plan."

That is the sequence of events that took place in 1997. At a shareholders' meeting, I believe on May 30 of 1997, a board of directors was elected; seven of those board members were elected by the shareholders, by the some 70,000 shareholders, a majority of them Manitobans. We as a government at that point in time appointed four members, on many occasions read into the record who those members were, and we have never in any way put any false information, any incorrect information, and always told the complete truth on the sequence of events and the transactions on this issue.

It is the member for Thompson who continues to be blinded by this issue, as we have seen on many occasions in this House, and continues to try to find any aspect of anything to do with the privatization of MTS because he has opposed that, and he continues to rant and rave in his own way, but there is definitely no matter of privilege whatsoever, Madam Speaker.

Mr. Kevin Lamoureux (Inkster): Madam Speaker, I, too, want to put a few words on the record with respect to what I think is a very important issue. It is an issue which has been brought up in the past. I can recall one of my colleagues had discussed the issue of conflict of interest with me, in fact had sought out legal counsel to make sure, in terms of what it is that he should be doing, because someone that was very close to him was an employee at MTS, and it was that person or the employee who was subject to receiving some monetary benefit. He had decided after consulting and talking about the issue to avoid the vote itself because of the whole issue of perception.

I think this is where the government is losing it somewhat on this issue. You have to acknowledge that perception is important in politics, and what Manitobans see here is in fact a brother of a minister who is receiving significant dividends as a result of a government action. Under normal circumstances, if it were not the Minister of Finance (Mr. Stefanson) who was conducting or playing the role that he is playing or has played in the divestiture of MTS, I do not think it would be as questionable in terms of the whole issue of perception.

So what I see before us is two issues: The first issue dealing with a brother of the minister who was responsible for divesting, enriching or being enriched as a result of the divestiture, and the other issue of the conflict of interest of how these monies or the actual price that MTS was being sold for and people, outside of the minister's brother, also being enriched.

The issue that concerns me is the one of the perception, because I do not believe this is something in which the government can in fact win. I think that it is very awkward. I would find it very awkward to stand up and defend something, when in fact I am so closely tied to it because it is my brother who is in fact the receiver of a substantial amount of what is, in one way or another, indirectly, tax dollar benefits. I want to be very careful because I realize whatever I say inside the Chamber I can get away with saying and not be liable to lawsuits outside of this Chamber. So I recognize that it is very, very important in terms that we choose our words carefully.

Madam Speaker, I think that there is concern with respect to how this individual was in fact appointed. If in fact it was the Minister of Finance, I think that there is some merit to it being looked at. So what I would suggest is that, at the very least, this motion be taken as notice so that all parties concerned have some time to review it and to make a good decision as to what best to do with respect to it. Thank you.

Mr. Tim Sale (Crescentwood): Madam Speaker, the point of the motion of privilege is the misleading of this House, the knowing misleading of this House by the Premier (Mr. Filmon) and the minister responsible for Manitoba Telecom Services. I want to review the chronology, because it is important that we, first of all, make the prima facie case, and it is important that you understand that we raised it at the first possible opportunity.

We needed to review Hansard--and I want to deal first with the opportunity question--very carefully and to review the evidence from the annual meetings and the circulars that were shared with shareholders of the Manitoba Telecom Services prior to being able to move a motion of privilege. We did not receive the minister responsible for Telecom Services' answers until this morning in the rough draft of Question Period. So this is I think clear evidence that we have satisfied the first condition. This is a very important matter, and we did not want to pre-empt having read Hansard carefully prior to raising the matter.

Secondly, on a prima facie case. The Premier on four different occasions earlier this week refused to acknowledge that he had in fact, as the president of the Executive Council, signed an Executive Council order, an Order-in-Council, appointing Mr. Stefanson and Mr. Schellenberg as continuing members of the board of directors of Manitoba Telecom Services on January 7, 1997--that is more than a year ago--and further that that same O/C appointed nine other new members of the board.

In other words, the first and most central issue here is the appointment of the first board of directors of this company long before there was a shareholders' meeting to ratify new directors of the corporation.

The point my honourable colleague the member for Thompson (Mr. Ashton) has made is also important, that these are exactly, identically the same people whom the shareholders approved and continue to approve; that is, they are the people appointed by this government. They include relatives of senior members of this government. The person appointed from the previous board, Mr. Schellenberg, turns out to be the person in charge of the compensation committee of the new board.

So the first point of the prima facie case is that on January 7, 1997, this Premier (Mr. Filmon), this minister responsible, signed an Order-in-Council appointing 11 members of the board, one of whom was the brother of the minister signing the order, a second of whom was the person who turned out to be the chair of the compensation committee, Mr. Schellenberg, continuing from the previous board.

Now let me now turn to the second part of the prima facie case here, Madam Speaker. What we are attempting to show, and I think we have shown, is that people appointed by this government directly, by the Premier and the Finance minister, developed, approved and put forward a plan to compensate themselves and their senior executives, that that plan was developed well before there was ever an annual meeting of the shareholders, and let me show that so that we are clear on those dates.

This information circular to which the Finance minister refers was dated April 14, 1997. The annual meeting did not take place until May 30, 1997. So six weeks prior to the annual meeting, an information circular was sent to all shareholders, including the Minister of Finance, who of course has a special share which the minister responsible for the Telephone System previously, perhaps aptly called the golden share.

Madam Speaker, let us work the chronology backwards. In this information circular on pages 10 and 11, there is an item called special business of the meeting. Special business of the meeting is the stock option plan and the approval of that plan. There are quite a lot of details, approximately a page and a quarter in length. It is a fairly detailed statement of what the plan contains, but it is very important that the second-last paragraph be understood, that this plan has been conditionally approved by the Toronto Stock Exchange, the Montreal Exchange and the Winnipeg Stock Exchange. Now, those exchanges do not as a matter of routine simply rubber-stamp a fax and send it back. I do not think it takes too much imagination to recognize that the board of directors must have approved this plan in March of 1997 in order for it to be forwarded to the three exchanges with the approval of the board.

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Now let me remind you that in March of 1997, in February of 1997, in January of 1997, the only members of the board of directors of Manitoba Telecom Services were those members named in the O/C of January 7, 1997, that is, the 11 members appointed by the Premier and by the Finance minister.

Now, Madam Speaker, let us further run that chronology backwards slightly. If it were to go to the three stock exchanges subsequent to the approval by the board of directors, it would have had to go to those exchanges at least by March, which means that the compensation committee must have been doing their work in February, bare weeks after they were appointed by the Finance minister, the minister responsible for the system and the Premier (Mr. Filmon).

So within a very short period of time, a matter of weeks, the compensation committee was hard at work beavering away at developing a stock option plan that would enrich the chairman to the tune, at current values of the stock, by one million dollars. They did all of that work, every last stick of that work, prior to the meeting of the shareholders. It had been approved by the board of directors of the corporation prior to the meeting of the shareholders. It had been approved conditionally--because of the way the law is written--by three stock exchanges prior to the meeting of the shareholders. The shareholders did not change one dot, one iota of what had been put forward by the compensation committee.

So I believe that it is clear that there is a prima facie case that this government has misled the House, particularly the First Minister and the minister responsible, by indicating that they did not appoint a board, which in fact their own O/C shows they did appoint, and secondly, that all of the work on the stock option plan was completed before there was ever a meeting of the shareholders. All of those details were in place. I believe we have made our case.

Hon. Gary Filmon (Premier): Madam Speaker, I think it is important that you ensure that, in ruling on this motion of privilege, you ensure all relevant information is available to you on the matter. I want to emphasize a number of things that perhaps have been overlooked deliberately or otherwise in the prima facie case, and I understand the politics of why it is being done in this manner, but a great deal has been made of the fact that the chair of Manitoba Telecom Services is the brother of the current Minister of Finance (Mr. Stefanson).

What is important to note is that he has been the chair of Manitoba Telephone System since 1989, prior to the election to office in this Legislature of the current Minister of Finance. So, in fact, he was appointed much earlier and has had a significant history as chair of the board. Over the period of time since 1989, his continuance as chair has been reconfirmed periodically at various intervals along the way, but he arrived at that position, as I say, prior even to the election of the current Minister of Finance to this Legislature. So members opposite can make whatever case they want to, but this individual was appointed based on his competence and his capability, judged by obviously a government of the day prior to the arrival of the Minister of Finance to this Chamber.

Madam Speaker, another issue that I think is being overlooked. The members opposite clearly have this information, because it was contained in the news release that was issued on December 2, 1996, and it is entitled "Findlay Announces Proposed MTS Board of Directors" and that board of directors that is being quoted from the Order-in-Council was in fact developed and initially announced to be appointed by the then minister responsible for the Manitoba telephone services. What intervened between the announcement of the names and the production and signing of the Order-in-Council, of course, was the privatization of the former Manitoba telephone services into Manitoba Telecom Services, in which case then responsibility transferred over to the Minister of Finance as the pro tem holder of the golden share on behalf of government. So in fact the announcement and decision, which members were well aware of, of who the board of directors were, was made much earlier by the minister then responsible. Again, they do not make a fuss over that. They are attempting, I know, to make the political credit and take the political shots, and so that is conveniently set aside.

Once in private ownership, the Manitoba Telecom Services no longer obviously was in the control of this Legislature in any way. Our responsibility, as has been laid out on numerous occasions, was to ensure, through the golden share provision, that the public interest in the public investment as holders of bonds was being looked after, and that continues to fall under the realm and responsibility of this Minister of Finance. But, I repeat, that company is no longer and was no longer in control of this Legislature or this minister or this cabinet.

So the plan to provide the shares as compensation was then developed for presentation to the annual meeting. Why, Madam Speaker? Because, in fact, it could not be implemented by the board of directors, because (a) No. 1, they had not been confirmed by the shareholders as the board of directors, and so they did not have power to act, and (b) they did not have power then to approve this without the vote of the shareholders.

So all of these things that were prepared in the interim by staff and by others and developed by the board of directors could have absolutely no relevance if the shareholders decided to do different things, and in fact the shareholders had the power to vote a different board of directors. That has been done, will be done in future by boards of private companies where they will take the recommendations of whatever is the nominating committee, and they will set it aside and put in place in fact different choices. We all have read about that being done. We have all read about different directors being put in place. In private corporations, we have all heard about shareholder revolts or shareholders' democracy taking over corporations and new directors put in place.

So in fact two things could have happened at the annual meeting: one, a different board of directors could have been in place; and two, the shareholders could have turned down the proposal that was put before them for consideration for compensation of both senior staff and directors and including the share option. None of that did happen because in fact the vote of the shareholders did both confirm the directors and the compensation package.

All of those things, though, did happen only after the new board was put in place, and in fact then it devolved to our area of authority which was that we had the authority to appoint only four of the 11 directors, which did not include Mr. Thomas Stefanson, the chairman. They were separately and independently elected by the shareholders of the new privatized Manitoba Telecom Services.

So you will find, Madam Speaker, that in nothing that was said by either myself or the Minister of Finance (Mr. Stefanson) did we mislead or place false information on the record, that this is all a pipe dream of the member for Thompson (Mr. Ashton) and his colleagues who have, obviously, a very serious fixation about this particular issue with Manitoba Telecom Services, an issue which they will never ever let die, and that is their right. That is their right, because for them it is all politics. That is all they live for; that is all they work for. They do not work for the best interests of the people of Manitoba. They only work for their own political interest.

Mr. Gary Doer (Leader of the Opposition): Briefly to the point of privilege raised, Madam Speaker. Over the last two days on April 6 and 7, the Premier (Mr. Filmon) on four occasions and the Minister of Finance (Mr. Stefanson), the minister responsible for the golden share, repeatedly stated in this House and in Hansard that the only appointees to the board of directors were the four so mentioned. They failed to mention that on January 7, 1997--

An Honourable Member: The current board of directors. That is all we are talking about.

Mr. Doer: You know, I did not interrupt the Premier. Perhaps the Speaker could hold the Premier accountable in this Chamber.

Madam Speaker: Order, please. As I indicated earlier, this is a very serious matter, and I would request the co-operation of members on both sides of the House in listening to the member presenting the reason for a prima facie case being established.

Mr. Doer: As I stated, the Order-in-Council signed on January 7, 1997, appointed Thomas Stefanson to chair the board of directors. That was signed by the Premier (Mr. Filmon). It was further signed by the minister responsible for the golden share. That is what we asked on Monday and Tuesday in terms of the individual in question, in terms of the $1-million stock option bonus. That is the question that the Premier and the Minister of Finance (Mr. Stefanson) in our view misled the House and misled the public and contradicted an Order-in-Council that was signed by them, and it is clearly on the public record, which is the essence, the absolute essence, of the point of privilege today in this Chamber.

Now, Madam Speaker, the Premier goes on to talk about Mr. Stefanson was appointed in 1989. We have not disputed that. If Mr. Stefanson had been appointed in 1989 and had received a million dollars in stock option bonuses with the old minister of Telecom Services or some other minister, it would have been a matter of Tory greed. It would have been, pure and simple, a matter of Tory greed, a political issue of the Tories selling a public asset and that public asset in turn being turned over for the private gain of a well-known Tory, and that would have been just simply Tory greed, but it goes beyond Tory greed. It goes beyond Tory greed, because you have a situation today where the person who appoints the person who ends up getting a million dollars is in fact the brother of the same person. You have the person who is given the responsibility of maintaining the golden share--I refer back to two weeks ago Thursday when the former minister of telecommunications went on repeatedly in the Interim Supply and said over and over and over again the Minister of Finance holds the golden share.

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So here you have an individual that is responsible for the public interest. He is responsible for the public interest of the Manitoba Telecom Services. He has been appointed by his Premier, and I would say put in a horrible situation, compounded by the fact that he did not realize he was in an unethical situation--he has been appointed to deal with our share and the debt that is owing to the taxpayers. So he is responsible for ensuring that the maximum amount of money that is owed to the public of Manitoba through the share offering be returned to the debt repayment as the holder of the golden share. He is not responsible as the holder of the golden share for allowing obscene bonuses to be given to well-known Tories when it is against the public interest of claim centres, rate increases and debt repayment.

So if we were to look at Mr. Stefanson in his former capacity, it is Tory greed. If we look at him now in the relationship to the minister responsible for the Telecom Services holding the golden share, being the brother of the same person who is making the million dollars, regrettably that is Tory ethics. The point of privilege today is focused in on not dealing with the relationship of the golden shareholder and the chair of the board and the Order-in-Council on January 7, on April 6 and 7 and 8 of this year. Madam Speaker, we think it is obscene that people are making millions of dollars, and we say that that is Tory greed, but we say the ethics of this issue go way beyond that. The Premier does not see it. The Minister of Finance regrettably does not see it, but we on this side see it, and that is why the point of privilege today.

Madam Speaker: A matter of privilege is a serious concern. I will take this matter under advisement to consult the authorities and will return to the House with a ruling.

Madam Speaker: To resume Question Period. The honourable member for Thompson, with a final supplementary question.

Mr. Steve Ashton (Thompson): On a new question, Madam Speaker. We are seeing again just how little this Premier and this minister responsible for MTS understand the gravity of the situation we face. Not only did this Minister of Finance appoint the 11-person board, including his brother, but this was the board, the slate that ended up being the final slate of MTS. It is also the board that solicited proxies as part of this circular. This is standard practice in the corporate world. So what happened was by the time this came into the shareholders' meeting--by the way, the First Minister (Mr. Filmon) had it wrong because, according to his own Order-in-Council, those directors are in place until the end of the first shareholders' meeting. Why will the Minister of Finance not admit that what he set in place was a done deal that resulted in his brother getting a million dollars at the expense of the public of Manitoba?

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, all I can do for the benefit of the member for Thompson is basically repeat myself and repeat the answers to similar questions that he has asked over the course of the last couple of days. First of all, stock option plans are nothing unique to MTS. They actually exist in all telecommunication companies across Canada, many other companies. If he goes back and looks at the information circular, he will see that the information circular provides the concepts of a plan; it provides the parameters of a plan. As I have read it into the record on at least one other occasion, it provides for options not to exceed 3.5 million common shares, which basically represent about 2.5 percent or thereabouts of the total shares issued. So back in May of 1997, I believe on May 30 of 1997 at the shareholders' meeting the stock option plan concept was ratified, and as they said in the circular itself, the board of directors shall administer the plan. The administration of that plan was put in place during 1997-98. Those details have been provided publicly and were provided to us within the last couple of weeks.

Mr. Ashton: What does it take for the Premier, for the minister responsible for MTS to recognize that what happened was that they set in place a slate, they drafted the slate that was adopted at that meeting, they put in effect a slate that was in control of MTS right up until the end of that first meeting, and that slate which included the brother of the minister responsible for MTS ended up making a recommendation, a fine--a done deal that ended up in that brother getting one million dollars? Do you not understand that is unethical in the eyes of every single Manitoban who has any concept of fairness?

Mr. Stefanson: Madam Speaker, as has already been pointed out in this House back on December 2, 1996, a press release was issued by the minister responsible for MTS at the time, outlining the individuals who were being appointed to the board. A shareholders' meeting was held on May 30, 1997, where the 70,000 shareholders who owned the shares in MTS and are concerned about the performance of MTS had an opportunity to vote for the directors of MTS. They voted in seven directors to the board; we appointed four other directors that we have read into the record. Later on in that same meeting a concept for a stock option plan was again put before the shareholders. The shareholders of MTS ratified the concept of a stock option plan. There is a meeting coming up in April of 1998, and once again, as is always the case with all companies, the board of directors will be held accountable by the shareholders of MTS.

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

Mr. Ashton: Madam Speaker, why does the Minister of Finance, in this case the minister also responsible for MTS, not understand that the people of Manitoba want him accountable for his unethical actions in appointing his brother, 10 other directors that came in with this done deal, in fact at a time throughout which, up until this day, he has been the minister responsible for the special share, the golden share that the government holds in MTS? Why does he not understand that he is directly responsible for what has happened and the unethical breach in this case which is leading to his brother getting to be an instant millionaire at the expense of Manitobans?

Mr. Stefanson: As Minister of Finance and the holder of the golden share of MTS, I certainly am responsible for the proper repayment of the debt that is owing back to the taxpayers of Manitoba. When MTS became privatized on January 7 of 1997, as I have indicated, the debt owing back to the government was $426 million. Today that debt is now down to $239 million, almost $200 million paid back by MTS to the taxpayers of Manitoba. That is certainly one thing that I am responsible for, and they are on track, ahead of track in terms of repaying that debt.

When it comes to the protection of the public and the consumer in terms of rate and service, as we all know, the same process is in place where CRTC would regulate MTS under private and public, and as I have said before, today in Manitoba we have the lowest residential rates for telephone companies in all of Canada, something we should be very proud of, Madam Speaker.

Mr. Kevin Lamoureux (Inkster): Madam Speaker, my question is for the Minister of Health. If I were a registered nurse in the province of Manitoba, I would be somewhat confused in the sense that a couple of years ago it seemed that we had registered nurses being laid off at different facilities and so forth, and we had registered nurses leaving the province. Today, in fact, what we have is hospitals now trying to recruit registered nurses.

My question is: I am sure that these registered nurses would like to see some form of stability; can the Minister of Health give us any indication, is there a shortage of registered nurses in the province of Manitoba today?

Hon. Darren Praznik (Minister of Health): Madam Speaker, the member for Inkster asks a very important question about our whole situation with nursing, and as we look at numbers, there is some expectation, in the years approaching, that if current trends continue we could be short of nurses in a variety of areas. I think and believe very sincerely that the key to managing this problem does come with part of the tools at the Winnipeg Hospital Authority, and the cases Winnipeg will have with the ability to have a common employer to be able to do staff planning on a regional basis will go a long way to dealing with some of the issues that are important in recruitment that the Manitoba Nurses' Union has raised and also to better plan and move nurses around the system as they are needed.

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Mr. Lamoureux: Madam Speaker, will the Minister of Health acknowledge that what is most important is there has to be a sense of stability? A registered nurse has to feel in fact that they have the opportunity to practise what they have been trained to do, that one year they cannot hear that they are going to be laid off and the next year they hear that there is going to be some sort of a shortage. Will he acknowledge that to be the case?

Mr. Praznik: Madam Speaker, not only will I acknowledge that here today, because that is absolutely correct what the member says, but we have been advocating over the last number of years, and that is why in fact the Winnipeg Hospital Authority in the case of Winnipeg, having the ability to be able to transfer staff with seniority with their benefits throughout the system as needed, goes a long way to providing that security.

Over the next month or year or so as Misericordia changes its function, there are some 250-plus acute care nurses in service at that facility who will be needed throughout the system. We will not have stability if we have individual facilities being the employer having to lay off staff and forcing them to reapply for other positions, and that is why we have been taking the stand that we have had with respect to common employing authority in the Winnipeg Hospital Authority.

Mr. Kevin Lamoureux (Inkster): Madam Speaker, again I would ask the Minister of Health to recognize that we will not have that stability if in fact there is no broader plan that does deal with the employment of our nurses.

Madam Speaker: Order, please. Does the honourable member have a question?

Mr. Lamoureux: Yes, Madam Speaker, and the question is to the Minister of Health with respect to the nurse practitioners, an issue which I have brought up to the Minister of Health and the previous Minister of Health: is the government moving ahead with the idea of bringing nurse practitioners more into the province of Manitoba to again deliver a better quality of health care to all Manitobans?

Hon. Darren Praznik (Minister of Health): Madam Speaker, the concept of a nurse practitioner is a very good one. As I am discovering in this portfolio, there are some important prerequisites to make that work. Obviously, being able to deal with the College of Physicians and Surgeons for overlaps of authority, having alternative mechanisms of remunerating physicians that encourage the development of primary health care teams with nurses becomes very, very important for that to work. I am hoping over the next number of months, as we get into negotiations with the MMA, we will be able to develop some of those models that are an important tool in seeing nurse practitioners develop in our province.

Mr. Dave Chomiak (Kildonan): Madam Speaker, my question is to the Premier. Can the Premier clarify what government policy is with respect to the Olsten contract? Is it the minister's statements of several months ago that the contract would end in four months? Is it the minister's statement yesterday in the House when he said there would be an extension of the contract, or is it the statement of the minister in the hallway when he said the contract would not be extended?

What is the government policy?

Hon. Darren Praznik (Minister of Health): Madam Speaker, the real issue in home care is not whether or not an Olsten contract continues for a month or two for a transition, unless of course, as the New Democrats would suggest, we should put patient care at risk and not have service for individuals.

Madam Speaker, we embarked a year or so ago on a process to test our home care system. We entered a tendering process. I have discussed that in the House. We had one successful bidder. Their contract expires, I believe, at the beginning of May, and there is provision to allow for a transition to whatever the successor program is. There is also provision with the Manitoba Government Employees Union for a review of that contract. We have talked about that over and over again in this House, and it continues.

Mr. Chomiak: My question again is to the Premier (Mr. Filmon), who supposedly is a manager of our public resources. My question to the Premier is: how is it that a contract that Olsten says has been extended would be worth $3 million of home care money--$3 million of patient care? How is it that the Premier cannot tell us whether or not the minister's conflicting statements are either the contract is renewed or the contract is not renewed? What is the answer to this $3-million question? I think taxpayers and patients deserve an answer.

Mr. Praznik: Madam Speaker, I understand that the one-year contract with Olsten, the contract expiry date is May 1. There is some provision for extension to accommodate a transfer to the successor if that is required. During the course of this year, another factor has entered into this that I have conveyed to the member for Kildonan, and that in fact is that home care in the city of Winnipeg is no longer delivered by the ministry but as of April 1 has moved to the Winnipeg long-term care, continuing care board. They have to be in a position to gear up the staff to be the successor to that contract. Surely to goodness members of the New Democratic Party would want a smooth transition for the patients involved. This side of the House believes very, very strongly in putting patients first.

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

Mr. Chomiak: Madam Speaker, my question is to the Premier. How does the Premier reconcile the statements of his Minister of Health who said yesterday in the hallway that the contract would not be renewed, when a vice-president of Olsten said the contract was continuing, when Olsten is getting new clients every week according to their own information, when the Minister of Health said four months ago that the contract would not be renewed?

Madam Speaker, is there any wonder people do not have any confidence in the ability of this government to manage health care in this province? Is it any wonder that it is in the disastrous state that it is in as a result of this Premier and these continuing ministers of Health? It is incredible.

Mr. Praznik: Madam Speaker, if tenders go out for a new process of service delivery, then we can have the debate on the future of health care, but surely to goodness, that members opposite to be critical of the Winnipeg Long Term Care Authority or the ministry in wanting to ensure a transition and patient care just makes absolutely no sense.

In fact, administratively, home care has now passed to the Winnipeg Long Term Care Authority. They are managing the end of this particular contract with Olsten. They are entitled to have some leverage, to have a smooth transition to meet their No. 1 responsibility, which is not to play the politics of the New Democratic Party but to put patient care first. It is our responsibility to ensure that every home care patient has adequate service during that transition.

Mr. Eric Robinson (Rupertsland): Madam Speaker, my questions are for the Minister responsible for Manitoba Hydro. On the 30th of March, this government lost yet another arbitration decision concerning Cross Lake, and I understand that the government is not going to be appealing this decision, unlike the bridge decision that the government continues to stall funding on.

I would like to ask the minister: how long will the Ross family have to wait for this government to settle their claim concerning the death of their loved one, Benjamin Ross?

Hon. David Newman (Minister charged with the administration of The Manitoba Hydro Act): Madam Speaker, this is one of the 126 claims pursuant to the Northern Flood Agreement, 1977, 73 of which have been resolved by agreement or otherwise, 26 active, 27 inactive. This is one of them that has been decided, and Manitoba Hydro has advised me and advised the public that they will be honouring this award, and they will be honouring the award with all due dispatch in accordance with the spirit of the Northern Flood Agreement, 1977.

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Mr. Eric Robinson (Rupertsland): Madam Speaker, according to Chief Roland Robinson of Cross Lake, he says that there has been at least a dozen deaths or injuries caused by Hydro.

I would like to ask the minister: will the families of these dozen other victims of changes to water levels have to go to court in order to obtain justice, or will this minister now agree to settle these claims?

Hon. David Newman (Minister charged with the administration of The Manitoba Hydro Act): Madam Speaker, I appreciate this question because it allows to clarify a record of substantial misinformation. The fact is that personal injury claims pursuant to the Northern Flood Agreement, 1977, are claims that have been received and have been honoured, in some cases by agreement before they ever went to arbitration and in some cases pursuant to an arbitration award.

The Northern Flood Agreement, 1977, provides a special treatment and a favourable chosen treatment agreed to by the parties for personal injury claims. These claims can be by agreement, are settled by other negotiation or by arbitration, rather than the costly court process with all the appeal processes involved. So this is the process that is followed even in those areas that have agreed to a comprehensive settlement.

Mr. Eric Robinson (Rupertsland): Given the arbitrator's decision last week, Madam Speaker, I would like to ask the minister now to review his position concerning the Northern Flood Agreement and Cross Lake. Will he review that position?

Hon. David Newman (Minister charged with the administration of the Manitoba Hydro Act): Madam Speaker, I of course have reviewed not only Manitoba's position historically under the Northern Flood Agreement, 1977, since I have become minister, but I also reviewed the performance of Canada and Manitoba Hydro under the Northern Flood Agreement, 1977, and that is why I think it is useful to understand some of the statistics and understand that $37 million have already changed hands and gone to the Cross Lake community of peoples. Seventy-three out of 126 arbitration claims or claims under the Northern Flood Agreement have been resolved. Twenty-seven are inactive by the choice, primarily, of the Cross Lake claimants and 26 are currently active. All of them are being pursued with appropriate due diligence. I have indicated with respect to the all-weather road claim, that that is one that I am particularly interested in reviewing. The difficulty we have is the Cross Lake Band coming forward to indicate what they really want and what they understand to be the spirit of the Northern Flood Agreement.

Mr. Stan Struthers (Dauphin): Madam Speaker, in the fall of 1996, I challenged every member across the way to come to my constituency and explain the reasons why they were selling off the Manitoba Telephone System, none of whom took me up on that challenge, by the way.

To the Minister of Finance, I would like him to come to Dauphin and explain why our community is losing 24 jobs and explain to them why they have to suffer while he makes a millionaire of his brother.

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, as we have indicated before, decisions that MTS are making today are basically similar decisions that they would make under a public or a private entity. Look at some of the adjustments to staffing that were done by MTS; many of them were done prior to privatization because of the competitive nature of telecommunication. The telecommunication industry here in Manitoba today, some 70 percent to 80 percent of MTS's business is now in competition, so they are making those adjustments, but in terms of the protection for consumers, for Manitobans, there is a regulatory process that they go through. CRTC reviews any rate requests, reviews any other expenditure adjustments and issues, and again, that is a process they would go through under private and/or public ownership.

When they were making their adjustments on their staffing, I am told that in every instance they attempted to offer either voluntary separation incentive plans, redeployment opportunities, and even with all of the downsizing they did during their public sector time, they were able to keep layoffs down to an absolute minimum.

Mr. Stan Struthers (Dauphin): Can the minister assure my constituents that the future of the Dauphin phone centre, a phone centre that could fall on the same hard times that the Swan River phone centre has under this government--or Portage or other areas in the province--can he assure the people of Dauphin that their phone centre is secure, or will it, too, be closed so that more profits can be turned over to his friends and relatives?

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, MTS will obviously look at the requirement to deliver services, and they do deliver services right across the province. They will continue to look at providing them in as efficient a way as they possibly can to continue to keep rates as low as possible for consumers, and today, as I have said many times in the last few days, our residential rates in Manitoba are the lowest of any province in all of Canada. That certainly is welcome news for the consumers, for the public here in Manitoba, but in terms of how they function, they will continue to make decisions that allow for them to operate in an effective and an efficient manner.

Mr. Stan Struthers (Dauphin): Does this minister not realize that by choosing his friends and his relatives overtop of the needs of Manitobans and the telephone system, he is clearly in a conflict of interest?

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I am not choosing friends or relatives or anybody over anybody else. I have indicated on several occasions what the process is for any rate adjustments for MTS. They go through a review process with CRTC. We saw evidence recently where MTS was requesting a rate increase, I believe, in excess of $3. Members opposite were making a big to-do about that. We said to them there is a process that they have to go through which is the same process whether they are under public or private. They went through that process, and the rate increase that they were ultimately allowed, I believe, was 84 cents, one of the lower adjustments in all of Canada. So there is a process that does protect the consumers; that is the same process under any kind of a structure.

Madam Speaker, I have already outlined for the member opposite the job that MTS is doing in terms of repaying their debt to the taxpayers of Manitoba, that they have now repaid almost $200 million of the debt that was owing to the taxpayers of Manitoba.

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Mr. Jim Maloway (Elmwood): Madam Speaker, my question is to the Premier. A group of 22 MTS employees were fired on March 25, '98, plus another group were fired on March 20 just before they were due to go on vacation. Meanwhile, the board of directors, including the brother of the Finance minister, have rewarded themselves with million-dollar stock options, and rates are going up.

I would like to ask the Premier: is this an example of Tory fairness, to reward family and friends at the expense of employees and the ratepayers of Manitoba?

Hon. Gary Filmon (Premier): Madam Speaker, of course when the member opposite sat on this side of the House as a member of government, his preferred way of dealing with the Telephone System was to take $27 million of ratepayers' money from Manitoba and just dump it on the sands of Saudi Arabia, with no jobs being created in Manitoba and $27 million of taxpayers' money being wasted in Saudi Arabia.

Some Honourable Members: Oh, oh.

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