Mr. Chairperson (Ben Sveinson): Will the committee please come to order. This afternoon this section of the Committee of Supply, meeting in Room 255, will resume consideration of the Estimates of the Department of Industry, Trade and Tourism. When the committee last sat, the minister had completed giving his opening statement to the committee, and I now call on the official opposition critic, the honourable member for Crescentwood, to make his opening statements.

Mr. Tim Sale (Crescentwood): Mr. Chairperson, I will not fill my entire–what is it, four hours?–30 minutes that I have. I would like to congratulate the minister, first, on his elevation to the ministry from the benches. I notice that he has not moved his seating location, but just his status. I congratulate the minister sincerely and wish him well in his new duties, however short they may be in duration.

Also, I would like to pay tribute, although they are not here but they will read it no doubt, to the staff of the department, who, I know, work hard to give advice and to try and work for the strengthening of the Manitoba economy. I know them reasonably well now after being in my position for the last four years. I think that Manitoba is well served by the staff of the department, and I want them to know that we value their work, as I am sure the minister also does.

I want to speak about a couple of basic issues in my introduction, and then we will deal with the detail in the actual line-by-line issues. The first issue I want to address is the issue of trade. The minister quite correctly yesterday cited the very good growth in exports that has taken place in the last approximately eight years that we have data for up to the present moment, from 1990 to 1998, the data I am looking at. There is no question that our total exports have grown sharply during that period of time. However, as the minister and the department usually fail to say, our imports have grown even more sharply, and they have grown for some structural reasons that I wish the department and the government would take much more seriously than it apparently does.

The 1995 election campaign, the Premier (Mr. Filmon) apparently had recognized the seriousness of the problem facing not just Manitoba, but all of Canada. Of course, in particular, it faces our province because we are even more trade dependent than many other provinces of Canada. The Premier, in his election material for the Conservative Party, made a commitment to reduce the dependence of Manitoba on the United States as an export market.

He obviously made that commitment for a very significant and, I believe, honest reason. That was that in 1995 we were already at the situation where approximately 72 percent of all our exports went into the United States market.

Now, as any economist, and I am not an economist, but as any economist will tell you and particularly a trade economist will tell you, that it is dangerous in the extreme to have excessive dependence on any one market for your exports because, as obviously can happen and has happened historically to us in this province, if the United States economy takes a bit of a dive, Manitoba's economy goes into a tailspin because we are so dependent on the United States as our chief export market.

So the Premier wisely, I think, and correctly identified trade dependence with the United States as a serious issue in 1995, and he committed himself to do something about that as something that he would accomplish in the term of office that is drawing to a close at the present time, hopefully, relatively soon.

He said he would reduce the trade dependence, and, of course, he did not want to lower our exports to the United States. I do not think he wanted us to export less. He simply wanted the United States to represent a smaller proportion of our total exports, and so the implication of that is that exports to other markets in the world would, of course, have to grow, and for his goal to be achieved, they would have to grow more quickly than exports to the United States. Otherwise, the percentage would not shift. We would still be just as vulnerable as we were.

Unfortunately, for whatever reasons–and I would like in our detailed discussion of the Trade Estimates to have the minister and his staff's views as to what the reasons might be–this strategy has been a complete failure on the part of the previous minister, the department, the province and the Premier (Mr. Filmon). In fact, what has happened over the period of time from 1995 to 1998 is that our export dependence has grown from 73 percent to 78 percent, and in the first six months of last year, we were in the alarming situation where the export dependence was over 80 percent. It fell back slightly in the last six months.

What that has meant–and I am sure the minister's staff will confirm all the numbers I am using because they all come from the Manitoba Bureau of Statistics and from federal export/import data–is that our imports from other countries have tripled from 1990, but our exports to other countries have grown by only $500 million or about 50 percent, less than 50 percent, in that same period of time. The net result of this is that when this government had its first full year in office–it would not really matter whether you went to 1989 or 1990 because the numbers are not much different, but taking 1990–we had a total trade deficit of $250 million. In 1998, our trade deficit had quadrupled, not just gone up by a few percentage points or even a significant percentage point, but it quadrupled to $1.51 billion. That ballooning took place particularly since 1993-94, but it is certainly a sharp deterioration.

Our trade deficit with the United States, again, far from shrinking, has gone up by 50 percent, more than 50 percent, from $986 million to $1.421 billion. So we are running a trade deficit with our biggest trading partner, and this is merchandise trade. This does not count what would be called the general accounts of the province which would include interest payments and that sort of thing. This is just measurable trade, services and goods. We are shipping $1.4-billion worth of scarce Manitoba capital and earnings out of our province to the United States to pay for a trade deficit, and in total we are shipping over a billion dollars out of this province for our total trade deficit. Obviously, the minister will understand that means our trade surplus with the rest of the world is about $400 million; our trade deficit with the United States, $1.4 billion, a net deficit of $1.051 billion in 1998.

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So I think that in discussion in Estimates, we have to get into some serious examination of why we are now in a situation where when you examine some American states, quite a few American states, in fact, are less dependent on the United States than Manitoba is, in terms of its exports. Look at California and New York. Look at the midwestern United States. Look at large areas of the American market that are less dependent on their own country, let alone any other country, than Manitoba is on the United States.

It is pretty clear from the trade disputes that have gone on and occupied a lot of our attention– whether it is softwood lumber or pork or durum wheat, it does not really matter much what it is–the United States does not have much interest in living by the spirit of international trading rules. They simply are prepared to be the elephant on the block and to enforce whatever they believe to be in the interests of their economy without much regard to the interests of anybody else.

I suppose that is understandable in a nation-state world, but for us to believe that somehow NAFTA has given us protection, we would have to be arguing that we would be in much worse shape, and, of course, we are in worse shape. So the argument presumably is that, if we did not have NAFTA, we would be in even worse shape than we are now. It is impossible on these numbers to argue that NAFTA has helped us to improve our situation.

Our situation, in fact, has deteriorated over the period of 1990 to 1998, deteriorated from 60 percent dependence on the American market for our exports to 78 percent. That is almost a 33 percent and certainly a 30 percent deterioration in our trade-dependent situation. So we will be raising that question, and I wanted to flag that in particular.

The second area that I wanted to talk briefly about was that I would like to have some discussion, and I am giving the minister notice, so that we will not have to go into a back and forth well-we-will-get-it-for-you process about the data that Manitoba uses to assess its tourism performance, as to why the data that Statistics Canada puts out in Tourist Scope are not the data that are used for Manitoba's determination of tourism activity.

There certainly is a variety of sources of data, but it is interesting to us that Stats Canada is the source for virtually every other nationally measured data that the province uses through its Bureau of Statistics, except in the case of tourism. So we would like to have some discussion of why that is the case.

Finally, Mr. Chairperson, I want to refer to the recommendations of the Manitoba Chamber of Commerce and the Winnipeg Chamber of Commerce and the Canadian Federation of Independent Business, all of whom suggest that governments are not terribly good pickers of winners. All of those organizations argue, both at the federal level and provincially, that governments ought not to be giving direct grant aid to companies, big or small, of any substance.

I do not think anybody has problems with assistance to go and show your wares at a trade fair, but concessionary loans, grants made, forgivable grants, forgivable loans, concessionary interest rates, it appears at least that the entire economic right is agreed that these are bad things. It appears at the same time that this government is committed to doing them. We would like to have some substantial discussion about why it is appropriate to give welfare to companies, while it is appropriate at the same time to take money out of the stomachs of Manitoba's hungriest children, particularly in light of the fact that we have the highest poverty rate in the country and particularly the highest child poverty rate. Given that the minister, I am sure, is aware of the tight correlation between childhood poverty and future economic potential, I am sure the Minister of Industry, Trade and Tourism (Mr. Tweed) is just as interested as we are in relieving poverty, because it clearly is a very costly strategy to have the highest child poverty rate in the nation. It costs us in terms of economic development, it costs us in terms of education, it costs us at the court level, it costs us in education, remediation, services such as those for fetal alcohol syndrome, the services we were talking about in the House today.

So, in light of that fact, that it seems that the government is more committed to corporate welfare than it is to child welfare, I want to start our debate off, just to kind of make it very clear where we are coming from, with a motion, Mr. Chairperson.

I therefore move, seconded by the honourable member for Dauphin (Mr. Struthers), that the expenditures of the Department of Industry, Trade and Tourism be reduced by $5 million specifically from appropriation 10.2(b)(3)(a) and that this amount be transferred to the Estimates of the Department of Family Services for the purpose of providing to all low-income Manitoba families the national child benefit supplement.

Mr. Chairperson: My ruling on that simply is this, that by Beauchesne 951: "It is not allowable to attach a condition or expression of opinion to a Vote or to change the destination of a grant."

So this particular motion is out of order.

Mr. Doug Martindale (Burrows): Mr. Chairperson, I appeal the ruling of the Chair.

Voice Vote.

Mr. Chairperson: The ruling of the Chair has been challenged. All those in favour of sustaining the ruling of the Chair, please say yea.

Some Honourable Members: Yea.

Mr. Chairperson: All those against.

Some Honourable Members: Nay.

Mr. Chairperson: In my opinion, the Yeas have it.

An Honourable Member: A recorded vote, Mr. Chairman.

Mr. Chairperson: Order, please.

Mr. Sale: He has called for a recorded vote.

Mr. Chairperson: A recorded vote has been requested. We will recess to proceed to the Chamber.

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

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

Hon. Mervin Tweed (Minister of Industry, Trade and Tourism): Mr. Chairman, I have with me at the table the Deputy Minister of Industry, Trade and Tourism, Mr. Murray Cormack and–

An Honourable Member: Mr. Jack Dalgliesh.

Mr. Tweed: I know Jack Dalgliesh. I am just trying to determine what–

An Honourable Member: Director of Finance.

Mr. Tweed: Director of Finance and Administration. I know that the honourable member expressed some concerns in regard to the trade issues, and I wondered if Alan Barber wanted to join us at the table now.

Mr. Sale: We will get to it. We will get to it quickly, but Mr. Barber is always welcome.

Mr. Chairperson: We thank the minister. We will now proceed to line 10.1.Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $508,600, on page 101 of the Main Estimates book. Shall the item pass?

Mr. Sale: Have there been any changes in this line in regard to senior staff in the last 12 months?

Mr. Tweed: I am advised, no, there has not been.

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Mr. Chairperson: 10.1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $508,600–pass. (2) Other Expenditures $71,300.

Mr. Sale: I notice throughout the Estimates that there are quite a number of places where the number for this year is absolutely identical to the number for last year. This would suggest that either last year was not needed or this year there are some minor reductions due to inflation or other cost changes. I know there have been input cost changes in computer services. Paper costs have gone up. I am aware of a number of other supply items that the price of which has not been stagnant, so how are we maintaining exactly the same amount of expenditure? Is service being reduced, or are we finding efficiencies? What is happening here?

Mr. Tweed: I am advised that this is one of the few examples where the costs have stayed the same due to varying costs and increases and decreases in some areas. I think it will be reflected throughout the budget that there are some increases in some lines and decreases in others.

Mr. Chairperson: Item 10.1.(b)(2) Other Expenditures $71,300—pass.

Item 10.1.(c) Financial and Administrative Services (1) Salaries and Employee Benefits $738,900.

Mr. Sale: I believe when I looked at the staffing at this branch that there may be an additional staff position. Is that correct? I have not got my staff chart in front of me.

Mr. Tweed: I am advised that there has been no change in staffing. By looking at the numbers for 1998-99, 1999-2000, it shows total salary and employee benefits for 14 FTEs.

Mr. Sale: Perhaps the minister could direct me to the page in the Supplementary Information that has the staffing line in it. I am looking at page 13.

Mr. Tweed: On page 15, subappropriation at the top, 10-1C.

Mr. Sale: There has been a fairly sharp increase in the salary line then of approximately $42,000 if my math is correct. What does this reflect?

Mr. Tweed: The increases, as I understand, were for a 2 percent pay increase effective April 1 and also the reduced workweek elimination which added an additional 1.9 percent.

Mr. Sale: Could the minister repeat the percentage addition?

Mr. Tweed: Mr. Chairman, the 2 percent pay increase effective April 1 and the 1.9 percent reduced workday.

Mr. Sale: I beg the pardon of the committee. I was conferring with my colleague momentarily, and I think I heard 4 percent explained. Four percent of 382 million is somewhere in the area of $15 million. The increase is $42,000; $15,000, $42,000. Where is the remainder?

Mr. Tweed: Mr. Chairman, along with the 2 percent and 1.9, there were certain merit increases that would be included in that total.

Mr. Sale: Would the minister table for the committee's sake the criteria on which merit increases are based in his department?

Mr. Tweed: I will see to that being brought back to this committee.

Mr. Sale: Was that a yes, Mr. Chairperson?

Mr. Tweed: Yes.

Mr. Chairperson: That was a yes.

Mr. Sale: If I am not mistaken again, the increases for those eight staff average slightly more than 10 percent in total. I am very concerned when individuals who are making quite a reasonable salary–I do not say it is excessive but a reasonable salary–are receiving increases of that level of magnitude when the vast majority of the civil service are being asked to stand still. I am wondering what standard does it play here?

Mr. Tweed: I am advised also that included in that increase is the merit for retaining staff with the information technology abilities and skills and the technology skills. That is part of the merit values that are put on the increases. As I said, Mr. Chairman, I would be happy to ask staff to bring back the listing for the merit increases.

Mr. Stan Struthers (Dauphin): I have a couple questions that I am interested in getting some answers to. It is also an opportunity for the minister to indicate some direction in terms of tourism in the Parkland. I have been in receipt of a letter from the Inter-Parks Tourism Board which is based in Roblin, Manitoba. The chair of the board pointed out several obstacles that their local board has come against insofar as offering tourist opportunities and actually getting some economic benefits for local Roblin, Russell, Grandview communities.

Mr. Chairperson: Order, please. Would the member for Dauphin indicate where he is in the Estimates here.

Mr. Struthers: Same place as the Chair is.

Mr. Chairperson: I do not believe you are. Do you have a page that you are working from?

Mr. Struthers: I do not understand what it is you are asking of me.

Mr. Chairperson: So far we have started out. We moved from 1.(b)(1) to 1.(b)(2). We are on 1.(c)(1) right now.

Mr. Struthers: If I am asking this on an improper line, could the Chair indicate a line in which I could ask this question, maybe at a later time, unless the minister wants to answer the question that I have, but that is up to you, Mr. Chairperson.

Mr. Chairperson: No, that is up to the committee, if they wish to move around. At this point we are on 1.(c)(1).

Mr. Sale: I have no problem with the minister. If the member would like to ask that question, then we can go back. I have no problem with the order.

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Mr. Tweed: I guess without having previous agreement or prior agreement, what we had planned because of the staffing and bringing deputy ministers in, we thought we would follow this and, again, if we know the schedule, then I can arrange to have the appropriate people available.

Mr. Struthers: Okay, I will wait my turn like a good representative. When the proper line comes I will ask those questions then. This at least will give the minister some heads up as to where I am going with the question. Thank you.

Mr. Chairperson: I thank the honourable member for Dauphin.

Mr. Sale: Just for clarification, are we still on (c)(1)?

Mr. Chairperson: We are.

10.1.(c)(1) Salaries and Employee Benefits $738,900–pass; 1.(c)(2) Other Expenditures $293,300–pass. 1(c)(3) Computer Services.

Mr. Sale: Mr. Chairperson, could the minister describe what computer services are being purchased through this line?

Mr. Tweed: That total figure relates to the internal computer services of the department.

Mr. Sale: Is this basically the desktop, the unified desktop or uniform desktop that was purchased from, I think it is ISM, I am not sure what the--SystemHouse ISM?

Mr. Tweed: Approximately $25,000 is budgeted for the desktop management. The rest is for the internal management, computer systems management.

Mr. Sale: I am puzzled by the answer. Is it then the case that the computer services are spread throughout the entire set of appropriations under other headings than Computer Services? The reason I ask that is that we are informed, in fact, we know, as a matter of fact, that the cost per desktop unit is in the order of $2,800 a year. Everyone has the same system now, and there are far more staff in the department than 10. So I am trying to locate where the SystemHouse contract services are shown in the Estimates.

Mr. Tweed: Mr. Chairman, I am advised that the SystemHouse purchases, indeed, are budgeted in each appropriation, and we can certainly provide that to the honourable member.

Mr. Sale: Mr. Chairperson, I would appreciate if the next time we meet there could be a total for services that are being purchased from SystemHouse pursuant to the desktop. If I can just expand a bit on this, it applies to this line somewhat, but I think only for probably maybe 10 stations or nine stations. I am not sure how many stations are covered here. I think it would be nine or 10. Maybe the minister could answer that, and then I will just move on to the next question. How many stations are covered here?

Mr. Tweed: I think rather than confuse the issue, I would be certainly prepared, Mr. Chairman, to bring the list of detail that the member has asked for.

Mr. Sale: I thank the minister for his response. If I could just then add a couple of other concerns that we have in regard to this contract, the contract is estimated, Mr. Chairperson, to be somewhere between $25 million and $30 million a year in total for all government departments, and it is now dispersed throughout government in a way that makes it extremely hard to track the expenditures to SystemHouse pursuant to the contract.

What we have been told by a number of staff from different departments is that SystemHouse has the right under the contract–and we are not disputing the right; we may dispute the wisdom, but not the right–to charge, using a fee schedule, for services over and above the basic desktop support. In other words, if they provide a help function for something not in the desktop contract, they are entitled to bill at a rate agreed to in the contracts, and there are other services for which they are entitled to bill over and above the base contract.

Our concern is the escalation of this contact's costs particularly now that SystemHouse is in a virtual monopoly provider situation, because we have largely eliminated our government departments' ability to do the services that are now contracted out, partly by giving SystemHouse some of those staff and partly by redeploying or laying off those staff.

So we would like to identify, as completely as possible, the total costs and the costs both for the base contract–some departments were twenty-eight hundred and something; some were twenty-six hundred and something. We would like to also identify the additional bills that have been paid in the past year or are anticipated over and above the base contract, which must be in the Estimates because all departments are using some services that are billed by SystemHouse on a separate basis. That is what we are asking for, Mr. Chairperson.

Mr. Tweed: Mr. Chairman, as stated earlier, we will certainly endeavour to get the information and provide it to the honourable member.

Mr. Sale: Mr. Chairperson, could we then pass this, subject to the agreement that we can come back and discuss it when the information is supplied and the information will come prior to the close of the Estimates?

Mr. Chairperson: The minister has agreed. Item 1.(c) Financial and Administrative Services (3) Computer Services $110,000–pass.

10.1.(d) Research and Economic Services (1) Salaries and Employee Benefits $506,500–pass.

Mr. Sale: Here we have a decrease of $38,000. Could we have some clarification as to the source of the decrease?

Mr. Tweed: Mr. Chairman, I would just refer the honourable member to page 17 where it identifies that we have reduced one full-time employment, one person.

Mr. Sale: I am on that same page. I was wondering if the minister could tell us what the new different function was and where the staff was transferred to.

Mr. Tweed: I am advised that that person was transferred to the Industry Development Division.

Mr. Sale: Then this does not actually indicate a reduction overall FTE. It is just a transfer.

Mr. Tweed: That is correct.

Mr. Sale: This division, as Mr. Cormack and Mr. Dalgliesh as well, and certainly Mr. Barber know very well, sort of came into being in a fresh way a few years ago when the department was trying to focus its ability to provide strategic direction for exporters in particular in dealing with trade and international trade. Could we have some clarification as to what the actual results are? Give us some ideas of the outputs of this division that are helping Manitoba companies to be more strategic in their export functions. If Mr. Barber would like to join us, that would be just fine.

Mr. Tweed: I am wondering, Mr. Chairman, if I could invite Mr. Barber to join us at the table.

Mr. Chairperson: Would the minister introduce his staff that is joining us.

Mr. Tweed: The Director of Research and Economic Services, Mr. Alan Barber, has joined us.

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Mr. Sale: Let me just clarify for the minister. I have the book, and so I am quite capable of reading what is in the book. What I would like is perhaps a fuller explanation of the kind of products, perhaps an example of something that has been done by the branch that is not policy sensitive that could be shared. I would simply like to know the kind of work that is being done.

Mr. Tweed: I am advised that this group basically develops and advises the department on trade policy and that the examples I think that the member might be looking for could be dealt with better under Manitoba Trade.

Mr. Sale: I am puzzled a bit by the minister's answer. They work in this division. I know they serve the government. I do not mind deferring the question, but I am not clear as to why it would be better asked under Trade, with Mr. Barber here, than it is asked here.

Mr. Tweed: Mr. Chairman, I am advised that this particular expenditure is dealing particularly or specifically to advice given to the department and to myself in terms of, I guess, tangible references or identifications. It would be again a little–I think they do, again, things like work on internal trade agreements. I can read if the member would like. It is just–perhaps I will. What might help is the fact that–

Mr. Sale: If the minister wants to just provide a copy of a partial note at the end of the day or tomorrow, I have no problem with that. I do not want to delay things unnecessarily if that would be easier.

Mr. Tweed: I think just, and I will be very brief, but just to basically, and then if the member suggests that he would like a full document. We have one trade policy staff. He serves on international trade policy issues. Examples would be with Canada, U.S., FTA, NAFTA. We have an economic analysis, and that person, it is a consultant position. It is focused on federal-provincial intergovernmental co-operation activities as well as providing analysis on economic development issues, including urban economic development issues.

We have a person for science and technology matters who works closely with staff on the EITC, the Economic Innovation and Technology Council, serves on the standing committee on science and technology, supports the work of western science and technology ministers and the Canadian science and technology ministers, oversees the Manitoba Centres of Excellence program. Research and informational staff provide research support to the department of economic development through monitoring Manitoba's trade performances and responding to requests for Manitoba trade statistics, charts, and graphs. That person oversees an annual survey of Manitoba businesses which does provide database information to produce a listing of Manitoba's manufacturing and service capabilities for investment promotion and trade development.

Planning and policy: one person provides support to departmental planning and evaluation processes, assists in the co-ordination of sector planning. Project Co-ordinator I is responsible for planning, developing, and implementing an effective, strategic, and measurable communications program which will convey the department's mandate, initiatives, and achievements to interested economic development stakeholders, including staff within the department. One administrative secretary provides clerical secretary research support. One director provides overall direction and support to the branch activities. In addition, that person serves as the international trade representative for Manitoba under the agreement on internal trade as well as provincial trade representative for the federal-provincial consultations.

Just to finish off, I guess with the question about the measure of performance, the branch is primarily a staff unit and is essentially responsible to requests from the executive of the department. Its performance is measured in general terms by the accuracy, relevance, timeliness and quality of the information and advice that it provides.

Mr. Sale: I thank the minister for that explanation. Does the government department have any specific objectives in relation to changes or amendments, whatever they might be called, to the internal agreement on trade at this point? Are there specific things that the government is working on to strengthen that agreement?

Mr. Tweed: Mr. Chairman, I can certainly get into the specifics, but the agreement did create an obligation to continue negotiations on the issues and it laid out several issues. I can certainly list them for you if you like, but one of them that has been brought to my attention was just the recent conclusion of the MASH negotiations, and there are other issues that were agreed upon at the time.

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Mr. Sale: Mr. Chairperson, could the minister indicate what the priorities are for either extensions or clarification of that agreement? The minister, I am sure, is aware there is a major dispute currently between Ontario and Quebec in regard to employment and import-export from Quebec to Ontario and vice versa. There have been in the past impediments in Manitoba in terms of, for example, transit buses, which have caused problems. What are the issues today that you are working on in regard to the agreement on internal trade?

Mr. Tweed: Mr. Chairman, some of the issues that are currently under negotiation would be clarifying the code of conduct on investment; the labour-mobility issues the member has brought up; the procurement of Crown corporations brought under the agreement; and as you have mentioned in regard to the MASH sector, we are hoping that the transit issue will be dealt with under the MASH agreement.

Mr. Sale: Could the minister be more specific about the code of conduct on investments, which is something I referred to in Question Period today and is referred to by all business groups as an ongoing irritant? Yet all provinces feel themselves trapped by each other's practices. Certainly, I know from businesses, who have spoken to us about the level of inducement offered by many American states, it makes it extremely difficult for people to live up to the letter of the AIT and the intention of it. How are we going about this particular thorny issue?

Mr. Tweed: I think we are all aware that there are many issues involved in these negotiations. One of them that has been suggested to me is an example of when a corporation or a company has several operations and makes a decision to consolidate these operations, is there anything that is being put on the table as leverage for consolidation. Spending by municipalities is currently not covered. That is one of the things that we are negotiating as far as we have the provinces agreeing on certain issues but the municipalities choosing to go a different direction. So that is another issue that is being negotiated.

Mr. Sale: Mr. Chairperson, recently the Angus Reid Group was given some assistance in locating here or expanding its operations here. I know there are other sections in Estimates where this might come up, but this is an example of, essentially, inducement. How does the inducement offered to Angus Reid work under the AIT framework? It seems to me it is in contradiction.

Mr. Tweed: Mr. Chairman, I would hope that we would be able to provide more information when we get under the call centres, but I am led to believe that the inducements that are offered are for new business opportunities, not basically taking one business away from another province or community. I guess that is how the system works and does not interfere with the agreement.

Mr. Sale: Mr. Chairperson, maybe we could clarify that issue. It is a long time since I read the AIT. None of us were planning to be in Estimates this week.

Is the minister saying that there is a clear distinction in the AIT between expansion and relocation, that the AIT only prohibits inducements to relocate but not inducements to locate and expand?

Mr. Tweed: The wording in the code actually does state "relocation."

Mr. Sale: Mr. Chairperson, it is wonderful to have agreements through which Mack trucks can be driven at will. That is, I think, the one thing that could be said about that.

I want to ask the same questions in regard to NAFTA and particularly–the minister perhaps would not recall, but two years ago sidebar agreements were entered into on labour and the environment, which I think the other signatories to NAFTA do not believe are binding, and I do not honestly think we believe they are binding either. Is it the view of the department that the labour and environment side agreements on NAFTA are binding agreements that actually have force and effect under the NAFTA treaty?

Mr. Tweed: I am advised that the side agreements are not formally linked to NAFTA. They are separate, and the obligation in the agreement is basically that if they fail, there is a panel that will review them, and if they have not met it, they will provide them with an action plan to fix, and if they do not meet those–I guess it would be if they do not comply to the action plan–there is a system where they can be fined.

Mr. Sale: I wonder if the minister has had any opportunity in any of his other lives, before this particular one, to visit the maquiladora corridor in northern Mexico along the American border south of Tijuana, in that area.

Mr. Tweed: No, unfortunately, I am not the world traveller that perhaps the member for Crescentwood is.

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Mr. Sale: I regret in some ways to say that I have not been there either. I guess I have seen a fair amount of video and other material from that corridor, but I have not been there. I would like to visit very much.

The evidence seems to be overwhelming that the environmental and labour conditions in the corridor are substandard by virtually any measure, certainly far below American standards, and American standards are higher than Canadian in most areas of the environment. There are many, many documented reports of failure to allow workers to bargain collectively, failure to enforce the most rudimentary of labour laws, whether it is safety issues, whether it is hazardous working conditions, whether it is protection against unreasonable discharge, arbitrary discharge, you name it. The companies that inhabit this corridor are widely believed to have very little regard for either the environment or fair labour practices.

Now, I do not want to get into a debate about the virtues or nonvirtues of unions because this province, through its previous minister, signed an agreement that is essentially in line with the International Labour Organization's, ILO, criteria for fair labour practices, and it signed an agreement that said that it would bind itself to environmental standards that were at least at a reasonable level, and the maquiladora corridor, by any fair assessment, is in flagrant disregard. There are many, many, many documented reports of labour organizers in Mexico being tortured and killed. Those reports are on ILO's records and have been for a long time.

So I am curious to know whether the minister is aware of whether Canada has registered any complaints that the staff of the department are aware of under the sidebar agreements, particularly with regard to the maquiladora corridor or Mexican labour and environmental practices in general.

Mr. Tweed: Mr. Chairman, I am advised that we have no knowledge of any complaints or issues being brought forward by the Canadian government at this time.

Mr. Sale: Mr. Chairperson, if you examine our trade with Mexico, you will see that it is a relatively small amount, and it goes up and down quite a lot. It is very, very variable.

We do, however, import a good deal of Mexican food, and, certainly, it is difficult to tell what of the manufactured goods that we import, particularly electronic goods, are manufactured in the corridor versus in Mexico or in the United States, because much of what comes out of the corridor is labelled as American. In fact, it is made in Mexico under the corridor agreement, and it is made at excruciatingly cheap wages and excruciatingly bad working conditions and environmental pollution often that we would wince if we saw it. If the minister could see some of the statistics and videos on this corridor, I think we would understand why I would say that.

Has Manitoba any concern about the violations of the sidebar agreements, particularly in the corridor?

Mr. Tweed: We certainly see Mexico as a high priority for our province, and we did have an increase last year in exports to Mexico of 14 percent. We, I am advised, have not had any of these particular issues brought to our attention at this point.

Mr. Sale: Mr. Chairperson, the whole issue of trade, fair trade and protectionism, is a very difficult issue, and it has always been a difficult issue. I am looking at the imports by selected countries and exports by selected countries to I hope the end of 1998. I think that is what I have got. No, I do not. I have the third quarter.

In any case, what I am looking at is the third quarter. We are looking at a reduction in imports from Mexico of some 38 percent during that time and exports to Mexico during that time, a growth of 26 percent. This bumps up and down. As the minister, I am sure, will see if he looks at some year-over-year comparisons, it is extremely variable. I suspect that is because a lot of what we buy are seasonal agricultural products, and sometimes the Mexican market is the cheap supplier and sometimes California is. So it varies with weather and agricultural imports for the most part.

Essentially, the difference between Europe's view and the NAFTA agreement is the difference between a group of countries that believe in having a labour and social and environmental code to which all members have to belong, and those standards are the same for all in the European Common Market. In the NAFTA situation, we have three different environmental standards that are official standards, plus we have a total abandonment of any concern for standards in the maquiladora corridor. It is essentially the economic dislocation of costs. We give those companies an artificially low cost. Yet they have the same free access to our market as our goods and services or American nationally produced goods and services do.

The NDP and, in general, socialist parties around the world have always supported fair trade. I do not know of a socialist country that has stood against international fair trade. I am talking about western socialist countries. I do not want to get into a big debate about old Communist-failed regimes. That is not the issue, but I want to make it clear that we are not talking about a point of view that does not value fair trade. We value fair trade, but we do not value a situation where countries allow a piece of their country to be used as a cheap base, environmentally cheap from a labour perspective, to essentially hide the costs of production in horrible wages and working conditions for our brothers and sisters in northern Mexico.

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I would hope the minister would have the same view because it seems to me that from a Conservative economic perspective this is not desirable either. It may be for different reasons, but it is not desirable to have companies being given artificial subsidies by not having labour standards enforced.

My long-range question, and this is one the minister may want to come back with an answer later about, is: Are our three countries moving in any kind of way towards standards that would be enforced in all three countries that would have at least some level of equivalency, so that the costs for doing business are truly similar in the three countries and that the difference will then be productivity and real advantage as opposed to the artificial advantages of having a labour code and no environmental code worthy of the name?

Mr. Tweed: I agree with the honourable member that we as a province and, I would suggest, as a country do want fair trade. I am led to believe that the actual regulations of the agreements are very similar. It really deals with the enforcements of the regulations, and we have participated in the side deals again to try and bring the enforcement side up to speed. The differences are very few and small. In our minds it seems to be in the actual application of the guidelines.

Mr. Sale: I think that is exactly the point, Mr. Chairperson, that there is virtually no enforcement in that particular area. In fact, there is not just no enforcement, there is active uninforcement, if I might put it that way, that the rights of labour are actively deterred, the rights of the environment are actively ignored. It is not simply a question of gosh, we should hire a few more inspectors. It is a policy to keep that corridor cheap and dirty because it is a great subsidy for exports from Mexico. I know Mexico faces many, many economic challenges, but we are not collectively better off when we engage in that kind of subsidy at the cost of workers and the environment.

I wonder if the minister can tell the committee what current measures are being taken to deal with the failure to enforce fair labour practices and sound environmental practices, particularly in the Mexican situation.

Mr. Tweed: I am advised, as we had discussed earlier, that we are not aware of any cases that Canada has at this particular time, but apparently the United States has a number of cases that they have directly with Mexico, and they are using the side deals to work on the provisions for enforcement of the regulations.

Mr. Sale: Would the minister undertake to identify, through his staff, the imports coming into Manitoba that are sourced in the maquiladora corridor, and would he–let me clarify for the minister. I am not asking him to bring that information here. I am asking him to undertake to identify the kinds of things that would be coming into Manitoba from the corridor, and would he undertake to become aware of the issues in this area that might bear on the abilities of Manitoba employers, companies and workers to compete fairly against what I believe is unfair trade and competition? To be clear, I am not asking the minister to comment here, to come back with this, but simply as a matter of his own activity, to become aware of this and to raise this issue through his officials at the appropriate quarters.

Mr. Tweed: I can assure the honourable member that I will make myself very aware of this issue.

Mr. Sale: I thank the minister for that. I want to ask a process question. I do want to explore the trade question that I raised in my brief opening remarks. I do not mind if we do it here or under the Manitoba Trade section. I am sure Mr. Barber has much to contribute to that. I do not want to keep him in two different places, so it is really up to the committee whether we do it here or under Trade, and I do not mind.

Mr. Tweed: Mr. Chairman, I am advised if we could do it under the Trade issues, if that would be suitable to the member.

Mr. Sale: 10.1. Administration and Finance (d) Research and Economic Services (1) Salaries and Employee Benefits $506,500–pass; (2) Other Expenditures $173,300–pass.

10.1.(e) Manitoba Office in Ottawa (1) Salaries and Employee Benefits $211,200–pass; (2) Other Expenditures $116,400–pass.

10.1.(f) Manitoba Bureau of Statistics (1) Salaries and Employee Benefits.

Mr. Sale: Mr. Chairperson, is Mr. Falk here?

Mr. Tweed: No, he is not. He is away at this time.

Mr. Sale: Again, to the minister: Do you want to defer this until Mr. Falk is here, or do you want to just carry on and deal with it without him?

Mr. Tweed: We could carry on, Mr. Chairman, I think.

Mr. Sale: I have a number of questions in this area, and that is why I asked whether the minister wished to defer. I notice there has been one addition, and that is in the area of the Policy Impact Simulation Model Initiative. Mr. Falk was kind enough to share with my caucus the previous model that was used, and I wonder if the minister would agree to having Mr. Falk and his staff share this new initiative and the new model that is evolving out of that initiative with our caucus and research staff.

Mr. Tweed: Mr. Chairman, we would certainly be glad to provide a demonstration if the honourable member wishes.

Mr. Sale: Mr. Chairperson, I think our research staff would probably appreciate that, and I would certainly so. I thank the minister for that.

I have a concern that I want to raise in regard to the way in which trade is reported. It has to do with the fact that virtually every economist and certainly every economic text that I have ever seen indicate that the underlying issue in trade for any economy is the trade surplus or deficit. Yet the publications of the department certainly provide the data on which you can calculate trade surplus or deficit, but they do not ever comment on it.

I think it is difficult when bureaus of the department or bureaus of any government, whether it is StatsCan or MBS or whoever it is, begin to comment on data in a way that borders on the political as opposed to the factual.

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I think that the minister's job and maybe the deputy's job is to celebrate Manitoba's successes and to be able to be accountable for Manitoba's weaknesses. That is what any government has to do. But I do not think it is the job of the Manitoba Bureau of Statistics to become that kind of a commentator, and I have noticed over the past few years that it is beginning to sound more like a commentator's view than to sound like the kind of dry statistical reporting that we have come to know and love from Manitoba Bureau of Statistics.

I want to raise that concern. The evidence for me is that certain things are not reported on, and the trade balance is a critical item. I am sure the deputy and his economic staff would agree that, from an economic perspective, exports are interesting, imports are interesting. The bottom line is, is there a balance there? Are we running a surplus that we can then use to our benefit, or are we financing a deficit that is costing our economy in terms of capital that is being exported to pay for it? So I wonder why MBS does not ever publish trade deficit, trade surplus, and trade trends in regard to deficit and surplus numbers.

Mr. Tweed: Mr. Chairman, I am advised that this is probably new to being brought to our attention, but I might also suggest that, when we report the numbers, we do show the exports and the imports. The person reading the data can get to that number that he wants, and also, if he chooses to interpret it, it is really up to the individual to in what way he would interpret it.

Mr. Sale: I want to ask the minister to ask his staff to look at what Stats Canada does. I believe he will find that Statistics Canada does, in fact, report surpluses and deficits, both in the merchandise account and the national accounts basis. There are probably half a dozen ways of recording surpluses and deficits in different aggregations of trade, whether it is tourism, whether it is manufacturing, whether it is financial services, or whether it is overall balance of accounts. I think you will find there are lots of StatsCan reports that do that, but I do not find any in Manitoba. I do not think that is wise, because essentially what you are doing is running the risk of politicizing the bureau that provides data that everybody–government, opposition, ordinary community members, research bodies–all of us use these data and we have to depend on these data being impartial and being complete. So, without criticizing the quality of the work that is done, I want to raise a real concern that we are not seeing the full picture in many of the MBS reports now. I am worried about that trend.

Mr. Tweed: I would offer to the member for Crescentwood (Mr. Sale) that our department will endeavour to check with other jurisdictions in Canada to see how they deal with this particular question and issue. I can advise the member that the reason I understand that Canada shows the deficit or surplus is that Canada as a nation has to finance it if there is a deficit. Therefore, they have to show it through their national accounts.

Mr. Sale: Mr. Chairperson, that is no less true of Manitoba as a province. We essentially finance our trade deficit by the export of our capital, Manitoba capital. It is still Canadian dollars, that is absolutely true, but our economy has a net outflow of dollars to pay for its trade surplus. Otherwise, we would have more money to invest in capital investment in Manitoba; we would have more money to invest in all kinds of things. We do not because we ship that money out to pay for our trade deficit.

Mr. Tweed: Mr. Chairman, I am advised that if we take into account goods and services in the province of Manitoba, we would not show a trade deficit.

Mr. Sale: Mr. Chairperson, I hope that is the case. Certainly, the minister's advice, I am sure it is accurate. Where are the numbers that show that to be the case? They are not in Manitoba statistics, at least not that I am aware of, so if the minister could perhaps at our next meeting bring a report from MBS that shows that overall balance-of-accounts approach, that would be helpful.

Mr. Tweed: Mr. Chairman, I am advised that–and I would agree with the member's earlier statements about reading statistics and numbers that sometimes we all need a little help in deciphering them. I am led to believe that those numbers are in the data, but we will endeavour to disseminate them for the benefit of the member and myself and report back.

Mr. Sale: I appreciate that, and I thank the minister for his answer. I do have another area in which I am equally concerned, and this is an area that staff will remember from last year. It has to do with employment and unemployment. It is the question that I raised last year in regard to the Canada labour survey which is a federal survey, not Manitoba, so I am not blaming Manitoba, but I made the point last year, and I will try to make it briefly again for the minister, that if you do not count Status aboriginal people and Status aboriginal people are the same proportion of every province, then the failure to count them probably will not distort unemployment data that much. It will be wrong for everybody, but it will be wrong by roughly the same amount, assuming the economic conditions aboriginal people face are roughly the same across the country, which is arguably true.

The fact that Saskatchewan and Manitoba both have a very high proportion of Status aboriginal people in their workforce means that the failure to include them does significantly distort our unemployment picture vis-a-vis other provinces. The reason is pretty simple that if 10 percent or 15 percent of our province's workforce is aboriginal and not counted, that has a much bigger affect on the bottom-line number than if 2 percent or 3 percent of our province is aboriginal and not counted. That is the case, for example, in Ontario where in Ontario the aboriginal population is about a third of the proportion that it is in Manitoba.

Now, I made this criticism last year, and I want to emphasize to the minister it is not a partisan consideration. I would make exactly the same observation about Saskatchewan. The reason Manitoba and Saskatchewan and, to a lesser extent, Alberta have very low unemployment vis-a-vis the rest of the country is that we have a much higher proportion of our vulnerable workforce that is not counted. It is not surveyed. I asked last year if there would be some willingness to deal with that issue, to at least address it with StatsCan because it distorts our self-understanding of our own economy.

Mr. Tweed: Mr. Chairman, I certainly listened and accept the member's comments as something that we can, as provinces and working with the federal government, continue to work and advance the case of how the reporting should be presented to the people.

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Mr. Sale: Mr. Chairperson, could the minister indicate specifically at what meetings, via what correspondence or using what processes this concern was raised in the past year by his department to the federal government, and would he table that information?

Mr. Tweed: I would ask the honourable member if he would allow me to ask Mr. Falk to present us with that information, and I will bring it back to committee.

Mr. Sale: Would the minister also ask Mr. Falk or whoever in his department would be the appropriate person to provide an estimate of the unemployment among status aboriginal people based on whatever sources of data are available and recognizing that these data may be softer than the labour force survey data, but at least an approximation?

Mr. Tweed: I will endeavour to find whatever information that we have available to us and bring it back to committee.

Mr. Sale: At the same time I am being critical about these two very important issues, I want to compliment the bureau on the timeliness of its data and the introduction of the website that is I think developing very well and I think is a real boon to people who are wanting to source data quickly, because, increasingly, it is hard to find human beings at the other end of phone lines. At least on the Internet you can find what is available and then if you still do not have it, you can try and find a real live human to ask a question of.

I will say that Mr. Falk is incredibly accessible and I appreciate that very much. I know that I can phone him and ask a technical or a stupid question, and they are usually about in the same percentage on my part, and he is always patient and he is always accessible, and I would want to ask the minister if he would pass on that support that I have for the work of the bureau.

Mr. Tweed: I, too, would echo the comments of the honourable member. I have read Mr. Falk's reports as the sitting MLA for Turtle Mountain, and now that I have taken on new responsibilities, I can attest that the information that he brings forward is always good and accurate and prompt. I would be more than happy to pass on, on behalf of all of us, the good work that is being done by that department.

Mr. Sale: Mr. Chairperson, on the understanding that we will come back with information during the Estimates process, I think we could move through this.

The Acting Chairperson (Mr. Faurschou): All right, very good. Item 10.1(f) Manitoba Bureau of Statistics (1) Salaries and Employee Benefits $664,300--pass; (2) Other Expenditures $256,000--pass. (3) Less: Recoverable from other appropriations ($60,000).

Mr. Sale: I ask this question every year and I forget to write it down, but I have my pen in my hand. What appropriation does this come from, Mr. Chairperson, and what is the nature of the recovery?

Mr. Tweed: I am told that it is for the sale of publications and for the other work that the bureau does for other departments within government. The sale of publications.

Mr. Sale: You learn something every day. So are we actually recovering this then from what used to be Queen's Printer? They are paying you fees, or are these recovered directly into the department?

Mr. Tweed: Just as an example, if he were to use that simulator project with another department, there would be some cost recovery for that.

Mr. Sale: So this is an estimated net figure then. It is not a specific transfer from a specific appropriation.

Mr. Tweed: Yes, Mr. Chairman, that is correct.

The Acting Chairperson (Mr. Faurschou): Item 10.1.(f) Manitoba Bureau of Statistics (3) Recoverable from other appropriations ($60,000)–pass.

Item 10.1.(g) Grant Assistance - Manitoba Horse Racing Commission $164,500–pass.

Mr. Sale: Mr. Chairperson, why do we not call it five o'clock, given that there is probably some other staff and it is three minutes to?

The Acting Chairperson (Mr. Faurschou): We have a request that it be called five o'clock. Do I have unanimous consent?

An Honourable Member: No.

The Acting Chairperson (Mr. Faurschou): We do not.

Mr. Kevin Lamoureux (Inkster): I also believe, Mr. Chair, you are going through the lines.

Mr. Sale: He is just not giving consent to calling it five o'clock .

Mr. Lamoureux: Just keep going.

The Acting Chairperson (Mr. Faurschou): We are now proceeding to item 2.(a) Industry Development - Consulting Services. Line (1) Salaries and Employee Benefits $2,338,000.

Mr. Sale: Mr. Chairperson, this is an area in which we have a fair amount of concern about the specific grants, particularly under (b), but under (a), I am wondering whether there have been any changes in structure or duties in terms of the consulting services of the department in the past year.

Mr. Tweed: The only change that I am aware of in the structure is that we have moved a person from research into the consulting services.

Mr. Sale: I note that the increases here in a professional-technical area are much less than the increases in the other area that we discussed earlier which were in the order of 10 percent. The increases here, although it is difficult to calculate them exactly with the additional FTE, would be probably in the order of 5 percent, 4.5-5 percent. What is the difference here?

An Honourable Member: That ought to get us to five o'clock.

The Acting Chairperson (Mr. Faurschou): The hour being five o'clock, stand adjourned. Committee rise.