Mr. Tim Sale (Crescentwood): Madam Speaker, on behalf of my constituents, many of whom have called me on this matter, I would like to rise on a grievance in regard to the many things which this government has done to impoverish Manitobans through the forced and undemocratic sale of the Manitoba Telephone System.
Madam Speaker, in this Chamber, the ordinary business of the Chamber was set aside. The rules of the Chamber were set aside to drive through the undemocratic sale of this corporation. That was a low point in the history of this Legislature. It was precipitated by a Premier who promised a number of times, but specifically on CJOB and in constituency meetings, that he would not sell the Manitoba Telephone System.
Madam Speaker, he had spoken falsely, obviously, because shortly after attaining government on the basis of that promise, and as my colleague from Selkirk has said, the promise to save the Winnipeg Jets, he broke both those promises.
Madam Speaker, let us look at what has happened to my constituents, particularly to those in my constituency who are low-income people. I had a phone call just this morning from a woman who is chronically ill, who has no option for her safety, for her personal safety has no option but to have a telephone. She has seen her phone rates go from just over $10 to just under $25 in a matter of a couple of years.
The government likes to maintain that Manitobans have benefited because they have lower long distance rates. That is true. Manitoba companies have benefited from lower long distance rates. Wealthier Manitobans who can afford to use long distance have benefited from lower long distance rates, but many poorer Manitobans, many seniors, many chronically ill people have suffered from higher telephone rates.
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The woman who called me this morning has had her rates more than doubled in the last two years. She is saying: on my pension, on the money I receive for shelter, I cannot maintain a telephone; with my health, I must maintain a telephone. She is in a no-win situation. If she meets her income needs to buy her medication and gives up her telephone, she gives up her security in terms of reaching health care when she needs it. This is a grievous situation for low-income Manitobans.
Let us then move to what happened after the government undemocratically sold this corporation by suspending the rules of this House. I will never forget standing at the back of this House completely immobilized by rulings which prevented my speaking, my Leader speaking, my House leader speaking, to oppose an undemocratic ram-through of this sale.
Madam Speaker, within weeks of the sale, the minister responsible for the telecom services, who is the Finance minister (Mr. Stefanson), and the Premier (Mr. Filmon), who had sold this corporation, signed an Order-in-Council, Order-in-Council No. 45 of 1997, appointing the brother of the minister responsible and the man who turned out to be the head of the compensation committee, Mr. Sam Schellenberg.
Those people, along with the other nine appointees of this government to the interim board which served not until the annual meeting, as the First Minister would like us to believe, not until the annual meeting, as the Finance minister and the minister responsible for the telecom system would like us to believe, but until the end of that meeting. In other words, they were still government appointees when they put forward the stock option plan which they had already cooked in February and March of 1997, a plan, the details of which I believe were already well known to themselves and to others. They had those details in mind, and we will show that in subsequent events.
They made a millionaire out of a Manitoban whose only service to this province had been to assist his brother and the members of the government to ram through the undemocratic sale of this corporation against the overwhelming wishes of Manitobans, against the promise of the Premier not to do so. His only service was to shepherd through the sale.
Madam Speaker, I had both the honour and the sad privilege of sitting through every hour, every single hour of the committee hearings on MTS, and who answered the questions? Jules Benson, the Minister of Finance. Who said in committee there will not be any further layoffs as a consequence of privatization? Thomas Stefanson. Who said that rates would not rise? Thomas Stefanson.
My constituents are outraged by the process that led to the sale, by the consequences of the sale, by the fact that the Minister of Finance's brother has been made a paper millionaire, been made a paper millionaire by actions of the board that was put in place by his brother on January 7, 1997.
You know, the government will assert that every other telephone system has a stock option plan and, you know, they are right. But there is also in the Toronto Stock Exchange regulations and in all the regulations of all the major stock exchanges in Canada a requirement that related family members not enrich each other without disclosure. They can enrich each other, but they have to disclose it. They have to put it on the public record. That is in the regulations of the Toronto Stock Exchange. This minister enriched his brother, and he did not disclose it. He did not even see a problem. He did not see a problem with signing an O.C. putting his brother in place, and then he claimed not to know about the details of the stock option plan until the annual meeting.
Well, Madam Speaker, my constituents have a great deal of difficulty with that statement, because they wonder how the minister responsible for the golden share--that is interesting, you know. All the members opposite have now started to use that phrase, and how apt it is. The proper term is the special share, but the Finance minister says the golden share, the Premier says the golden share, the minister formerly responsible says the golden share. Perhaps it is Freudian or perhaps it just reflects the reality. That share has turned to gold for their friends, for their appointees, specifically for Tom Stefanson.
Well, in any other stock exchange in the world, brothers would not be allowed to enrich brothers without a full disclosure of what was going on, so that other members of that corporation and members of the public would know that brother A appointed brother B who got a big fat stock option. Every other exchange in the world requires that, but not in this case. Brother A does not see what is going on here as a problem. Every Manitoban I have spoken to sees it as a problem. They understand that it smells to high heavens when brother A puts brother B in a situation to be enriched by the actions of his friends.
When this is happening in the context of the closure of important phone centres in Portage, in Steinbach, in Morden, in Dauphin probably, these towns were promised that they would not see their stake in the Manitoba Telephone System diminished. These towns were promised that they would continue to have the kind of presence that that company has provided as a public corporation owned by us all. I think perhaps the member for Kirkfield Park (Mr. Stefanson), the member responsible for the Manitoba Telecom Services, does not understand that in rural Manitoba we are not just talking about good services. We are talking about important jobs, highly paid jobs, highly skilled jobs, to which rural Manitobans could aspire.
When you take away those kind of jobs, you take away a level of hope from the young people of those communities. You take away the sense that they can actually deliver some important telecommunication services to themselves. They do not have to drive to Winnipeg. They do not have to get on the phone to the Faneuil corporation and ask for something to happen out of Winnipeg. They could do it for themselves, and when those phone centres and service centres are closed, Madam Speaker, what happens is what a member of the telephone system who called an open-line show on which I was a guest said to me just this week.
I was raising the concern about the obscene stock options, and this gentleman phoned and he said I am still a member of the staff of Manitoba Telephone System, but he said I am very, very disheartened. He said to the open-line show to the audience, never has morale been lower, never have we felt worse about the work we are doing. This is a long-term employee of the company. What he went on to say was, Madam Speaker, it used to be that when customers called they got service quickly and effectively. It used to be that when we had a problem at a customer's house or at a customer's place of business, we could call on backup services that would quickly and efficiently offer their resources to solve the problem.
He said not only now do people wait for service in the first instance, when we as employees call for backup support, it is not there anymore, he said. So people are doubly penalized. The quality of service is going down. The cost of service is going up. The number of valued employees is going down, but the stock options are booming, and the stock price is booming.
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Let us remember that all across North America we have seen huge layoffs in the telecommunication industry and huge gains in stock prices. There is no surer way to enrich yourself as a member of the Board of Directors of the Manitoba Telephone System than to lay off more people. As soon as you lay off people, the stock price rises.
So let us ask about a conflict of interest then. I have a stock option plan available to me. I can enrich myself by the simple expedient of laying people off. Who has been laid off? Four hundred and fifty people have been laid off since this company went private. What has happened to its stock price? It has gone from $13 to $23. What does that equate to, Madam Speaker? Well, that gain of $10 a share more or less equates to $700 million in nominal company value since this company was privatized. It was privatized for $910 million. According to the stock market today it is worth an additional $700 million.
That is value that was taken out of this province, transferred to shareholders in other parts of this country and in other parts of the world. Stockbrokers are telling us that less than 20 percent of this company is still owned in any way by Manitobans, less than 20 percent. So the great majority of that $700 million has not escaped into the pockets of a relatively few Manitobans. It has escaped outside this province, outside this country.
The government told us what a risk it would be to keep this company because it was such a risky business. The stock market has passed its judgment on that foolishness. The stock market says not only is it not very risky, it is worth $700 million more today than it was when you privatized it. The only thing that has happened between the date of privatization and today is that there are 450 fewer employees, and the chairman of the board, the brother of the minister responsible for the corporation, is a million dollars richer. That is the only thing that has happened. There is no new technology. There have been no new breakthroughs. There have been no new agreements that have enriched this company. It is simply, we have got fewer staff, the stock market loves it, and the minister's brother is a millionaire.
That is the consequence of privatization, while $700 million in value has flown out of this province, the biggest giveaway that has ever happened in the history of this province or, I dare say, in the history of any province in Canada. I do not believe any other province has given away such value and my constituents regret it.
Mr. Stan Struthers (Dauphin): Madam Speaker, I rise on a grievance. The sale of the MTS by this Conservative government is the biggest rip-off in the history of Manitoba. It was not just a rip-off in terms of finances or economics. It was a rip-off in the way that this Legislature has been treated by this dictatorial Premier (Mr. Filmon) and his cabinet and those who support him in the back benches.
In Question Period today and earlier this week the Premier and the Finance minister (Mr. Stefanson) have told us that we need to look at the facts, that we need to be honest, we need to be truthful, and they claim that throughout this whole discussion about this historical rip-off, the sale of MTS, they claim that they have been honest with the people of Manitoba throughout this whole discussion. Nothing could be further from the truth than the honesty of this government when it comes to selling the publicly owned Manitoba Telephone System.
The reason that I rise on a grievance on this particular issue today is that I do not know how any of us, I do not know how I, as an MLA, am to represent adequately my constituents if we have to deal with ministers and first ministers who refuse to let their words match their actions, ministers and the First Minister who say one thing and do another, do not contribute to democracy in this province and, as has been mentioned in Question Period earlier today by speakers from the government side of this House as well, what is important are the democratic principles upon which this building was built.
Key to a democracy is the honesty of the government. That, Madam Speaker, has been breached from day one in this MTS debate and, since the privatization of the Manitoba Telephone System, honesty is not a word that I would associate with this whole debate coming from the government.
To begin with, Madam Speaker, I remember very clearly, and the people of Manitoba remember very clearly, the words of this government pre-1995 election where they categorically, undeniably stated that they would not sell the Manitoba Telephone System. They went further. They said the only person who was concerned about selling the Manitoba Telephone System was the member for Thompson (Mr. Ashton). The member for Thompson had the foresight and the courage to point out that this government, if they were elected, would sell the Manitoba Telephone System. He was right. The facts prove the member for Thompson correct.
Madam Speaker, in our own election campaign in Dauphin in 1995, I confronted the PC candidate with the same suggestion, and I suggested to him that if we re-elected the Conservatives in the 1995 election, they would sell MTS. He said no. I was accused of being a fearmonger. Well, how hollow does that cheap kind of an accusation appear now? If I have to be called a fearmonger again and again and again and be proven correct again and again and again, I will do it again and again and again. This government was not honest with the people of Manitoba. They said they would not sell it. They turned around and they did. Their word cannot be trusted.
In the House, during the debate on MTS, this government stated that there would not be layoffs because of privatization. This government said that unequivocally in this House. What has happened since? At least 450 Manitobans have lost their jobs because of this government's dishonesty. Twenty-four, in the latest round in Dauphin, are losing their jobs. The community of Dauphin is getting kicked by this government to the tune of 24 jobs. In the Parklands area, we are losing a phone centre and in excess of 30 jobs. The Tories said that was not going to happen. Here we are today, it is happening. It is right there in black and white in front of everybody to see.
This government said there would be no rate increases, Madam Speaker, no rate increases. How did this government expect to pay off the shareholders in the new company if they were not going to have rate increases or if they were not going to lay people off? That is what is happening now. Instead of a telephone system being managed on the basis of the public good, it is now being managed on the basis of benefiting the few, the few which includes the Finance minister's brother, Mr. Tom Stefanson.
Another promise that this Conservative government made in the debate concerning the privatization of the Manitoba Telephone System was that they would keep it Manitoban. Manitobans would still be in charge of their company. That was unequivocally wrong, and I suggest that the Tories knew that there was no way that they were going to be able to keep Manitobans in charge of MTS once privatization became reality.
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Madam Speaker, again, when we told Manitobans that they would lose control of their telephone system and that people from outside of the province and indeed outside of the country would become major and majority shareholders in this company, we were accused again of being fearmongers. Well, once again, the facts bear us out. We were right again. The people of Manitoba were right because they understood that once you put this company up for sale, there was no way you were going to be able to control where those shares were going. The government knew that, we knew that, the people of Manitoba knew that. Still the government stuck to its story and sold MTS.
Madam Speaker, another little fib that the Conservatives laid on us in the discussion of MTS was that we needed to sell the telephone system to get more capital to buy more technology to improve the system. Well, they have accessed less capital to buy less technology and less equipment to improve this system now. The private company is not keeping pace with the investment that the public Manitoba Telephone System was doing before this government privatized it.
Did this government have support of Manitobans in doing this? You know, if you strike out and strike out and strike out time after time after time when you consider the facts, I can see you might be able to get your argument across if you have support of the people of the province. Well, it was the opposite. They did not have anywhere near the support of the people of the province. The vast majority, 78 percent in rural Manitoba, opposed what the Conservatives were doing; 60-some percent in the city of Winnipeg opposed what the Conservatives were doing. Again, this government struck out, but this government proceeded on and, in an undemocratic fashion, threw the rule book out in this House, suspended democracy in this province and rammed through the biggest rip-off in Manitoba history. Now, today, this government is really struggling to try to rationalize for all the things that they messed up in this whole debate.
We pointed out that there would be very few people who would benefit from this deal, and now we are being borne out on that as well. It is becoming absolutely crystal clear just who is going to benefit, on the backs of taxpayers, I might add. The people that are going to benefit are, No. 1, the stockbrokers who took in $35 million, the same stockbrokers who recommended this sale, who recommended the sell-off of Manitoba Telephone System, collected in $35 million for doing so. Before that, the profits were being turned back into Manitoba.
We were eliminating party lines at a cost to the Manitoba Telephone System, but at the benefit of my constituents in Rorketon, Manitoba, who were some of the last people to have to put up with party lines. The publicly owned MTS solved that problem. Other jurisdictions where there are private telephone companies still have party lines. The Manitoba Telephone System was looking at ways in which we could use fibre optics to connect different parts of our province, using fibre optics to connect us through distance education, something that is very much needed in rural Manitoba. What is the private MTS doing now about that? Where are they going with it? I would suggest, nowhere.
In specific to what was going on in Question Period today with the questions that were being asked and not answered by members opposite, in respect to what went on the day before in Question Period and on Monday in Question Period, it is absolutely clear that the statements made by both the Premier (Mr. Filmon) and the minister responsible for Manitoba Telecom Services are in absolute contradiction to the facts, in absolute contradiction to what is down in black and white.
On the one hand, the Finance minister (Mr. Stefanson) says that he appointed only four people. The Order-in-Council says that he appointed 11, one of which is his own brother, Tom Stefanson, who was given, they call it, the golden share; Tom Stefanson, who, who could stand to gain a million dollars was appointed through Order-in-Council by his brother, the Finance minister (Mr. Stefanson), to a position where he stands to gain a million dollars. That is exactly opposite to what the minister told us in the House. That is basis for a grievance. How can I go to my constituents and try to explain what is going on in this House if the Finance minister will not give me the whole truth about the issues we are dealing with? That is the case with this deal, a deal which every time we kick it, smells a little bit worse.
In black and white there is a circular containing the government's plan for this stock option, and the circular approves, before any shareholder's meeting, this plan, a plan put together by the appointed brother of the Finance minister through Order-in-Council, a plan put together by Mr. Schellenberg who is the chair of this committee appointed by the current Finance minister. It is absolutely clear that if we in this House expect to serve our constituents, if we in this House want to go from the Legislature to our constituencies and explain what this government is up to, with any hope of being fair, then we have to deal in honest terms. We have to deal with the facts, not the spin that the Premier (Mr. Filmon) or the Finance minister want to put on this but the honest-to-goodness facts.
I, as a member of the Legislature, cannot go to my people in the Parkland and put forth the government's position as portrayed by the Finance minister, and I cannot talk about any kind of good things that this government claims to be doing when they do not give me the truth. Thank you, Madam Speaker.
Mr. Gregory Dewar (Selkirk): Madam Speaker, I rise on my grievance. In 1996, Manitobans were furious when this government broke their promise and sold the Manitoba Telephone System without consulting the Manitoba public. As my colleague from Dauphin mentioned, against the wishes of over 78 percent of rural Manitobans who were polled at that time, 78 percent of rural Manitobans opposed the sale and the privatization of the Manitoba Telephone System, yet this government went ahead against the wishes of the majority of Manitobans and sold off the telephone system.
During that election as well the government also promised, and all of us here remember that, of course, to maintain Pharmacare. They promised to spend over $600 million on health care capital spending, and they also promised to save the Winnipeg Jets. They promised $600 million for capital health care, and they also promised to save the Winnipeg Jets. There are Manitobans out there who believed them, and there are Manitobans who went and supported them because of their promises.
Well, the government opposite and these members opposite, they betrayed the trust of those Manitobans because they did not spend the $600 million in capital like they promised. If they had done it then, we would not be facing some of the problems that we are facing currently in health care. They kept promising a personal care home in Oakbank. The sign is still up there. They have to go at re-election and repaint it: Coming soon to your community, a personal care home. The sign is still up there, but there is no personal care home in Oakbank.
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Also they promised to save the Winnipeg Jets. Well, the Winnipeg Jets have moved to Phoenix, another broken promise from the members opposite, and Manitobans will remember them. They will also remember the promises that were broken by the members opposite. In fact, the only promises that they did keep were to find jobs and contracts for their friends and corporate donators. That is the case, and that is why it is important for us to stand up today and to put these comments on the record.
Madam Speaker, MTS was a publicly owned utility in this Crown corporation for over 80 years, and it served Manitobans well. It kept rates low regardless of where you lived, whether you lived in the city of Winnipeg or in Dauphin, Selkirk or in a remote northern community. MTS at the direction of the government, and this was started with Pawley administration and carried on with the Filmon administration, they spent, I believe, $600 million, $700 million in capital. They upgraded the rural network. They brought individual-line service to all of Manitobans. They expanded community calling zones.
MTS upgraded their network in rural Manitoba, provided them, as I said, with individual-line service because it was a public utility. It was done so because the government of the day decided that this was in the best interests of Manitobans, and it went ahead and the public utility did that. There are two other provinces besides Manitoba that have individual-line services in this country. That is the province of Alberta and the province of Saskatchewan. The province of Saskatchewan still has a publicly owned telephone system, the province of Alberta no longer, but it was because they were publicly owned or are publicly owned utilities that they have individual-line service.
MTS has employees in every region of this province. In fact between 1990 and 1995, the eastern region where Selkirk is a part of, in 1990, there were 546 employees; in 1995, there were 428, significant downsizing because of the members opposite. But the former minister of MTS, the member for Springfield (Mr. Findlay) said well, we had to downsize, but that is it, we are not going to downsize anymore. There is no reason for a privately owned, privately operated Manitoba Telecom Services to lay off any further. He said so in a quote in the Selkirk Journal, where he says, and I quote: There is no stimulus I am aware of says they are automatically moved to Winnipeg, Findlay says. I do not see anything as far as the jobs in Brandon, Morden and Selkirk as far as a change in ownership.
Well, he was wrong. He was wrong in this article, and he is wrong now. We have seen lost jobs in Selkirk and Brandon and Morden, Dauphin, in the North.
I urge members opposite to stand up today in this Chamber, Madam Speaker, as my colleagues on this side are doing, stand up today in this Chamber and stand up for rural Manitoban and for northern Manitoba. They represent communities, they represent constituents that have been laid off because of the change from a publicly owned to a privately run Telephone System, so I urge them to stand up today and to really look at what has gone on in the MTS since it was sold.
We have seen rates go up, and they promised that rates would not go up. They promised that jobs would not be lost, and jobs were lost. They promised that ownership of the privately owned MTS would stay within the province. They were wrong, wrong, wrong on all those promises that they put before the public and they put before this Chamber.
What we have seen, Madam Speaker, and it has been raised in this House this past week that in order to pay for this million-dollar stock bonus that the Minister of Finance's brother and others have received is to raise rates and to lay off those Manitobans. Tom Stefanson laid off Manitobans, he raised rates, and he is now rewarded by a million-dollar stock bonus. Something stinks, and it is a shame that members opposite are sitting in their seats today supporting this action. We know members opposite, I do not think they do support it by their response today and other days in Question Period, while they are letting their Minister of Finance (Mr. Stefanson) and they are letting the Premier (Mr. Filmon) stand up without any support at all from them. They all have their heads down in their desks. They are all fiddling for something to do.
Some Honourable Members: Oh, oh.
Madam Speaker: Order, please. The honourable member for Selkirk was recognized. [interjection] Order, please.
Mr. Dewar: Madam Speaker. The members opposite they will not stand up in this House and support the actions of their government in terms of giving Tom Stefanson a million-dollar tax bonus.
Madam Speaker: Order, please. The honourable member for St. Norbert, on a point of order.
Mr. Marcel Laurendeau (St. Norbert): On a point of order, Madam Speaker. The honourable member for Selkirk has said I was not standing up to support my minister. I would like him to know I do support my Minister of Finance (Mr. Stefanson) 100 percent. I always will.
Madam Speaker: Order, please. The honourable member for St. Norbert does not have a point of order.
Mr. Dewar: Madam Speaker, that is a rather weak defence. The member for St. Norbert, who I thought had better sense, is linking himself to the Finance minister, some of the actions of the Finance minister over the past number of years and the Finance minister's brother getting a million-dollar stock bonus, while at the same time MTS is laying off workers and raising rates for all Manitobans across this province. He is standing up today and supporting that. I thought he had better sense than to do that.
Madam Speaker, the sale of MTS was a major loss for Manitobans. We lost an economic tool in this province, and our rates have gone up. But we found out recently that some of the dealings of the Premier and the Finance minister, they have made millionaires of a few key executives of that corporation at the expense of the rest of this province. This I know is a great shock and of great concern to all Manitobans who will view this and other actions of this government in another year and a half, when we have the chance to take this issue and other issues to the people of this province. I know my constituents will be very concerned and very upset when they are being laid off and they are losing their jobs when the Finance minister's brother is a making a million dollars. They will not--I know all Manitobans, other Manitobans as well--forget the actions of this government. Thank you very much.
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Mr. Gerard Jennissen (Flin Flon): Madam Speaker, I, too, am pleased to be given the opportunity to put some words on record regarding the grievance presently before the House.
One gets a sense of deja vu whenever this side of the House makes reference to MTS. It is something we have seen before. We hate to say it, but I guess we are going to have to say it. We told you so. We told this government before they embarked on this ideologically driven privatization course that selling MTS was not the right thing to do. We told them it will lead to layoffs, to job relocations, to rate increases and to a host of other ills. I think we have proven to be fairly prophetic on that.
Now we discover that senior executive officers, officers first appointed by this government via the January 7, 1997, Order-in-Council, are now enriching themselves via a stock option plan they themselves engineered. The First Minister (Mr. Filmon) has argued that this is nothing new and that other telecoms do this as well. This is probably true, Madam Speaker. The point is that those other telecoms are privately owned and our telecom was publicly owned and was sold by this government.
Manitobans are not happy with this direction, at least northern Manitobans are not happy with this direction. It is not palatable to ordinary citizens, because they are faced with cutbacks, and they will not take it kindly when they see their telephone services decrease, their monthly telephone bills increase, people working for MTS being laid off, and so on. They will not take this kindly when they discover that certain senior executives are making millions.
The point is, MTS was publicly owned and should not have been sold. The government denied its plans to sell MTS right up to the last bitter moment. I heard the First Minister say that I think a matter of weeks before they actually sold it, that they had no intention whatsoever of selling MTS, and of course they did. I do not know what that does for the credibility of the government, but these firm denials about selling MTS and then actually selling it, what appeared moments later, certainly flies in the face of telling the truth.
One honourable member talked about perception, and I think it was the honourable member for Inkster (Mr. Lamoureux), that perception was also important in this. We must not only do the right thing but people must feel--the perception must be correct as well. We must not only do justice but must be perceived that justice is actually being done. That is lacking in this case. How are ordinary Manitobans supposed to react when they face telephone increases? How are they supposed to react when the Finance minister's (Mr. Stefanson) brother stands to make a million dollars on these stock option plans? These are the very same people who were once entrusted with the people's telephone system. It does not look right. It looks too much like the fox and the chicken coop.
An Honourable Member: It is the fox in the chicken coop.
Mr. Jennissen: The fox in the chicken coop, for the honourable member.
Despite all the rhetoric from the government, and we hear a lot of it, that the majority of shareholders would remain in Manitoba, that they would be Manitobans, that rates would not go up, that service would be good, et cetera, that service would increase, those promises obviously went the way of a lot of Tory promises.
Despite the overwhelming desire of Manitobans to keep MTS a public corporation, the MTS privatization bill was rammed through this Legislature, despite the heroic efforts of many members on this side of the House, particularly the member for Thompson (Mr. Ashton).
That was a sad day for all Manitobans, that particular day. This whole MTS debacle, this whole debacle from the day it was sold until now, stinks to high heaven. Like my honourable member for Dauphin (Mr. Struthers) said, the more you kick that carcass, the more it stinks. It reminds me particularly of Saskatchewan in the Grant Devine heyday. The people's public assets were fair game then to enrich Tory privateers, and the same direction seems being followed here.
It is sad that this government has gone this direction, because I do not think that they believe that they can sow the wind and then reap the whirlwind, but that is exactly what is happening. You cannot go this path without also facing the negative consequences later on. And they cannot say we did not warn them. Governments should not be in business to enrich only a few. We have not been elected to make sure that somebody's brother becomes a millionaire. We are here to enhance and to safeguard the welfare of all our citizens, particularly our poorer citizens and our citizens most in need of being safeguarded.
As the member for Crescentwood (Mr. Sale) has pointed out earlier, stockbrokers made dollars, many dollars, from the sale of MTS. The senior executive officers made many dollars from the sale of MTS, but ordinary Manitobans did not fare so well. They are left with the sad result, and the sad result is poorer service, increased phone bills, and so on. Others in this House have referred to the sale of MTS as the biggest rip-off in Manitoba history, and I think they are very close to the truth.
The reason I rise today, Madam Speaker, on this grievance is partly because I will have great difficulty explaining to northern Manitobans how it is possible that a handful of Tory appointees, formerly, can now become millionaires via the MTS system when their rates are going up, when their service is being slashed, when their MTS worker is leaving town or is being relocated or has lost a job.
I do not believe that many of the members opposite even realize how difficult it is for some northerners to survive. Many northerners cannot even afford a telephone. Some of the smaller northern communities such as Brochet and Lac Brochet and Tadoule Lake, South Indian Lake and so on have only a handful of telephones, and yet those telephones are lifelines, absolutely necessary because many of these communities cannot even be reached by regular road system. So the telephone becomes extremely important.
If you take a look at a community such as Pukatawagan which is also in my constituency, a community of roughly 2,000 people, I just looked in the telephone book. There are roughly only between 40 and 50 private subscribers to telephones. One of the reasons that there are so few subscribers in the community of 2,000 people is that they cannot afford it. Now does the government believe--do the members opposite really believe that by privatizing, by building in profit, it is going to be easier to get telephones up north specifically when private telecom systems are out to look only at the bottom line? They will want to be where the business is, where most of the businesses are, which is down south. In other words, there is no mandate to give good service to those isolated communities up north, and that was, of course, the reason we kept it in public hands, because that way we could get good service to northern Manitoba and to rural Manitoba.
It is an irony, Madam Speaker, that we have 450 job losses since the sale of MTS, that the rates have increased, that the service has become poorer, that people have been shunted from their place of work to a different place. For example, the person working for MTS in Flin Flon has to move to Brandon and so on. It is ironic that, at the same time this is happening, we are going through these contortions and these pains, that a few Manitobans should become super rich because certainly that corporation was never designed to create wealth for a few people.
Now the Premier (Mr. Filmon) today again and the minister bring out the old chestnut that the CRTC would approve or reject rate increases, regardless of whether a telecom is owned privately or publicly. What they failed to mention is that, if you do not apply for a rate increase under a public system because you want to keep it down for people, then CRTC is not going to impose that rate increase on you. But, when you have a private system and you want to make your 12 to 15 percent profit, then, of course, you are going to ask for rate increases all the time, so it is not good enough to say it makes no difference under CRTC. It makes a heck of a difference. Compare Saskatchewan to Manitoba.
The public systems are geared to providing service for people, even people in rural areas and remote areas. That is why we, under the public system, extended direct-dial telephone all over the province. Would a public system have done that if there were not big bucks in it? I doubt it very much. The privately owned system is going to go where the population density is, as I pointed out before. It is not geared--its primary aim is not to be geared to providing good service to people. Its primary aim is to make big bucks for its shareholders. By the way, those shareholders are outside of Manitoba, a vast majority, and many of them in the United States.
Madam Speaker, the privatization, market-driven agenda cares only about the bottom line. It does not care about people. It does not care about social justice. It does not care about northern or rural need, and no amount of words the members opposite put on record denying this is going to change it. A privatized telephone system in this province is not conducive to helping poor people. It does nothing for social justice. It does nothing about erasing inequalities in the system.
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How are our seniors, who are already stressed enough in northern Manitoba, what with health attacks, the attack on health care, what with the increases in Pharmacare deductibles and so on, how are those seniors even able to afford telephones? And aboriginal people?
As I pointed out before, many northern communities have very few telephones because ordinary people there cannot even afford a telephone. Yet those are the very people, Madam Speaker, who need telephones the most, and those are the people who in the future will be denied them because they simply will not be able to afford them. Of course, this becomes even more contemptible when you realize that others in the system are going to be making millions out of this privatization direction.
The government is drifting in a direction that can only be described as dangerous, Madam Speaker. In fact, I would say when this government started, they went from timidity to arrogance, and now they have gone far beyond arrogance. They are going in a direction that reeks of corruption, and, in fact, I think it even reeks of nepotism.
I wish that I did not have to say this, but the smell is there. The odour is unmistakable. It is corruption; it is sleaze; it is nepotism. I wish it was not there. I wish it could be different, but that is the way I see it, and I will continue to speak up for my northern constituents.
Thank you very much, Madam Speaker.
Mr. Doug Martindale (Burrows): I am pleased to take part in this debate today, although I am disappointed that this debate has to take place at all, but the government created this problem for themselves, and we feel obliged to address it on behalf of our constituents. I have been cleaning out my files, and I was going to throw out a file that says MTS, but I am glad that I kept it because I am going to make use of it today. I never thought that I would use this file again, but because this government has chosen to reward its friends in high places, it is necessary to resurrect some arguments that we used before.
In fact, one of the arguments that I used in my questions with the former minister responsible for MTS was about Telus, the Alberta telephone system that was privatized by the government of Alberta. I asked the minister if he thought there were going to be rate increases as a result of privatization, as there were in Alberta. I asked if there would be employees laid off as there were in Alberta. In fact, I requested the prospectus called the Investor Fact Book and Telus sent it to me, and it was very interesting and helpful information.
I probably quoted this into the record at the time of the debate here on MTS, but it bears repeating that from 1991 to 1995 there was a reduction in employees of Telus, and we are seeing the same kind of thing in Manitoba. The government says, well, they were laying off employees before the privatization, but usually what corporations do and what governments do with Crown corporations, or any corporation does to make it more profitable when they sell it, is lay off employees ahead of the sale. That reduces expenses and makes it a more profitable corporation, but the government denied that they were going to lay off any employees, and now the Premier (Mr. Filmon) tries to rationalize this by saying, well, they would not act any differently in the private sector than they would in the public sector.
We think that there are more layoffs in the works, and the reason for that is that we are moving to competition in local service. We have already got competition in long distance service, and about a year from now, I understand, we are going to get competition in local rates.
Well, that is going to be very interesting, because right now we have a very cynical and jaded public who are very upset with this government because they are giving million-dollar stock-option profits to their Tory-appointed Tory friends on the board of directors. So what is going to happen a year from now when people are offered a choice? They are going to say, well, why should I be loyal to MTS. They are rewarding their friends with huge profits, profits from the sale of $200,000 in shares, so I do not feel any loyalty to MTS.
I think there has been a lot of customer loyalty to MTS in the past, where people felt that because it was a publicly owned Crown corporation, because its head office was in Winnipeg, it was a Manitoba company, and they, I think, historically have had the lowest or second-lowest rates in Canada, people did not want to switch because of their customer loyalty.
In fact, I remember hearing from the Minister responsible for MTS or perhaps in media reports that in spite of long distance competition, MTS did not lose very many customers to their competitors. People were loyal to the company, and even though they had the opportunity to switch, they continued with MTS. So this is what we were told; I do not know if it is true. I have no reason to question it, but we were told that they did not lose a lot of market share to private-sector competitors.
But what is going to happen now when people are upset about this government rewarding their friends and, in particular, Mr. Tom Stefanson, the brother of the Minister of Finance? People are going to say, well, why should I stick with MTS? I am going to go to the competitor.
That is going to have implications because then the board of MTS is probably going to lay off staff in order to reduce costs because they really only have two options. One is to reduce profits, and the other is to reduce expenses. Well, guess which one the board of MTS will do. Of course, they will choose to lower expenses, which means fewer staff, which means poorer service, which means eliminating phone centres in places like Swan River, and I understand there are other places, as well, that have lost their phone centres and their service technicians. In fact, the level of service in Manitoba is much, much higher than for Bell Canada, where there are extensive time-waiting periods for installing new equipment. But we will probably see--I am sure we will see a reduction.
How will this reduction take place? Well, probably, they will try to buy out employees, and that will probably happen over the next year. When that is finished, they will put an end to the buy-outs, and then they will just give people two weeks notice and lay them off. So we will have fewer Manitobans employed, once again.
Now, those are not the most important issues here today. I think the most important issue here today is the conflict of interest in which this government is thoroughly involved because they appointed the board of directors, and, surely, they knew about the rewards for the board members in advance. That is what we are claiming here based on the time line of the Orders-in-Council and other kinds of evidence.
We think the public sees through this. Of course, as one of my colleagues said, the government has a problem of the public perception, and we know that in politics perception is reality. I am sure that the member for Lakeside (Mr. Enns) would agree with that; he has been here a long time. Even though the government tries to derail this debate and talk about the time line, the real problem for them is that the public has probably already made up their mind, and when they see the brother of the Minister of Finance (Mr. Stefanson) standing to benefit by a million dollars, the public has--and if they have not already passed judgment, they will very quickly pass judgment on what is right and wrong here.
Who is going to pay for this? Well, of course, the subscribers pay for it because if you are rewarding your executives with million-dollar packages, then someone has to pay for it, and, certainly, there are going to be future rate increases. In fact, we predicted there would be rate increases. In fact, we were quite surprised when the CRTC did not give MTS the kind of rate increase that they wanted, but now we understand that they have applied for a rate increase March 1 retroactive to January 1, and the public is going to be very cynical once again about that kind of timing. The government probably hopes for their own political sake that they do not get what they are asking for. This is becoming an albatross around their necks and one that they would rather not have.
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Mr. Marcel Laurendeau, Deputy Speaker, in the Chair
I would also like to draw a parallel. Mr. Deputy Speaker, I would like to draw a parallel based on something that I believe the Premier (Mr. Filmon) said the other day about the Saskatchewan Potash Corporation, and our member for Kildonan (Mr. Chomiak) was yelling across the floor that the government of Saskatchewan sold it, which is true. In fact, I have some Globe and Mail stories with me today from August of 1989 when the Conservative government of Saskatchewan sold the Potash Corporation, and there were many parallels between how it was privatized and how MTS was privatized, including using closure in the Saskatchewan Legislature.
At the time, Mr. Romanow, now Premier Romanow, said, and I quote: The government might have won the short-term legislative battle, but the matter will not be resolved until the next election and one I think they are on the verge of losing on this issue of privatization.
Those words turned out to be prophetic, because the Saskatchewan New Democratic Party won the election in Saskatchewan in 1991.
There were similar issues and comments made about Saskatchewan Potash and the legislative process and how the legislation was rammed through the Legislature in a most undemocratic way.
We also have parallels between things that happened in this Legislature in 1996 and the issues of today. At the time that the privatization of MTS was rammed through this Legislature, people were commenting about ethics. Here is what Professor Arthur Schafer, director of the University of Manitoba Centre for Professional and Applied Ethics, said and quoted by Frances Russell in the Free Press of October 25, 1996. He said that the government is abusing its trust relationship with the people of Manitoba, obliging it to make major decisions on the best and therefore the most disinterested advice available. He said ethical norms have been violated.
That is probably our major concern today, that we have the Premier (Mr. Filmon) and the Minister of Finance (Mr. Stefanson) signing the Orders-in-Council appointing the board of directors of MTS, and we believe that those individuals and the government were knowledgeable about the benefits package being given to board members and senior executives and that that placed this government in a conflict of interest and, in particular, the Minister of Finance.
We think that is appalling. The people of Manitoba I think believe it is appalling. I am not sure what can be done about it, but I think the people of Manitoba will pass judgment on them, and they will have their chance, either this fall or next spring in an election. This issue is not going to go away. We will remind people that the government promised not to sell the Manitoba Telephone System before the 1995 election and broke their promise. This we will remind people of and remind people of. We will not let any voters in Manitoba forget that this government broke their promise and cannot be trusted on this issue.
It is not the first conflict of interest that we have caught this government in. We know that Mr. Bessey benefited from what we believe was a conflict of interest. We know that a senior manager in the Department of Family Services was caught in a conflict of interest when he was negotiating on behalf of the Department of Family Services a contract in the area of his department, Income Security, and then left the department and went to work for the company that he was negotiating the contract for.
I raised this in Question Period with the minister, and, of course, all we got was deny, deny, deny, which is what we are getting in Question Period this week from the Premier (Mr. Filmon) and the Minister responsible for MTS. The Minister of Family Services (Mrs. Mitchelson) defended her former staffperson in spite of the very clear provisions of The Conflict of Interest Act, which say that if someone leaves government, there is a one-year cooling off period. There is one year in which there can be no contact with your former employee.
What did Mr. Sexsmith do? Mr. Sexsmith had meetings with the staff in his former department within a year, I think within six months of leaving the Department of Family Services, a clear conflict of interest, similar to the one that we are talking about today.
So with those few comments, Mr. Deputy Speaker, we will continue this debate and we will continue to point out to Manitobans that this government does not understand the conflict of interest, and when they are caught in a conflict of interest, of course they will not admit it. Thank you.
Mr. Jim Maloway (Elmwood): Mr. Deputy Speaker, I received a letter two days ago from a constituent of mine who worked for the telephone system for 23 and a half years. He was fired by MTS on March 25, 1998, with a number of other people.
He received a letter from the telephone system. It says: MTS Communications has been forced to reduce the size of its workforce. To the extent possible, these reductions have been made through voluntary retirement and termination opportunities. Unfortunately, voluntary incentives, initiatives have not proven sufficient, making layoffs necessary. Accordingly, this letter will serve to advise you that effective immediately, you are permanently laid off without right of recall pursuant to the provisions of the letter of understanding, voluntary termination and permanent layoff program, in the MTS Communications Incorporated team collective agreement.
Now, here is a man 16 months away from retirement, and this corporation that can afford to give stock options which will make millionaires of board members including the brother of the Finance minister, a corporation that is doing that is turning around and firing employees with 23 and a half years experience, 16 months away from retirement, is simply throwing them out on the street.
The letter to him is telling him that they have been forced to reduce the size of the workforce. I think that this man has great difficulty understanding that, when he reads in the paper that Tom Stefanson has stock options worth a million dollars. He finds that very hard to believe, that he should be fired so that the brother of the Finance minister should be made a millionaire, so that other board members can simply help themselves and run this telephone system as their own private fiefdom.
Needless to say, this government is making a lot of enemies throughout this process of privatization of the telephone system, and I would guess that neither this person nor the other 20-some people that were fired, 22 actually on March 25 and another group on March 20 just before they were due to go on their vacations, I am certain that they and their friends will remember how this fate befell them come the next election.
I want to tell you, Mr. Deputy Speaker, that we on this side of the House will be making every effort to make certain that as many people as possible understand how this government has operated with the assets of the public.
Now, in addition to this letter that was sent to this particular person by Larry Kilmister, this man received a release that he has to sign. The release in part reads that he agrees, he has to agree that the payment is intended to be confidential. So his severance package is supposed to be confidential, and he agrees that he will not at any time disclose it, reveal it, confirm it or otherwise communicate to any person, firm or corporation--I assume that includes his wife and family--the amount of consideration paid or any other term of the settlement between the releasor and releasee.
He further agrees to use his best efforts to ensure that anyone familiar with the said settlement, which I guess includes me now, does not disclose, reveal, confirm or otherwise communicate the amount or terms of the settlement to any person, firm or corporation. Needless to say, this particular person is not very happy right now with this government.
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Mr. Deputy Speaker, this privatization cannot be taken in isolation. This privatization occurs because this government, the ideology of this government is consistent with conservative movements, conservative organizations, conservative governments not only across this country, but in fact around the world. Whenever they get an opening, whenever they see an opportunity to sell off public assets--and, by the way, which turn out usually to be sold to their friends--whenever they get an opportunity to do that, they proceed and do this.
We have seen privatizations in England. We have seen privatizations, I recall, in British Columbia a few years ago where the Brick fiasco occurred and people in the province were given shares. Everyone in the province was given shares of this Brick corporation. What we saw was people running around, broker-types buying the shares of poor people, and in very short order, the shares were owned by very few connected people. That is what happened in this situation. These shares were sold under market value, and the shares within days, if not weeks, were owned outside the province of Manitoba.
So this government tries to argue that, in fact, the corporation is still going to have a Manitoba presence, that the head office has to be in Manitoba, that Manitoba government is heavily involved in this company, but we know that within a couple of years that the debt will be paid off to this government. This company will then be picked up by AT&T, another company, and when that takeover occurs--if the economy is not in the tank by then and it probably will be--but if it does occur, then these shareholders who own these shares right now are even going to make more money, because AT&T will come in and buy this company at an even higher share price, share value, than $23 a piece. So that is where the future of this telephone system lies.
We see in rural Manitoba the company shutting down offices in rural towns. We see layoffs happening in rural towns. We see the telephone system reducing the number of machines that dig the cables in rural areas from, I believe, three down to only one at this point. It is certainly noticed by people in the rural areas that the maintenance is being left, that the interest in being there is just not there as the company rushes to do the best in terms of a bottom line. In the same way that this company was prepared two or three years in advance for privatization by splitting it off into its three components, in the same way that that process took two or three years to prepare this company for its eventual sale, we see it further being prepared through a further pruning of the workforce and a further rationalizing of its operations to produce maximum profitability so that it becomes a good takeover target for AT&T or whoever else is going to buy it.
When that occurs, Mr. Deputy Speaker, we can say goodbye to the head office. The head office will be in name only. It will be like the head office of other companies, I believe, McKenzie Seeds and others, that the operation of the company really rests with its owner outside the province, and there is simply a sign on some building that says that it is a head office but it is defacto controlled, run from elsewhere. That is where this corporation will end up, and we on this side are convinced that this will only be the first step.
If the Conservatives get away with this electorally speaking, then they will be looking in short order at the hydro development. They have already moved the Manitoba Hydro in the same direction as the telephones. They have split if off into the three units. They are laying off people, and you can see the pattern. The pattern is repeating itself, and we wonder which brother of which minister over there will be doing the Tom Stefanson shuffle in another couple of years.
Madam Speaker in the Chair
Madam Speaker, this Tory monkey business will continue as long as these people are allowed to continue in government. That is why it is incumbent upon us as the opposition to make certain that their term in office is as short as possible; in fact, they are doing this to themselves. It was not this opposition who appointed Tom Stefanson. The government are arguing today, well, Tom Stefanson was put on the board before his brother was elected, but the fact of the matter is that he was put on the board by this government. This government created this situation that we have here right now, and it is no argument for them to try to make lame arguments to try to extract them from this situation. Clearly, what you have here is a group of Tories who have been put in charge of a former public asset, who are using this asset to maximize returns and maximize benefits to themselves and family members, and they are not going to get away with it.
This time you may have gone one step too far. You have gotten away with things over the last 10 years. You know, the teflon don, the teflon Premier has been operating for 10 years, and I think they have become overconfident over there. They think they can solve all their problems by the spin doctors that they have running around trying to solve their problems for them.
I have given them credit before. They have been successful, but I think this time they may have taken things a little too far, and I would expect that they are going to have a very difficult time trying to explain this fiasco to their supporters, not only the voters of Manitoba, I mean it is not going to sell to the voters of Manitoba, but they are going to have trouble explaining to their supporters who are going to want to know why they were not part of the--Madam Speaker, it is a good of a definition of how the group operates over there.
The member for Lakeside (Mr. Enns) likes to talk about the $57 million in the sands of Saudi Arabia. You know, every time he does that he knows he is walking into a trap, because he was around here way, way back 30 years ago when CFI became a big issue, and those expert business people over there shovelled $93 million. Now if you adjust $93 million into today's money, I do not know how much that would be, but that is an awful lot of money. That makes the amount of money lost in Saudi Arabia look very, very small when you are looking at $93 million that Kasser and Reiser spirited off to Switzerland.
You know, Madam Speaker, these people never knew where the money went. They just simply shovelled it over to--and I remember the member for Lakeside (Mr. Enns) and Mr. Spivak were running for leadership of the Conservative Party at the time. They were on 24 Hours CBC show during their leadership, and I remember being part of a studio audience in which I asked them to explain the missing $93 million. They could not explain it then, they could not explain where the $93 million was then, and they cannot now. They just rest and sleep comfortably with the knowledge that 30 years have passed, and the public is not interested in this anymore.
So do not ever try to let them convince you, Madam Speaker, that they know business, that they know how to run business, because their record certainly demonstrates that the truth of the matter is that it is the exact opposite, that these people have had more boondoggles while they have been in power, the biggest one being that $93 million. As long as the member for Lakeside is here, I will continue to ask him to tell us what happened to that $93 million, because--
An Honourable Member: I will tell you.
Mr. Maloway: Well, you know, the member for Lakeside says he will tell me where that money went, and I wish he would stand up and tell us, because people in this province have been waiting for 30 years to find out what happened to that money.
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Madam Speaker: Order, please. The honourable member's time has expired.
Mr. Conrad Santos (Broadway): Madam Speaker, I would like to use my grievance privilege, which can only used once, because this is a very important public issue for every one of us. We know that governments are moved and are operated by people, by men and women who are either elected or appointed to public office, and they are there ideally to be the public trustees, the stewards and trustees of all the people. As such, they are supposed to act on behalf of the benefit of the general good of the community, of the general good of all the people.
Publicly elected MLAs like us in this Chamber are here in order to represent our constituents, all the people of the province together that we may promote their interests and achieve the quality of life essential to a good society.
The moment we violate that public trust and we succumb to the danger and problem of self-interest while in public office, to that extent we have been derelict in our duties and to that extent we have risked the general good of all the people in Manitoba. We know that government exists in order to protect the weak, those people who cannot help themselves, those people who cannot by themselves be able to struggle and win in the vicissitudes of life. We know that government exists to protect the minority from the tyranny of the majority, from the domination of the majority and, yet, the moment we use that power of majority to promote not the public interests but the private interests, we have succumbed again to the primacy of self-interest as the main enemy.
I have seen people who when they analyzed the situation, the social situation, they came to the conclusion, I have found the enemy, and the enemy is I. It is our self-interests. So some great scholar said, if I am not for myself, who am I for? If I am not for my brother, who am I for? If I am for myself and if I am for my brother, what am I? We have descended to the lowest level, especially if we are already elected to public office.
So we must all the time be aware of that danger, and we cannot rely on the so-called business experts, the professional experts if they are devoid of ethical morality. The most dangerous thing that could happen in any government is to take the advice of self-interested people who are expert in business matters but are devoid of moral ethics.
What happened in this particular case? This government took the advice of brokerage firms who are experts in selling securities, and then they advised that they sell a public asset, the Manitoba Telephone System and, in the process, they benefited themselves, a $35-million profit in the process. This is selling public assets, that the public asset may be converted to private assets so the private assets can now be subject to these attacks of self-interested people, and this is all done legally. It is called options to buy shares of stocks. These are decided by people who themselves are the decision makers. They are supposed to be the directors of a company. It is a private company and supposed also to be like politicians. They are supposed to be acting on behalf of their shareholders, but they are acting for themselves again. In so doing, they decided that they would promote themselves, that they would grant stock options and benefits to themselves, and to do that they must show--according to the business bottom line--some kind of profit. How can they show profit? Of course, it is easy. You just lay off employees, and you have fewer expenses, less salary to pay; then the profit level will increase. Then you are justified in paying bonuses to yourselves.
So you could see the pattern now, not only in MTS but also in other companies--GM, the banks. The higher their corporate profit, the more employees they lay off, because that is the only way they can justify their salaries, their executive options to purchase for themselves options of shares of stock.
Take this particular case. The chief executive officer of MTS, who happens to be the brother of the Minister of Finance (Mr. Stefanson), had 120,000 shares, option to buy 120,000 shares. Those shares initially were worth $14.63. Now they are worth almost twice, $23 per share. If you do your mathematics and multiply, that will mean a gain of a million dollars. There is nothing wrong with that if you are an owner of shares of stock if you invested your own money in it, but this is not his own money. This is a bonus given by the board of directors, recommended by a committee who are themselves interested, and they are themselves the beneficiary. That could happen in a private setting, nothing wrong with it. The trouble with this one is the ultimate source of the money is the assets of a public corporation, the people's, taxpayers' money.
An Honourable Member: This is not a public corporation. That is the whole point you are missing. This is a private corporation.
Mr. Santos: The private corporation now, of course, can be run by the directors in any way they like, but still this government is represented in the board of directors through the golden share, so called, where we, the government of Manitoba, appointed four of all the 11 directors. But, in so doing, you have recounted all the set of events how it happened. This board of directors was appointed by the Premier (Mr. Filmon) and the Minister of Finance (Mr. Stefanson), and they are to be in office until the next annual general meeting of the shareholders. During those times, they have concocted all these plans to benefit themselves and then recommended the same to the general shareholders. But the shareholders are voting by proxy, and they will surrender their vote to the board of directors who will cast the ballots for themselves. These are people acting in their own self-interest deciding for their own self-interest. There is a lack of morality there.
The point here is that all these things happened because of privatization. The privatization is simply a means to convert public assets to private assets, so that it can be within the control of those who run the corporations. When they are in control, they, of course, can benefit any way they like because that is the basis of our capitalistic system. Greed has no limit. You get as much as you can get. As soon as these assets have passed from the corporate hands to private hands of the directors, then the company can be sold off, and they are themselves already millionaires.
There is nothing wrong with that if the source of the money were their own investment and the product of their own effort and the product of their own labour, but this is the taxpayers' money. These are the people of this province. They created Crown corporations not only to provide public services but also to make the quality of life affordable for Manitobans. That is the reason why executives and corporate executives of Crown corporations are in a difficult position. They not only are expected to maintain the bottom line in terms of financial stability, but they are also expected to render public services to the people of this province. In so doing, there could be a conflict in that they cannot make as much money as they would like to make because they are mandated by the legislation creating the Crown corporations to create public services for the people of Manitoba.
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I remember when MTS was still a Crown corporation, the rates were reasonable, the people in rural areas were happy, direct dialing had been extended to them. When it became private, the Crown corporation became a private corporation, what would happen? They will not think any more about the service element of that Crown corporation, MTS. They only think of the dollar margin, the value that they can get, can extract out of this corporate asset.
Privatization then becomes a means. It is a means to convert public assets of the people into corporate private assets of corporations, so that these private corporate assets may now be divvied up and divided among all those who run the corporations, whether they invested in it or not. By being executive officers, by being in positions of control, in positions of decision making, they themselves benefited themselves, but the source is ultimately the taxpayers' money of this province.
An Honourable Member: Not true.
Mr. Santos: Yes, it is true because the assets originally were public assets. The mandate of the legislation had been changed. It now becomes a matter for corporate profit. All this they call policy. They made up their minds that these people now in the private realm can now plunder the assets of what used to be a Crown corporation and convert the corporate assets into private personal assets. That is how money is made in this day and age of shares and stocks, bonds and all those instruments that are no longer productive in the sense of creating real goods and services for the people. All they need to do in order to make money is to sell it to some higher bidder, shares of stocks of Crown corporations being sold, and other corporations gulping another corporation, and the rest of them can run off with the profits. That is how money is made without effort.
If we get our government strong enough, it can only be strong when the public is aware of what is going on in the government if the people and the public are informed enough as to what is going on. Unless the public is informed, things happen inside veils of government secrecy and the people know nothing about it. The moment they awake and open their eyes, they see that they are in trouble already, and it is too late.
The sale of MTS, if it was done through an honest mistake by warmhearted people, would have been pardonable, but if it was done in cold-blooded deliberation to convert public assets into private corporate assets, that it can be divided among the participants, it is a conspiracy and a collusion among people in high places at the expense of the original owners of this Crown corporation.
They are now suffering. Manitobans who were employed by MTS are now being laid off. The people, clientele of this province, who are subscribers to MTS are suffering high rates, and the higher rates will be ever-increasing higher rates for the present and the future. The seniors of this province who can hardly afford a telephone system are being imposed upon to increase their rates, and the seniors need all these phones in order to have some kind of psychological stability for themselves when they want to call their relatives and their children and keep in touch with their grandchildren, and they can no longer afford to pay the rates. This is the quality of life that you are offering to our people? Is this what we want while we are in government? Are we to sustain the greed of some people to enrich themselves at the expense of all of us? That is not our function here. Our function is to protect the quality of life of Manitoba. Our function is to protect the interests of those who are weak in our society like the seniors, the sick, the disabled, the people who are the lower end in the social hierarchy. They need a government; they need Crown corporations; they need publicly invested Crown corporations to render them services, not to make money for the few who are already wealthy.
Of course, they gave the regional option to the Manitobans here of all levels of life, but these people, as soon as they see that there is a little margin, sell off their shares of stocks. Who are the buyers? The buyers are mostly those people in the stock markets, and they are no longer Manitobans. Madam Speaker, 80 percent of shares of stock of MTS is now in the hands of people who reside outside of Manitoba. These are the people who decide. Thank you.
Mr. George Hickes (Point Douglas): Madam Speaker, I rise to express my grievance on behalf of my constituents of Point Douglas. A majority of them are not wealthy enough to buy shares and benefit from the sale of MTS, but would have benefited greatly if we had the option of keeping it a public corporation instead of the private corporation it is today.
When I say that, I am amazed when I hear the opposition say, well, you know, it is a private corporation, and the directors and whoever benefited from bonuses and share options, that is entirely the option of the corporation as it is today. That is true. That is one of the big reasons why when I voted against the sale of MTS, I voted against individuals and companies reaping profits from a Crown corporation where those profits should go back into the company and should go back into the people of Manitoba.
When I say that, the profits of the MTS corporation when it was public were going towards expanding services to rural communities, such as individual phone lines. It was going to ensure that rates were kept low so that our senior citizens of Manitoba, of whom a majority in my constituency are on direct-fixed incomes--they view a telephone not as a luxury, but a real necessity for them to maintain a life of independence of their own.
When I say that, you look at a lot of the senior citizens that are in subsidized Manitoba Housing units, and a lot of them are very happy with the pensions that they are able to get from the governments. That is the only income they have. A lot of the seniors are aging and a lot of the seniors have medical problems, so when they need to phone a doctor or phone an ambulance in the middle of the night, they have to have access to a telephone. It is not a means of luxury, but a means of saving of one's life.
That is the whole point that I want to make here, like the whole concept of private versus public. Public, I said earlier, the profits and the intentions of the company are to keep the services available for the people that need it the most. When I say "people that need it the most," in other words, everyone shares. When I pay my phone bill here in Winnipeg where I reside, when it was a public corporation, I knew some of the dollars that I was using to pay my phone bill were being used for rural and northern Manitoba, and I felt good about the ability to share the few dollars I had to help keep the rates lower for rural and northern Manitoba.
One only has to travel to a few of the remote communities in northern Manitoba to realize the importance of a telephone. Under a private corporation, the onus on that corporation is not delivery of affordable phones for individuals who need it the most but to ensure that rates are returned to shareholders. That is the difference where we are coming from and I personally am coming from. I do not mind sharing a dollar to help someone else.
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Even if you look at the concept of Manitoba Hydro, that is the same thing. That kind of scares me because if we use the same justification to privatize Manitoba Hydro, a lot of our rural and especially our northern friends, family and individuals in a lot of those remote communities will not be able to afford to have the delivery of hydro to their homes. More and more of the communities are switching to electrical power, and I encourage the increased capabilities of other remote communities to modernize hydro services.
Why I say that is because right now a lot of the communities cannot even plug in a toaster and a kettle without blowing a fuse. If we have full services in those communities, then the families can have refrigerators, can have all the things that we take for granted when we leave this Chamber and go to our homes tonight. We take that for granted, but in a lot of those northern communities, they do not have those kinds of services. Even a lot of the houses do not even have hot water tanks for a decent shower or a bath. Is that the kind of Canada you see, the kind of Canada that is supposed to be a loving, sharing, compassionate Canada? That is not true. That is not the way I see my Canada. I see my Canada as us who have something share with others.
When I see the past record of the government, it kind of makes me a little uneasy because I know when I ran in the elections, I heard the government say that they would spend $600 million for capital for personal care homes. I heard that promise and as soon as the election was over, that was shoved aside, and now we see crisis in our hospitals and health care system because of that broken promise.
I do not know how many people here have mothers and grandparents, but I know my mother is 80 years old, and I would not want to see her lying in a hallway of a hospital. The only reason you are in the hospital is because you are sick or have had an operation, and if she is under drugs and stuff like that and covers come off her and she is lying there, that would make me very furious. I do not think that is the kind of health care system that we want for not only our families but for all citizens of Manitoba.
And the only reason, the only reason we have the crisis today is because of the--well, one of the major reasons, not the only one, but one of the major reasons is because of the broken promise of the $600-million capital to build personal care homes. That is a big, big factor. There are a lot of individuals who are in hospital beds who could be in personal care homes being properly looked after with dignity.
Also, when we heard the promise of keeping the Winnipeg Jets in Winnipeg, that was a promise that was made, and I heard it very clearly, that we will do everything to keep the Jets here in Winnipeg, and what happened shortly after the election? They are now in Phoenix.
So when we talk about public versus private, yes, what you are saying has a bearing of truth, that it is now a private corporation, and a private corporation can do what they want. That is why we stood in this House, and we challenged as strongly as we could to try and stop the sale of MTS because we were afraid that, once it is privatized, these certain things would happen that would not benefit all the citizens of Manitoba. It only benefits individuals that have the means to purchase shares.
I know a lot of my constituents do not have the means to buy shares in MTS, so they in turn will be paying higher and higher rates to subsidize the people that are well off. To me, that is kind of backwards, in my way of thinking, because I thought individuals that had the funds would share their funds to help people that are less off in times of need, but what we are seeing here is the people that have the least are having to share and give to people that are well off. That just kind of does not balance in my way of thinking. [interjection]
I know the member for Turtle Mountain (Mr. Tweed) just said, well, I do not know about that, but think about it. When MTS was a public corporation, the profits that went into the corporation did not go to individual people; it went to be shared by all citizens of Manitoba. Rural communities--
An Honourable Member: Are you suggesting that senior management should not be adequately paid?
Mr. Hickes: Well, when they were working for and employed by MTS, MTS as a public corporation, you did not hear them saying, well, I want to leave Manitoba, and I want a different job. They all had that choice. It they want to leave--if I am not happy with my situation here, I have that choice, and if I want to go, say, to Nunavut in April 1, 1999, I could go up there, and I could be making a lot more than what I am making here. But I am happy here because I have a sense of feeling that I could be, and I hope I am, making a contribution to the citizens of Manitoba and to the people of Point Douglas, so money is not everything. The individuals that you just mentioned, are they not entitled to raises and bonuses? Well, the individuals you are talking about, Bill Fraser earned a salary of $234,600. Now there are seniors at 817 Main Street that just get their pension and that is it. So you are asking them to increase their telephone bill, so Bill Fraser can get an increase of more than $234,000. How does that balance out in your way of thinking?
An Honourable Member: How much should he get?
Mr. Hickes: He was getting $150,577, and that is a pretty darn good salary. So, if that is the going rate for MTS, that is a fair rate, what is wrong with that $150,000? Why does he have to get a raise to $234,000?
An Honourable Member: Because that is the going rate now.
Mr. Hickes: If he was not happy with $150,000, I am sure there are other qualified people that would apply for a $150,577 job. I am sure they would be. But how come if these individuals were not happy at that time, why did they not leave? How come they were there when MTS was a public corporation? So what makes you think that they would have bolted, and they would have left Manitoba, and we would have been stuck with someone that could not run the corporation? Are you saying that these are the only individuals in all of Manitoba that have brains? Is that what you are saying? The rest of Manitoba--in Manitoba, we do not have qualified people to fill these kinds of jobs? Is that what you are saying? There is only a small handful of people that have those kinds of brains and qualifications? I differ with you. I think there are a lot of very skilled Manitobans that you should be giving credit to that could do a very adequate job that each of these individuals is doing, but the obscene part is that when you look at Bill Fraser, $150,577, his wage is increasing to $234,600 plus received a bonus of $93,900 when before he got $45,000, and then you go on in this list and you see James Fitzgerald, who received a raise of more than $10,000 to $135,000 and a bonus of $40,800. Well, who is paying for that?
Who is paying for that is the seniors that I have just spoken about that are on fixed pensions at 817 Main Street that I will stand up any day to defend and I will stand up any day to get some benefits. I will not stand up against the seniors from 817 Main Street or the northerners that are seasonally employed when they have to get a phone increase. This is the third increase that the telephone system is asking for, not executives take a little bit of a cut, take a little bit of less bonus, so that way we do not have to raise a senior's phone bill from 817 Main Street. No, they are saying we want to raise your phone bill so we can give these individuals that are making this kind of money an extra bonus or a raise in pay. How does that make any sense?
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If you look at Granville Lake, like telephones in Manitoba are not a luxury, they are a necessity. You know in Granville, they only have two telephones. That is all the community can afford for about 50 people. Do you know in South Indian Lake, there are only about 20 or 30 telephones because the other people only work seasonally and they cannot afford telephone bills?
So I tell the members opposite, look at the facts and look at what has happened and look at how you as a government, the government of the people, can you help the people of Manitoba and not just a few that have the money, that have the luxury of buying shares. Thank you, Madam Speaker.