Second Session - Thirty-Sixth Legislature

of the

Legislative Assembly of

Standing Committee on Public Utilities

and

Natural Resources

Chairperson Mr. Frank Pitura Constituency ofMorris

Vol. XLVI No.5- 6:30p.m., Tuesday, October 29, 1996 MANITOBA LEGISLATIVE ASSEMBLY Thirty-Sixth Legislature

Members, Constituencies and Political Affiliation

Name Coostltnrnq P.ar4 ASHTON, Steve Thompson N.D.P. BARRETT, Becky Wellington N.D.P. CERILLI, Marianne Radisson N.D.P. CHOMIAK, Dave Kildonan N.D.P. CUMMINGS, Glen, Hon. Ste. Rose P.C. DACQUAY, Louise, Hon. Seine River P.C. DERKACH, Leonard, Hon. Rob lin-Russell P.C. DEWAR, Gregory Selkirk N.D.P. DOER, Gary Concordia N.D.P. DOWNEY, James, Hon. Arthur-Virden P.C. DRIEDGER, Albert, Hon. Steinbach P.C. DYCK, Peter Pembina P.C. ENNS, Harry, Hon. Lakeside P.C. ERNST, Jim, Hon. Charleswood P.C. EVANS, Clif Interlake N.D.P. EVANS, Leonard S. Brandon East N.D.P. FILMON, Gary, Hon. Tuxedo P.C. FINDLAY, Glen, Hon. Springfield P.C. FRIESEN, Jean Wolseley N.D.P. GAUDRY, Neil St. Boniface Lib. GILLESHAMMER, Harold, Hon. Minnedosa P.C. HELWER, Edward Gimli P.C. HICKES, George Point Douglas N.D.P. JENNISSEN, Gerard Flin Flon N.D.P. KOWALSKI, Gary The Maples Lib. LAMOUREUX, Kevin Inkster Lib. LATH LIN, Oscar The Pas N.D.P. LAURENDEAU, Marcel St. Norbert P.C. MACKINTOSH, Gord St. Johns N.D.P. MALOWAY, Jim Elmwood N.D.P. MARTINDALE, Doug Burrows N.D.P. McALPINE, Gerry Sturgeon Creek P.C. McCRAE, James, Hon. Brandon West P.C. McGIFFORD, Diane Osborne N.D.P. MciNTOSH, Linda, Hon. Assiniboia P.C. MIHYCHUK, MaryAnn St. James N.D.P. MITCHELSON, Bonnie, Hon. River East P.C. NEWMAN, David Riel P.C. PALLISTER, Brian, Hon. Portage Ia Prairie P.C. PENNER, Jack Emerson P.C. PITURA, Frank Morris P.C. PRAZNIK, Darren, Hon. Lac du Bonnet P.C. RADCLIFFE. Mike River Heights P.C. REID, Daryl Transcona N.D.P. REIMER, Jack, Hon. Niakwa P.C. RENDER, Shirley St. Vital P.C. ROBINSON, Eric Rupertsland N.D.P. ROCAN, Denis Gladstone P.C. SALE, Tim Crescentwood N.D.P. SANTOS, Conrad Broadway N.D.P. STEFANSON, Eric, Hon. Kirkfield Park P.C. STRUTHERS, Stan Dauphin N.D.P. SVEINSON, Ben La Verendrye P.C. TOEWS, Vic, Hon. P.C. TWEED, Mervin Turtle Mountain P.C. VODREY, Rosemary, Hon. Fort Garry P.C. WOWCHUK, Rosano Swan River N.D.P. 101

LEGISLATIVE ASSEMBLY OF MANITOBA

THE STANDING COMMITTEE ON PUBLIC UTILITIES AND NATURAL RESOURCES

Tuesday, October 29,1996

TIME- 6:30 p.m. Mr. Sel Burrows, Private Citizen Mr. RodFritz, President, International Brotherhood of

LOCATION- , Manitoba Electrical Workers, Local435 Mr. Lance Norman, Manitoba Chamber of Commerce CHAIRPERSON- Mr. Frank Pitura (Morris) Ms. Mary Pankiw, President, Manitoba Society of Seniors VICE-CHAIRPERSON - Mr. Gerry McAlpine Ms. Emile Clune, Private Citizen (Sturgeon Creek) Ms. Holly Cain, Private Citizen

ATTENDANCE -10- QUORUM - 6 WRITTEN SUBMISSIONS:

Members ofthe Committee present: Mr. Bud Shiaro, Selkirk, Manitoba Ms. Paula Mallea, Brandon Committee, Save Our Hon. Messrs. Cummings, Ernst, Findlay, Hon. Mrs. Telephone System Mitchelson Mr. John Nicol, President, Union of Manitoba Municipalities Messrs. Ashton, Dewar, McAlpine, Pitura, Sale, Mr. Ron Rudiak, Retiree, MTS Tweed Mr. William Sharpe, Steinbach, Manitoba Mr. Eduard Hiebert, St. Francois Xavier, Manitoba WITNESSES: Mr. Ross C. Martin, President, Brandon & District Labour Council, CLC Mrs. Theresa Ducharme, People in Equal Participation Ms. Martha Owen Inc. Ms. Winnie M. Chanas Mr. Bud Shiaro, Private Citizen Ms. Maggie Hadfield, Communications, Energy and Ms. Shelly Blanco, Private Citizen Paperworkers Union of , Local 55 Ms. Paula Mallea, Save Our Telephone System Ms. Mary Pankiw, President, Manitoba Society of Mr. AI Mackling, Private Citizen Seniors, 'Inc: Mr. John Nicol, President, Union of Manitoba Municipalities MATTERS UNDER DISCUSSION: Mr. Ron Rudiak, Private Citizen Mr. William Sharpe, Private Citizen Bill 67-The Manitoba Telephone System Mr. Eduard Hiebert, Private Citizen Reorganization and Consequential Amendments Act Mr. Ross Martin, President, Brandon & District Labour Council, CLC * * * Ms. Martha Owen, Private Citizen Mr. Garth Minish, Private Citizen Mr. Chairperson: Good evening. Will the Standing Ms. Connie Gretsinger, Private Citizen Committee on Public Utilities and Natural Resources Ms. Karen Minish, Private Citizen please cometo order. The business before the committee Ms. Gail Cherpako, Private Citizen this evening is the consideration of Bill 67, The Ms. Emile Clune, Private Citizen Manitoba Telephone System Reorganization and Ms. Maggie Hadfield, Communications, Energy and Consequential Amendments Act. Paperworkers Union of Canada, Local 55 Ms. Debbie Maruntz, Communications, Energy and At this point, I would like to inform the public that Paperworkers Union of Canada, Local 7 subsequent meetings have been called to hear public 102 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

presentations on and for the consideration of Bill 67. is demonstrated by the number of out-of-town presenters Following tonightand tomorrow night's meetings at 6:30 listed. Given thefact that rural and northern Manitoba is p.m., meetings have been scheduled for Thursday, going to be very directly affected by this sale if the October 31 at 9 a.m. and then another meeting on the governmentpushes it through, we feel that this committee same day at 6:30p.m. Following that, ifnecessary, on shouldnot only hold hearings here at the Legislature but Friday,November 1 at9 a.m. I will repeat those dates so throughout rural and northern Manitoba. that you can write them down: Thursday, October31 at 9 a.m.; then another meeting on the same day at 6:30 I can indicate to you that I have talked to people p.m.; following that, if necessary, on Friday, November throughout Manitoba who have indicated they would 1 at 9 a.m. make a presentation ifhearings were held in their own community. I was in Brandon on the weekend; I was in All the meetings will be in this room, No. 254. The Portage yesterday. There were a number of people I notice for these meetings is posted on the board outside spoke to there who said they would register to make a the committee room and on the notice boards outside the presentation, but they could not make it into Winnipeg. Legislative Chamber. In the case of Thompson, I know there are many people whowould liketomake a presentation, but it is an eight­ Before continuing on with the consideration of the bill, hourdrive. Given the weather conditions, I do not think there are certain matters regarding process to clarify at even eighthours would be an appropriate amount of time thispoint Forthe committee's and public's information, to have in that case. thereare currently 212 persons registered to speak to Bill 67. A list of the presenters should be before all I believe, given the historic nature of this particular committee members as well as posted at the back of the bill, thatwe need to do what we have done, what we will room. be doing, for example, in the Child Advocate, what the government has done with various committees of For the public's information, if there is anyone present appointed backbenchers travelling around the province this evening who wishes to appear before the committee on various different issues. I think we should do the and has not yet registered, you may register with the appropriate thing and that is have hearings on Bill 67 Chamber staff at the back of the room, and your name throughout rural and northern Manitoba. That is why I will be added to the list. move thatconunittee this urge the provincial government to hold hearings oo Bill 67 throughout rural and northern Interms of the order that we will hear presenters, there Manitoba. are currently48 persons registered to speak who are from out of town. They are indicated as such by the asterisks Mr. Chairpenon: I have received the motion, and it is after their name on the list. It has been a Manitoba in order. practice to hear from persons who are from out of town first as a matter of courtesy for the distance that they have Motion presented. travelled. How doesthe committee wish to proceed? Do you want to hear from allthe out-of-town presenters first? Mr. Chairperson: Discussion on the motion?

Mr. Steve Ashton (fhompson): I have a motion that is Don. (Minister of Consumer and relevant to out-of-town presenters. Perhaps I might move Corporate Affain): Firstly, for the edification of this at this point in time and perhaps we can deal with members of the public ifno one else, the fact is that the that. is the only Legislature in Canada that has public hearings on its bills after second reading Mr. Chairperson: Okay. to allow for the input of the public. As the government House leader, I have today called a number of committee Mr. Ashton: Yes, we have stated in terms of the meetings so that we can accommodate the 212 people particular interest of many people in rural and northern ·who wish to make representation to this committee, but Manitoba on this particular bill, something that I believe I cannot concur with my honourable colleague from October 29, 1996 LEGISLATIVE ASSEMBLY OFMANITOBA 103

Thompson that the committee should be travelling bankers from Bay Street in Toronto, , made the throughout the province. That has not been done in the decision within two days of receiving that report and are past with respect to legislative committee hearings. We now saying, on the most fundamental process we have in have provided, we hope, sufficient opportunity for thisLegislature, with the only chance that the public has everyone to be heard through the calling of a nwnber of to have input on this, that they will not hold rural and meetings for consideration of presentations on this bill. northernhearings.

* (1840) I would remind you, Mr. Chairperson, every time I have asked questions about this, and we have asked Mr. Ashton: I want to say to the government House questions, do you know what the response has been? leader that I do not believe the government has done Well, we aregoing tohave hearings on Bill 67. Well, in anything as drastic as this, certainly in the time I have case anybody from the public thinks that is very been an MLA. The government is selling off the generous, I would justpoint out that we hold hearings on Manitoba Telephone System without once campaigning every bill. The bottom line here is though, this is an on that as part of its mandate in the last provincial absolutely historic decision. I think the government election. Infact, the governmentsaid it was not going to should reflect on the fact we have ownedMTS since sell MTS. I mean, I would like to see a lot more than 1908, andwithout anymandate whatsoever, theyare now public hearings. I would like to see a vote of the people proposing to sell it offas of November 7. of Manitoba on this issue. But ifwe are not going to have the vote, if we are going to be denied by the Mr. Chairperson, is there no sense of democratic government, I thinkthe appropriate thing to do would be process leftwith this government? What are they afraid to hold the hearings. of? Are they afraid if they go to rural and northern Manitoba that they are going to fmd out the reality of I want to stress again that it has been done on other what people think aboutMTS? I cantell you, Sir, and matters. We are talking about the Child Advocate's the rest of this committee, why I feel the government is office doing the same. The government has no problem not supporting this particular motion. They do not want sendingout peoplethroughout Manitoba on other issues. to hear from the people of rural and northern Manitoba I do not understand why the government would want to because they know a lot of people are opposed to this avoid having hearings in rural and northernManitoba sale, absolutely opposed. Otherwise I would suggest to other than the fact that it is obviously afraid to face the you, Sir, thatthere might be some agreement on this, but people. you know, the tough facts of democracy are that sometimesg overnmentswhen they are elected have to do I want to point out that this decision to sellMTS was more than sit around a cabinet table and decide on the madewithout asingle public meeting being organizedby futureof one million people, 20 people around a cabinet the government. In fact, it is only the opposition, table making that decision. I believe they have an including the official opposition, and grassroots people obligationto consult with the people ofManitoba. I will throughout provincethe who have been part of meetings, go further than that. I would say on something as organizing meetings, getting something going with a important as MTS, to get their direct approval of democratic process. This government has not had a anything as drasticas the sale. single public meeting on this issue of the sale ofMTS. So, Mr. Chairperson, I find it absolutely amazing that So I ask through you, Mr. Chairperson, to the the government will not hold those hearings. I can government and to the public of Manitoba, how can we indicate rightnow-I mean, the government House leader have any democratic legitimacy on the sale of MTS if, indicated there were a nwnber of other hearings being first of all, you have a government that did not tell the scheduled in Winnipeg, threeof which were scheduled, people of Manitoba what it was going to do in the incidentally, without any discussion whatsoever with the election, in fact denied that repeatedly even after the opposition. I would say to the government, as well, and election? A government went and made the decision to we can deal with that in a few moments, that I would sell MTS based on a report from three investment hope they would not try to ram through Bill 67 during 104 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

morning hearings in which many people, many working put his commentson the record, I would ask that you call people, cannot attend. the question.

You know, Mr. Chairperson, we have the opportunity Mr. Gregory Dewar(Sdki�): Mr. Chairman, I would right now to go and hold those hearings. I am quite like to support this motion put forward by my colleague prepared to discuss with the government House leader the member for Thompson. As he has stated, this tonight which communities we could visit. We have administration has no mandate from the people of raised this before in the Legislature. We raised it Manitoba to sell offthe Manitoba Telephone System, a yesterday,so it is not like we are raising this without any publicly owned utility since 1908, a utility that was notice. I do not know how the government can go and createdto bring chaos to that particular industryin 1908 fuceits constituents, therural members and-well, they do and was created by-I believe his picture is on the wall not haveany northern MLAs-but how you can have rural here this evening, the fellow right behind me MLAs do anything other than support those hearings. here-Premier Roblin, who was a Conservative Premier. What has the government got to lose by holding those The reason he did it was-I remember reading a quote hearings? We can accommodate that. We have the from him-to keep the profits that would be generated weekend coming up, for example. froot telecommunications in the province; then the profits I would suggest we look at holding hearings would be used by the govenunent and for the people of throughout rural Manitoba this weekend. We can deal Manitoba. with committees in different communities. I would suggest that what we could do is something that was As wasmentiooed, we knowthat when the government considered a few years ago, I know, during the Meech will be reviewing legislation they will send, they may Lakediscussion. We do nothave to have one committee. have a make-work project for government members. We can break up into subcommittees, whatever it takes. They will send them out throughout Manitoba. There is I sayon the opposition side that we are prepared to hold a number underway currently. I know on Friday a hearings, no matter where, at whatever time, throughout government member will be in Selkirk reviewing Manitoba to accomplish this. legislation.

The government cannot just turn around and say, oh, Thispiece of legislationis very important to the people well, we normally proceed this way, we normally only of Manitoba. It is veryimportant to my constituents who have hearings in the city of Winnipeg. There are live out in rural Manitoba, and the question is, what are precedents that have been set. I mentioned before in you afraid of. You know what you are going to hear if terms of the Child Advocate. I could mention other you go out there. You know that there is only a handful examples of committees that have travelled the of individuals who support you on this. It is very province-municipal assessment. I was part of that frustrating that the rural Manitobans and northern committee that travelled throughout the province. Manitobans, who will unfmunatelyhave the most to lose by the privatization, will not have the opportunity to You know, Mr. Chairperson, I want to stress again that appear here today and will not have the opportunity to this is not a nonnal committee. This government has no have their voices raised. mandateto sell offMTS, has no right to sell offMTS and has most definitely no right to abuse the democratic So I appeal tothe rural members opposite and I appeal process by refusing to allow, as the government House to all members here that we continue with the hearings leader would do, the people of rural Manitoba to have herebut, as well, we hold hearings throughout Manitoba full opportunity to have discussion on this issue. Do not to allow rural and northern Manitobans the opportunity kid yourself, the bottom line is, if you do not approve to speak to this legislation. rwalhearings you will not be allowing the people of rural Manitoba to have a say on this issue. Mr. (Crescentwood): Mr. Chairperson-

Mr. Mervin Tweed (Turtle Mountain): Mr. Mr. Chairpenon: Before you start, Mr. Sale, I would Chairman, having allowed the member for Thompson to just like to interject here. I would like to beg the October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 105

indulgeoceof thepublic who are here tonight that part of interfering in virtually everything that it does, crippling the procedures within the Legislative Assembly is within it in terms of the selling of crucial assets, strategic assets committee hearings and within the Assembly itself, in like the cable system, crippling it with contracts with terms of applause, that this be kept to a very minimum, companies that perhaps do not really need to have nine in fact, none at all ifit is possible. We would appreciate years of guaranteed cash flow, crippling it by agreeing to the public's co-operation in this regard. have it suffer low rates of return on its toll lines by putting it into a 20-80 percent partnership with Clifford A (1850) Watson and Associates in Toronto through a new company calledMB Communications. Mr. Ashton: Mr. Chairperson, I appreciate your role as Chair but having sat through another committee last Sothere is a greatdeal of interest from the government Thursday where there was not any difficulty expressed to interfere in the daily running of the operation, with people doing the basic thing of applauding, I do not occasionally for good, for example, in the putting of think people are wanting to be disruptive here. I think single lines throughout Manitoba and getting rid of the thereare a lot of frustrated people inManitoba who want old rotary switch systems and getting into digital to have their say on the telephone system. When they switching and putting a great deal of fibre optic into the applaud it is because this is their only chance to have a company. There is this funny schizophrenia of our say on MTS, and ifthey are frustrated to the point of company is a vital asset and we are going to make it applauding theopposition when we speak out on behalf better for rural Manitobans, our company is a political of MTS, I would suggest that we let them applaud. Let tool and we are going to use it to reward our friends, and the people have a say. then all of a sudden waking up and saying, my goodness, we better sell this company because it is vulnerable to Mr. Sale: Mr. Chairperson, obviously, I support technological change, and in the space of a short week­ strongly this motion for all the reasons that our two end,three daysworth of time, we went from the report of membershave already said but for some other reasons as the stockbrokers to the decision to sell. well. Now government clearly can move quite quickly when You know,Mr. Chairperson, some time in the fall of it wants to. Sogovernment is quitecapable of organizing 1995, the Premier (Mr. Filmon) and the Minister hearings in rural Manitoba even on relatively short responsible for Telephones (Mr. Findlay) awoke to find notice. But whatI reallywant to focus on here in support that 70 percent of the revenues to the telephone system for this notipn that people ought to have their say is that were suddenly up for competition. Now that did not I think vexy clearly the reason the government does not happen in the summer of 1995; that was not new. They want to do this is the immense embarrassment it would awoke to discover that there was technology rapidly suffer for not having a single study, not one single study changingin the whole field of telecommunications. I do from the Manitoba Telephone System itself, who not really think that was terribly new, either. presumably knows its business, about the merits or the lack thereof of selling this corporation- not a single Sosuddenly in the courseof a very few days, we had to independent study about the risks in the telecom­ hiresome stockbrokers at public expense, at the expense munications industrytoday and the reasons therefore why ofMTS, to findout what the valueof this company is and the Crown corporation ought to be sold. to make a recommendation about selling it. Now you do not hire stockbrokers to find out the value of a company; You know, we just got today the Public Accounts for you hire stockbrokers to sell it. They are going to now 1996, and lo and behold, the Manitoba Telephone profitto thetune of $25 million or so, as we have pointed System's value to the province has risen. The last six out. months, the profits of the corporation are up over last year. Yesterday in the Winnipeg Free Press, we learned So there is a strange combination in this whole process of the newest of digital compression technology being of selling of incredible lethargy and then blinding speed, field-tested by this company, one of a very few field tests the lethargy of holding onto the telephone system and of this technology in North America. For a company that 106 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

is supposedly greatly at risk and in danger of falling I havea copy here-andI actually hope to be able to share behind, putting our assets at risk, this is very strange this with as many members of the public as possible-of behaviour for this terriblyvulnerable corporation we keep thepeople who have had the opportunity to speak on the hearing about. futureof MTS. It is called the MTS Financial Advisory Group-now you might think that was based in It seems to me to be perfectly clear that technologyis Manitoba-care of BCE Place, P.O. Box 500, 161 Bay moving very quickly, but it also seems to me to be very Street,Toronto, Ontario,M5J 2S8. This is the group of clear that the Manitoba Telephone System is evolving three investment bankers who sent a report to the and challenging themost competitive companies in North TreasuryBoard-and I notice Mr. Benson was in the back, America in its own capacity to use technology. The thehead of Treasury Board-onApril 30. Treasury Board government never tires of standing in the House and madethe decision on that day. They went to cabinet the telling us aboutthe newhigh-speed fibre optic link to the following day, and daystwo after they received this report United States andwhat wonderful numbers of jobs this is frmtthe investment bankers, the government announced bringing. These are not high-tech jobs. These are the sale of MTS. telemarketing jobs, but they are jobs. They do pay wages. The government seems to be very pFpud of the Now this is the same government, minister who was telephone system's capacityto invest in technology that writingto people in MarciHmdI have a letter here which allows it to be so competitive that it has gained, waswritten to a residentof Westman saying that contrary accordingto government, 5,000 telemarketing jobs in the to some reports no decisionshave been or will be made last few years. Now this does not seem to me to be aboutthe privatizationwithout public discussion. I had describing a company that is so at risk that we have to a senia at a meeting in Brandon who used a term which run quickly to the stockbrokers in Toronto and sell it. I cannot use because it is unparliamentary, but I just do not know how the government can justifY making a Whatthis seems to me to be speaking of is a company statement like that-and that is March l-and April 30, that is very competitive, that is very aggressive in its 1996, the only people they would listen to prior to technological development, that haspositioned Manitoba making the decision were who? The three investment well to be a leader, as the government likes to keep bankers. As the member for Crescentwoodpointed out, telling us we are in the area of telecommunications, and coincidentally, the three investment bankers from Bay that a little bitof due process and a little bit of democracy Street, Ontario, are going to be some of the prime and a little bit of travel through rural Manitoba to let beneficiaries of the sale. They are going to be making people have theirsay, to hear the government, maybe for commissions on the sale. once, make a cogent case as to why this is goodpublic policy-they simply do not want to have any more I donot think you have to be an expert on ethics to see exposureto the ridicule they will face for not having any that thatstinks, Mr. Chairperson. I also do not think you clothes on. The emperor, Mr. Chairperson, is quite haveto knowmuch about the democraticprocess. There naked. is something fundamentally wrong when basically this government has listened to three Bay Street investment Mr. Ashton: Mr. Chairperson, while I was speaking on bankers, made a decision in two days over a company this, one of the government members made some that served us well since 1908. referenceto turningthis into a circus, and I want to say to the government members on this committee, this is not a When the member for Selkirk (Mr. Dewar) made circus,this is the one little bit of democracy we have left reference to who was a visionary-be in this province. This is the only opportunity members of was a Conservative, too. I imagine right now he is the public are going to have to speak on MTS, because probably rolling over in his grave looking at this this government will not put the issue to a vote of the government dealing with the legacy that he left this people, will not run on a campaign on the sale ofMTS. province. You know, MTS does not belong to this government; it belongs to all of us. We are all You know what offends me, Mr. Chairperson, and the shareholders, Mr. Chairperson, and I want to say, you do member for Crescentwood(Mr. Sale) referredto this, and not have the right to do what you are doing, and I say October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 107

throughyou to the committee, you most defmitely do not these kinds of hearings, you may even try and use your have the right- and I am speaking here on behalf of a lot majority to do other things to limit those hearings, and I of my constituents in northernManitoba and a lot of the know you are going to try and use your majority to make rural Manitobans I have talked to, and, yes, people in surethat your government membersdo not vote with their Winnipeg, too, are concerned about this-you do not have constituents but vote with the government line, but I am the right now, after you have said one thing in the just saying to government members on this committee, election, afteryou appointed a review of three investment you can run but you cannot hide. At some point in time, bankers, after you promised public consultation, public you are going tohave to face thepeople and if you sell off discussion, and you had absolutely none, not a single the Manitoba Telephone System without any mandate meeting. Not one single Manitoban was ever consulted whatsoever from the people of Manitoba, you are going over this decision other than the 20 members of the to pay the price. cabinet, Mr. Jules Benson, the head of Treasury Board, andTom Stefanson, the chairperson ofMTS. You know Mr. Chairperson: Ready for the question? what, with this decision? It did not even go to the MTS board. An Honourable Member: Question.

* (1900) Voice Vote

Mr. Chairperson: All those in favour of the motion, Not only did it not go to the MTS board- we filed a please say yea. Freedom oflnformation, which I have here. We thought at least somebody must have been asked about the sale. Some Honourable Members: Yea. You know, we asked for a Freedom of Information request October 10 for any studies that were done by Mr. Chairperson: All those opposed. MTS on privatization. You would think that there would be some study, right? One study, any study. I want to Some Honourable Members: Nay. read into the record what was said: In this application you requested access to a copy of all studies on Mr. Chairperson: In my opinion, the Nays have it. privatization that MTS is using for the privatization of MTS. Mr. Ashton: I request a recorded vote.

I want to emphasize this. You know what the response Formal Vote was: MTS has not had any studies done on privatization andis notusing anystudies for the privatization ofMTS. A COUNT-OUT VOTE was taken, the result being as What we have here, the only basis of the decision fo llows: Yeas 3, Nays 6. essentially is the MTS Financial Advisory Group, Bay Street, Toronto, Ontario. You did not even go, Mr. Mr. Chairperson: I declare the motion defeated. How Minister, toMTS. Soyou wonder,Mr. Chairperson, why does the comrnittee-Mr.McAlpine. we might suggest thathearings be held in ruralManitoba, in northernManitoba. I know why the government does Mr. Gerry McAlpine (Sturgeon Creek): Mr. not want that. It is because you do not want to face the Chairman, I move people on this issue. THAT we hear all out-of-town presenters in the order But I have one thing to say to government members on registered with the Clerk's Office this evening and hear this committee, particularlyand those who might suggest all other presenters as they have been received. Each it is a quote, circus. There is something in this province presenterwill begiven 10 minutes for a presentation with called democracy and, you know, governments are five minutes for questions. custodians of the public assets, public services, the trusteesand I want to say to the government, you may use Mr. Chairperson: I have a motion that is in order and your majority on this committee to stop us from having it states by Mr. McAlpine and moved that we have all 108 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

out-of-town presenters in the order registered with the Voice Vote Clerk's Office this evening and have all the other presenters as they have been received. Each presenter Mr. Chairperson: All those in favour of the amended will be given I 0 minutes for a presentation with five motion, please signify. minutes for questions. Some Honourable Memben: Yea. Don. (Minister of Family Services): Mr. Chairperson, as has been the practice in Mr. Chairperson: I declare the amendment carried. other committees, I know that we have Theresa Now on to the main motion, as amended. Ducharme here who has some special circumstances that I think shouldallow herto make presentationfirst so that Mr. Ashton: I want to indicate, first of all, in terms of she has the ability to go home. So I might add that to the time limits, I remember a time not that long ago when it recommendation if that is appropriate. was standard practice not to have time limits in committees and to suggest, as the mover did in the Mr. Chairperson: Is that in agreement with the mover? motion, this is standard practice, well, it is standard practice because the government has itsused majority in Mr. McAlpine: Yes, Mr. Chairman, I would allow that. the various committees we have been faced with, particularly in this session, to make this a standard Mr. Chairperson: I have been advised that we have a practice. It is not standard practice for us and, in fact, I motion before the committee that we should deal with it thinkif there is any bill in this session of the Legislature and then we can deal with Mrs. Ducharme's request as a where there should not be this kind of restricted time special request. limit,it is this bill. It is historic. It is the last chance for people. November 7 this bill, if the government has its Point of Order way, is going tobe rammed through the Legislature. So, Mr. Chairperson, I think the time of it in this particular Mr. Ernst: Mr. Chairman, on a point of order, I believe case is absolutely unfair. Mrs.Mitchelson amended Mr. McAlpine's motion. Mr. McAlpine agreed with it so the motion is now, as I want to stress the detail of this particular bill. I am amended, and then we should deal with the questionon sure themem bersthe of public who have had a chance to it. readit through in its detail-this is a bill that is 30 pages long. Now, you get 10 minutes. That is 20 seconds per Mrs. Mitchelson: Mr. Chairperson, might I amend that page. I lookat some of the names that are on in terms of motion to indicate that before hearing the 51 presentation, and I know I have talked to some people presentations from outside of the cityof Winnipeg that with some pretty detailed comments to make. I just do arelisted on the agendato make presentation that we hear not think it is fair or reasonable to apply these kinds of fromTheresa Ducharme and then move to those who are timelimits. I want to stress again, as I did when I spoke here from outside of the city of Winnipeg. to the previous motion, we are prepared to sit whatever reasmable hour to accommodate members of the public. Mr. Chairperson: Does everybody understand the Reasonable to my mind is not three, four in the morning motion? but is at a reasonable time in the evening which is Mr. Ashton: I would like to indicate we certainly agree accessible to the many people who due to work to the amendment. We have had similar provisions in obligationscannot comeback. Butthe bottom line is this other committees for people who cannot return or other kind of restriction we feel is far too restrictive. special circumstances. We would certainly agree with that, with the amendment to the motion. I would like to I also want to indicate that in other committees, we address the motion afterwards, too, please. havehad clear provisions not having names dropped off You know, there are going to be some people I am sure Mr. Chairperson: We have an amended motion before who will be here tonight who may be able to stay until, the committee. say, eleveno'clock. Iftheir name is called at II :0I, they October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 109

should not lose their opportunity to speak. In fact, I An Honourable Member: Question. know in at least one committee we have allowed names to be called at least three times, and we have had a Voice Vote number of restrictionsin place by agreement of all parties that names not be called after midnight. I want to Mr. Chairperson: Question. All those in favour of the indicate that we oppose these limits. motion, please say yea.

* (1910) Some Honourable Members: Yea. Mr. McAlpine: We do not want to work after midnight. Mr. Chairperson: All those opposed, please say nay. Mr. Ashton: Well, themember for Sturgeon Creek (Mr. McAlpine) says, we do not want to work after midnight. Some Honourable Members: Nay. I do not want people who have to work tomorrow to sit here while you ram the bill through, to the member for Mr. Chairperson: In my opinion, the Yeas have it. Sturgeon Creek. I want to have them have a chance to get heard. Formal Vote

Mr. Chairperson, I want to indicate that we oppose the Mr. Ashton: Request a recorded vote. timelimits, particularly on this bill. I also have a motion which I will move once this matter is disposed that A COUNT-OUT VOTE was taken, the result being as hopefully will prevent the kind of thing that we are fo llows: Yeas 6, Nays 3. concernedabout happening withpeople having to sit here till two, three, four in the morning. I do not think that is Mr. Chairperson: The vote is 6 to 3 in favour of the reasonable. What we have normally done is allow a motion. I declare the motion carried. certain time when you assess at eleven or twelve o'clock. Ifit is toacco mmodate members of the public, we will sit Mr. Ashton: Mr. Chairperson, I already referenced longer. But I can tell you one thing, I will not sit one trying to get some process in the committee that is fair to second longer to accommodate the members of the the public. I do not believe it is fair for the public to government in ramming through the sale ofMTS. have to sit hereall at hours in the morning or risk having their name dropped if it is called. I have sat in Mr. Sale: Mr. Chairperson, I understand from some committees where this government has called names at nods that the suggested hour that the government is four o'clock m the morning just a few years ago on a putting forward is some time around 12 or 12:30. We particular bill, although in those days there were no time can discuss that after this motion goes through, but I limitson presentation. But the names were called at four want to express a concern about the process of reading o'clock in themorning, and people who could not stay at ruralnames. Thenotice for this committee was yesterday four o'clock in the morning lost their right to speak. evening, basically, and today. The bill cleared the House yesterday,as the House leaders know. For those who are What I want to do is move a motion that was adopted planning to make presentations from ruralManitoba, this theother night in thecommittee dealing with The Labour is incredibly short notice. So it would seem to me to be Relations Act, Bill 26, and, actually, the motion was very unfair to rural people to have their names read movedby thegov ernment members after they voted down tonight and if they do not appear, to drop those names. a similar version from our side and, in fact, ifthat is what I think that if they do not appear, they simply do not it takes to get it agreed to, I do not mind if they introduce appear, and we do not drop those names. I am not clear it. whether that is part of the member for Sturgeon Creek's (Mr.McAlpine) intent in his motion in terms of process. I would move

Mr. Chairperson: Any more discussion? If not, are THAT this committee assess its progress at midnight you ready for the question? and not call names after that time. 110 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Motion presented. So I ask the government if they can perhaps clarifY what the intention is going to be in terms of when names Mrs. Mitchelson: As has been the case in many other will be dropped, not just to the bottom of the list, but for committees and many bills that have been heard this the information of the Minister of Family Services, in session, we have made accommodation for those with othercommi ttees, names have been dropped entirely after special circumstances, those who have travelled the they have been called two or three times. I do not want distance to come and make presentation, and we have to see people denied their opportunity because of their never dropped them offthe list if they were not here but name being called, say, tonight at 12:30 in the morning moved them to the bottom of the list and called their and then again at 9:05 on Thursday. What is the names again. So let us not have on the record the intention of the government on that particular aspect? comments and the innuendo that was left by members of the opposition. Mr. Ernst: Mr. Chairman, the purpose for scheduling a variety of meetings was to try and accommodate 212 I do want to indicate that, if there are people after a peoplewho have indicated a desire to speak to this issue. certain hour who would rather stay tonight and make Committee has been prepared to sit until two and three presentation than come back again at a11other time, I o'clock in the morning to accommodate people who think we want to accommodate those individUals. cannot come back at another time.

Mr. Ashton: Mr. Chairperson, that is exactly what this At the same time, Mr. Chairman, the intent is to motion does, that is exactly what happened in The progress throughthe list of names. For those people who Labour Relations Act, and I would suggest the wish tomake presentation, if they cannot come during the government members support this motion because the daytime, we have scheduled another evening meeting intent is that we sit until midnight. We assure members tomorrow night to accommodate those people. We have of the public if they cannot stay after midnight, their scheduled two evening meetings and two daytime name will not be called and dropped, but if there are meetings in

understanding that if a person is called who is not here, Mr. Ashton: Just on that, it is not standard practice. their name will be dropped to the bottom of the list. Is We have sat on committees where names have been that agreed? called three times. It is also not standard practice to schedule committee hearings without the agreement of the Thenext item is that there is agreement that there will opposition. Well, there is absolutely no agreement on be two calls for the name, which has been the standard this. I am the opposition House leader. I was not practice? consulted on any of these additional committee hearings. I had people, members of the public, ask me about this Some Honourable Members: Agreed. today. It is the first time I heard of it. So, if the government is going to do anything, it should not be by Mr. Ashton: No, Mr.Chairperson, my understanding is callingit standard practice. They should move a motion the government House leader was saying that he will not to that effect, and we can debate the motion. drop names. The purpose of having these four hearings is to allow people to appear. I am very concerned again, I hateto continue with these procedural wrangles, but, and I cannot support having names dropped. People have quite frankly, Mr. Chairperson, I do not know what the to work Thursday and Friday during the day; I do not government's problem is. I mean, what are they afraid want to see them lose their opportunity to speak on this of? Why do they want people's names to be dropped? bill. Quite frankly, we can sit evenings. We have sat Nameswill be dropped, I can tell you, under this system weekends on other bills. I think those options are far on Thursday morning and Friday morning. I think that is fairer tothe public, so I want to urge the government not absolutely unacceptable. We are prepared to sit here and to do that. I thought the intent was to sit as long as it listen to all 212 Manitobans. Actually, we would be takes, and if that means sitting evenings and on prepared to sit and listen to all one million Manitobans. weekends, I think that is probably the most reasonable I think that might be one way of finally persuading the thing to do. governmentto change its mind. But, ifthey do not want to listen to the one million, I think they should listen to * (1920) the 212. I want to put on the record again, we did not agree in Mr. Sale: I think this last five minutes has been an the opposition to these additional committee hearings. example of why people lose some faith and trust in There was some agreement on this hearing tonight and government. We raised the concern about the process of having a hearing tomorrow night, but none of these ruralspeakers, andthe Minister of Family Services (Mrs. additionalhearings that were put in before were agreed to Mitchelsoq) �dicated that this would not be a problem, by the opposition. If it means that people are going to ' we would not drop names. We raised the concern lose their right to speak, Mr. Chairperson, we do not through our House leader, Mr. Ashton, that there are agreeto having names readtwice. We want to make sure manypeople who cannot be here during the daytime, who that everybody gets a chance to speak, within reason. I work, and members opposite indicated, the government thinkwe have done this before in many committees. We House leader (Mr. Ernst) appeared to be indicating that have sat the additional hearing; we have come back on he understood this, and that is why there were meetings weekends. We are prepared to do that. in the morning and that is why there are meetings in the evening, so I thought we were moving to a reasonable Mr. Chairperson: What is the will of the committee? consensusthat names would be dropped at the end of the committee hearings. An Honourable Member: Standard practice. If no one was there at the last meeting that was Mr. Chairperson: Standard practice, which is the scheduledand they could not be there, well, then, I guess practice of the committee that in such a situation the they have lost their place, and we understand that would name is dropped to the bottom of the list ifit is called happen. But ifso-called standard practice, which clearly and they are not there. Then, if the name is called a is not standard-I have only sat on five committees so far second time and the person is not present, the name is and there has not been a standard practice, it has been dropped off the list. varied each night in terms of how it has been handled, 112 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

and it has been varied in terms of numbers of timesthat but wewould listen to people that still wanted to make a peoplehave been called, so I do not know what standard presentation. Is that not correct? practice is. But, ifit is what it appears to be, then people are going to be dropped tomorrow from the ability to be Mr. Chairpenon: Yes. heard, and that is not fa ir. It is not democratic, and it is not what these members opposite were indicating was Mr. Tweed: Thent omorrow we would startwhere we their intent. It certainly is not what the Minister of finished tonight to callthe names again. I guess, based Family Services (Mrs. Mitchelson) was indicating was onmy limitedexperience with 200 peopleon the list, we her intent. will not read through the list with the time frame that is allowed. We would not be completely through the 200 Soyou have rammed through the ideathat we will not names probably fo r three or fo ur days. have rural meetings. You have rammed through time limits so that people will not have a chance to speak to Mr. Ashton: You will on Thursday morning when the complexity of this bill. Are you now going to ram people cannot come, let me tell you. [interjection] through closure so that people who are on this list will not have a chance to speak because they live somewhere Maybe there is some hope. Maybe the member fo r where it is too difficultfo r them to get here tonight, and Twtle Mountainwill supportour position because I tell they will not be here in the morning on Thursday you you will run through names if you call it on a morning? Isthat the intent of this committee because I Thursday morning. Alot of the peoplehere tonight I am do notthink that thedemocratic proce ss is well served by sure are working during the day and will not be able to that kind of high-handed approach to an historic debate come, and there is a real danger that the list will be run about the future of the telephone system? through a coupleof times. Thatis exactly our point.

Now we know that there will be peopledropped from I would stronglyurge thegov ernment to fo llow what it the list. It happens in every committee hearing, and we was talking about before, which I thought was going to recognizethat at some point the names will be called, and happen. Ifthey are going to schedule these committee ifthey do notappear, they will not get a chance to speak. meetings, the least they should do is make sure that We accept that. What we do not accept is that a names are not dropped until the hearings are completed. committee that has scheduled fo ur or fivemeetings will If the government still does not see some need for start dropping people before they have gotten to the flexibility, perhaps I would suggest-and I think the fourth or fifth meeting when it might be possible fo r member fo r Crescentwood (Mr. Sale) pointed out people to have made the trip to Winnipeg; to have accurately-there is no standard practice especially with arranged for child care; to have arranged fo r time off this government that we not decide on these matters, work; to have arranged to be here to speak at a time that perhaps hold this off. We have the procedure set for makes sense. So, ifwe could agree that we will indeed tonight, reassess tomorrow. I think at that time we may drop names, but we will not drop them until at leastour get a better sense of what is happening in the committee fourth or fifth meeting, I think that makes all kinds of soperhaps as a compromise I would suggest that we not sense and all kinds of fa irness, given the way you have vote either way on this yet and deal with the rules we circumscribed this process already. have fo r tonight and come back to this tomorrow.

But, if standard practice means we are going to read Mr. Chairpenon: Is there agreement that we deal with through the names at 11:55 and then again tomorrow this matter at a subsequent meeting? [agreed] night at 11:55 and those that are not here are gone, that is not standard practice; that is simply dictatorial We will now begin the presentations and as agreed ramming through of legislation that you cannot support earlier on, I would ask Theresa Ducharme to come by any other means. fo rward to make her presentation.

Mr. Tweed: My understanding that the motion brought Mrs. Theresa Duchanne (People in Equal fo rward wasthat wewould notcall names after midnight, Participation Inc.): Thank you, Mr. Chair. I cannot October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 113

wait to speak. It was very short notice. I am here when this privatization and the stockholders came in, I representing all the institutionalized, all the disabled, was making phone calls like crazy. I even had to phone ailing, elderly and frailing to have a lifeline dependency the Citizens' Inquiry. Why do you think I am 211? It is on MTS which is our lifeline. not because I am late, I am unintelligent. It is because the circumstance of trying to conserve the active people Now if you could ask everyone to stand up, they all to be there who are going to make an impression and will stand up, sir and/or madam, and I cannot do that. I make the change and also reinstate the fa cts that you will cannot have the privatization and the system and it was not be able to remove and privatize. short notice, so short that I will be offering you the receipt ofmy transportation bill which is $60 to bring me Now, I have three reports. We are going through 300 here by special circumstances. At the same time, MTS, health care changes. My wheelchair breaks, the wheel fo r 42 years of my disability-and I am going to ask each has to take fo ur days to get repaired. Now, how would and every one of you at this committee, have you ever you like your leg tied up around your neck and say, well, been dependent on anything else but your own mobility you cannot move fo r three days but get to work? Go and so that you do not have to say, MTS is my lifeline? do something and you can live with your leg around your neck and say, yes, you can do something, but fo r fo ur Could anyone say nay or yea or hurray? Could I hear days you have to sit there and wait. Now you phone some voice to say, yes, I needed the lifeline ofMTS? No, repairs fo r respirators. You ask fo r any kind of service, you did not. So you would know what you are talking and you phone the private agency. They say, well, I am about and you do not know what you are doing here and sorry, but you are not our customer and we want money you arenot even sure what direction you are going. First fr rst. I said, well, you cancome and pick up the money. of all, the people we voted into power, a majority of They said, we do not have an account with you; now we government, must conserve their energy fo r their own do not see that you are registered; we see that you are immobility, because Mrs. Ducharme is very contagious with the Health Care department, but you need more and she is infectious and there is no cure fo r me and it is services thanwe can afford because we want to make a called love. I love to live and I live to love. There is not profit on you, Mrs. Ducharme. You use the telephone. a policy or a bill such as 67 which will go without being We know you use the telephone. I have inquired. I have recognized or reinforced or reinstated. Have you ever even phonedthe top chiefS, everybody in charge, and they tried getting rid of a political hemorrhoid? Well, that is said, well, we know we look after you 100 percent, and exactly what Mrs. Ducharme is and she will not let MTS they do. leave this province regardless of what. Now I have tried the private agencies. We even had to

* (1930) remove ourselves from-and I have a medical alert attached tomy chair so that ifl require somebody within -When these gentlemen were asking fo r a second 24 seconds, a minute or two, they are right at my lifeline. meeting, a third meeting or even any other kind of I cannotlive in the community, and we are being moved meeting, going out to rural Manitoba is wonderful, but into the community, so we have to have MTS, not a have you considered going into an institution fo r those private profit-making agency that says-the first comment who are bedridden and have the telephone at their lifeline they say is, we are here to serve the customer but how side to talk to their relative, talk to their friend or even much canyou afford? Now everybody is here. We have have a moment to speak to someone under the paid fo r MTS. We own MTS. I have shares in MTS, circumstance of goodwill? Is that not wonderful? Where and if you remove it, Sir, we can take everyone here to is your clap, people? I thought you died. [applause] court because I have every telephone bill I have paid all There. my life , every telephone bill. I have shares in MTS, Sir, and Bonnie, you hadbetter wake up soon because you are At the same time, gentlemen, and Mr. Chairman, you the only ladyat this table, darling, besides myself, and at are the one that is going to have the headache after all the same time-no, no, she is behind the board there, the this, because you have been here two hours longer just board with the Chairman. There you go-at the same like I have. At the same time I am veryconcerned that time, I am very angry that this came up. 114 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

I approached other major organizations, and they said But do you know how painful that is, Mr. Chairman we cannotget there, Theresa. You go out there, and they and committee members, because I hope to God-and I will have to call more than one. They will have to move would like to ask, have ever :1.t1yone of you been without it maybe to 1998, 1999, because if they want to make any cash? [interjection) You have been without cash. changes, and by that time Conservatives will have Why, because you slept over and you fo rgot your wallet, another election, and we will conserve our energies till right? That is right. There. So at the same time, you then. We will have no conserved energy in power know, it hurts my fee lings, my husband being because Mrs. Ducharme is on a very, very tight-my unemployed, I am unable to do anything fo r myself In husband is not employed, we cannot afford-we own order fo r me to have 24-hour care, 365 days of the year, MTS. It is our property, and it is our purposeful everything I requirefor 42 years, I have had to ask and be prosperity that we have taken care of fo r our whole polite and receive and also offer in return. That is why I lifeline. Now, we are not asking fo r any, begging or killed myself to come here today under circumstances, cheating, because we have paid fo r that system. I will that is why I did not want special treatment, but I said, turn over and every individual of Manitoba who has an you know it is very costly to me. I had to cancel my MTS lifeline will sue the government, and we will ask orderly calls so that I could not go to the washroom, I themto become privatized. Is that not wonderful? Yes. couldnot eat, I couldnot drink afterthree o'clock because anytime I want to go to a special meeting you have to change your whole mechanical and biological changes We will make the government go out. Is that not just to be part and parcel. wonderful? They will get their wages according to how much energy they have put towards the public, and we Now, I hopeyou are prepared fo r tltisstatement, and I will privatize the politicians. Would that not be want a fa x from your decision of the decision of constipating? That is right, because out of all the parliament when you deliver it and what happens to all services that they are wanting to privatize, they fo rgot to these people becausethere are other people waiting from look at their own wages, their own income that they institutions. I want to know under The Human Rights raised. See, they even gave themselves a raise in pay. Act how you are going to serve them by going to their Now, is that not marvellous that you look at the location. See? A gentleman was right to go to Brandon neighbours butyou do not look at your own self and say, and go to The Pas, go other places because why sit in hey, we can do better if we cut everybody else off. your nice warm Legislative Building, and why fight the weather and the conditions and the advisory- Now, you know, it is painful to me that I have to come here when the people from the institutions ask and say, Mr. Chairpenon: Mrs. Ducharme, I am sorry. Your wiD you go out there and make sure they do not take our time is up. lifeline, and they said, Theresa, you do not know how angry we are. We do not even want to come. I said, I Mn. Ducharme: Well, I am not in jail, darling. So I promise not to break down because it is painful to me to wantto sayooe closing statement, one closing statement. have toargue andthen go to a private agency and say, are You are supposed to say in two minutes, please. Ifyou you going to stay open aU day and they say, no, we do not are running any meeting, you give a person, not to cut have enough staff. No, we cannot pay this. Today, I had them offtheir breath. a problem with the Better Care service that are supposed to start in November. They said, no, our office, we did Mr. Chairpenon: You are just encroaching on your not have enough staffready so we are closed at twelve question time, that is all. o'clock. I said, oh, is that not wonderful, you are going to open November 7 and here you are not even ready to Mrs. Ducharme: Okay, well, at the same time, I would prepare, and they said, oh, no. I phoned other agencies like to ask, would you please consider the concerns that fo r a circumstance and they said, well, we have to make I have, and how under the Human Rights Act, will you money first. We do not serve just anybody. We have to cater andalso allow those who are institutionalized to be know if you have cash. Where is your account or do you heard, who are bedridden, dependent on lifeline, MTS, use Visa? and they arenot ableto leave their bedside? Now, that is October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 115

a human rights act and request that has to be considered Mrs. Ducharme: When I asked fo r him to write that in before you privatize MTS, because all people have to writing, on October 17, we had a private meeting with have a chance to be heard. the Ministerof Health, James McCrae, and we asked him if the Home Care program or any contract is like the Mr. Chairperson: Thank you, Mrs. Ducharme. contractof MTS or the bank or the mortgage, and he said it is not worth the paper it is written on. That statement

A (1940) was said in front of all the peoplepresent, and that is how painful I am withMTS. Hon. Glen Findlay (Minister responsible fo r the administration of The Manitoba Telephone Act): So the day it is privatized, they will look out fo r a Thank you, Theresa. I picked up on a couple of lawsuit from Mrs.Ducharme, becauseam I a shareholder. comments you made. I just want to say that MTS will Okay? not be leaving the province, and the services now delivered byMTS will not change. Mr. Ashton: I wanted to ask you a question on that, because everywhere I have gone in the province people Mrs. Ducharme: Can I have that in writing? are saying the same thing you are saying. They are saying: Let us get this straight here, the government Floor Comment: Talk is cheap. wants to sell offsomething we already own; and, ifwe are lucky to have millions of dollars-we are not going to Mrs. Ducharme: Hey, no comments, I can handle it buy back what we already own. myself here. I want that in writing.

Mr. Ashton: I really want to thank Theresa fo r the Is your message to the government today that not only presentation, and I agree, we should get that in writing, are you a shareholder, but you as a shareholder are voting because what the minister does not say is that-he is against selling offMTS? already saying, the chairperson of MTS is saying that immediately up to a quarter to one-third of the shares of Mrs. Ducharme: You have got it, baby. MTS will be sold outside of the province. Mr. Ashton: I just want to conclude by thanking In Alberta, where they sold off their telephone Theresa. By the way, I havetalked to many people in the company, the shares now trade on the Toronto Stock disabled community, and it is unanimous. Everybody I Exchange. What the minister does not tell you is that 25 have talked to said the same thing, and they realize what percent ofMTS under this bill that he is bringing in can good service we have gotten fromMTS because it is a be owned by people from outside of the country. They publicly owned company. are being really democratic; they are saying you can only buy $55 million worth ofshares. So I think you get some When you are here today, you are not just speaking fo r idea from that. I would get it in writing. Mind you, then yourself; you are speaking fo r not just the disabled again, theysaid in the election they were not going to sell community, but I thinkfor pretty well the whole province MTS in writing too. So I do not think their word really ofManitoba, so thanks a lot fo r coming out. means much.

Mrs. Ducharme: Thank you fo r allowing me to speak Mrs. Ducharme: May I answer your question? firstand thankyou fo r hearing me and accepting my tears because, do not fo rget, I will be running in the next Mr. Chairperson: Mrs. Ducharme. election and the Parliament is not accessible to me. We will start at home base. Mrs. Ducharme: I want to answer his question.

Mr. Chairperson: I am just recognizing you fo r Mr. Chairperson: Thank you fo r your presentation, Hansard. Mrs. Ducharme. 116 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

I would like to now call, as agreed, our out-of-town telephone service to all areas of Manitoba, MTS has presenters. I am starting with Mr. Bud Shiaro. Please madea profit to return to the people of Manitoba. Since comefo rward. Do you have a written presentation to be 1990, MTS has made more than $100 million in profit. circulated? In 1995, MTS made more than $15 million profit. In 1995, MTShad nearly 4,000 employees locatedthrough You may proceed. the province who provided network access to 864,000 residents andbusinesses . Mr. Bud Shiaro (Private Citizen): IfI may before my time starts, Mr. Chairman, could you-and it is a short The fo resight of successive governments in Manitoba time that is allotted to me and sometimes I ramble since 1908 is being discarded. The Manitoba Telephone on-give me a two-minute warning, please, becausethere System has now become a symbol of the loss of are some points I would like summarize? democracy in our province and nothing less than that. This has been accomplished in a matter of months. Mr. Chairperson: Yes, I will do that. Nearly90 years offa irness to the peopleof Manitobais being thrown aside in the name of privatization. The Mr. Shiaro: Thank you. people of Manitoba are once again being put in the position of subsidizing the private sector or, as the late A Manitoba heritage-perhaps before we start, can I David Lewis said, the corporate welfare bums. wait till the paper comes around? I am sorry. Just to show you the significance of this move, last Mr. Chairperson: Please proceed as we distribute. Friday, The Globe and Mail, Report on Business, their magazine fo r November '96, talked about interactive Mr. Shiaro: Doyou want topr oceed? Okay, thankyou. media, which includes telephone cableand wireless, and which will grow to a $1.5- trillion industry in the next 1 0 In 1908, the Manitoba Telephone System becamethe years, page 22 of that magazine, ifmembers on this side first government-owned telephone system in North of the table would care to look that up. America. The system was established by a Conservative government in order that all people in Manitoba might Misplaced Trust. TheFilmon government's so-called have affordable access to telephone communications. As sale of MTS is nothing short of a political con job. a bit of an aside, I support Mr. Ashton, and I urge this Telling the people ofManitoba that they can buy what committee to hold hearings across the province, so all they already own is nothing less than a shell game. It peoplewho own this company, the MTS, can have some certainly is less than that which the people of Manitoba input to this committee. havethe right to expect of a government in a democratic society. The most glaring example of this less than Much has changed since those early days of democratic approach to governing by the Filmon communication. The people of Manitoba have become Conservatives is the fa ct that at no time during the last the owners of a very valuable technological resource. A provincial election did the Filmonites statethat ifelect ed resource thathas placed Manitoba in a strategic position they would sell-off MTS-at no time. envied by other provincial governments that did not have thefor esightto establish a government-owned system. A On May 24, 1995, Mr. Ashton of the NDP asked Mr. technological resource that would allow the government Filmon in the House if he can indicate whether this to develop the ability of the province of Manitoba to government hasany plans whatsoever to privatize partor become leaders in the information age. all of the Manitoba Telephone System. In fa ct, will he assure Manitobans wewill maintain public ownership of Since Manitoba Telephone System was established in the Manitoba Telephone System within the province of 1908, it has met and exceeded its mandate to provide Manitoba as a Crown corporation? low-cost telephone service. The people of Manitoba enjoyed telephone rates that are amongst the lowest in Mr. Filmon responded by stating: I can indicate that North America. While meeting the mandate of low-rost we do not haveany plans to do that. We continue always October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA ll7

to operate on a pragmatic basis. We continue always to unequivocally that he operates in a pragmatic manner on look at ways in which we can ensure our economy will behalf of Manitoban society. Giving up $47 million to grow, that we will take advantage of new technology, of make $16 million is less than pragmatic. Giving up all the things that are important to us as an economy and control of a portion ofthe business with a multimillion­ a society. dollar potential is simply a matter of operation that is more closely resembling obtuse than pragmatic. Now, if one was to answer that question in an obtuse manner, then one might give any manner of meaning to The Filmon government has chosen to ignore the words of our Premier. However, if one is to continue Manitobans who are owners of MTS. A public utility to believe that Mr. Filmon believes in and practises all with assets in excess of a billion dollars represents a aspects of a democratic and caring fo rm of government, large portion of the wealth owned jointly by all then one must believe that Mr. Filmon clearly answered Manitobans. Surely, the Filmon government must seek Mr. Ashton's question in an unequivocal manner. Mr. approval of all Manitobans prior to making any decision Filmon clearly stated that he had no intention of to privatize MTS, or go into the rural areas and talk to privatizing any or all ofMTS. Then Mr. Filmon went on people, take this committee out there. Perhaps the most to partition and privatize MTS. He sold the cable important thing that MTS now represents in Manitoba is operations fo r $11.5 million, while an internal MTS the loss ofdemocracy in our province. This loss can still report releasedthree months before the sale said the value be reversed. of the cable portion of MTS to be greater than $70 million in the Winnipeg Sun, May 10, which is attached Restoring Confidence. The government should to my presentation. consider the fo llowing reasons to withdraw Bill 67.

The report went on to say that the wires and (I) The special share that the Manitoba government transmission equipment are a little gold mine in the will hold in theprivatized telephone system is likely to be information age. Furthermore, the report states, cable relativelyshort term in duration. Section 13(8) of the bill operators could use those wires to offer local phone provides fo r the redemption of Crown shares by the service andmay one day steal away hundreds of millions corporation. This section is entitled Crown vote ceases. of dollars worth of MTS business. When Mr. Findlay, as It would be betterif it were noted as the public control of the Minister responsible fo r MTS, was questioned about Manitoba ceases of Manitoba Telephone or one dollar the report, he stated: the evaluation we had was $7.5 equals one vote, because if I have a million bucks, I can million. When pressed fo r details, Mr. Findlay stated, I buy a million votes in this company, but as a taxpayer I cannot remember the company, but someone was hired to cannot do thatand as a worker I certainly cannot do that. do it. Mr. Filmon stated that he and his government operate on a pragmatic basis. Surely, there is little * (1950) sensible about giving away nearly $60 million of public money. Surely, it is anything but pragmatic to put a The fo llowing is an example of why Bill 67 will put person who apparently suffers memory lapse in charge of the people of Manitoba at economic risk. The private a Crown corporation with the economical and strategic insurance companies claim to be one of the most value ofMTS. It must be. competitive private industries in Canada. This industry has balked at banks getting into the insurance business, Mr. Filmon oversaw a deal that gave Faneuil, an claiming that the banks would have an unfair advantage American telemarketer, a $47-million contract that in an already lean, competitive marketplace. included the right to use the MTS customer database fo r seven years. The June 5 Winnipeg Sun says something In spite of this assertion by the insurance industry, the about that being illegal, but that remains to be seen. Manitoba Public Insurance Corporation states that Faneuil gave up $16 million in shares fo r the right to use Manitobans arepaying some of the lowest insurance rates the database. Mr. Filmon gave up $4 7 million in control in Canada under the publicly owned Auto pac. It is that over the way in which MTS could take advantage of a Road Wise information leaflet you get with every multimillion-dollar industry. Mr. Filmon stated renewal; at least I get it with my renewal. In fa ct the 118 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

government leaflet which accompanies all notices of go on therecord . Mr. Filmon stated in the May 3, 1996, renewal indicates that we are second only to the public Free Press that he argued against the privatization of insurance of Saskatchewan. We are also at MTS in the last election. Therefore, are you prepared, approximately one-third the cost as a public utility-one­ each and every one of you, members of this committee, third the cost of the insurance in the newest heartland of areyou prepared toadvise Premier Filmon that he should competition, Toronto. What a place. dissolve the government and call an immediate election on theConservative sole platform of selling off MTS? I It would seem prudent to reconsider the need fo r this wanta response. I think as a taxpayer I have a right to a bill and to further consider the advantages to all response from each and every one, for the record. Are Manitobans of owning their own telephone system. you prepared? This sideof thetable is. Mr. Minister, are you preparedto call an election? You are not prepared to The cable television industry is seeking cable call an election. Let the record show that the minister deregulation as noted in the Winnipeg Free Press, shakes his head in the negative. Canwe start down this October 10, '96. The press article goes on to say, the side perhaps. No, let the next minister, and I do not cable industry wants to charge what the market will bear know ifthe seating arrangements areded, recor but the in Canada's largest communities by early 199�. next minister chooses not to look at me, and the next minister? This article notes major phone companies also have their eye on the market, but we are not; we want to get An Honourable Member: He is not a minister. out ofthat busines s. It totally amazes me. It would seem to be good business sense to attempt to lessen one's Mr. Shiaro: He is not a minister. The next member of losses. A government that has literally given away its the committee. [inteljection] You are like Tim. No, you cable component- are not like Tim, by any means, sir. Mr. Ernst is a man who has been around many years in various levels of Mr. Chairperson: Two minutes. politics. Are you prepared to advise your colleague the Premiel" of Manitoba to dissolve government and call an Mr. Shiaro: Thank you-ofthe telephone system should immediate election? admit its mistake. This government should not put the people of Manitoba at further risk. Mr. Chairperson: I am sorry, your time is up. Are there any questions? The third reason to get out of this: This government hasan obligation to consider the well-being of all people Mr. Ashton: Mr. Chairperson, I wonder ifyou think in Manitoba. Presently, the profits of the Manitoba perhaps the reason the government does not want an Telephone System are returned to all Manitobans. This election now or any kind of vote on MTS is the same is after jobs are created and paid fo r, capital is invested reason why they did not tell the truth to the people of in andnew workers aretrained, along with the upgrading Manitoba in the 1995 provincial election about MTS of present long-term employees. when they said they would not sell it off.

I would then like to flipto the last page. Withdraw Bill 67. This government should drop this bill. Ifthe Mr. Shiaro: Through the Chair, the reason that they will government is not prepared to drop this bill, then it not call an election is the same reason they did not raise should find the courage to call an immediate election. the issue,is theydo not want to put the fa cts on the table. Make the sale of Manitoba Telephone System the If they called anelection, the people ofManitoba would platform upon which this government goes to the people knowthe true worthof MTS, I believe. They would also of Manitoba. Let the people of Manitoba decide the fa te have an opportunity to examine all the fa cts, all the of this telephone system, their telephone system. issues, what is happening. A $1.5 trillion industry, in the evolution-everything says this is the way to go, and we Therefore, I would like to do a poll of each and every are leaving it. So, yes, I believe that the reasons are the member of this committee, and I would like that poll to same. It is deception. I am sorry, but it is. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 119

Mr. Ashton: I am wondering, too, being a resident of are then say ing that I am a citizen in name only. I am not rural Manitoba, from outsideof Winnipeg, what people a citizen, I am not a voter of Manitoba except fo r one are saying in your community and people that you may-I brief minute whenI walk into that voting booth and drop think, by the way, the window slamming is probably the my ballot. After that, I do not count. I am nothing, and ghost of Rodmond Roblin. I notice his picture is right that is undemocratic. That is not what democracy is next to the window here. He is trying to send a message about. That is not what our voting process is about. to the government. B ut I wonder what people in your community are saying about the sale of MTS. Do they When Mr. Filmon says that, as the Premier of this support the sale or do they want to keep MTS publicly province, I think what he is saying is that he has little owned? regard fo r the consequences of what this means. When you remove that fo rm of democracy frompeople, when Mr. Shiaro: Through the Chair, the people in my you say you are not truly citizens of this province, then community in Selkirk that I have talked to-and I live just what the hell alternative are you leaving people. It is outside of Selkirk in the municipality of St. Andrews­ scary, and it is heading downhill fa st. Ofcourse, what want to keep MTS. Their understanding is that there is they will do is pass a bill to build another prison to take the potential as soon asthis is privatized of having to pay care of all the people who are truly frustrated and rebel, approximately $30 a month more on their bill. As a but thatis what he is saying to me. He is indicating a lot shareholder, that is my dividend and I have a right to of disregard, uncaring and total disregard fo r democracy, protect that as anyone does. So the support is to keep and it scares me. It really scares me. MTS publicly owned and let it be out there in this evolving industry. Mr. Chairperson: Mr. Ernst, fo r a quick question. Mr. Chairperson: Mr. Ernst. [interjection] Oh, Mr. Ashton. Mr. Ernst: Mr. Shiaro, can you tell us who your employer is? Mr. Ashton: Yes, I am quite willing to give leave afterwardsto Mr. Ernst ifthe time runs out. I just wanted Mr. Shiaro: My employer is the City of Winnipeg. to ask one further question. When I asked-1 mean, you mentioned some of the questions that I have asked in the Mr. Ernst: Thank you. Legislature, and I did ask that question. I also asked the minister in September, by the way. He said they had no Mr. Shiaro: Can we tell me who your employer is, Mr. plans to privatize MTS. He even said that the only Ernst, when you are not here? person talking about it was myself and the only party ' talking about it was the NDP. This was last September, * (2000) a few months before they sold offMTS. When I asked the Premier to put it to the vote of the shareholders-and Mr. Chairperson: Thank you very much fo r your you have mentioned this. Theresa Ducharme mentioned presentation. I would like to now call Shelly Blanco. Do earlier about being a shareholder. What he said in the you have copies fo r distribution? You may proceed. House was we were shareholders in name only.

Ms. Shelly Blanco (Private Citizen): My day began Now I am just wondering how you fe el-you mentioned today very early. The phone started ringing before eight the fact thatyou fee l that you are a shareholder-about the o'clock in the morning, and my children used that phone Premier's suggesting that you are not really a shareholder, three or fo ur times to determine who had their t-shirt; that in effect by selling off MTS the way they are doing what shoes their friends were going to wear to school; it here, that the only ones who really have a say over its make sure that they had what they needed to get to future are the people in the Conservative government, school, to and from theirfriends . It is their network. that you as a shareholder have absolutely no say over its future. After they left for school, my 21-year-old boy used the Mr. Shiaro: Through the Chair, I believe what I fe el phone to take care of an airline ticket problem that he had about this is that the Premier and some of his colleagues had. A friend of mine stopped by after dropping her kids 120 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996 off to school, and she used my telephone to phone and we cannot do that about an awful lot of things, but our sign up to come to this hearing today. My daughter basic natural resources and those things that are phoned because she forgot her binder, maybe not her important fo r our well-being we can do that, and we friend'sjeans, but she fo rgot her binder. Thefo ster care should do that. That is your job when you are elected. co-ordinator from Gimli called me because I am a fo ster parent. A parent in thecommunity wishing to registerher I was speaking todayas a private citizen, but I would child for gymnastics phoned me to find out how she could like you to know that I am also a co-chair of the Selkirk do that now in the middle of the season. One of my group that wasworking to save MTS, and so I would like fr iends called to chat, and the dentist called me to talk to speak a little bit on behalf of those people in our about my children's dental appointments today. communitythat I thinkwill be affected if this bill were to go through. Ihavementioned bef ore that one of the calls The telephone system is not a commodity. It is not a I got today was from a parent wishing to register her styrofoam cup company that we can do without. The child. I am on the board of the gymnastics association. telephone company is what all of us use to participate in Our town has figure skating associations and hockey our communities; it is what we use to run our lives; it is associations andevery kindof sportassociation that you how we get help. Thetelephone service is one of our life can imagine. We have the Kiwanis Club and all of the blood. We cannot do without it. We cannot risk that service organizations. someone will decide that, well, maybe long distance is tooexpensive is to provide to these people, or that basic How do these organizations operate? On volunteer servicehas to cost fo ur times as much for people living labour and volunteer time because people like myself in a certain area, or that we should have pay-per-call who are not employed outside the home are making service that makes it impossible fo r a homebound senior hundreds of phone callsevery year to makesure that the citizen to stay on the phone and make maybe 15 or 20 services and thesports thattake place in our communities calls a day because that is the only way they can happen. We do that with ourtelephone s, and ifthere is communicate to other people or shop for their groceries anything doneto that telephone to increasethe rate that I or call someone when they are frightened or sick. will have to pay in order to do that, I will not be able to provide thatvolunteer service to my community, nor will I think it is absolutely shameful that this government anawful lot of other people. That will mean that a very, would even consider using something as vital and as very serious effect on my community will happen. We basic a resourceas our communications system, thinking need that. It is how we talk to each other. It is how about it as if it were something we could sell and allow community groups organize. anyone else to own it. The health and well-being of Manitoba is what we as voters ask you to protect and to Ourcooununi ty has a lot of senior citizens as do most. nurture fo r us. I do not think that is what is happening Many of those people have difficulty getting around. with Bill 67, and I am here today to ask you to please They rely on the telephone. They can shop over the withdraw this bill and do not hesitate. telephone. They can talk to friends. They can call doctors. They can order drugs through the pharmacy. The reason that I believe privatization is the thing we They can call fo r help. They can arrange rides. These do not want is that the mandate that we have when we things are important, and these people are on fixed own ourown company is a mandateto provide some kind incomes, many of them. How canwe possibly say that of equitable service across the province. It is a way of this particular thing, the telephone, is something you do ensuringthat if we wish it we canstep in and have some not really need or you do not need full service? That is control over the kinds of policies, the kinds of service notfair. is That notthe quality of life that we want to say thatwe will get. We can say to our own corporation, no, we have here in Manitoba. you cannot charge the people in the North or senior citizens or someone else a higher rate because it costs We have a mental health facility in our community, and moreto provide service to them. What we cansay is, we probably because it exists there, we have a crisis unit as want a quality of life in our province, and we will well. We have many people living in our community organize thiscompany to provide that to everyone. Now withmental health issues, and the phone is also a life line October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 121

to them in very much the same way as it was to the first So I would ask you again. There is no harm in woman who spoke tonight. The phone is what allows withdrawing a bill. I know you want to ram it through, them to live independently in their own home because but I think that I speak fo r many people. One last they can use that phone to get the help they need when comment before mytime is up. I wantto tell you that you things become too tough. There would be a huge cost to have 212 people on this list, but you have thousands the province if these people had to go back into more who would like their voices heard, but the institutions because they were no longer able to freely use democratic process here has become so difficult. There the telephone to seek the hdp and the organization they are at least 20 people I personally spoke to who do not need to carry on their lives with the disabilities that they have the courage to come into a building as ostentatious live with. as this and speak to you with any kind of comfort. It is not that theydo not have opinions; it is not that they want We have rural residents attending Selkirk. We have a to see MTS privatized; it is that this is not an huge rural area around our community and fa rmers fo r environment in which they can operate. So I would like whom that telephone is what is used to order parts, to to say that I speak on their behalf, and I am sure so do talk to one another from long distances, people who are everyone else of the 212 who are here. not able todrive in and out of town where there are other people. Many friendships take place over the phone. I Mr. Chairperson: Thank you fo r your presentation. know many of my friendships take place over the phone. Are there any questions? I do not think that we want to change that. Mr. Dewar: Thank you, Ms. Blanco, fo r both your We also have in Selkirk one of the MTS fa cilities, and presentation this evening on behalf of the residents of I have a huge concern over the effect that privatization Selkirk and your work on the SOS campaign. I want to will have on the workers at MTS. I have two particular ask you a question about that campaign. Could you tell concerns: one is the possibilityof massive layoffs, and I me the budget of that campaign, please, in Selkirk? fa il to see in any way, shape or fo rm how a growing number of unemployed people in my community could Ms. Blanco: Yes. We have spent $157. benefit my community at all. I also have a concern about the quality of the work life of people working fo r phone Mr. Dewar: Canyou tell me how that $157 was raised? companies under privatization- Ms. Blanco: It was raised out of the pockets of people Mr. Chairperson: Two minutes. donating that money to us.

Ms. Blanco: Not toolong ago, I saw a program from the Mr. Dewar: Thank you. Could you tell me how that United States where there are private phone companies. money and where that money was spent? It.was a show about sweatshops and the resurgence of sweatshops in the United States, and they were talking Ms. Blanco: We had a little bit on postage. I cannot about the contracting out of various parts of the telephone remember. [interjection] Yes, I had some long distance service. It was absolutely dreadful what was going on charges. No, Greg, I cannot remember. Sorry. there, people working at less than minimum wage fo r piecemeal work, and that is what is going to happen to Mr. Dewar: As I recall, the coalition, they purchased our MTS workers if we privatize this company. balloons-

I have a family. I have seven children; I fo ster another. Ms. Blanco: Oh, that is right. Yes, we went in the We have a phone bill already over $100 a month that we parade in Selkirk. We purchased balloons that we gave can ill afford. Any change in that will be a lowering of out to the kids. the quality of life that we have. I want to say that we are * (2010) average Manitobans on an average income, and I do not thinkthat we should have to pay with the vital services in Mr. Dewar: This $!57-campaign, the government was order to be residents of this province. so threatened by that $!57-campaign in Selkirk that they 122 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

spent $400,000 of taxpayers' money to counter it, to Mr. Ashton: I am wondering, have you had the counter the campaign in Selkirk and to counter opportunity to talk to some of the government MLAs campaigns like this campaign throughout the province. privately, andreco gnizingthe fa ct that right now it would Do you have any comments on that? takentwo go vernment MLAs to vote against the bill and this bill would not pass, because they have 30 members Ms. Blanco: It is rather unfair competition, I would on the government side? I know all 23 NDP MLAs suggest. opposethe bill; thereis a member from the Liberal Party here as well, and all three Liberal MLAs have opposed Mr. Ashton: This is a fo llow-up question. Who are the the bill, but if you had a chance to talk to those MLAs people of Selkirk believing, the government with its and tiy andpersuade twoof them to vote to save MTS, to $400,000 advertising campaign or the Save Our keep it publicly owned, whatwould you say to them? Telephone System committee in Selkirk with its $157 campaign? Ms. Blanco: I think when I am making a decision in my home, one thing I have to ask myself first is, how will Ms. Blanco: Well, I cantell you I know that, when we thisdecision affect thehealth of my fa mily, the health and began our sign campaign a couple of weeks ago, I well-being of my fa mily? Will the sale of MTS into personally did the phoning to ask people ifthey would private ownership contribute in some very clear way to take signs. I made probably 150 calls, and I only had the health andwell-being of the lives of Manitobans, not two people who did not wish to have a signput in their to the lives of people who own it, not to the lives of yard. That says an awful lot to me about whom we are people who might profit by that system, but we have to representing when SOS is here tonight. look then, what is the quality of our telephone system, and dowe have anyreason to believe that the sale of this Mr. Ashton: As you know, one of the issues that has will improve thator improve its accessibility to people in been raised even tonight is the fa ct that we are all our province? Ifwe cannotdemonstrate very, very clearly shareholders in MTS and we had no opportunity to vote that the sale of this company will in fact contribute in on whether to sell it off in the election because the some very clear and definable ways-you should be able government said it was not going to sell MTS. What is to list those. There should be a nice big list of how will your sense of Selkirk? You mentioned in terms of the our service be better, how will the cost of the system-can signs andwhat-not, but ifpeople had a chance to vote on we guarantee that that will not be increased? What will this in Selkirk and surrounding communities, how do you be the benefits? Ifwe cannotdetermine that there will be think theywould vote? Would they vote to sell offMTS benefits, then we should not do it. I think there must be or to keep it publicly owned? MLAs out there who can make that decision-two, I would hope. Ms. Blanco: I do not think there is any question whatsoever that the Selkirk community wishes to keep Mr. Chairperson: The time is up. Thank you very MTS. I would like torespond a little bit to what you said much fo r your presentation. about having hearings around the province. While I can absolutely concur with your request that that happen, I I would call Paula Mallea to come fo rward. You have would suggest that it is absolutely unnecessary to have handouts. Please proceed. hearings around the province, and I think the people of the province have spoken quite loudly. I do not think the Ms. Paula Mallea (Save Our Telephone System): people of the province want MTS sold. I think they want Yes, thank you, Mr. Chairperson. I would encourage it in public hands. I think they want to keep it in public people not to try to read that thing right now; save it fo r hands, and I do not think there is any reason to believe your bedtime reading. It is far too long. I would rather otherwise. Now if the government is going to attempt to have your attention here, if I may. ram this bill through anyway, then certainly I think you had better have public hearings so that you understand There was a lot of eloquence coming from those quite clearly as a government that you are doing it against previous speakers. I will not try to match that. What I the will of the majority of Manitobans. want to say, though, is that I have lived in Manitoba fo r October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 123

ll years now, and I chose it among the many places in the act because they permit anything, virtually anything, the country that I have lived as the place that I wanted to to happenwith respectto ownership once the debt is paid be. I am beginning not to be proud to be here. I am off. You and I both know that, ifAT&T Canada gets beginning not to be very proud of this government. Mr. interested in this company, as they are, and they canbe, Ernst commented that this is the only government in the they are now cited to be, and approved by the CRTC to countrywhich would provide us with an opportunity like be in fa ct a Canadian-owned company, Canadian­ thispresent to to a committee. I would like to suggest to controlled company-and if you believe that, I have a himthat this is about the only government in the country bridge to sell you-if AT&T gets interested in this as well that would try to pass this type of extremely company, thatdebt is going to be paid offso fa st, you are important legislation without ever telling the people that not going to have time to think about it. Once that was in its plans. happens, the head office cango anywhere, the jobs can go anywhere, it can be fully owned by a single individual. This government is distinguishable, I think, from the That is what the legislation says, Sir, and I would Harris government in Ontario only by the fa ct that at least challenge anybody at this table to show me where it says Mr. Harris had the brass to tell people what he was up to, otherwise. and they got to vote on those things. We never had that

chance and I think we need to have it now. I am not one lit (2020) of those who fe els that every piece oflegislation that the government wishes to put fo rward has to be taken to the Now, there is a certain arrogance attached to your people. You have been elected to be leaders and we efforts to do this without consultation of any kind. I am expect you to lead, so that is not my point. personally insulted, and I am insulted on behalf of all of the people behind me by the fa ct that it is clear to me that This legislation is different in kind. It is an essential you fe el that none of us is smart enough to understand service we are talking about; it is essential fo r all this business, that none of us can distinguish between Manitobans. It has an effect distinctly and directly on public and private enterprise, that none of us has ever run every single Manitoban. We own it; we have owned it a successful business, that none of us canread a balance since 1908. This is not the kind of legislation that you do sheet. Sirs and madam, I think not. We do know what not take tothe people, myfriends, and I would ask you to we are doing here. You underestimate our intelligence, reconsider, with all respect. and it is quite breathtaking the way in which you are doing this. Now, I guess, because my expertise is as a lawyer that I would like to address some of the legal aspects of this You say,'tw6 days after the last annual report ofMTS thing. I have read this legislation backwards and came out, which said that it was competitive; it was forwards, and I have heard the honourable minister in paying its debt down and it was making money and charge of telecommunications say, as he said today, that providing the best service in the country. Allowing fo r Manitobans will continue to be in control of our the fa ct that we tend to exaggerate a little in our annual telephone system. Sir, with all due respect, there is reports, all of those canbe demonstrated to be true. Two nothing in the legislation to guarantee that. You have days later you are selling the company. Why? Because every intention of passing the legislation before ever we cannot be competitive, because our debt is too high, doing anything about such guarantees. We have no way becausewe do not have good service, because we cannot of knowing whether you will put such guarantees in the afford technology. Give me a break. prospectus for this company that goes before the Securities Commission after the legislation is passed. Here is Grade 2 arithmetic, just fo r what it is worth. A There is nothing in there, Sir, that is going to keep this private company is going to buy our telephone system. company either physically in the province or in the hands That private company is going to immediately waltz to of Manitoban people. the CRTC saying, please, sirs, we must have some more higher rates, please, in Manitoba because we have Just to be specificfo r a moment, I would ask everybody additional costs. We have costs of providing this service in the committee to please reread Sections ll and 14 of that the publicly owned corporation did not have. What 124 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

would those costs be? Nwnber one, a private company time and have no benefits. That is the first thing that is will bepaying corporation tax. You know that we do not going to happen. do that right now. Thatis a big chunk of money, and any The second thing that is going to happen is any self­ private enterprise getting into this business. is going to be respecting private corporation is out there properly to very concerned about it. That is one . make a profit fo r its shareholders. It is not there committed to Manitobans. It is not there committed to Two, theyalso are going to be paying a whole lot more providing service. It is going to take one look and say, for whatever debt they have to take care of, and that is right, these services are not paying. These services are because, of course, our system benefits fromthe credit costing usmooey . Thatis me in Erickson; that is the guy rating that your government provides. That is a big in Tadoule Lake andChurchill Falls and every place else. difference; it is a lot of money. It matters and it is going Thosepeople areeither going to have 50 bucks a month to come out of our pockets. to pay for their local phone, or they are just not going to have a service. This is 1996. You cannot even do a Finally, and notleast-and I hate like heckto be the first decent job search without a telephone, so let us get one here to mention that word "profit," which is not a serious about this. I mean we are talkingabout saving dirty word; I am a businesswoman, I knaw what profit peopletheir phoneshere. is-but a profit fo r a publicly owned service that is supposed to be provided affordably and accessibly to all I know other people are going to mention this, but the Manitobans is not on, sirs; it is not on. We cannot have other thing that the legislation does do is it puts into them going to the CRTC and saying, you have to let us somejeopardy the benefits that people who have worked raise rates because we have to give our shareholders a for MTS over their lifetimes are expecting to receive, and return. Our system right now does not have to give us they have every right to receive. These people have paid any more return thanwe require to run a good service. It dearly for thosebenefits. I knowthat the legislation is set is service at cost. We are prepared to support that up not toreduce amount the of mmey that goes into those service, and we have great difficulty understanding how benefits, but that is all it does. It does not protect what any private organization is going to be able to provide benefits are provided. It does not protectthe erosion of better service more cheaply to anybody here. benefits. It says nothing about what would happen to the surplus that might arise from superannuation funds.

Now, I come from Erickson. I just drove fo r three Mr. Chairperson: Excuse me. Your time is up. hours to get here and I am going to have to drive three hours back through God knows what kind of weather to Ms. Mallea: I am just very disappointed that I have get home, and the people where I live stand to have their driven the minister from the room. Let me say that right local rates triple under private ownership. People living now, and I will take your questions. in the North where Mr. Ashton and Mr. Robinson, who is here, and others who are representing their people Mr. Chairperson: Questions? tonight are likely to have their rates quadruple. That is a lot of money fo r somebody on a fixed income. That is a Mr. Ashton: I would like to thank the presenter. lot of money fo r people up there who do not have the would also ask that the brief be accepted as a written kinds of income that you have sitting here in Winnipeg. brief to be printed in the Hansard, which is the practice because I was listening, and I amjust going through it. Mr. Chairperson: Two minutes. It is certainly a well-researched brief.

Ms. Mallea: Here is what is going to happen when this Mr. Chairperson: Is there leave? thing gets sold to a private enterprise. Allthe jobs-just like happened when Unitel came to town-are going to go An Honourable Member: Sure. some place else. Any that do not are going to be reduced to a shambles. They are going to pay less. They are Mr. Chairperson: Yes, leave then to have the going to have fe wer benefits. They are going to be part- presentation by Ms. Malleaentered into the record. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 125

Point of Order Ms. Mallea: I fully expect that. In fa ct, there you have the precedent, of course. Further to, I think one of the Mr. Sale: Point of order, Mr. Chairperson. things that has been missing from the debate is that we should be learning from our history. I think that, if there Mr. Chairperson: Mr. Sale, on a point of order. were examples of privatized telecommunications companies that have been beneficial, the government Mr. Sale: Without encroaching on the time of the would be trotting those out as we speak. They do not presenter, it is my understanding that by convention all exist. written briefs are accepted without the need fo r a motion on each one. If that is not the case, could the Chair so The Canadian examples that I am aware of that are advise so that we could move a single motion and not recent and are, I think, useful to us are , have to do this each time? which since privatization has raised rates at a much swifter rate thanever has happened in Manitoba and also Mr. Chairperson: I thinkit is customary that all written which is requesting, as we speak, to be able to charge briefs submitted are entered into the record. consumers fo r each and every single local telephone call. Think what that would doto asmall business, a nonprofit

* * * organization or even someone justtrying to run their lives with their children in schools and everything else, it is Mr. Ashton: I want to foc us on the issue of rates just-it is beyond the pale. Also, in Alberta, I am aware because I do not know if you have received a copy of the that since they privatized five or six years ago they are so-called MTS Answers that was sent around. I assume now paying some 34 percent higher rates than we pay in everybodyin this roomhas. This is one of the things they Manitoba as between their last effort to raise rates and are spending the $400,000 on. I notice one of the the one which will take effect in February, that is, from members of the public at the back has a copy with her December of last year to February of next year, 14 currently. What is interesting about what that document months, their local rates have been increased from says is: trust us-I am just paraphrasing it here-the rates between 70 percent to over 1 00 percent. That is in just are set by the CRTC. I want to foc us in on that because over a year. Now that is what we can expect a private I have before me-and you reference this in the written company to bring to us in Manitoba. brief-and I want to reference the specific decision on the 19th of February, 1996, with AGT . You said a private * (2030) company is going to be able to go to the CRTC and get those additional costs recognized. Well, the 19th of Mr. Chairperson: Mr. Ashton, fo r a very quick February, 1996, AGT went and got a $6 a month question. increase because of tax liabilities that went back to the privatization. Not only that, the CRTC stated that it Mr. Ashton: Also, AGT is the same model they are regulates, basically it guarantees AGT-which used to be fo llowing in Manitoba, but since I am obviously running publicly ownedand now it is privately owned-a returnon out of time here. I want to ask you, you mention you are equity of 10.25 percent to 12.25 percent. from Erikson. Your MLA would be-

Now, I want to just briefly mention what the invest­ Ms. Mallea: Mr. Gilleshammer. ment bankers said about the return on investment in Manitoba. They said it is about 6. 7 percent. This is not my figures; this is the three investment bankers. So are Mr. Ashton: The Minnedosa constituency. He is one of you saying then that under the regulations that the day the government members. He is one of those potential that MTS is privatized that private company will be able two who could save the Manitoba Telephone System. I to go to theCR TC andsay, hey, look, we are only getting am wondering what you would say privately to Mr. a 6. 7 percent return on our investment; we need to get Gilleshammer as a constituent of his, as a rural between 10.25 percent and 12.25 percent as AGT is Manitoban, that might try and persuade him to be one of allowed? those two people to save our telephone system. 126 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

Ms. Mallea: Well, everything that I have said up to telephone system in the province, and in that way now, but also just that people are very restless about this. preventing the waste of several million dollars of capital I mean, he was electedto office to do the things that he as well as the extreme cost to the telephone user. In said the governmentat that time was going to do, not to effect, he was saying, telephone competition is going to sell thetelephone company. When I speak to Progressive cost money to the users. It is not going to save any Conservative supporters in the area, they are, first ofall, money. He was right. It costs money. You have to swprised that anyone would even trysuch a thing without invest in a business; you have to have a marketing going to the people and, secondly, amazed that they are agency; you have to have advertising; you have to have not given an opportunity to say anything about it at all. publicity. You have to have all the infrastructure and all When they see that what the arguments are, they are the office staff. So he said, we want one system. In virtually 100 percent unanimous that this is fo lly, and effect, that is what he was saying. they know it. I regret to say it, I think this government is going to go down in history fo r this one, and you heard it He went on to say: I believe also that it is a good here first. commercial proposition and whatever profit there is-you know, Conservatives were not afraid to shy away from Mr. Chairperson: Thank you very much fo r your the word "profit"-in the operation of the telephone presentation. system from this time on will belong to the people of I would like to now call Mr. AI Mackling to come Manitoba rather than to a private company. I am also fo rward and make his presentation. Do you have notes? proudof thefa ct that we have been able to securefo r the people of Manitoba, the first complete system�mplete Mr. AI Madding (Private Citizen): No. system he is talking about-of government-owned telephones on the continent ofNorth America, and I am Mr. Chairperson: Then proceed, please. sure from the information that is being secured that the result, as years go by, will prove more and more Mr. Madding: The present administration says it want beneficial to the people. to privatize Manitoba Telephone System because it now faces competition in a deregulated system. MTS has A Conservativego vernment launched the MTS, despite proven itself successful despite competition. We have the fact there were services out there, to provide a had deregulation in long distance fo r some many months, complete service, to provide a unifYing force in the but MrS is winningin this competition. What about this province, to make sure that everyone in the province whole principle then of competition? Did it just start in would have an opportunity one day to have telephone thisyear, 1996? No, it was alive and well in 1908 when service. And you have heard eloquent testimony tonight a Conservative government said, we own a government asto theessential nature of the telephone industry in this telephone system. They were operating a government province as an important social and economic sinew in system, a very limited system, but they said we are going this province. to buy out the competition, private competition. They were doing thereverse of what this administration is now When the Roblin government started out with the doing. Manitoba government telephone system and then bought out Bell, it was operated as a completely tightly Why were they doing that? Here was a competitive controlled government system. There was no regulatory telephone system in Manitoba, so the Manitoba Free board looking over what they did. They set the rules as Press-it was not the Winnipeg Free Press then-had a tohow muchpeople would pay. Only after a time did the reporter that questioned Premier Rodmond Roblin about government give up control because it wanted to make this: Will you tell me why the governmentpurchased the sure that the system was built to provide service to the Bell system instead of completing the public system people. already begun? In effect, why are you eliminating the competition? Service to thepeople ofManitoba was the criterion, not Mr. Roblin said: We purchased the Bell system fo r the as would be the case now. Under privatization the purpose of avoiding the necessity of having a dual operation would be based on a return of the bottom line, October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 127 onprofit-and there is nothing wrong with profit-but not Mr. Madding: -but that was not the fo remost need. a concern to provide an essential service throughout the The need was to expand and to enjoy a sophisticated province, but to register a profit fo r the shareholders. modem service throughout the province.

Now the present administrationsays that MTS cannot When we talk about debt-equity ratio, the minister meet the technological challenge. Think of the challenge who-I will not refer to the fact where he is, but it was he in 1908. Think of the uncertainty about the advancing that forced the telephone company to advance schedule technology then. That gentleman was not afraid as a the introduction of private line service. I happened to Conservative to launch a government enterprise to live on party service-and I was Minister of the provide services to the people. What about MTS's Telephones at one time-and I was prepared to wait and positionin respectto technological challenge? I think the we were going to be waiting another two years, but this present administration is hoping that the people of government said, you had to do it right way. It was a Manitoba have very short memories. I remember about politicalact tofo rcethe corporation to spend hundreds of 20 years ago, the Manitoba Telephone System being the millions of dollars to advance private telephone pioneerin respect to a system-I believe the code name or connections. Now they criticize the corporation for part the acronymwas Iris-and we had a community, I believe of that debt. it was Headingley, that as an experimental model was completelywired into the newtec hnology. You could do I want to underline my concerns about the lack of everything fromyour home by the telephone. consultation in respect to this legislation. Nowhere was there any hint that ifelected a Conservative government Now that technology was not taken up. It was too would launch privatization of the telephone system. expensive. It was too far ahead of its time, but the MTS Where privatization had its earliest beginnings, I as a corporationhas not only lived with new technology, suppose, was in England. At least they had the courage it has beenat the leadingedge of new technology. So this and the will to state this is what they were going to do. argument that this minister and this government are This was a hidden agenda on the part of this making, that the MTS cannot cope with the new administration, and I want to say, as used technology is not worth listening to. Just by the way, to to remind me across the Chamber, that governments do underline it, just in today's Free Press, MTS gives net not own public assets that are under the control of speed a big boost-right up in front on the technology. government, that they are the mere trustees of those That argument just does notwash at all. assets.

* (2040) Mr. Chairperson: Sorry. Yourtime is up.

Whatabout thispublic debt? The other argument that Mr. Madding: Well, I will answer in questions. they say is that the poor corporation has a great debt-to­ eqUity ratio. We have to admit around this table and in this building that successive Liberal coalition,coalition Mr. Chairperson: Thank you verymuch . of Liberalsand Conservatives,Conservative governments and NDP governments have said indirectly to the Mr. Ashton: Mr. Chairperson, I want to welcome AI corporation: Did you provide service at cost? You are Mackling back, former Minister responsible for the not there to make a profit. You are to provide a blanket Manitoba Telephone System, former Attorney General, of service throughout the province, and they have done and I want to ask AI a couple of questions. Well, the that and done that very, very well. members across the way, if they wish to raise questions to Mr. Mackling, will have the opportunity without Thedebt-equity ratio could have been changed over the making comments across the table here. years by Conservative, Liberal or NDP governments if they wanted to by a moderate change in the basic I respect AI Mackling a lot, and I want to ask you a telephone rates- slightly different perspective here. You talked about the fact that the government did not say they would sell off Mr. Chairperson: Two minutes. MTS in the election. I want to go to some of the 128 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

questions that have been raised before. Most of the Mr. Mackling: I believe, Mr. Ashton, you are quite presenters have said we are the shareholders of MTS. I correct. If something can be considered fa irly on a want to ask, more in your capacity as a lawyer and as a reasonable basis to be ethically wrong or morally former Attorney General as well, ifthis was a private wrong-and surely taking property and disposing of it company, would they be able to do what they are doing, without coosent coostitutes an immorality or an unethical which is basically dispose ofthe assets ofMTS without practice-ifthat is the case, then it ought to be illegal. I a shareholders' vote? believe that a courtof equity could set aside this sale. I have yet to findauthority fo r that, but generally in law I Mr. Madding: Absolutely not. Your analogy is fa ir. have fo llowed the practice if something makes good The peopleof Manitoba ownthis corporation. They have COIIlDlOO sense, if theethics and the morals are right, then elected, not by 55 percent or even near that, a group of there should be law that says so. peoplewho are entrusted with the administration of this asset which we own. That administration did not Mr. Cbairperson: Thankyou very much. Your time is encompass the right to sell it off. There has to be, in my up. Thankyou very much fo r your presentation. view, when there is a trust relationship, some consent either tacit or explicit given by the beneficiary of a trust Point of Order to the trustee in order to allow that trust asset to be disposedof. Itwould be unheard of in any transaction in Mr. Ashton: Ona point oforder. I just want to note for law wherethis trustrelationship occurredfo r a trustee to the record that I had many more questions for Mr. arbitrarilydispose of anasset as the MTS is to the people Madding, andonce the again time was beingimposed by of Manitoba. the government preventing detailed questioning on what I think is a very significant point, in this particular case, Mr. Ashton: So, in other words, ifthis was the private thelegality itself of the sale because I do not think this is sector, this was not this government, they could not do a legitimate sale. I think Mr. Mackling raises a very what they are doing. They could not as a trustee sell off important point that not only the people of Manitoba the assets without the approval of the owners of the shouldbe aware of but anypotential buyer because, quite company, the shareholders. frankly, ifthis is not a legitimate sale, I do not think that the peoplewho might be interested in purchasing shares should rush into purchasing those shares unless they are Mr. Madding: Exactly right. I have looked and I still fully aware of all the potential consequences. Mr. believe that it may be open fo r a challenge to be made in Mackling raises a very excellent point. courtbecause there is no justification fo r this sale. There is no hint of consent on the part of the owners of this * * * corporation to its sale.

Mr. Ashton: Well, it is interesting you have raised the Mr. Chairpenon: Thank you very much fo r your legal question, Mr. Mackling, because this is something presentation. that has really bothered me since the beginning of this whole episode of Manitoba history. We know they do I would like to now cal! Dave Tesarski to come not have, I believe, the moral or ethical right to sell it or fo rward and make a presentation. Dave Tesarski? Mr. political rightsince they did not campaignon the election Tesarski not being present, his name will go to the and have not put it to a vote of the people, but you are bottom of the list. suggesting, then, perhaps they may not even have the legal right to do what they are doing. I am wondering if I would like to now call Mr. John Nicol fo rward to you have any more comments on that and if perhaps you make a presentation. Mr. Nicol, do you have copies fo r do not think as well that the only appropriate thing fo r distribution? this..government to do is to table Bill 67, stop the sale of MTS, and prevent the kind of chaos we could be in if Mr. John Nicol (President, Union of Manitoba there was what might potentially be an illegal sale. Municipalities): Yes, I do, thankyou very much. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 129

Mr. Chairperson: Thank you. You may proceed. (Mr. Vice-Chairperson in the Chair)

Mr. Nicol: Thank you. The Union of Manitoba The province has often cited MTS's $800 million debt Municipalities appreciates the opportunity to appear as a reason fo r selling the company; however, it is before the standing committee considering Bill 67, The important to examine what this debt represents. MTS Manitoba Telephone System Reorganization and has incurred this debt because it provided affordable Consequential Amendments Act. We represent 166 phone rates and made tremendous capital investments municipalities, including all of the 106 R.M.s, 14 LGDs, acrossManitoba. The debt represents crucial initiatives, 23 villages, 20 towns, three cities. The mandate of the such as the installation of ftbre optic cables, the UMM is to assist member municipalities in their installation of digital switching and, perhaps most endeavour to achieve strong and effective local importantly, the conversion of party lines to individual government. To accomplish this goal, our organization phone lines in ruralManitoba. MTShas spent over $620 acts on behalf of our members to bring about changes, million in the last six years upgrading the rural phone whether through legislation or otherwise, that will service. It is interesting to note that even with larger enhance the strength and effectiveness of municipalities. populations the private telephone companies in B.C., Ontario and have not extended individual line We are here today to state our opposition to Bill 67 service to all areas of those provinces. and theprivatization of theManitoba Telephone System. When the province announced the privatization of MTS Most recently, MTS, along with the City of Brandon, earlier this year, we received a number of resolutions played a vital role in the establishment of an enhanced from our membermunic ipalities expressing objections to 911 emergency response system for rural Manitoba. In the province's plans. The resolutions outline concerns fa ct, MTS is cwrently spending $2.5 million to purchase about the loss of jobs and the increase in telephone rates and install network-related equipment and activate new which will result from privatization. In less than a computer systems to facilitate the operation of the month, delegates to the UMM annual convention will emergency service system. The 911 service was only debate and discuss another resolution opposing the viable fo llowing the installation of private lines. We privatization of MTS. believe it is impossible to measure the social and economic beneftts which rural Manitoba has gained * (2050) through these initiatives. Clearly, the current and previous provincial governments also recognized the Aswe are all aware, MTS hasa long and distinguished importance, of�eseprograms fo r rural Manitobans when history of providingafford able qualitytelecommunication they authorized their implementation. servicesto ruraland northern Manitoba. When MTS was created in 1908, it was the ftrst government-owned telephone system in North America. The province Over the years, the UMM has been able to discuss a established a Crown corporation in part to ensure that range of other signiftcant issues with the MTS executive areas outside the city of Winnipeg would receive and the Minister responsible fo r MTS. For instance, the telephone services which were not being supplied by the UMM and other organizations were participants when private companies in operation at that time. MTS held the ftrst public hearings in Canada on call management fe atures such as call display and call trace. Providing service to rural Manitoba has never been an Inthe lastfew years, MTS has instituted annual meetings easyor a profitabletask fo r Manitoba Telephone System; with our board of directors, during which time we have nevertheless, it has been achieved because as a Crown discussed the destruction and replacement of survey corporation, MTS has been driven by public policy monuments, the placement of MTS cable, cellular phone considerations rather than being solely concerned with service in rural Manitoba, and grants in lieu of taxes. profits andbottom -line efficiencies. Rural Manitoba has Many of these matters have been successively addressed beneftted from the political will of provincial because, as a Crown corporation, MTS has a public governments to subsidize rural and residential rates with interest in working with municipal government. It is revenues from urbanand long distance phone rates. difficult to imagine that a privately owned company 130 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

would have hadthe sameincen tive to pursue these public Gentlemen, I would thank you very much for the policy issues. opportunity to express our concerns on this crucial issue. Thank you, Mr. Chairman. [applause] At the same time that MTS has been maintaining low rates, providing quality services and programs, it has Mr. Vice-Chairpenon: Thank you, Mr. Nicol. proven itself to becompetitive in a rapidly changing tele­ communication industry. According to the corporation's Mr. Nicol: I donot feel comfortable with that, ifyou do '95 annual report, MTS had net earnings of $15 million not mind. and was also able to reduce its outstanding debt. In the first quarter of '96, MTS made a profit of $9 million. In Mr. Vice-Chairpenon: Thank you, and maybe we addition, the corporation has been able to maintain its could ask the indulgence of the people in the audience to customer base in the long distance market despite the refrain from applauding. increased competition in this area. The minister himself had recently stated that, by keeping 80 percent of long Mr. Sale: Why mind, Mr. Chaiiperson? I think that you distance revenues, MTS has one of the better records wiD only increase thetemperalW'e ofthese hearings yo if u across Canada. try to keep people from increasingly showing their support for those positions taken by people as We acknowledge thatthrough Bill 67, the province has knowledgeable and experienced in public policy as the provided short-term protection for Manitobans through Union of Manitoba Municipalities. [applause] the issuance of a special share to the Crown. This will ensurethat the company's head office stays in Manitoba; It seemsto methat this is the government level closest- that Manitobans have a majority of seats on the board, and that the company cannot dissolve or dispose of a Mr. Vice-Chairpenon: Order, please. substantial part of its property. However, as soon as the new companypays off the debt owed to the province, the Mr. Sale: This is the government level closest to the special shareis surrendered, and the protective provisions people, and it seems to me that ifthey are clear that this are all repealed. The control of the company, which is a bad policy, then the government indeed is running provides such an essential service, could then be taken counter to the interests of Manitobans who understand away from Manitobans. the importance of these services.

In conclusion, it is clear Manitoba currently has a Mr. Vice-Chairpenon: Order. Mr. Sale, do you have competitive telecommunications company that has a question for Mr. Nicol? provided universal quality services at affordable rates. MTS has over $1 billion in assets, contributes $450 million annually to the provincial economy, and employs Point of Order 4,000 Manitobans. All these benefits will bejeopardized when the company is privatized. Mr. Ashton: Mr. Chairperson, on a point of order.

In themost recent MTS annual report, ChairmanTom Mr. Vice-Chairpenon: On a point of order, Mr. Stefanson stated that in its operation MTS recognizes its Ashton. obligations as a provincial Crown corporation. Mr. Stefanson wrote: We are the caretakers of a major Mr. Ashton: I realize that you are in a difficult position provincial asset, its communication infrastructure, which in having become the Acting Chair, but I notice the is strategicto theecono mic and social development of all previous Chairperson was not attempting to state water Manitobans. was not a legitimate question. Usually we have a f air amount ofleeway. We have only got five minutes, and I The UMMstrongly agrees with this statement, and we would suggest perhaps that we allow some leeway to therefore urge the provincial government to maintain members of the committee and members of the public. I MTS as a Crown corporation. think we were doing fairly well before. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 131

Mr. Vice-Chairperson: I am only asking Mr. Sale ifhe committee about going to rural Manitobans directly in has a question fo r Mr. Nicol. terms of the hearing. I have received by the way some resolutions from a number of rural municipalities * * * supporting the idea of having a direct vote on this, a shareholders' vote. I am wondering if there has been any Mr. Vice-Chairperson: If you do, Mr. Sale, would you discussion on that yet at UMM. If not, perhaps whether please present your question to Mr. Nicol? Thank you. it will be one of the issues that will be discussed because one of the concerns we have obviously on the opposition Mr. Sale: I am contexting my question as every other side is to make surethat whatever decision is made about questioner has done, including those on the government MTS reflects the will of the people of Manitoba. side, and I will continue to do that. Mr. Nicol has indicated his organization's opposition. I was struck by * (2 100) his point on page 2 that $620 million of this $830 million debt that seems to be so crippling was only Mr. Nicol: We have not discussed it at the board level, incurred in the last six years according to your sir. presentation. It was incurred in order to make single-line service a quality service available to rural Manitobans. Mr. Ashton: I am just wondering, in terms of the very Do you think that was an inappropriate expenditure on clearposition from UMM, ifyou have communicated this the part ofMTS, Mr. Nicol? tothe ministerand any other members of the government and if there has been any response from the minister or Mr. Nicol: No, I certainly do not think it was members of the government. inappropriate. Rural Manitoba needed single-line service. One of the examples that we gave was 911, Mr. Nicol: I personally have not had the opportunity to which requires single-line services in order to have it. go to any great lengths with each and every cabinet We hadthe opportunity to speak with MTS and with the minister, but my member of the Legislature is Mr. minister at thetime to speak about that, and we agreedon Findlay and we have talked. We have differences of that. opinion on a lotof things, both in the municipality and in Mr. Ashton: I want to stress the significance of your the province. We have discussed it. I am not an MLA; brief because I know many rural municipalities have I am just a lowly reeve. So that is part of Mr. Findlay's passed motions opposing it. The UMM does speak fo r decision. many municipalities, the rural municipalities, LGDs, villages and towns and the three cities you reference. Mr. Ashton: I do not think anyone is lowly and certainly not yourself, and when you speak on behalf of I also want to ask a question on rural phone service the UMM, it certainly has to have some impact, I think, because this is one of the big concerns we have. The on this decision-making process. governmentjust put out this document, which said, well, we are no longer in the days of party-line service. From I also want to ask too if you are aware that the my understandingof the brief, you are confirming the fa ct Manitoba Association of Urban Municipalities has thatin provinces that do not have publicly owned phone passed a resolution that is also on record opposing the companies, privately owned phone companies in sale. provinces like B.C., Ontario and Quebec, many of those people in rural areas still do not have the kind of party­ Mr. Nicol: I have no idea what the urban association is line service that we have because of the kind of doing now. investment that you and Mr. Sale just referenced a fe w minutes ago. Mr. Ashton: Perhaps I will just leave that as information, but also I just want to ask you if you can Mr. Nicol: That is our understanding of it, sir. once again give themembers of the public, particularly in Mr. Ashton: I am wondering, too, in terms of process, the city of Winnipeg, some idea of whom the UMM because I know we had some discussion earlier in this represents, because you reference the large number of 132 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

municipalities, but is not the UMM basically the voice 15(8) read: "Thepersons described in subsection (2) are for rural communities in Manitoba on a whole series of deemedto consent (a) to termination of their participation issues, including on MTS? in the fund; (b) to the assignment and transfer of assets, liabilities and agreements from the fund to the new plan; Mr. Nicol: We do, werepresent all rural municipalities, (c) to the determination of all rights under the new plan the maj ority of local government districts, but we also without reference to The Civil Service Superannuation represent 23 villages, 20 towns and three of the cities, Act, the fund, or any trust or trust agreement relating to Brandon, Thompson and- them; and (d) to termination of their participation in the group insurance plan established under The Public An Honourable Member: Portage Ia Prairie. Servants Insurance Act toand theassignment and transfer of monies and investments, liabilities and agreements Mr. Nicol: Portage Ia Prairie, yes. Thank you very related to such group insurance plan." much. I would like to say fo r the record that I donot consent Mr. Vice-Chairperson: Mr. Ashton, with one more to any changeswhich would allowMTS to administer my question. pension. In its annual report to the Legislature, the Crown Corporations Council stated that MTS has a high Mr. Ashton: Actually I just wanted to thank the business risk with a negative risk trend because of presenter on behalf of the UMM, and I do know that the industry uncertainty and its high debt-to-equity ratio. UMM is speaking out fo r many rural Manitobans when With releaseof this report, the Minister of Finance Eric he says and the UMM recommends that this bill not go Stefansm said that he recognized the financial problems through. I want to thank the presenter very much. facing MTS and saw the need fo r something dramatic to bedooe. One canonly speculate what dramatic thing the Mr. Nicol: Thank you. minister has in mind, and surely no present or future MTS pensioner would want to become a part of it. A Mr. Vice-Chairperson: Thankyou, Mr. Nicol. privatized MTS maysell offany or all of its assets. Each division will beentitled to part of the MTS pension plan, I callon JoAnne Hamilton. JoAnneHamilton. JoAnne andany pation which is removed will cease to be a part Hamilton. of the plan. As the pension fund becomes fragmented, benefits could decrease or cease entirely. As a private Okay, we will call the next person on the list, Ron company, MTS would be free to sell, lease or dispose of Rudiak. Do you have written presentations fo r all or substantially all of its property, cease to carry on distribution? business, or be dissolved or liquidated and dissolved under the corporation's act or otherwise. Mr. Ron Rudiak (Private Citizen): Yes, Mr. Chairman, I do. MTS employees need no reassurance when they Mr. Vice-Chairperson: Okay. You may proceed. contribute to the Civil Service Superannuation Board. It is not a controversial issue. The CSSB pension plan is Mr. Rudiak: I am here to express my displeasure with well funded and managed and has earned the well­ the government of Manitoba regarding Bill 67, deserved confidence of contributors. authorizing the sale and privatization of the Manitoba Telephone System. Manitobans have been betrayed. In 1985, the fe deral government passed the pension Many times we were told by this Conservative benefits standards act to ensure full funding of pension government thatthey had no plans to privatize MTS, and obligations. The money, approximately $350 million, is I am glad I did not bet the fa rm on those statements. presently owing to theCSSB to clear up MTS's unfunded liability. This Filmon government has fo rmulated Bill 67 outlines how privatization will proceed, and legislation to allow manipulation of the pensioners' and hidden within the agenda we find that our pension is employees' money away from the CSSB and will allow being manipulated away from the CSSB. The words in MTS to manage/mismanage our funds. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 133

We have not beenconsulted on these matters nor given been in contact with many private citizens, including an equal opportunity to make any changes or deny any business people in the town of Steinbach, and a lot of changes to the existing plan. Without meaningful them are very concerned about the privatization ofthe dialogue the motives of this government and MTS are ManitobaTelepho nes. Whenthey find out that their bills suspect. Thank you. are going to increase dramatically, then they are not in favour of it at all. However, what happens is MTS in Mr. Vice-Chairperson: Thank you. that area sent out the flyer, the two-page little piece of paper that was supposed to explain how the rates would Mr. Ashton: I would like to thank Mr. Rudiak for his be controlledby CRTC, and what I fo und was that in the presentation. I should say to the members of committee, post office where people have boxes that a lot of that we have had the opportunity to talk already, and I know stuff stayed in the boxes. It was not read, unfortunately, you very kindly sent me some material that spoke, I because I am sure, people ifthey did read it and thought know, certainly fo r your own concerns. I raise the issue about it for a little bit, I am sure they would have the in the House, and the minister-! hate to paraphrase same questions that the rest of us have. him-basically said, do not worry, trust me, there are not many concerns, and MTS pensioners who have looked at Mr. Ashton: I appreciate that perspective because, once this situation do not have this concern. I am just again, I havebeen all over rural Manitoba and I have had wondering what your sense is, not only of your own a tough time fm ding anyone that supports selling off concern but of other people or retired MTS employees. MTS. I want to fo cus in on what you are saying here Are they concerned about the future of the pension plan? again too in terms of pensioners, people are receiving what-1 ,300, I think approximately, people receiving * (2 110) pensions, andwhen you quote the words here which says: Mr. Rudiak: I have talked to probably close to 100 "The persons described in subsection (2) are deemed to retirees. I have talked to many present employees in consent (a) to termination of their participation in the various offices within the province of Manitoba, and I fund." have not fo und one person that supported Bill 67 of all those people. Some people were not aware of the drastic I want to ask you, did the government before it tabled implications of a privatized telephone system. The part this legislation ask you fo r your consent; and, if they had where the telephone company could be sold offand not asked you for your consent, what would have been your even belong to a Manitoba company, a lot of people are answer to Mr. Findlay and Mr. Filmon and the govern­ not aware of that. The time frame was so short fo r Bill ment? 6 7 that really nobody had much preparation time, and I would have to saythankfully that there were some people Mr. Rudiak: Mr. Ashton, I have never been asked by that did take the time, like the NDP party and the anybody to give consent to this portion of the bill. I Liberals. They had the time to look at it or they made believethat it was put in there to hide within this agenda time to look at it, and they made some of us aware of the fact that our pensions could be at risk. some of these serious consequences of what is going to happen. Mr. Vice-Chairperson: Mr. Ashton, with one more question. Mr. Ashton: I am wondering, too, because you are from the Steinbach area, if you could outline if there is a lot of Mr. Ashton: One final question. Once again your call for this in your area of the province, and it is representative in the Legislature is a member of the interesting we just fo llow the UMM, which represents government side, and I mentioned before it would only rural municipalities and which is opposed to the sale. I take two members, only two members to vote the other am just wondering what the view is of the people you are way, to stop this bill. I am wondering what you would talking to in your own community, in the Steinbach area. say if you had the opportunity to talk to your member of the Legislature about Bill 67, whether it be in regard to Mr. Rudiak: Here again, it is a similar situation to the the pension or the overall sale of MTS, what would you employees of Manitoba Telephone System where I have say tohim to tryand convince him to vote with the many 134 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996 people you are saying in Steinbach, who are saying that We have various types of pensions when we leave we should not sell off MTS? there. Some of them are predisposed. My particular pensionis a 15-year guarantee which can be tallied out in Mr. Rudiak: I would probably reiterate some of the 15 years totally to an amount of money that should be things thatwe talked about here that people really are not mine ifthey do mess with the pension fund. It comes to aware of the implications, and I would explain to him $128,056.80. If I live beyond 80 years of age, it that I have not fo und any employee yet who has been in continues ongoing till I die. Since all the money in the fa vour ofthis. I have talkedto several peoplein the town present fund now has all been donated, I understand, by of Steinbach who really could not make a decision one the company and is fully in the pension fund and is only way or the other, but, by and large, everybody I have payable to the pensioner, therefore, no one else has any talked tois not in fa vour of privatization. I am surprised permission to take or use this money. I understand it that this is continuing in the province of Manitoba in comes to about $700 million. This is quite a sales many, many jurisdictions and that this Conservative gimmick for those who want to buy this portion of the government is notaware of it or does not seem to want to company. I know it will have to be divided up among the be aware of it. I find it incredible, you know. various parts and pieces they sell away, but this is a lot, and a big selling point fo r them. Mr. Vice-Chairperson: Thank you, Mr. Rudiak, for your presentation. Good night. All pensioners, employees and citizens should receive their pension value in shares of the newly fo rmed The committee calls Mr. William Sharpe. Do you have Manitoba Telephone System. This is not going to copies of your presentation fo r the committee, Mr. happen, I know, but in our wishful thinking we would Sharpe? like to have some guarantee that we are going to get a pension to continue on into this new company era. I Mr. William Sharpe (Private Citizen): Yes, I do. thinkthat is about all I have to say.

Mr. Vice-Chairperson: Okay. You may proceed, Mr. Mr. Vice-Chairperson: Thankyou, Mr. Sharpe. Sharpe. Mr. Sharpe: Thank you. I am speaking for retired Mr. Ashton: I wanted to thank the presenter. I am just employeesas well. We are looking at a pension fund that wondering if you could c;!ve the committee some is about to dissolve and be given to the Manitoba indication of how long you worked fo r MTS.

Telephone System to manage the best way they can . We have a government body that is looking after our Mr. Sharpe: I worked there 25 years and then I retired. pensions right now. We have utmost trust in it, and I see I have been retired five more. no reason to take it away from them. My presentation then is more about the pensioners who are going to be Mr. Ashton: Was there ever any question in your mind shortchanged here. whenyou workedfo r MTS that your pensionplan would ever, at any time, be put into this type of situation? The Manitoba government of Mr. Filmon regarding the When you worked there you received a guarantee MTS pension plan. The MTS pension plan is controlled basically from the employer that you would be getting a and held by the Manitoba provincial government Civil pension fund under the Civil Service Superannuation. Service Superannuation Board. We the pensioners of Was there any doubt in your mind that that was ever Steinbach area respect and trust this arrangement. We going to be changed? have accepted it and see no reason to take the money to pay ourpensions away fromthem. They are doing a good Mr. Chairperson: Mr. Sharpe. Mr. Sharpe. job, and they could still do a good job under privatization. We do not know or trust our money in the handsof the appointed people who are trying to move in Mr. Sharpe: Yes, I heard you. When we worked fo r the on our pension money, which may be the basic cause fo r company, we did not receive the pension as part of our the move they are doing. daily pay-and we expect it to be there at the end-and it October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 135 never struck me that it might not be there until this new Mr. Sharpe: Yes, I think it would be nice to separate buyout has come to hit us in the fa ce. out those who had money coming and pay them if they are going to divide the money up. If they are going to Mr. Ashton: Well, I am wondering if you do not think divide the company up and sell it, they are definitely that the government has a moral and legal obligation to going to have to divide up the pension plan and the continue the existing pension plan. Do you think they money in it. I would like to get some reassurance that we have any right to do anything other than what you are that are already retired will receive ours. suggesting, which is keep the same- Mr. Vice-Chairperson: Thank you, Mr. Sharpe, fo r Mr. Sharpe: No, there is absolutely no right. your presentation. Mr. Eduard Hiebert. Do you have a copy of your presentation? * (2 120) Mr. Eduard Hiebert (Private Citizen): I have it but Mr. Vice-Chairperson: Mr. Sharpe. I am just they are in the process of duplicating it right now. Can identifYingyou fo r the benefitof Hansard, Mr. Sharpe. we just go with the next one, and I will go right behind him then? Mr. Ashton: I believe thatthe presenters today thinkthe Mr. Vice-Chairperson: Is that agreed? [agreed] Thank government has absolutely no right to make this kind of you, Mr. Hiebert. Mr. B. E. George, B. E. George? B. decision, and I believe Mr. Sale has a question. By the E. George. Thank you, Mr. George will drop to the way, I would like to thank the presenter, and I notice you bottomof the list. Mr. Ross Martin. Mr. Martin, do you are from Steinbach area as well. have copies of your presentation fo r the committee?

Mr. Sale: Mr. Chairperson, I wonder, sir, if you are Mr. Ross Martin (President, Brandon & District awareof the sad history of the CN Route company which Labour Council, CLC): Yes, I do. was privatized to a trucking arm of CN which was privatized, and the pension fund was looted by the new Mr. Vice-Chairperson: You may proceed with your private owners. All of the employees who thought they presentation, Mr. Martin. had secure pensions fo und they had not only no secure pensions but no assets left in the company and were left Mr. Martin: Mr. Chairperson and members of the with huge amount of wages owning. Are you fa miliar committee, I would just like to mention that the weather with that large bankruptcy? is not very nj.ce out tonight, and I do thank you fo r moving those of us from rural areas up. We had two Mr. Sharpe: No, I was not fa miliar with that, but I have other people that were going to come, Mr. Ron Teeple, heard before about it, though I am not familiar with the who was going to make a presentation-unfortunately, he actual come and go, because I was not thinking about it could not come with me because my employer wants me at the time. I will be looking fo r those things in the somewhere else tomorrow morning-and Evelyn Findlay, future, though. a retired MTS member, who also would have wanted to come and make a presentation. Neither can make it Mr. Sale: Would it be your position that, at the very because this committee will not travel out to the rural least, if the government insists on ramming through this areas. privatization that they should split the pension plan so that those who are now in receipt of pensions would at The Brandon and District Labour Council represents least see their assets and their guarantees continued and approximately 4,500 members from 25 affiliated local that existing employees and future employees might unions, including the CEP Locals at MTS. We have suffersome other fa te, but at least those who have served been involved in the Brandon Save Our Telephone the province fa ithfully-well, who have done their work System Committee since its inception. and contributed-would have the guarantees they were promised by splitting out the plan and the actuarially Since 1908, the owners and the customers of the calculated assets to which they are entitled? ManitobaTelephone System have been the same people, 136 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996 the peopleof Manitoba. We already own MTS, so why people. I believe they have laid offabout 300, all in should we pay fo r it again? Yet Bill 67 will transfer Manitoba Controlled by a private companycould mean ownership from the people of Manitoba to private the transfer ofthese jobs andprofits to anywhere in North shareholders without the people having any say. We fa il America seriously impacting Manitoba businesses. MTS tounderstand why this government is so intent on giving as a publicly-owned company has a mandate to provide away the Manitoba Telephone System since all their the best phone service at the lowest rates to all argwnents canbe easily dismissed. We can only come to Manitobans. Its policy has been to keep residential rates the conclusion that the sale is based on ideological low sothat household each can aff ord phone service. The reasons rather than on common sense. We also believe more residents spend on telephone service the less they that there has been a conspiracy by the Progressive spend on other goods and services. Conservatives to give away Manitobans' MTS assets at the lowest possible price. Not even Mr. Findlay is so Bill 67 does not guarantee that Manitobans will incompetent to sell the cable system worth $63 million continue to own MTS. It is so ambiguous that foreign fo r only $11.5 million. Other reasons had to be ownership is probable. When Alberta privatizedAGT, dominant, especially when MTS was making a profit of it was to be held by Albertans. Only 10 percent could $1.9 million and revenues of $5.8 million, ,especially afford shares, meaning that 90 percentof the population when every other telephone system is trying to acquire gave their company, their ownership, to the richest 10 cable systems. This wasa sellout of the most treacherous percent. Now AGT is traded on the Toronto Stock kind. Exchange. At the same time, Albertans pay 34 percent more thanManitobans fa: basic phone service. AGT just The second sellout wasthe telemarke ting. FaneuilISG applied fo r another $6 per month increase. The CRTC received a $4 7 million contract with MTS, but this was does notprovide the protection that Mr. Findlay claims, vecy suspicious due to the apparent interference by Mike andhe knowsthat he is lying about it. Bessey, the Premier's (Mr. Filmon's) friend. Besseyalso had a personal fm ancial involvement of $400,000 with Mr. Glen Findlay, Minister responsible for MTS, has an officer of Faneuil. In addition, Manitoba's senior indicatedthat MTS needsmil lions of dollars to improve servant, Charles Feaver, left to become a senior the technology. MTS bonds could be issued to raise executive of Faneuil. capital,the same as the highly successful HydroBonds, or Mr. Findlay could givethe $400 millionthat he is writing But thebi ggest deception is the sale. The minister, in of(to MTSbuy to new equipment Mr. Findlay said that the mostcowardly fas hion, refusedto take this legislation the debt load is too high, yet it is Mr. Findlay and his to the people of Manitoba. He refused to hold public government thatspent $600million to provide individual informational meetings with the peoplewho own MTS. phooe service toall Manitobans. Now we have access to He refused to defend this legislation with his peers, enhanced 911 emergency service. Neither Ontario Bell relying instead on the Tory majority in the Legislature, nor Quebec Bell, both private companies, provide this hoping that no one would know what he and his gang level of service. were up to. Now, to sweeten the pot, the government has MTS is not only paying all its debts but it is also announced that it will pay off one-half the debt, makinga profit which is reinvested back into the system, approximately $400 million. Thatis $400 fo r every man, improving serviceto Manitobans. Mr. Findlay has stated woman and child in this province. Not only is he that MTS is burdened with government interference, swindling the people out of their telephone system, he is therefore cannot make timely decisions to counteract charging them fo r it and then selling them shares on top otherprivate telephone company decisions. Mr. Findlay of it. What a traitorous act. It is the same as having a and his government have had eight years to correct this house withhalf a mortgage, selling the house but keeping problem. Perhaps Mr. Findlay is lying. It took only three the mortgage. It is stupid, and it is shameful. days to sell MTS. What could be quicker than that? Perhaps it is Mr. Findlay that needs changing. Consider the fo llowing. MTS has the second-lowest residential mtes in North America. MTS employs 3,700 * (2 130) October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 137

Another government scam appears to be the pension the ruralarea in places such as Souris, Virden, Deloraine, changes. Employees, retirees have been denied half the Boissevain, Glenboro. The people we have come across seats on the board. The issue of surpluses has not been did realize that MTS was being sold, and they wanted to addressed nor have improvements . Federal regulations know whom it was being sold to, why were they selling do not guarantee pensions. They only give a framework it. Quite frankly, there has been a blackout of to govern the pensions. And why do MTS shareholders information. The members representing those ridings, I have to pay $400,000 fo r Tory propaganda right here? believe, have deliberately kept this information away MTS has not been sold. Yet, under the MTS logo, a from the members in those ridings, the people that elected double-sided sheet of Tory lies and half-truths has been them, in the hopes that no would mention it and they delivered to every Manitoban household, and under the could pass this ridiculous legislation. signature, I might add, of Mr. Fraser. Since when did he get elected to be a political hack? Mr. Ashton: Well, there are a lot of the government MLAs-I mean, apart fromthe island of sanity in Brandon We strongly oppose our money being used fo r your East with Len Evans, they are all Conservative members propaganda machine. We strongly object to this elite in southwest Manitoba. I am just wondering, have any of Tory advertising without any consent from the current them had a public meeting on the issue of MTS? shareholders. This is the same government that is passing labour legislation next door under Bill 26 that Mr. Martin: None thatI am aware of. I believe they are requires every person represented by a union to be too scared to let the people know what they are doing. contacted prior to anyadverti sing. Does this government not believe in its own legislation? Is this a crooked Mr. Ashton: So this government, which campaigned in governmentintent on lying to Manitobans? MTS is ours. theelection on not selling MTS, in Westman has not had It provides decent-paying jobs- a single public meeting to solicit the opinion of the residents of Westman, the people they supposedly Mr. Vice-Chairperson: Two minutes. represent in the Legislature.

Mr. Martin: Thank you-and competitive service. Its Mr. Martin: There is none that I am aware of, and I privatization will seriously impact residential customers, have written to Mr. Findlay asking him for public small businesses, nonprofit organizations, people on meetings; Mr. Findlay did not even have the courtesy to fixed incomes, seniors, the disabled, Internet users and send a letter back. those who live in remote or rural areas. We cannot afford Mr. Ashto�: .Well, it is interesting, too, because he also privatization. We cannot afford Tories. Thank you. wrote to you a letter aand lot of other people I know, sent copies of a letter which stated-and I referenced this Mr. Ashton: Mr. Vice-Chairperson, I want to thank Mr. earlier-that contrary to some reports, no decisions have Martin for his presentation. I want to foc us in on been made or will be made about the privatization of Westman, asyou indicated, since we are not able to go to MTS without public discussion. That was on March 1, Brandon and western Manitoba to have hearings because 1996. On April 30, they decided-well, two days after of the government's refusal to allow that. I wonder ifwe they received the report from the investment bankers-to could sort of transplant ourselves to Brandon fo r a sell it off. moment and if you can perhaps outline what has been happening in Brandon and Westman. You mentioned Now you have Mr. Findlay sitting here, after you about the Save Our Telephone System committee, you received this letter, I am wondering what you would like mentioned some of the things people are talking about. to say to Mr. Findlayabout his statement that there would What are people saying in Brandon and Westman about be public discussion of MTS, when in fa ct no such thing what this government is doing to our phone system? happened and they made the decision based on the investment bankers without any input from the public. Mr. Martin: Basically, the people are opposed to it rightacro ss. Very, very few peoplehave wanted anything Mr. Martin: I believe Mr. Findlay was playing very fa st to do with it. We have delivered pamphlets throughout and loosewith the truth, and I believe this plan was part 138 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

of the government's plan fo r a considerable amount of If you go with me, on tht: first page of the handout, time. I have already indicated that in my brief, in that there are some 43 names I believe from the Lundar area they were selling offcable, the profitable centres such as who are requesting that this committee go to Lundar and cable, the telemarketing, in the hopes that MTS would give them the opportunity to talk with them as well. If lose its customer base and they could sell it to their you then goto page 3-I guess I do not have the attention friends fo r absolutely nothing. of everyone here but I will go ahead anyway. I am not sure why. Is the time still running while you are not So I do not believe that this decision was made after listening? March 1. I think it wasmade prob ably sometime a couple of years ago, and the date, whatever the date may be, An Honourable Member: Yes. April 1 or whatever, that date, that is when they actually made the announcement. The decision was made long Mr. Hiebert: Okay. On page 3, there is a document before that. which I have prepared which talks about the Canadian Wheat Board, the benefits of it and by way of parallel Mr. Ashton: I am wondering too, and a lot of people givesyou the example of why people, fo r example, want have talked about all of us being shareholders of MTS, toget rid of the Canadian Wheat Board. That it is really and given the fa ct the government obviously did not tell the same bunch ofpeople who are tryingto get rid of the the truth about what their plans were with MTS in the MTS as well. I will not get into the details of that. election, whether you fee l they have any moral, ethical, political-I am trying to think of any right-other than the Then onpage 8 is the infamous ad that you people had fa ctthat they have a majority government and can ram it MTS tell us the news fo r the future. You are getting two through if they can persuade their members to support it. pieces ofhandouts. Unfortunately, the rear side was not Dothey have any right to sell offthe Manitoba Telephone part of your initial one. That was something I fo rgot to System? mention to theperson copying, my mistake. But I simply want to indicate to you that-and I will just back up a Mr. Martin: The only right that I believe that they have little bit-many of you know that I was before the PUB is a legislative dictatorship. Basically this is my representing rural people. Through that, we ended up company. I pay my telephone bills. In fa ct, I pay two of accomplishing I think an improvement in rural service them now. Everybody in this room who has a telephone such as theelimination of party lines and access to all of pays a bill, andthey all own it. I am the owner of it; I am our neighbours. Within that context, I certainly have one of the owners. Every person who has a telephone in gottena lotof information as to what is good information this whole province has ownership in it. It is theirs, and within the PUB, and when I look at this letter that you I donot believe that they have been asked whether or not people hadthe CEO of MTS write, there is very little in to sell it. If you tried to pull this off with a private there that has any fa ctual value. I dare any of you to try corporation, they would string you up. I do not see why and say that that statement is fa lse to me on the basis of they should be allowed to do it with a public corporation good quality information, because this is absolutely a and one that happens to be one of the most successful horrendouspiece ofinf onnation as far as misinformation. probably in North America. I think it is a criminal activity, certainly no moral grounds or ethical, and they * (2 1 40) ought to be ashamed of themselves.

(Mr. Chairperson in the Chair) Mr. Vice-Chairperson: Thank you, Mr. Martin, fo r your presentation. One important element that is missing from this information that you are passing on to everybody telling I call Mr. Eduard Hiebert. You may proceed, Mr. them what it is about, this information and the one you Hiebert. did with the Health minister is exactly the same thing. Mr. Hiebert: Thank you. The foc us of my presentation You are telling us all kinds of good stuff, but nothing in will be on two parts, the detail and also the process. I there says that these hearings, fo r example, are coming will, however, not spend a lot of time on the detail. up. Nothing in either one of these documents says, hey, October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 139 people, if you really have some concerns, here is an union. I did not know that at the time. I put that on the opportunity. The whole thing basically says, as this record. one-it concludes: Full details are expected to be available to Manitobans in early November. Guess I also put this letter on the record. This was a letter what? By that time it is like a mousetrap. It is set; it is that I sent to the Chair of that, by the way, which I have finished. They cannot do anything. not received any response so far. I think it is absolutely uncalled for when people in your situation are making Without going into any of the legal stuff, and I mean basically judicial types of decisions and to have such despite my participation before the PUB, I believe there blatant bias being exercised by one of their members in are a number of areas in which this legislation is going to that other committee and that the Chair does not even be subject to legal challenges because it is flawed. The have the audacity so fa r to acknowledge that letter to me, process is flawed. It will not stand up in court as fa r as never minddoing anything about it. I thinkthis is further being able to justifY that due process was taken. Enough reasonthat this type of hearing will not stand up in court of that, though. if this gets challenged. You need to have due process, not just simply walking through the motions. Onpage 9, I give for your infonnation a little bit more, Dealing a littlebit further with the process, on page 13 just a few of the counterpoints to the ad we just finished I give you a pieceof -it is part of the press. You certainly speakingabo ut. Then I address you-this is on page 9 of get very favourable reporting on it. It is very different as my brief on the bottom two paragraphs. I want to bring to when you start analyzing the truth of it. However, I it into the public record over here. Many people, would like to focus in on just the last paragraph. It ends including Mr. Penner, certainly know that at the time up indicatingand saying: "Premier plans to when I brought forward the purple fuel issue and I also conduct a major shuftle"-and by the way this is after they brought fo rward the telephone issue, it was the other have talked about this particular plan, the privatization, governmentthat was in power at the time. I was already et cetera, and there are going to be a lot of howls. But, a member of the NDP at that time, but Jack certainly anyhow, he then concludes and says: "Premier Gary knows very clearly thatI embarrassed both Schroederand Filmon plans to conduct a major cabinet shuftle soon Doer into doing that what they should have done. I will after the session ends in early November. Any Minister be leading up to that point as fa r as yourselves here, as who under-perfonns during the current session"-and I well. Just hang onto that thought, though, fo r a little like to stress that-"any Minister who under-perfonns later. I just simply say, it is there. during the . current session will likely be warming a

Government back-bench ...." Now I would like to turn over to process, on page 11. was already before the committee of 49 on the I mean, this is the goodspin that they areputting on to regionalization of health. I believe I came there in good it, but this is also the reason why Jack Penner lost his spirit; I gave the infonnation. I only carne there on the cabinet seat. This is also the reason why my own basis of what I had heard in the news, that it was going minister, , was not part of cabinet. They on. I had not known about it beforehand. I came there; dared for a moment to speak their mind, and they got I made my presentation. Someone obviously liked it. I treated in a very punitive manner because of it. This has was in a rush. I was a rural person. When I was going put a good spin on it, but the reality is that is what is home to do some more farm activities, this person went happening. out with me. We had a bit of a chat, and one of the membersof that committee, one such as yourselves here, I want touse this as a lead-in to something that I want came out, and if you refer to page 12 and the top of the to give you a bit of advice. Recognize that it is coming paragraph, he firstmade kind of a-1 think an unwelcomed from an NDP member, but, on the other hand, I also approach to the lady. Having gotten our attention, he standfirmly onthe ground thatwhen the NDP have fa iled then very rudely and stridently indicated to me that he I embarrassed them into action. I believe in that. I also now knew where I stood and that was all he needed to ask the same of you people. I believe honestly, for know. It so happened that this person was a part of a example, at the federal level it is not good fo r Canada 140 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996 that we have had this route since Mulroney. I mean, I Mr. Ashton: I would like to thank the presenter. I do absolutely could not understand we went into the second know that he has been very involved in terms of termof him. However, the point is this. No matter how presentations on telecommunications issues. I attended bad he was, there was, I think, a lot of good, dedicated- therecen t CRTC hearings here in Winnipeg, and I know Mr. Hiebert was there. So he has, I think, been very Mr. Chairperson: Two minutes. accurate in describing the fa ct that he does have some knowledge in this area. Mr. Hiebert: -good, dedicated people who wanted to serve on behalf of within the tradition of the I just want to ask one quick question on the names Conservative party, and I think there is some good from Lundar, which, as you mention, is in Lakeside tradition within that. Yetthey got bounced out, and they constituency. The sense I am getting across rural got bounced heavily. One example of that is Felix Manitoba, there is a cross section of people from all Holtmann. He was my MP. At the time when they went differentpolitical persuasionswho aresaying theydo not up fo r election when was the leader, no want MTS sold off The 43 people here and the people one within the Conservative Party would have dared in Lundar,and you are from St. Francois Xavier as well, stand against him. However, now that he has been out whatare people saying? I mean, is it only the NDPers or one term, he tried to come in again, and he was beat by people from different political persuasions concerned someone whom I have never even heard of before. about this?

Mr. Hiebert: Well, clearlymany of the NDP are against The very point that I am making to you people, those it. Many of the Liberals are against it, but I have also of you who really want to continue to serve, you need to certainly talked with a number of Conservatives, keep youreye onwhat is currently having to be done, but including some prominent Conservatives, as fa r as you also need to lookat the practicalityof the future. I prominent, well-known toyou, who have assured me that suggestto you it is going to be-despitemy own political they are verymuch against this. There is one even closer orientation, it will be a bad day if a lot of you lose into the Brandon area. I gave hima call. I mean, as fa r because a lot of the people, once they really findout the asmy own participation, he could support it. He agreed thing that you fa st-tracked, how negative it is fo r them, with it; however, because of his own political persuasion you will get a fe w calls that I think that you will be withthe SOS people in Brandon, I guess, because of the surprisedwith. Maybe they will not have the audacity to union affiliation, he could not. But I certainly want to tell you toyour face, but they certainly will tell you when stress I think it is very widespread. they are in the little box making the next election. I remind you of that. If I may add a further point as to the process. Just before cominghere, and I did not have an opportunity to Maybe just to conclude my last point, if you then go to put it into the report, but just as I was coming, someone page 14, I simply share with you, I think, a summary called me to advise that a broker had called to say that statement of the kind of threat, I think, that you people MTS will be on sale, and only fo r 10 days will are under. I hope you recognize it and that you have the Manitobans have the exclusive chance; thereafter, it will strength and the good will to recognize and say simply: be opened.suggest I that is another aspectthat needs to Look,I am sorry, Mr. Filmon; you probably will not run be on the public record that-without repeating what I again. I do not thinkyour friendshipjust fo r the next two said before as how you have fa st-tracked a number of years or three years is worth so much that putting at risk things, here is another example of how you are the verygood things I want to do in many years fo r now prejudging the situation just as the letter with Newman. as well. It is being prejudged, and, to a large extent, we are simply making a bit of a farce out of this thing here. I Thank you. I am now open fo r questions if you have want todo this in good fa ith, but please recognizethis is any. a bit of a fa rce.

Mr. Chairperson: Thank you verymuch . * (2 150) October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 141

Mr. Ashton: I appreciate your point because this MTS role. He voted for the government to buy natural gas in Answers document that you and other presenters have the 1980s. He voted for, he voted with the NDP at the referenced, what I find the most offensive about this is the time, and I am wondering what you would say to Mr. very fact that they are using MTS right now to promote Enns who, as you havepointed out, has had a very strong the government's position on the sale when the sale has tradition of speakingout for public ownership in his own not been approved by theManitoba Legislature. The first mind to persuade him to be one of those two vote by the way took place on Monday when the second Conservative MLAs that we need to stop the sale of reading took place. I am wondering if you have any MTS. comment on the legitimacy of the process. We have heard a lot of people tonight say that it is wrong to sell it, Mr. Chairperson: Mr. Hiebert, for a quick answer. a lot of people saying,we arethe shareholders, the people of Manitoba. What is your view of the process they are Mr. Hiebert: I would certainly tell him the same thing following? thatI toldClayton Manness and asked him to say that to some of the friends, and I really do not need to know Mr. Hiebert: I already tried to get a bible in this what their private conversations are, but it was exactly building because I forgot mine. It is unbelievable, the along that point. I thinkthey should be very cognizant of people searched, and they could not find any. However, their future, that if they want to serve the people of I would like to make reference to Luke 16, which talks Manitoba, not just now in jamming through something about a rich man hiring a CE O, conducting a business, that Filmon really wants in order to do the same thing andthis CE O is a bit of a crumb. He kind of gets notice that Mulroney is on as far as being on the take, but that that he is going to get fired, so what he does is he the rest of themreally want to do something legitimately. basically goes to one of the people who owes his boss a lot of money and says, hey, instead of paying your 100 They need to look a little bit ahead at the future. You bushels of this, only give him back 50 and goes through are going to lose the opportunity, and I say this as an the list, and at the end of the story, I think many of you NDP person, not in the blatant sense but in the pragmatic know this story, the rich man ends up saying, he really sense. I hope some of you take it to heart. [interjection] commends this guybecause the people of darkness really know their pitch an awful lot better than the other people. If I can only say, there are a certain number of exceptions to betaken with regard to me and as far as the I allude that back to the question that you were asking civility, both in this proceeding and the other one, here as to this particular document. I think, to a large extremely �ivi1. I much appreciate that, but I also hope extent, we can either callthis government acting like a bit thatthe ear is also part of what is being done, not just in of a pimp in relationship to the people over there. This thesense of going through the motions. I have welcomed may be strong language, but it is dead on because some this opportunity, and I hope it also means something. o( the people over there, when they spoke up in the last Thank you. election, I understand, in one union alone, over 140 people of them got laid off permanently. I do not think Mr. Chairperson: Thank you very much for your that much of the people, from Marilyn Edwards in presentation. Brandon to Madam Funk in Steinbach to even Mr. Fraser, that what theyare saying there, that they said that I would like to call Chris Morrow-Litke to come necessarily of their own free will. I think it was forward, please, to make his presentation. Chris something that was scripted, and it is an absolute sham. Morrow-Litke? The Sergeant-at-Arms is checking the hallway. He is not present. Therefore, Chris Morrow­ Mr. Ashton: I am wondering too what your suggestion Litke's name will drop to the bottom of the list. to the government would be. We have had people- and I give this opportunity to presenters. You are represented I callNestor Molina to come forward. NestorMolina? by an MLA on the government side, and you mentioned Seeing that Nestor Molina is not here, the name will be Harry Enns has traditionally taken for an independent dropped to the bottom of the list. 142 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

I call Andrew Dolenuk. Andrew Dolenuk? Seeing as were heavily censored, which is just a slight indication Andrew Dolenuk is not here, I will call Martha Owen to that maybe the government is acting behind our backs. come fo rward to make a presentation. The government ignores all the good things about Do you have copies fo r distribution? MTS, fo r example, the profits fo r the first half of 1996 being as much as the entire profits from last year, 1995, Ms. Martha Owen (Private Citizen): I have six a doubling of profits. That is never mentioned, and a copies. I know it isnot enough, but I will give you those. vast maj ority ofManitobans,percent % of residences and 86 percent of businesses, still subscribe to MTS in spite Because much of what I have put in them has already of all the other choices. Now, I would say that speaks been said, I will not fo llow them exactly, and I must very well fo r a company that has been deliberately extend my sympathy to the government members here. It sabotaged in so many ways. How much better could has to be really difficult to sit here fo r hours while MTS do with the support of the government? Why not speaker after speaker calls into question your motives and sell MTS bonds, as someone else mentioned, just as we your integrity, but I would say to you, do not worry. You seU HydroBonds ifwe need to raise money, and much of are the elected members. You do not have to listen to the MTS debt was deliberately engineered by the anything that anybody says. You canjust go ahead and government. For one thing, competitors have been do what you like when this exercise is all over, so carry allowed free access to MTS phone lines. That is good on. business? The cable network valued at $63 million by internal MTS documents was sold fo r $11.5 million to I am starting, if anyone is looking at my things, on private companies, and according to MTS's own page 2 and mention some of the things that people have corporate business planning department, that sale left already said. They have already talked about Alberta MTS open to potential revenue losses of $300 million. Government Telephones. Mr. Sale said something about Now, $300 million could have gone a long way to CN. One thing I did not hear anyone say was that since improving the debt-to-equity ratio. CN was privatized, the CEO holds himself responsible, not to Canadian employees, not fo r services to northern In 1993, an independent study by Ernst & Young, not Manitoba, but only to shareholders, 65 percent of whom an arm of the NDP, reported that the ownership of the are American and have no stake in Canada's northern cable network placed MTS in an enviable position and communities, and why should we expect anything better strongly recommended that MTS retain ownership. Mr. fr om a privatized MTS? This government is not even Findlay claimed that neither he nor the MTS executive going to talk to the northern communities. The North is committee ever saw the report and that he would have going to get a double or a triple whammy, no railroads, considered it irrelevant in any case. In September '95, no decent telephone services, no one to listen to them. Filmoo claimedto have no intention to sell MTS. A fe w weeks later, as others have mentioned, he hired three This government claims that the sale of MTS is companies to study the sale. Now, obviously he knew in necessary because MTS is too heavily in debt, and who advance that theywould recommend privatization. What says so? The Crown Corporations Council. This is an Bay Street brokerage which stands to make handsome agency that was created by this government to study commission on the sale of shares will endorse continued Crown corporations. What kind of recommendation can public ownership? We were not told what those studies weexpect from an agencythat is created by a government cost us. Earlier, the Tories gave MTS's $19-million data which is ideologically committed to privatization at all base to Faneuil in return fo r only $16 million worth of costs? Thecouncil president, Doug Sherwood, admitted Faneuil shares. The Provincial Auditor called that a $3- to having privately recommended privatization, but he million subsidy to Faneuil. That was a direct giveaway did not make therecommendation blic pu because it might of public money to Faneuil, $3 million we gave them. prove controversial. When the Free Press obtained a Then they also negotiated a $14-million telemarketing copy of thereport under The Freedom of Information Act, agreement with Faneuil, and the Free Press says that the 10 of the 27 pages of that report had been blanked minister responsible, Mr. Findlay, admitted to knowing out-that is some freedom of information-and the others little about the joint venture. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 143

In May of '96, Faneuil was in arrears to MTS fo r $1 Ms. Owen: I live in Pinawa. million in long distance charges. In June, Mr. Findlay said the account was cleared up. He did not tell us if Mr. Sale: In Pinawa, I believe, there is a rather large Faneuil paid any interest charges, and I am wondering if atomic energy installation which I suspect depends they have kept up with their payments since. somewhat heavily on telecommunications excellence. I would thinkthat the retirement community that has been Then there is this piece of motherhood and road apple started in some of the surplus housing in the town also pie. This cost us $400,000 of our tax money, and all it probably is an area of great concern fo r seniors who are does is promote the sale. Listen to what it says. The counting on telephones as part of their security. Have bottom line is that the telecommunications industry is you talked with people in your community about the continuing to change. To keep pace, MTS must change importance of the affordable, excellent service that we along with it. Now is that not profound wisdom? To have? What is their view of the sale? keep pace, MTS must change. That tells us a whole lot. It should be noted that Filmon's press secretary, Barbara Ms. Owen: Actually, no, I have not. People in Pinawa Biggar, is in charge of this campaign, and one of the are so preoccupied at this point with the potential for the reasons why this hascome out under the MTS line is that loss of the industry of Atomic Energy there and the Tom Stefanson ofMTS, Chairman of MTS, is a brother likelihoodthat they will be leaving the town that I do not of , a cabinet minister, and other people thinkthis hasreally hit them very much or that they have who arealso relatedto the government could be involved paid much attention to it. in the process of dealing with MTS. I understand that some of thefiles arebeing studied by Pitblado & Hoskin, Mr. Ashton: I want to thank the presenter fo r the brief that Gary Filmon's son works there and that Tom I, obviously, share the presenter's frustration with the Stefanson's son also works there. I just think we ought to very statements that the government has made. Quite know that. frankly, what scares the living daylights out of me is whenI hear the governmentmaking the same statements FloorComment: All we need is Archie Bunker and we about Hydro and MTS that they made only a few short have All in the Family. months ago with MTS.

Ms. Owen: Well, it does seem an incestuous I want tofoc us in on what we have been talking about relationship. with other presenters. That is the concept that we are shareholdef$, this is our company. I want to ask whether Now, there is a saying that you should never believe you fe el the gdvernment has any right whatsoever to sell anything until it has been officially denied. During and offMTS, specifically given the fact that they said they after the election, the Tories officially denied that they would not do it in the election. Their actual election intended toprivati ze MTS. Now, they officiallydeny that mandate is to protect the public ownership of MTS. the sale will be harmful to Manitobans. They have also begun to make official denials about their intent to Ms. Owen: I was very pleased that there were some privatize Hydro and the Manitoba Public Insurance lawyers here who could talk about the legal aspect of it. system. So unless we take these denials seriously and I do not have any legal knowledge, but surely if the find a way to stop them, we are going to lose everything. government took my house from me and decided to sell it Thank you. and then offered mefirst right to buy shares in it, I would be a little insulted. I fe el the same way about this, that * (2210) theyare selling property to individuals which collectively Mr. Sale: I am wondering if you could indicate, Ms. belongs to us already and because they are the Owen, where in the province you live. government, they can do it.

Ms. Owen: DoI have to wait for my name to be called? Mr. Ashton: It is interesting, too,because I know one of the previous presenters said that the analogy here is Mr. Chairperson: Yes. Ms. Owen. thatit is like selling your home but hanging on to half the 144 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

mortgage in the process because that is exactly what is often we go through this, well, what do we have to going on with MTS. compete fo r, why do we have to compete, it is just, but we have to compete. You cannot get through to people I want to ask a further question because you dealt in that there is not the need to compete where you have your brief with a number of these particular issues, and everything you need already. So I find it terribly the fa ct here that the sale-we learned today actually that frustrating. the prospectus on the sale of MTS will be issued November 9, two days after the final vote in the Mr. Chairpenon: Mr. Ashton, fo r a quick question. Legislature. So we as the people in Manitoba will not even know what the real true details of the sale will be Mr. Ashton: A quick 4uestion, in Pinawa, your until after all the decisions have been made. I am representative is , the member fo r Lac du wondering what your comment is on that. Bonnet.

* (22 10) Well, I wasjust in Beausejour and Lac du Bonnet, and know many people in those communities were Ms. Owen: Well, I do not know anything more to say on concerned and surprised that the sale was going through. that except that this has been a whole process of dis­ I wonder, if you had the opportunity to try and persuade information frombeginning to end, both disinformation Mr. Praznik to be one of those two government MLAs and misinformation. We are expected to trust whom? I that could save MTS, what would you say to him to try do not know. and convince himto vote with his constituents against the sale ofMTS? Mr. Ashton: I amwond ering, too, as well, because you referenced the three brokers, Wood Gundy, RBC Mr. Chairpenon: Ms. Owen, fo r a quick answer. Dominion Securities and Richardson Greenshields-I think you are right. I think anybody can figure out that Ms. Owen: There would be nothing I could say to you go to these people fo r advice and they are going to Darren Praznik. As one of the other constituents said to give you advice to sell it. They are in the business of me once, there are two things I do not like about him . selling things. You do not call a real estate agent over to His fa ce. your house fo r them to tell you how nice your house looks. You call them over and they are going to recommend that it be sold. Mr. Chairpenon: Thank you very much fo r your presentation. But I am wondering if you do not also fee l that­ [interjection] Well, the government members are giving Ms. Owen: Just ooe coounent, no one from this side has me advice here on selling houses and various different asked a single question. things. I amtalking about MTS here and whether you do not fe el it is absolutely immoral fo r these three Mr. Olairpenon: I would like to now call fo rward the investment bankers to benefit in any way, shape or form Natiooal Farmers Union, who will name a spokesman at from the sale, because right now they are going to get the podium. Is there a representative here from the upwards of $25 million in commissions from the sale. National Farmers Union? The Sergeant-at-Arms will check the hallway. No? Then the National Farmers Ms. Owen: Yes, I absolutely fe el that way. It is another Union will be dropped to the bottom of the list. I call way of enriching the rich and depriving the poor and the fo rward Ian Robson. middle classes. Maybe businesses think that they are going to benefit because they are looking to lower long Mr. Hiebert: I would just simply like to say something distance rates, and the mantra of competition has swept on behalf ofhim, that I met him through the committee- them all up in its spell. So when we have a good corporation that does very well without competition, my Mr. Chairperson: Mr. Hiebert, to speak on behalf of fr iends say, but we have to compete. No matter how Mr. Robson. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 145

Mr. Hiebert: Well, not to bring his fo rward, but just being a public corporation of Manitoba, that we were simply, let us recognize the fact that he is fromwestern already doing this. The second thing I see that was Manitoba. I know he is very dedicated. He did proposed is that this would ensure that Manitobans have something as far as in the grain marketing panel. control of MTS, and I thought we already had that too. Whether or not I agree with him is not the point. My The thirdthing that was mentioned by the president of the point is here, within the perimeter, we still have company was that the new company would be able to reasonable weather. I know the National Farmers' Union. move fa ster and adapt and be flexible and fit into the I am not a member of them, but some of them or most of marketplace where it is needed to be at this time of high­ them are from out west. Ian Robson defmitely is. I ask speedchange . Well, if thisis not already happening, why this committee to give some special recognition to these is that person there? Why is the government not rural people thatso even though they are read, technically providing them with the ability to do that? Is the many of themprobably do not have an opportunity to be government admitting that it cannot manage a public here. I wish you would recognize that as well so that you fa cility efficiently? I propose that this legislation be sent take that into account. backto the government to be rewritten in order that MTS can function in the way that it is supposed to, as a Mr. Chairperson: Thank you fo r those comments. Mr. publicly owned, accountable company. The incredible Robson, not being here, his name will be moved to the fa ct that has been stated that no information is available bottom of the list, and I will call Jan Chaboyer. Jan on what the true value of the company is, what the share Chaboyernot being here,the name will be dropped to the price is going to be, it is just absolutely unconscionable bottom of the list. I now call Kim Fallis. Kim Fallis not that this is not available at this time, and it will not be being here, the name will be dropped to the bottom of the available until after the legislation is passed to propose list. I now call forward SusanTj aden. Susan Tj aden, not the sale of the company. Perhaps we should sell offthe beinghere, her name will be dropped to the bottom of the government or call fo r an election. list. I now call Garth Minish. Garth Minish, please come fo rward. Do you have copies fo r distribution? That was short and sweet. Any questions?

Mr. Garth Minish (Private Citizen): I do not have Mr. Chairperson: Thank you very much. Questions? copies fo r distribution. Mr. Ashton: Thank you. I do not think we would get Mr. Chairperson: Okay. Please proceed. Do you have muchof a price for the government,quite frankly, so I do the copies with you? not know if that is much of an option, but I certainly appreciate the sentiment. Actually, I could have repeated Mr. Minish: No, I said I have no copies. what a lot of people across Manitoba have been telling me, which is save MTS and sell Filmon, but I thought Mr. Chairperson: You have no copies? Please that might be considered to be a cheap shot. proceed. Mr. Minish: I will be short and sweet. I am here as a I appreciateyour point.[interj ection] No, I put it on the concerned citizen of Manitoba. The proposed sale of record. I do put things on the record that I say, and the MTS, I fe el, is a prime example of the lack of this members on thegovernment side of the committee, I wish government to berespo nsible in managing the provincial they would do the same on MTS, but, to the presenter, affairs. I am sure that creative accounting procedures you mentioned the share price and this really bothers me, will show that MTS is in fa irly poor condition. Some of this bothers I think a lot of people, the fa ct that the people before me that have spoken tonight have essentially thedecision to sell MTS will be made without shown very eloquently that it is not in bad shape at all. themembers ofthe Legislature or the people of Manitoba Generally, the pro posals that were put fo rward were knowing the details of the sale. I am wondering, just in basically three that I see. your personal life, if you can imagine any parallel where you as an individual citizen would ever do an ything as One is offering shares of MTS to the public to fm ance stupid in deciding to go ahead and do something, sell modernization and to help pay down the debt. I thought, something off, your house, your car or whatever without 146 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

knowing all the details on the sale first. I mean, would not going to vote againstthe bill, it is his bill, but the one you do that in your own personal life? thing he could do is withdraw the bill. What would you

say to try and get him, your MLA., to change his mind? Mr. Minish: Absolutely not. I would use the parallel of putting my house up fo r sale and accepting an offer on it Mr. Minish: I have actually already had a meeting with or accepting several offers from someone that knew the Mr. Findlay on educational issues. I happen to be a value of my house but I did not and offered me half the teacher. I believe that Mr. Findlay is between a rock and price or a third of the price or a quarter of the price. I a hard place, because I firmly believe that this thinkit isjust a terrible thing to have happen. To use the government is being led from the top in a dictatorial example of the cable company that was sold here as manner. I would be very surprised if Mr. Findlay were several other people have mentioned, it was sold for elected again in ourriding. I fee l very, very badly fo r him

$11.5 million Mr. Findlay commented in passing that he in that case. I would say that to him, that I fee l very thought it was worth $7.5 million and the MTS internal badly, thathe has put himself into a position that he may audit put its value at somewhere around $63 million. not get elected again because of his stance on the MTS and other issues. Evenif it washalf of that and Mr. Findlay to be out by $4 million on something like that, to think that an Mr. Chairperson: Okay. Thank you very much fo r industry would pay $11.5 million fo r something that is your presentation. only worth $7.5 million is-I mean, I hope that the educational system teaches us a little bit of math because Mr. Minish: Thankyou. it justdoes not wash. Theaccount ability, it is over in left field. Everybody is going down the road and somebody Mr. Chairperson: I would like to now call Brenda is out in the field, in the mud. I think it is terrible, and Portree. Brenda Portree. that is why I am here tonight. I cannot believe, as you say, the unadulterated gall of the government to try and Mr. Sale: Mr. Chairperson, just while we are waiting pull this off. It is a joke. It is an absolute joke. The for the Clerk, I do not know whether the committee is government in the province of Manitoba is being laughed aware-they may be-that there is a travel advisory in at, and that is an embarrassment to me as a taxpayer. western Manitoba of a serious snowstorm, so many of the people who signed up for tonight are not going to be here Mr. Ashton: I am also wondering, too, where you are I think fo r that reason. They may not be here tomorrow from in the province. fo r thesame r eason. Ofcour se, many of those from town knew that there were 50 or 60 presenters from out of Mr. Minish: Actually I live in Mr. Findlay's riding. town, so many of them are not here either. I just think it live in Oakbank, Manitoba. is important, that the crowd here is not reflective of the concern but of their need to sleep and conserve their Mr. Ashton: Well, it is interesting, too, because I energy. have-given theopportunity to say what they would say-I guess we will have to use the same question I used Mr. Chairperson: Is Brenda Portree not here? Okay, before, say privately, if you had a chance to talk to your her name will be dropped to thebottom of the list. Jasper MLA. We were just in Oakbank just a short time ago, Robinson. Jasper Robinson. the NDP caucus, andthere was a very interesting meeting too in anotherpart of theminister's constituency, Dugald, Mr. Ashton: Mr. Chairperson, Jasper Robinson is a in which a lot of Mr. Findlay's constituents were very constituent of mine. I know he had indicated that he vocal about not selling offMTS. wishes to present but, unfortunately, he cannot drive the eight hours into Winnipeg. He was registering on the I am just wondering what you would say to Mr. hope that our motion would pass and there would be Findlay, not only on your own behalf but in terms of hearings in Thompson I also would note that Mr. Oakes other people in the Springfield constituency in Oakbank at 131 is also from Thompson and Mr. Murphy as well. if you had a chance to sit down with him. I assume he is Sorry, the next three presenters, all three are from October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 147

Thompson and all of them indicated they wished to to voice my concerns and I base these concerns on present ifhearings were held in Thompson and probably common sense. Firstly, I want to say to this committee, would not be able to make it into Winnipeg. Mr. Oakes I do not want this government to sell MTS. MTS has is from Thompson. been a publicly owned utility since 1908. I find it an irony that we are sitting in this room with that Mr. Chairperson: So Mr. Robinson, Mr. Oakes and gentleman's portrait looking over us. MTS at the present, Mr. Mwphy will not be here. Okay. Their names will be I am told, is making a profit. I do believe that MTS is listed at the bottom. Connie Gusingie-[interjection) responding to the competitive market when we look at Gretsinger, sorry. I have a misspelling here, I am sorry. their long distance services. I believe that Manitobans would prefer to buy long distance services from the Connie Gretsinger. Do you have copies fo r company that they own and they operate. MTS has distribution? always served and beencommitted to enhancing rural and northern communication services. I question, will this Ms. Connie Gretsinger (Private Citizen): No, I am new company meet that same type of commitment? sorry I do not, Mr. Chairman. I only wrote my presentation this afternoon. As many presenters before have said or they have referred tothe MTS Answers pamphlet, I also would like Mr. Chairperson: Please proceed. to refer to it. I find it interesting to note that the government has taken the time to tell me why the sale of Ms. Gretsinger: Okay. Thankyou. First of all, I would MTS is necessary and why it is good fo r me. Yet, they like to thankthe legislative committee fo r the opportunity have not given me theright to tell them that I do not want to address them on the issue of Bill 67. However, having this deal. In this information page, there are three sat in thisroom since6:30 tonight, I am a little concerned reasons listed why to sell MTS. We talk about about the interest on this side of the table here. I am competition. MTS is already competitive. I have a real really wondering whether some of these presentations concern in the fa ct when companies like AT&T publicly have not bored some of these people to death. Mr. state that they would be willing to buy MTS. We talk McAlpine has spent the majority of the evening scowling about changing technology. Will this new company at the audience. Mr. Driedger has spent time grinnin g maintain the level of commitment that MTS has to our like a Cheshire cat. I am not quite sure what he is rural and northern communities or will we fa ce the thinking. Mr. Findlay has looked down through his possibility that the basic phone service will not be glasses most of the time and Mrs. Mitchelson, obviously, available because of high rates? You talk about we sent her home to bed. investment in' the future. Will this new company with foreign ownership have some investment integrity to I would like to assure you that today I have come to Manitobans and to the Manitoba communities? I do not speak not as a union representative or as a political want decisions about telephone service and com­ activist, though I have affiliations in both of those areas. munications made by Bay Street investors and from an Could I please have your attention, gentlemen? I come American city. from 50 miles out of town and there is possibly a storm. I would like my I 0 minutes, please. I am here today to The bottom line, gentlemen, is that this bill offers no speak on behalfof myself as a citizen in Manitoba. I am long-term control over the newly privately owned here to speak on behalf of my parents, who are senior corporation. There is the issue of the ra tes. The govern­ citizens, and my neighbours and my friends and my co­ ment cannot guarantee that rates will not increase. They workers who are gravely concerned about the future of the state that the CRTC has control of this. Yet, in your Manitoba Telephone System. I guess we come as a information page youassure me that the CRTC will make group and we would be labelled as the shareholders in sure that the rates are fa ir and affordable. If that is not a name only. contradiction, I do not know what is.

Tonight my presentation is very basic. I will not bore My biggest concern is the rates. If they are to become you to death with graphs and quotes and figures. I want unaffordable, you will be denying access to basic 148 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996 communication services, likely-as many presenters have of approach and I believe his line was, trust me, my said before-to some of the most vulnerable people in fe llow Americans. Well, we all know what happened to society, senior citizens, disabled people and people in that man. isolated areas of Manitoba. I view this as a decision which is not based on integrity and caring for our * (2230) communities. It will make no difference what advanced technology this new company is able to provide. It will It is my understanding that the Premier's (Mr. Filmon) be atravesty if people cannot afford basic phone service response to the cost of the ad campaign was, well, it in Manitoba. stimulated the advertising industryin Manitoba. I find it unfortunate that the Premier did not have this same You have talked about the service in your information attitude tothe unioos when they ran ad campaigns during sheet, and you boast about a workforce of 4,000 in MTS. the 1995 election. Let me make it very clear to you Whatabout this workforce? This information sheet does gentlemen that there is a distinct difference because at notsay anything about this workforce. Will they remain leastthose ad campaignswere voted on democratically by or will they be part of this new company's downsizing union members. I know, I was there. I do not recall any and restructuring in the name of prof\t? , I see no consultation or any vote on the government's MTS ad guarantee and no security in the future for Manitoba campaign. I amvery angry at you, as the government, fo r Telephone System's workers. wasting such a large sumof money. Shame on you.

In the rural communities, MTS is a significant Inessence, as a government, you are settingoff to sell employer. Can youtell mehow this is going to affect my offa publicly owned corporation, a corporation that is community? You talk about MTS and the headoffices accountable to the people and the government of will remainin Manitoba. Will you guarantee this to me? Manitoba. You are going to give it to a multinational You talk about that Manitoba will be offered corporation who will have fo reign interests- opportunities to purchase the majority interest in the MTS shares, andthere are presenters that have addressed Mr. Chairpenon: Two minutes. this issue before much more eloquently thando. I In the literature that I have read it states, the bill outlines what Ms. Gretsinger: -no tiesand no accountabilityto the happens in the short term, things such as the headquarters people of Manitoba. I urge this government to allow remaining in Manitoba and that we will have majority public hearings on the issue of the sale of MTS. I urge slotson the board ofdirectors andthat no individual may you to stop the voting on Bill 67. Let the people of own more than 15 percent of the shares and that 25 Manitoba tell you how they feel about their publicly percentof this is fo reign ownership. It sounds good, does owned utility. I alsowould liketo directa message to my it not? But in theliterature that I read, it also says that as MLA, Harry Enns, in the constituency of Lakeside. I soon as the new company pays offthe debt owed to the wanthim to vote against Bill 67. I carry a message from province, this special sharing clause is automatically the constituency ofPortage Ia Prairie. Forty people there surrendered and all the protective provisions listed are attended a public meeting this week. They are saying to automatically repealed. Is that true, gentlemen? their MLA, , vote against Bill 67. The bott001 line is, and I cannot stress it enough, Manitobans Lastly, I want to address the issue of the advertising do notwant MTStaken out of the public sector. They do campaign, this campaign to sell this deal to Manitobans, not want it privatized, but Manitobans do want the your information pages, your TV, your radio and your elected officials to listen to them. Thank you. paper ads. Is it correct that the cost is $400,000? Excuse me, gentlemen, but that is an awful lot of money Mr. Chairperson: Thankyou . Any questions? to me, to my parents, to my friends. In my economics, I cannot afford to waste $20. You spent this money to tell Mr. Ashton: I would like to thank the presenter and I me that something is going to be really good fo r me but want to particularly echo what she said, too. We did yet I have no choice in making the decision. I recall have a meeting in Portage Ia Prairieyesterday. It was a another politician inhistory who took this particular type good cross-section of the community, people from all October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 149

different backgrounds and, dare I add, different political the same month that the minister appointed these three persuasions too, all concerned about the future ofMTS. investment bankers. They started interviewing them in I am wondering-you mentioned about your own September, according to the minister's own word, at the constituency, you mentioned in Portage-you know, what same time that in the committee he was saying it would the talk is. Are you fm ding much support fo r selling off not be sold off. MTS or are people saying to keep it publicly owned? I am wondering what your comment is on that to a Ms. Gretsinger: No, I have not fo und anybody that I government that-someone used the word "gall" before, have talked to that says yes, let us go ahead and sell off but, well, okay, let us use it-has the gall to say, we are MTS. I think, as one of the other presenters said not going to sell offMTS and then turns around and just previously, there has not been enough information out over a yearlater, we are fa ced now with losing the public here. This little sheet is wonderful; it is a great campaign ownership of MTS. exercise, but it does notreally give answers. I think after November 7, there is going to be a lot of Manitobans and Ms. Gretsinger: I think ifyou ask the public, a lot of people in Portage Ia Prairie who are going to be very people fe el very betrayed. I do, personally. I fe el that surprised that actually, indeed, MTS has been sold off this government has misled us. They seem to be governing by arrogance. They seem to take a Mr. Ashton: I think that is an important point because paternalistic attitude the way they have presented these I find it absolutely amazing that I am holding public issues onthe MTS, that, I will give you the facts as I see meetings in Portage Ia Prairie and the government has them and trustme, theyare good fo r you, so do not worry never once had a single public meeting anywhere, about it, I will give you the details after November 9. whether it be in Portage Ia Prairie or anywhere in Manitoba. Mr. Ashton: So your bottom line then is, I guess, the government has said, you know-and used an American I want to ask you, since they obviously have not president's words, trust me. They said, trust me on MTS consulted and they did not run in the election on this, in the election. You are saying you do not trust them any what you think should be done. Obviously, you do not more now that they are selling it off than you did when support the bill, but do you think there should perhaps be they stated that during the election. a vote onthe issue, either an election or a special vote of the shareholders of MTS, before they can sell it off? Ms. Cretsinger: No. I have to be very adamant in the fa ct that, no, I donot trust the government. I think if this ' Ms. Gretsinger: I do. I believe that the public hearing particular government had campaigned on the issue of process should go beyond this building and it should go selling off MTS, they would have lost votes in the last into the communities as well. I am not necessarily an election because I think that the public views MTS as advocate of government by referendums, but I do believe near and dear to their hearts as they do health care, and an issue such as MTS, it should go to the people and believe me, the public was certainly in an uproar with there should be some type of vote. health care changes. So I think if they really knew what was going to happen to their publicly owned utility, the Mr. Ashton: I am wondering, too, you mentioned in Tories would have paid the price of losing some votes. terms of during the election-and what really, really fr ustrates me is it was not a question of not saying Mr. Chairperson: Mr. Sale, fo r a quick question. anything. The government said they had no plans to sell MTS. They said it very clearly; they repeated that after Mr. Sale: I am just wondering, Ms. Gretsinger, you the election in May. They repeated it again in September. raised the issue of the question of the short term versus the long term. Do you think that the people that you have I was criticized by the Minister responsible fo r MTS talked with in your area understand that the protections (Mr. Findlay) fo r being the only one that was talking that are being trumpeted by government are simply a about selling off MTS, we were the only party that was charade, that the daythat AT&T or someone else decides talking about privatizing MTS. This was, by the way, to pay offthe debt, to recapitalize the company in their 150 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

own way, that they can be gone the next day? Do you and I am sure Mr. Findlay must get tired of those three thinkpeople understand that? letters.

Ms. Gretsinger: No, I truly fee l the public is not aware * (2240) of the intricacies of this because it has not been out there fo r them. Ifyou have access to things like Hansard and It is a difficultjob that you have. You have two very you have access to literature that maybe I do, fine, you controversial, very high pressure areas to deal with, but know these things, but the average public does not. In I am here tonight to speak in protest over the this information package, it looks very good when we privatization ofMTS,as in Manitoba Telephone System, talk about shares. The 1V adsare very polished and very andI was going to tell you a story about Aesop's fa bles, professional to convince people that, do not worry, you but I am sure you all know it. I am a Grade 5 teacher. are going to get to buy shares in it. I think the Manitoba You have all heardthe Fox and the Hare story, where the public will be devastated after this deal goes through. fo x said trust me, and it did not work out that way . · I would like to trustmy government. I would really like to Mr. Chairperson: Thank you very much fo r your trust them. I believe very strongly in the democratic presentation. process, and I do not fee l that there has been a lot of democracy in these last fe w years. MTS stands fo r the Ms. Gretsinger: Thank you. ManitobaTelephone System. That means that the people of theprovince of Manitoba own it. We have paid fo r it, Mr. Chairperson: I would like to now call Colleen as hasbeen soeloquently said this evening. I am not sure Seymour. Colleen Seymour. Not here, the name will be thatany government has the right to sell what belongs to dropped to the bottom of the list. the public unless they go to a plebiscite, and I have not heard any talk of that. Dawn and Heather Orton. Dawn and Heather Orton. Not here, the names aredropped to the bottom of the list. I would like to tell you a story. My fa ther is 84 years old, and I spoke to him last night and said, Dad, I am Max Juliak. Max Juliak. Not here, the name will be going to go to the Leg to speak against the privatization dropped to the bottom of the list. ofthe Manitoba Telephone System. He said, please ask them not to from me. He worked fo r the Manitoba Gamet Boyd. Gamet Boyd. Not here, the name will Telephone System as a camp cook in 1949, May 26, be dropped to the bottom of the list. 1949, because my dad never fo rgets a date. I said, how much did you get paid Dad? He said, I got $200. That Ray Cantelo. Ray Cantelo. Not here, the name will be was really good mooey, because ifyou rung the rule of 72 dropped to the bottom of the list. onthat, youknow what that is worth today, Mr. Findlay. He said, please tell them not to sell it, Karen. I said, I Karen Minish. Karen Minish. Please come fo rward. will Dad. He left his new bride and two baby daughters Do you have copies available fo r distribution? in Erickson to go so that rural lines could be upgraded after the war. He cooked fo r gangs from 25 to 43 men. Ms. Karen Minish (Private Citizen): Actually, no, I There were nine gangs when he was cooking, and they do not. used to rate them according to how high their meal costs were. I remember being a voy little girl and Dad coming Mr. Chairperson: Okay, please proceed. in saying, youknow, I hadthe lowest meal cost again, 23 cents. I was really proud of my dad, and I was proud of Ms. Minish: I would like to say goodevening to Mr. what he did fo r the Province of Manitoba. Findlay. I was supposed to have a meeting with you tonight at 8:30. I spoke to your secretary, and it had to To sell this particular service to the highest bidder be shunted to December 4. We are going to get together basicallydemeans all of the work of the people who laid one of these days. I did not plan on presenting to this those lines, all of the men who left home so that they particular MTS brief I have other concerns about MTS, could work on them, and I really ask you not to do that. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 151

I do understand that you are between, as has been said Mr. Sale: I understand that. Okay, thank you fo r that this evening, a rock and a hard place, but I ask you to response. Secondly, you have talked about the question consider voting against this bill. ofCross Lake. Could you just tell the committee what it was like to live in a community that did not have phone I worked in Cross Lake when I came right out of service when you were there? What was the experience, fa culty in 1969. There were no telephones in Cross Lake. and what do you think the difference today is fo r those We had short-wave radios at the mission, but there are citizens? telephones now in Cross Lake, and I am not sure that a private corporation would bother servicing the small Ms. Minish: To make a phone call at Cross Lake in population there, but MTS did it. 1969 was a big event. First of all, you had to go over to the mission, because that was the only place that had a My daughter was with me earlier this evening. She short-wave radio, or theprincipal who lived six miles and left. She said, I would like to stay, but, she said, I have across a muskeg. I did not walk that muskeg more than to go home because I have an MTS teleconference once, andI did not make a phone call the rest of the time booked at nine o'clock with the University of Victoria. that I was up there. It was just an impossibility; you did She is completing her second degree. lamnot sure that not do it. They had another one at the nursing station, ' service would beavai lable fo r her ifthis were sold either. but the nursing station was further than six miles away, so we certainly did not access that either. Change is a goodthing sometimes. I ama teacher, and lots and lots of times we change things in a classroom Now I believe they have the flip phones, they have the because it is going to expedite the learningproc ess. So cell phones, they have everything they need because of if your government is looking at changing MTS for the MTS. It is just a complete difference. better, I need some more fa cts, because everything I have read, and I am not an uneducated person, tends to Mr. Dewar: You are an out-of-town presenter. Where contradict itself. I ask you to look at that. We are not in are you from? a deficit situation right now. The Conservative government has done a very good job of eroding, Ms. Minish: Well, I am from Mr. Findlay's riding. I completely taking away the debt. I take my hat offto live in Oakbank, it is snowing outside, and I really hope you. Overall sources of revenue have gone up by a 206 is not slippery tonight. It is not that long a drive, but healthy 15 percent in the last two years. There was a when it is dark it can be. $300-million tax reduction to businesses, which may or may not be a good thing, but I guess my bottom line is if something isn't broke, don't fixit, and I do not think the Mr. Dewar: I amfrom Selkirk and I understand that the MTS is broke. roads are getting kind of bad out there. Have there been any public meetings in your community regarding the Mr. Chairperson: Thank you very much. privatization ofMTS?

Mr. Sale: Thank you very much fo r an impassioned Ms. Minish: Not that I am aware of. There have been presentation. I want tojust ask a question, and ifyou fe el some MTS signs put up, andnobody asked me ifI would it is inappropriate, tell me and do not answer, but has put one up. I would have very gladly put them. Every your fa ther expressed anyconcern about the pension issue single person that I have spoken to about the sale, with thatwas raisedearlier by two gentlemen from Steinbach? the exception of two people, have been against it. The Is he first, I guess, a pensioner from MTS? Does he have two people who thought it was a marvellous idea are an MTS pension? multimillionaires. I think that says it all.

Ms. Minish: Actually, I do not think I can answer that. Mr. Dewar: Ofcour se,you have the opportunity here to I amnot sure enough of the fa cts. I think he probably is, speak both to your MLA and the minister responsible, but he does not tell me about that. I amnot supposed to and I guess ifyou have a message fo r him, what would know about money and stuff, you know. that message be? 152 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Ms. Minish: Themessage would be to please reconsider story is that selling our assets can cost Manitobans. A the sale of this, please. You are trying very hard to do a short-term profit todaycan and will cost us tomorrow, very difficultjob. I doubt very much ifMr. Filmon will and it certainly will cost this government. run again, but I have a sneaking fee ling that you would really like to, and it is very difficult to support a party I firmly believe that it is morally, criminally and that is going to do something as devastating as this will financially unwise to even consider the privatization of be, so please vote against it. Thank you. the MTS. When communication is so vital and so important to our future, I wish and I really hope that Mr. Chairperson: Thank you very much fo r your some of the words that you have heard tonight in presentation. It has been brought to my attention that opposition of privatization of MTS will hopefully cause Gail Cherpako is an out-of-town presenter. I would like somerethinking on this issue. Mr. Findlay, I would love tocall her to come fo rward now, No. 149. Do you have you to withdraw this bill. copies fo r distribution? Finally with the privatization this government is just

* (2250) absolutely abdicating the responsibility, and they cannot successfully handle this corporation like an MTS, then I Ms. Gail Cherpako (PrivateCitizen): No, I do not. think that. I concur with the previous speakers, let us keep the MTSand sell offthe Conservative government. Mr. Chairperson: Please proceed. I fee l I have been betrayed, I am hurt, I am upset, and Ms. Cherpako: Thank you. I am also a shareholder in this issue should and must be taken to the people to be the MTS, andI wish to go on record that I am absolutely voted on. Thank you. opposed to the privatization of the MTS. I was also asked to have it recorded that my parents, Olga and Mr. Chairperson: Thank you very much fo r your Pushka, and my physiotherapist, Ann Dawson, friends presentation. and colleagues are also very much opposed to this privatization of the MTS. Mr. Dewar: Thankyou very muchfor your presentation. You are again an out-of-town presenter. What Having heard some of the arguments, and I really fee l community are you from? it hasjust been propaganda in fa vour of selling the MTS, it has not been successful in changing our minds. I am Ms. Cherpako: I am from the community of East St. angry and I am insulted that the Manitoba government Paul and also in Mr.Findlay's riding. Also, Mr. Findlay, would spend our tax dollars in order to convince the please think twice. I think that this bill will definitely public that privatization of MTS is in their possible best cause and hurt all of us Manitobans, and I really do feel interests. Whose interests? There are the rich who are thatthis was muchvery planned. It is nothing that is just just going to get richer. I am disgusted that the public happening today. I mean, this has been going on behind interests are being both ignored, and services are being the back boards. eroded. This government has a responsibility to serve and not dictate. Mr. Dewar: During the April 1995 general election, I am sure you were fo llowing the election like most While I was on vacation, I met an individual who Manitobans. Did Mr. Findlay at that time, did he shared this revealing piece of information, that his friend campaignon the privatization of MTS? had been successful and sold a complex in Hawaii and fo rtunately had made $25 million profit. He thought he Ms. Cherpako: Absolutely there was no indication that was a really good businessman, and most would agree. he had indicated that there would be the selling of the Thepurchaser one year later was successful in selling the MTS. same complex to a Japanese firm fo r a $125-million profit. His friend, whothought he was so clever, is still Mr. Sale: Thank you and thank you fo r your upset and irate today. The point I wish to make with this presentation. Does Mr. Findlay send mail to his October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 153

constituents? Doyou receive information of a newsletter Ms. Cherpako: Correct. Yes, we did receive that and kind or just letters from Mr. Findlay from time to time? also, too, a number of neighbours, friends and colleagues at the school that I work at also sent letters saying that Ms. Cherpako: Occasionally. they were very much opposed to the privatization and the selling of the MTS. Mr. Sale: Over the past while have you received any written material from Mr. Findlay explaining his views of Mr. Ashton: The reason I mention that is because more why it is important that his constituents should than90 percent of the people responded, including from understand that there is no risk here in this sale and in Springfield, said they did not want it sold, and I am just fa ct that this is a good thing? Has he tried to defend this wondering if you think at a bare minimum that your in writing to his constituents? member of the Legislature who is also the Minister responsible fo r MTS should not have done the same Ms. Cherpako: There was one handout and I do not thing, should not have sent out at least a survey asking recall exactly if it did come directly from his office, but his own constituents what they thought about the sale of there was one sheet that said that it was just a wonderful MTS. Do you not think that would have been the fa ir idea. But I mean, it just did not wash. J believe that the thing to do? MTS were directed to send it out, and I would wager someone that perhaps- Ms. Cherpako: Correct. I thinkit would be an absolute fa ir thing to do and, Mr. Findlay, can we ask you fo r an Mr. Sale: Is that it? answer to that question, please? It would have been a fair thing to do. Why was it not done? Would you Ms. Cherpako: That is what it looks like, yes. answer my question?

Mr. Sale: Just fo r the record I was holding up one side Mr. Findlay: I am here to hear- ofthe copy of thematerial sent not fromMr. Findlay but fr om Bill Fraser the president and CEO of MTS who Ms. Cherpako: You are here to hear? were required by government to spend $400,000- Mr. Findlay: I am here to hear the input of citizens and Ms. Cherpako: Yes, in order to send it out, that is I am listening intently. correct. Mr. Ashton: Mr. Chairperson, I think that if the Mr. Sale: -to promote the government's plan, but minister wanted to listen intently he might have without giving any significant information. Thank you conducted a vote ofhis constituents, a survey. I think he fo r your presentation. would have got a very clear message, and I think that is probably one of the reasons that the minister in his own Mr. Ashton: In fa ct, I did send out as many letters as I constituency has not even asked his own constituents, let could. I have sent letters out across Manitoba and alone the restof the people of Manitoba what they think. particularly including Springfield, and I asked people I just want to ask the presenter again, too, you mention what they thought, yes or no, do you want to sell it or do about people you work with, are people in East St. Paul, you want to keep it publicly owned? I think more than theminister's own constituency, do they want to see MTS 90 percent- sold off? I ask this question seriously because the thing thathas puzzled meis, I have travelled all over Manitoba Ms. Cherpako: There were- and rural Manitoba and urban areas, and I have had a tough time finding anyone outside of the Conservative Mr. Chairperson: Ms. Cherpako. cabinet that wants to sell off MTS. Are there a lot of people in East St. Paul that are saying sell it? Ms. Cherpako: Sorry.

Mr. Chairperson: Go ahead. I just have to recognize Mr. Chairperson: Ms. Cherpako, fo r a very quick you fo r the record, so that you are duly recorded. answer. 154 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

Ms. Cherpako: To my knowledge, I do not know of the bottom of the list. Carol Masse, not here, name will anyone that wants to sell MTS. Everyone that I have ever drop to the bottom of the list. Margaret Hayward. spoken to has been totally against it, that there is no Margaret Hayward, not here, dropped to the bottom of reason to sell it, not in their minds. There is absolutely the list. Bill Sloane. Bill Sloane, not here, he will drop no reason other than turning adollar somewhere, and it to the bottom of the list. Jean Dixon, not here, dropped is not a valid reason. I think, fo r the good of the citizens to the bottom of the list. Fred Tait. Fred Tait, not here, of Manitoba andthe good of our own futureand the good he will drop to the bottom of the list. Ken Sigurdson. of conununication, it is absolutely essential that we keep Ken Sigurdson, not here, his name will drop to the the MTS. For us to quickly sell it, there is no purpose, bottom of the list. Chris Tait. Chris Tait, not here, his and the purpose, I would like to know, is really what? It name will drop to the bottom of the list. Sel Burrows. cannot be fo r dollars and cents. There must a lot more Sel Burrows, not here, his name will drop to the bottom that is being not-well, is being withheld from the general of the list. public. So we are at the pointnow where we will startto call I fe el that there are lot of things that are going on names as they arenumerically-in thenume rical order they underneath, and I just am not aware of it, becauseit just are on thelist with persons registeredto speak. The fust does not make sense. Manitobans are against the person on that list is Darryl Livingstone. Would you privatization of MTS. They do not want it sold, yet it is please come fo rward. Darryl Livingstone, not here, his just being handed away, and it is being sold for, I would name will drop to the bottom of the list. Emile Clune. say, pennies for what it would end up being worth in the Emile Clune. Did we get your name right? future. It will be worth a lot more in years to come. It is definitely an important asset, and you just do not get rid Ms. Emile Clune (Private Citizen): No, you did not. of things that are important. Mr. Chairpenon: Sorry.

* (2300)

Ms. Clune: My name is Emile. I am here, Mr. Mr. Chairperson: Thank you very much for your Chairman,but I wish to be by-passed at this time. I will presentation. be presenting on behalfof someone else if you get to them this evening. Is that all right? Ms. Cherpako: Thank you.

Mr. Chairperson: So you want to be by-passed right Mr. Chairperson: I would like to now call Susan Tail. now? Susan Tait. It looks like the storm has kept a lot of people home. Susan Tait's name will be dropped to the Ms. aune: I wantto beby -passed. You candrop me to bottom of the list. Heather Emerson-Proven. Heather the bottom of the list if you want. Emerson-Proven. Her name will be dropped to the bottom of the list. Keith Proven. I do not think he is Mr. Chairperson: Okay. here. No. His name will bedropped to the bottom of the list. Lyle Ross. Lyle Ross, not here, dropped to the Ms. Clune: Okay, thanks. bottom of the list. Brad Mroz. Brad Mroz, not here, he will drop to the bottom of the list. Antoine Desrosier. Mr. Chairperson: We will do that. Harry Restal. Antoine Desrosier, not here,he will drop to the bottom of Harry Restal. Not here. Dropped to the bottom of the the list. John Whitaker. John Whitaker, not here, he will list. Maggie Hadfield. She is here. Do you have copies drop to the bottom ofthe list. Bert Beat. Bert Beal, not fo r distribution? here, dropped to the bottom of the list. Glen Hallick. Glen Hallick, not here, his name will be dropped to the bottom of the list. Irwin Baummung. Irwin Baummung, Ms. Maggie Hadfield (Communications, Energy and not here, his name will be dropped to the bottom of the Paperworkers Union of Canada, Local 55): Yes, I list. Anthony Riley. Anthony Riley, not here, dropped to have. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 155

Mr. Chairperson: Okay. While the copies are being quality oftheir pension fund and a rapid strippingof any distributed, I would invite you to please proceed. surplus funds that could have been used fo r improvements or just fo r long-term stability of current Ms. Hadfield: Thank you. Mr. Chairman, members of benefits. the committee, I am here today on behalf of the 1,700 members of the Communications, Energy and I recently read another report in the Free Press Paperworkers Union who work at MTS and whom I regarding the privatization of the CN, the trucking represent. I am here to tell you a number of things, that division, and it was a very sad story indeed and made me this legislationremains seriously flawed, that this process fe el very sad and not a little bit worried about my is divisive and hurtful to many people, as we have heard members and their future. I will quote from that article tonight already, and that should you railroad this which is attached to my speech. It says at the beginning legislation through in order to meet artificial deadlines, of that, "Many people cried as they relived the you will sow seeds of discord, and later you will reap the devastation of being leftwithout jobs or pensions during whirlwind of that. hearings into the privatizationand collapse of CN Rail's truckingarm. Dorothy Dickson started working at CN at As Manitobans, you should fe el a profound sense of the age of 17. For 36 years that is all she knew." shame. You are selling the farm. You will be responsible for the losses to our province and to our * (23 10) communities that will result from this action. You are disposing of one of the most important economic and What did she have to say at the end of all this? She community institutions in our province, our MTS, and as said, "'I did not wantto get up in the morningany more.' a province we will have nothing to show fo r it except After eight years of waiting fo r her pension, Dickson has broken communities and unemployed workers. You given up on many things that would keep most people should also be ashamed of this process, because there is going. 'Thedreams and plans my husband and I had are no consensus in Manitoba in support of this gone. I fe el cheated. Our dream is gone as far as ever privatization. What youare doing is rooted in an extreme living in a house. It wasn't only the loss of wages that ideological position and not the needs of our community. hurt. "' Later on in the article, it talks about "Some estimate over $100 millionin CN assets were turnedover I want to highlight two issues which underscore what toRoute Canadafor $23 million. Following the collapse a bad deal this is fo r MTS employees and users. First, do of Route Canada" some two years later, "employees not let anyone tell you that there is a labour peace at MTS discovered theirpension con tributions and unemployment or that the essential employee issues relating to the insurance premiums had been spent." I do not want to privatization are taken care of. This is not so. There is seethat fate in the hands of my members, the employees no current contract fo r half of the workforce at MTS and of MTS. they are, frankly, losing patience with the prolonged negotiations. I want to highlight two issues which underscore what a bad deal this is fo r MTS employees and users, and I The pension plan fo r MTS employees remains an just repeated myself, I do believe. outstanding and very unresolved issue. We have heard a number of platitudes from MTS and the government officials to the effect that our pension plan is secure; Picking up where I left off,our members currently have however, our independent advisors have told us in no secure pensions through Manitoba's superannuation plan, uncertain terms that there is plenty of insecurity fo r the and I say to you that the Province of Manitoba has a plan as a result of this privatization. I draw your moral obligation to these members to protect their attention tonight to the statement on Saturday by pension earnings now and into the future. The pension Professor Vorst of the who said issue is not all right. We have no assurance that our in the Free Press just on Saturday, if the lessons from pensions will beprotected in the fu ture. To proceed with privatization and corporate takeover elsewhere are to be privatization while these issues are outstanding is learned, MTS employees can expect a decline in the enormously irresponsible of this government. 156 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

Secondly, the people of Manitoba must know that the because one thing the government glosses over and barely purpose of this privatization is to facilitate downsizing even mentions, even in their propaganda sheet, it talks and contracting out. The principal reason why we are about the MTS workforce in one paragraph, is the without a contract after almost two years of negotiations potential fo r some very significant changes to that is that thecompany is demanding the unrestricted right to workforce. contract out jobs. Why? Why indeed would that be so important to MTS atthis time? Because that is what this Ms. Hadfield: Absolutely. privatization is intended mainly to achieve, less workers, less wages and less services to Manitobans? Why not be Mr. Ashton: You know, whatamaze s me, they have not honest? This government does not have the courage to looked at Alberta. I phoned Alberta, and I talked to say clearly that it wants rural telephone offices closed people. I have talked to people who worked in the down, workers fired and telephone rates fo r rural users telephone system, former senior managers, some of them increased dramatically. It will not say these things actually living in Manitoba, and one of the first things because Manitobans expect and demand a more that happened in that province was that the privatized compassionate government than that. Is this not what company laid offhundreds of people throughout Alberta. Mr. Baines is talking about when he goes around the Insane cases, people were forced out the door in an early province saying that privatization is about freeing the retirement and hired back at half the wage they were company from government restraints? Other than serving receiving before. Many rural offices and phone centres the public interest, just what are these government were closed. restraints anyway that we keep hearing about? I am wondering, when you say here about the Be under no illusion; we are fully aware that a employment, if you do not see the same potential here in privatized MTS intends to ruthlessly contract out jobs, Manitoba,given the fa ct that we are actually going to be close telephone offices and increase rates dramatically. fo llowing the Alberta model. We are actually having the Northern users fa ce a 300 percent increase or more in same kind of privatization here. their rates tofulfill user-pay the profitcentre concept that this government has fo r telephone services. Manitobans Ms. Hadfield: In actual fa ct, I have also done some will pay more, much more, and they will lose jobs which research into what happened in Alberta because, yes, that are vital to the economic vitality and viability of our is whatwe are seeinghappen here. The actual number of communities and to the social strength of fa milies. people who lost their jobs in Alberta Government Telephones was 5,000 of 11,000, so there are 6,000 AsI mentioned toyou at the outset, so discord and reap employees left there. They closed down their phone the whirlwind. We all saw the television coverage of the centres, later fo und out they had made a mistake. Mind struggle at General Motors over contracting out. We are you, on that same issue, we have just closed down the organizing that future fo r Manitoba because we will not Flin Flon Phone Centre, we have just closed down the give up and meekly walk away from our jobs and our one out in Steinbach, and we have just closed down the communities for you or fo r anybody else. This one in Winkler, so we are not even waiting fo r privatization is a shameful act. It will lessen Manitoba. privatization to do those things. Back to AGT, AGT It will hurt people and communities. It is not supported closed down their phone centres, realized they had made by a maj ority of Manitobans. You have the ability to ram anerror, opened some of them up again, rehired some of thisthrough in thecoming days. We know that. But you thosepeople they hadlaid offat much less, and, yes, I do will be held responsible for your actions, make no see that being repeated here in Manitoba. That is the mistake about that either, because that is just as sure. disgrace of it all.

Mr. Chairperson: Thank you very much. Questions. Mr. Ashton: When you mentioned about Mr. Baines, talking about that privatization is about freeing the Mr. Ashton: I want to thank Ms. Hadfield, a fo rmer company from government restraints-1 know the constituent of mine, for the excellent presentation. I want government has been saying about freeing MTS from the to foc us in on a couple of the points you have referenced shackles of government, which I fm d is interesting October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 157

because they are the government, and they have been they were most courteous. I did a short presentation to since 1988, so it is sort of an indirect criticism of them. them about the history of MTS and my take on what Can you maybe explain who Mr. Baines is and what he privatization would mean to a place like Morden and to is referring to? the senior citizens there. It was a warmly received presentation and after the presentation, they all stayed Ms. Hadfield: Mr. Baines is the new CEO who was around afterwards to talk to me and to express their hired in January of this year to head up MTS Net. dismay that this should happen to them.

* (2320) One of the gentlemen that stayed around the longest Mr. Ashton: So what Mr. Baines is doing then is used to own the pharmacy out there, I just cannot recall suggesting that without public ownership-and the what his name is now, but he said he used to vote government of Manitoba is saying, fo r example, that Conservative but that this hasreally done him in, frankly. there should be a fo cus on ensuring that there are So there you go. employees in rural Manitoba. There are more than a thousand Manitobans outside the cityof Winnipeg who Mr. Chairperson: Mr. Sale, fo r the last question. work fo r MTS. Is what he is saying then that once it is privatized, which could be in effect as �ly as January I Mr. Sale: I want to just ask about the pension issue. next year, that everything and anything could happen When the airports across Canada were privatized, because the government is no longer going to be there employees were given the option of staying with the saying that you have to have decentralized employment fede ral plan, transferring all or part of their plan benefits and you have to have focus on Manitoba employment? to the new company or going completely with the new company. Yet, in this situation, the government Ms. Hadfield: I think what Mr. Baines is doing is what legislation seems to say that all the assets of the plan are he is being wellpaid todo andthat is being the flunkyfo r to go to the private company. Have you studied this the government, frankly. He is giving the party line. issue? Do you have any understanding of why they would wantto fo rce those assets to go to the private new Mr. Ashton: I just have one more question. Mr. Sale company and why they would not be willing to let assets has a question as well. stay with the Superannuation Fund to guarantee pensions? I know you were invited out to a meeting of seniors in Morden. We talked about this. I am wondering if you Ms. Hadfield: I am sorry, but I cannot even second could perhaps-and this fo llowed, by the way, one of our guess why. Sufficient to say that I have been totally and best turnouts in Manitoba in terms of a rally to save completely disgusted by the fact that they have three MTS, this was back in the winter, and we had a really unions on the premises at MTS and we have not been good turnout in Morden. Three MLAs were there. You consulted, not once, on what should happen with a went back in, I know, because seniors wanted to talk private pensionplan on how that would be done or any of about MTS and they wanted to talk to somebody who the decision making even though all of the funds in the could speak from your perspective. Superannuation Fund today belong to the employees of MTS. I am wondering if you could tell the committee what the seniors in Morden-not a die-hard NDP area of the province traditionally, I should say that, in fact; I would Not one red cent of MTS's money is in there because say on the record that I think when I went there with the their portion of the pension, as you will probably other two MLAs, they probably had not seen an NDPer remember, the legislation under the superannuation gave before-were saying about MTS and what the government them the right not to put their half or match the is doing. contribution and put it into the Superannuation Fund. MTS was given a special dispensation, ifyou will, to pay Ms. Hadfield: Yes, I had actually a very interesting their portion of thepension out as they went along. So as afternoon with them. It was very nice, very pleasant and people retired, then MTS kicks in their half. 158 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Now, we had a tremendous unfunded liability at MTS they haverealized that it isprobably a promise they could in termsof theirportion of the pension plan. I remember not keep. Meanwhile, theytalk nothing about the selling when I came on staffwith the union about 15, 16 years off of MTS and now trying to--that they got a good ago now, there was a lot of talk about that unfunded majority, because they did promise the people of this liability. In fa ct, MTS started to put some money aside provincethat they would do everything they could to save for that. If we are to believe everything that is said-and the Jets, and they realized that that would help them get I say that with tongue in cheek these days-then they are intooffice given the number ofseats they needed to get a almost up to par with their investment in getting their maj ority, when they probably knew that it would not get part of the pension put to one side, but they have that in­ them-or they could not do anything about it. But it house, it certainly is not in the pension plan as such. would get them enough so they could do and get through legislation such as this, of selling offof MTS, realizing It really mystifies me how people can make all these that if they promised thepeople that during the election decisions about ourmembers' money and the members of they probably would not have gotten in. IBW and Teams' money without ever talking to the bargaining agents. The only reason that we have had any They alsoprobably realized that, if they told the public meetings at all with MTS is because we have demanded duringthe election campaign that they were planning on those meetings. I think it is absolutely scandalous and selling MTS, they probably would have lost votes instead shows a total disregard fo r people. I thought that this of gained, because the majorityof votes that they did get government was in here to look after people and to make were from rural Manitoba where the most opposition to sure that they were happy little campers, but it seems as this bill is. though that is all put to the side when it comes to their agenda and people do not matter anymore and that is Okay. It was not part of their election platform; really a very sad, sad story. therefore a lot of people fee l it is not and should not be a part of the mandate of this sitting of the Legislature, of Mr. Chairperson: Thank you very much for your this five-year period. There really is not much public presentation. support in the maj ority of Conservative ridings where there areConservative MLAs for this legislation. Private I would like to now call Bill Hales. Bill Hales. Not ownership of Manitoba Telephone System will create a here, his name will be droppedto the bottom of the list. company thatprofit is driven as opposedto a corporation that is now customer driven. The main reason why it is Debbie Maruntz. Debbie Maruntz. Do you have being customer driven is because it is owned by the copies fo r distribution? customers that it is there to service and who own it. Those customers not only own it, they have a means of Ms. Debbie Maruntz (Communications, Energy and makingchanges, implementing policy into thecompany, Paperworkers Union of Canada, Local7): No. if they wish, through who they elect. Telephone service has come to be a basic necessity in life. Mr. Chairperson: No. Did I get your name right? The Conservatives back in the early 1900s realized Ms. Maruntz: Close enough. that. I donot think much haschanged in the last 90 years as fa r as Conservative philosophy, as fa r as basic Mr. Chairperson: Close. Please proceed. necessities of life. There is a lot of talk about the fa ct that there is a lot of bureaucracy within MTS, and that is Ms. Maruntz: Okay. First offI would just like to get part of the reason why we have to sell it off, that the an idea of what the logic behind this whole issue is, private sector can do it better than the public sector. becausethere are a lot of people outthere who still do not Well, who are elected officials, besides the fa ct that they understand it, because Gary Filmon and the do come fr om the public sector to start with? A lot of Conservatives are the reasoning behind promoting and you people have businesses out there or you work fo r promising things during the election, like what they could companies thatpossibly youare on leave fromto sit here do to help save the Jets when I do not think they-I think whileyou are in elected office. Are you trying to tell me October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 159

that you did a good job while you were out there, and worth, the MTX scandal. Anything that you can think of now that you are here you cannot do it good enough, that has been a real problem at MTS is because the therefore it has to be sold off? To me, that tells me that government has interfered and not stayed at arm's length you do not fee l that you are qualified enough to do it here, like it is supposed to with Crown corporations. then what happens when you go back out to the workforce? Are you no longer qualified then either, or Lastly, I would just like to know how this government what happened once you stepped over into this building fee ls that it has the right and the nerve to sell something when you came out of private life? What changed that to me that I already own. I am a taxpayer of this you do not think you can run a government or a Crown province. As a taxpayer and as a paying customer of corporation and what have we been doing fo r the last 90 MTS, I fe el I am a shareholder just as if l had gone to a years? stockbroker andbought shares in any other company that I can go out and buy shares in. As a result, I fe el that this The bureaucracy will not decrease, it will just switch government, by doing what it is doing, is stealing my fr om government bureaucracy to corporate bureaucracy rights as a shareholder to have a say or not telling me up and corporate bureaucracy has the same problems that front when they were running fo r election that they were government bureaucracy does. It is a ,lot of times top planning on selling it and not holding a vote- heavy and a lot of times people at the top do not always know what is going on at the bottom. Private companies Mr. Chairperson: Two minutes. listen to the public a lot less than governments do, especially when it comes to running government and Ms. Maruntz: -so all the other shareholders can have runningCrown corporations. Government is a watchdog an equal and fa ir ability to make a decision in this. IfI influence and has some say and control when it owns-if do decide to buy shares in this, in something I already something is part of the government or a Crown own, I feel I would be aiding and abetting a criminal act, corporation. Why should we be like the fe deral because asfar as I am concerned, selling this company to government and sit and complain about, fo r example, CP me, which is something I already own, is an act of and say, oh, we do not have to worry about branch lines stealing, which is a criminal act in this country. By me, when it gets sold off. Within the last month Lloyd anybody who goes out and buys shares is buying stolen Axworthy is on the TV and he is screaming, up in arms, goods and, as a result, is aiding and abetting a criminal we cannot sell off the branch lines, but there is nothing act. we can do because we do not own it anymore. What is going to-the government is now saying, we are still going Mr. Chairperson: Thank you fo r your presentation. to have control if MTS gets sold off. Do not tell me the Are there any questions? Could you stay fo r some same thing is not going to happen here that happened questions, please? with the railway. Mr. Ashton: I would like to thank Ms. Maruntz fo r her :It (2330) presentation. I just want to foc us on a couple of points thatyou raised. It is interestingthat you mentioned about What kind of influence is this government going to CN and the rail line which has been privatized, because have with private enterprise? MTS has always done well the Minister responsible fo r MTS is also the Minister of when it has been owned by the government, especially Highways and Transportation and, in his capacity as a when the government has dealt with it as a Crown Minister responsible for Highways and Transportation, corporation, like government is supposed to deal with has beenexpressing concernthat this privatized company Crown corporations. Government is supposed to deal is now trying to get out of the Hudson Bay rail line and with Crowns at arm's length. Ninety percent of the time, the Sherridon line into Lynn Lake. In fa ct, we had the when government has let MTS run and dealt with it at bizarre situation in the Legislature where he was asking arm's length, everything has been fm e. The only times questions about CN and started saying about how CN MTS hashad any real problems is when government has should not sell off this and do this irresponsible thing. interfered, fo r example, with the sale of cable, and we Then I got up as the MTS critic, and I was asking about ended up selling it fo r 1 0 percent of what it was really the privatization of MTS, where exactly the kind of 160 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

things we are concerned about with CN that he is I can show the members opposite the quotes from the criticizing are going to happen with the privatized MTS. Toronto Daily Starin which Bill Catucci, the president of I know that, speaking from experience as a northern AT&T Canada, which is a misnomer, says they are-are MLA I am wondering ifyou do not fee l that perhaps the you not sayingthen that this government better watch out minister should take off his hat, which is his MTS hat, and the people better watch out because the exact same fo r the moment and listen to what he says when he is the thing will happen here in Manitoba? Minister of Transportation and understand that what you are saying is going to happen if MTS is privatized, and Ms. Manmtz: Yes, andI think it is going to cause even that is, it will not be the same company. more of a drastic problem ifa company like AT&T gets in, because it is going to defeat the whole purpose of Ms. Manmtz: Yes, I totally agreewith that, and that is competition, because right now the primary competition part of the problem, like the government says, we will against MTS is AT&T Canada. They already own one­ still have control. But what? Manitobans will still be third of Unite) with three of the banks. Ifthey pull in able to own a certainpercent age. Well, what is stopping, MTS, I mean, whereis the competition? It hasjust gone then, me turning around and selling it to someone else downthe toilet You are trying to sell MTS because it is and them turning around and selling it to someoneelse. competition, and the prime competitor is the first in line Let us say, a big company comes in, like AT&T or and the first person who is interested in buying it. After something, and then they end up-the ft rst step, they will all of us Manitobans go out and buy our share, who is to always have some control of who buys, but once it goes say they are going to be behind me and give me money beyond me,we havelost everything. The government, no and say, here buy it and then sell it to me when you are matter what, is going to have no control over anything, done? and I cannot see how they can be so hypocritical and arrogant and expect that the public is going to take this Mr. Ashton: Well, exactly. Quite frankly, I do not all in and believe everything they have to say with knowwhy thegov ernment is not honest about this and up everything else that is going around. I mean, I just get fr ont about this and explain to people that, as people the impression they think we are real stupid and we are have said all night, these so-called guarantees or the sponges and we are going to soak this all in and it is Manitoba ownership in here are not really worth the going to, not spit it back out. paper that this bill is written on.

Mr. Ashton: It is interesting you mention that because * (2340) in Alberta thatis exactly what happened. There they had a 5 percent limit on how much anyone could own. Here, I want to ask you one fm al question, because what I by theway, it is 15 percent I do not think that will affect found really interesting is the perspective-you know, toomany people in this roombecause that is $55 million, talkingto a lot ofMTS employees throughout Manitoba, according to the numbers we have. You can only buy One thing that a lot of people are saying is MTS is not $55-million worth of shares. What happened in Alberta perfect, and especially the last fe w years the government with the same process as in this bill is that peoplewent has been interfering in a lot of ways, particularly with around Alberta, and they set up proxies in every bank, labour relations, you know, bringing in the Bill 70s and some of the senior management at AGT, and what they the Bill 22s, et cetera. What I find interesting though is did, they bypassed this. They just went and got a lot of people, after being really kicked hard by this somebody to buy a block of shares, and they went and government on a lot of issues related to wages and bought the block of shares offthat person. salaries and not,what still believe in MTS as a company, as a publicly owned company. I have talked to people So I am wondering if you are not suggesting that who have told me that they like working at MTS fo r one exactly the same thing can happen here in Manitoba, and thing, too, and that is they are working fo r the people of that is, once somebody buys these shares, they can do Manitoba; it is not just another job. whatever the heck they want with it and that, in fa ct, AT&T, which has already said it is interested in buying I am wondering if you could maybe put some the Manitoba Telephone System, said that on the record. perspective on that yourself coming from your own October29' 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 161

perspective and some of the employees obviously that that you allowed me even though my name had been you would know and work with, just how much you think called. that that will change if MTS is sold off to a private company. I live in Gimli constituency at Netley, Manitoba, a place that used to be a town; now it is a grain elevator Ms. Maruntz: I think it would change a lot. There is a and a few houses, and gradually, as rural Manitoba is lot ofloyalty there. There is a lot of people with a lot of being depopulated, we in rural Manitoba have depended service who have put a lot of their hearts into it. They are on certain institutions, one being the grain elevators, as just like anybody else working anywhere else and put in a core to maintain our population base and to maintain 20-25 years service. They would not have stayed there our economy. You know, the Manitoba Telephone truck that long if they did not really believe in it. It is causing that comes around and fixes the telephones, works on a lot of divisiveness within the workforce because there things is one of those institutions that rural Manitobans are people who believe one way or the other. Another have had to depend on over the years and have had there thing you are saying, too, is a lot of them think enough of to depend on, and one starts to wonder where is rural the company and believe in it enough that the Crocus Manitoba going as the privatization first of Manitoba Fund was approached to look into as�isting employees Telephone System and we would assume that Hydro and finding out about helping them out buy in, and this would not befar behind. Where is rural Manitoba going government just turned a blind eye and would not even to go? It is a dilemma. Asthe fa rms get larger, more and listen, would not even talk to them. more farmhouses get tom down. It is a dilemma how rural Manitoba is going to survive. Now, Gimli, with a A government who is interested in selling, a mayor like Mayor Barlow, has done an exceptional job, governmentwho isinterested in giving the people of this and meanwhile Selkirk, at the other end, is full of empty province an opportunity to buy into something turns a storefronts and, even though it has one small industry, is prime opportunity down from the people who have the surviving. most vested interest in it is another prime example of the arrogance of this Conservative government and the fa ct You know, I am a parent of three kids and just had my that part of what has built up over the number of years fifth grandchild, and when your kids start to do that they have been in here in power, and it is another something wrong, it is a dilemma of how to discipline example to me of the fa ct that they have been in too long. them, how to put them back on the right path. Some We should have got rid of them a long time ago. people work with shouting at them; some try reason; some try harsh discipline. Others try a combination of Mr. Chairperson: Thank you very much for your effects on your children and your grandchildren at presentation. I have just been advised that our last call times-it is one of the greatjoys ofbeing a grandparent. for out-of-town presenter-Set Burrows has just showed You can look after the kids for a while and then give up a little while ago and would like to present. Is there them back after a while, but you are still concerned. leave of the committee to allow him to present? This is what I am dealing with right now in this Some Honourable Members: Leave. decision toprivatize the Manitoba Telephone System. It is sort oflike your children who have gone astray, taking Mr. Chairperson: There is leave. Mr. Burrows please something that has been very important to Manitobans begin. and are in danger of doing something that could have serious repercussions to the people of Manitoba. Mr. Sel Burrows (Private Citizen): Thank you very much. I do not know if you are all aware that there is a I donot know if my testimony or the others that might bit of a storm out there. My little pickup truckwas just come out here will have any impact on your thinking, but, about blown offthe highway a couple of times. I do not hopefully, you will take the time and look back know ifthere are a lot of other rural presenters who were historically. I am not a historian, but I understand that not able tomake it here, but you may want to think about the Manitoba Telephone System was built and developed giving people a second chance, and I appreciate the fact by people of all parties, by Conservatives, Liberals, New 162 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Democrats, that it was held out by Manitobans wherever a good-paying job, because you may privatize them. we went as a matter of pride. We had the lowest Oncethey are privatized, there will be some good-paying telephone mtes in North America, still do. We can run a jobs remaining, but many will disappear because the telephone system better than those guys fromNew York. greatbenefit, theytell us, of privatization is the ability to get away from payingdecent wages to many of the people We are fa cing a small tragedy. We are fa cing the who work fo r that organization. release of something that is very Manitoban, very pure, something that we can be very, very proud of, no matter The president of the Manitoba Home Builders what background you come from, whether you are an Associatimwill probably leave Manitoba too because he engineer, a fa rmer, whether you are an economic will have feM:rand fewer people who are earning enough development consultant, which I was in my last job. You money to buy houses. We in Manitoba are going to be understand economics, or you do not understand facedwith a continual ecmornic decline, not only in ruml economics. The argument that telecommunications is Manitobabut -because I had to have somework done on becoming too complex fo r us poor, puny people in my car the other day, I had to walk through Winnipeg- · Manitoba to handle and we have to go outside to some great experts, well, that has been taken care of through Mr. Chairpenon: You have two minutes left. our agreements through Stentor, where we exchange expertise with other, some private, some government­ Mr. Burrows: lbankyou very much. I saw the nwnber controlled, enterprises, and we have access through that of vacant store fronts in Winnipeg. I saw the economic agreement to all of the expertise that is needed. decline that is in Winnipeg, and ifwe take more decent­ payingjobs away from Brandon, ifwe take more decent­ Because the new modes of communication that the payingjobs away from Selkirk and Gimli, Manitoba will Telephone System is going to be so crucial to, not only be in even further economic decline. are going to be costly but are also going to be profit generating. The issue of debt that I understand is being I asswne some of you gentlemen and ladies read The raised by the government is not a functional issue, but Globe and Mail on occasion. There was afa scinating thereare others who candeal with those areas better than articlethe other dayon Britain on the privatization of the I. water and sewer system. It was greeted with great glee when it was privatized some years back. Now Britain is I want to talk a little bit about jobs, as Manitoba fa cing a serious, serious issue of profit taking out of the continues to see the outflow ofgood-paying jobs. We are system. They are not reinvesting into the maintenance of fa ced with the situation with the privatization of the the water and sewer system, and they are wanting more Manitoba Telephone System, one of the things that will money at the same time. It is quite likely that belooked at by its new owners is how to get costs down. governments will be fo rced, of whatever stripe, to re­ Will we be looking at operators living in Boston or in nationalize the water and sewer systems in Britain, North Dakota? Will we be looking at operators that are because waterand sewer of are basic importance to health contmcted out that are paid $5.50 an hour, even less? It and safety of people in the coc..."!try. was about a month ago, the president of the Manitoba Home Builders' Association was on the radio, totally Well, fo r those of us who live in rural Manitoba, the frustmted. Even with the low interest rates, he could not telephone is also a basic safety necessity. When there is figure out why Manitobans were not buying new houses. a storm brewing, even in October-I was just thinking, Well, I could explain it to him. First of all, there are gee, it is not even November yet, and we have a storm fe wer good-paying jobs in Manitoba than there were hitting us-if the telephone system is not maintained and before, and those people with good-paying jobs who can when there is an emergency, where are we in rural afford to buy a new house are not sure if they are still Manitoba going to be? If it is not profitable fo r the going to have their jobs. If you work fo r the Manitoba private sector, will they bethere to fix our telephone lines Telephone System, if you work fo r Manitoba Hydro, if without charging us an enormous amount of money? you workfo r the Liquor Commission, or ifyou work fo r

Autopac, they do not know if they are still going to have * (2350) October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 163

Mr. Chairperson: I am sorry, the time is expired. Mr. Ashton: Well, it is interesting too, because even in this MTS answers sheet, you know, they have a little Mr. Burrows: Okay, fine, I was about to start on section here on MTS workforce that does not reference another point, but this is a good time to interrupt. anything in terms of the fa ct that not only are there not any guarantees,whether it be in rural Manitoba or here in Mr. Chairperson: Questions now. the province, but exactly the kind of thing you are talking about may happen. I just want to foc us on something else. You mention about North Dakota. There was a Mr. Ashton: Yes, I want to thank Mr. Burrows fo r his CBC open line show a while ago, six months ago, and presentation. I just want to fo cus in on a point you somebody phoned in from North Dakota. They talked raised. You talked about what may happen with jobs at about what it is like to live with a private phone MTS. I find it interesting you talked about operator company, a totally deregulated environment in North services being provided elsewhere, because I do not know Dakota. She said at the time, it cost more to phone the ifyou are aware of this, but Bell in Ontario is contracting county seat, to the regional centre, than it does to phone now, looking at contracting with Arizona fo r operator Winnipeg. She said, take my advice, do not sell your services. I always thought there was some irony in that. publicly owned phone company. Do not end up like we I guess, when the government said in the 'last election that are. I wonder what your thoughts on that are too, you they were going to save the Winnipeg Jets and they were mentioned about, you know, with North Dakota, whether not going to sell off MTS, what they did not say, what you think we are actually headed in that direction. they really meant was that there were going to be MTS jobs, but they were going to be in Arizona, and people Mr. Burrows: Well, I think it is fa irly unanimous in were going to be able to watch the Winnipeg Jets, only rural Manitoba thatwe arepetrified at (a) what our phone they would be called the Phoenix Coyotes at that point. rates are going to be, and (b) what is it going to cost fo r So I wonder if there is not some irony in what they have local calls versus longer calls? There are all sorts of said. But I wonder ifyou could fo cus in on that, because rumours going around. We look at what has happened in there are 4,000 Manitobans that have jobs, many of other jurisdictions, and I think our fe ar is very valid. I which canbe instantaneously moved out of the province. think the fear that: (a) our telephone bills, local I mention operator services, the bills that MTS puts out, ownership of a telephone, the basic use of a telephone is the same bills that Bell Canada has. What do you see in going to escalate massively; and secondly, that we are the future fo r MTS ifit is privatized? probably going to get stuck with it being more expensive fo r me to call Gimli or Selkirk than Winnipeg, or to Mr. Burrows: Well, this is one of my major concerns. phone New York. These are the crazy things that are The survival of the economy of Manitoba is dependent on happening and without it being owned by Manitobans, keeping decent-paying jobs in Manitoba. An operator is who care about service to Manitobans first and running not exactly a high-paid job, but it is cheaper to put them it efficiently and effectively, we are fa ced with some very in Arizona or North Dakota. When one phones for an scary, very difficult decisions. airline reservation, you do not know where that operator you aretalking to is sitting. It could be in ; it I guess I really hope that you will take some time. It could be somewhere in the United States. Once the took many,many years to create the Manitoba Telephone system is privatized, the only rationale that is used by a System, and it seems that in a very, very quick time we private company is, how can they make and maximize are going to lose it. I would hope that some of the issues their profits, and if that means dumping decent-paid jobs that I have raised: good jobs, stability in the rural in Brandon, dumping decent-paidjobs in Winnipeg, they communities, jobs staying in Manitoba-you know, we willdo that, and they will transfer the jobs, whether that have not even got into the issue of profit, of money be to Phoenix, whether it be to North Dakota. Again, flowing out of Manitoba, out to shareholders who will be you know, when I have driven through North Dakota, I residents outside of Manitoba, and that being part of a have seensome of their telephone answering centres that capital outflowout of Manitoba and out of Canada. We they have, and, gee, areyou guys not going to be proud if have not got into that issue. All these are crucial things that happens? It is probably going to. that require more study. This is being rushed much too 164 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

quickly. Perhaps if you, gentlemen, and I am sorry, I room, so that we do not have to go through the list of keep saying gentlemen, it is difficult these days to be names again, if you wish to make a presentation to the politically correct, do you want to say, lady, woman, committee tonight yet. whatever, the members of the committee would take a longer look at this, take some time, give people more I would like to call Rod Fritz fo rward. Do you have timeto testifY. I really hope that you will give other rural copies? people, who werenot able to get in tonight because of the storm, a second chance at this because it is a crucial Mr. Rod Fritz(President, Interna tional Brotherhood issue. The telephone system is part of Manitoba history of Electrical Workers, Local 435): No, I do not. and I would hate fo r you to cross it offthis urgently. Mr. Chairpenon: You do not. Please proceed. Mr. Chairperson: Thankyou very much. The timehas expired. Thank you very much fo r your presentation. Mr. Fritz: Thank you, Mr. Chairperson. My name is Rod Fritz. I am the president of the International Mr. Burrows: I amjust wondering, there are some other Brotherhood of Electrical Workers, Local 435, people from my area, would you take some time to think representing craft workers, maintenance, garage aboutpeople who could not get in tonight being allowed mechanics, warehouse people, building maintenance. I to? have come here tonight to speak about this issue, but I havetaken several notes. There have been a lot of good Mr. Chairpenon: Yes, no names have been dropped comments here tonight. I hopethat the committee takes offthe list. Sowhen meeting the is called again they will these comments and studies them. be called again. What I would like to do is just flip through my notes Mr. Burrows: Thankyou very much. here and talk a little bit about our organization, about unions. I am not too sure how fa miliar the committee is Mr. Chairpenon: It is very close to the hour of with unions and how they operate. Just fo r an example, midnight, and there is a motion that says that we would the IBEW, we hold monthly meetings of our executive take a look and assess the progress at midnight and not and all of theactioos of ourexecutive are taken out to our call names after that time. Do we proceed with the- constituents across the province. We go to Brandon, Dauphin, Thompson, Morden, Portage Ia Prairie, Selkirk, Mr. Ashton: Just on that, I think the intent of the Steinbach, and I ooly say thatjust to let you know that we motion and I think the consensus was that ifthere are go to our constituents every month to get fee dback from people who want to present after midnight, they should them. perhaps identifY now. You know if they cannot come back tomorrow orat upcomi ng hearings, perhaps with the One thing I would like to speak about is some of our table staff, perhaps while this next presenter is members out in the rural area refer to us as having presenting, and depending on how many people want to perimeter vision and that we do not look past the present, we will sit as long as it takes to hear them and Perimeter. Talking tonight about having just the then adjourn. meetings here in Winnipeg, I reallythink the committee should be reconsidering that and thinking about getting

* (0000) out to the rural people. We have talked aboutthe storm tonight that is blowing in; a lot of people are not going to Mr. Chairperson: Is that agreeable with the rest of the be heard. committee? [agreed] One of the issues that our union had a couple of years In case people did not quite hear Mr. Ashton, it was ago was that there was Bill 22 that was imposed on the suggested that when our next presenter comes fo rward, Crown corporations and so on. And MTS, at that time, those that wish to stay and make a presentation, please we had a ballot gone out to our members because it was register with the Sergeant-at-Arms at the back of the actually contravening our agreement and our hours of October 29, 1996 LEGISLATIVE ASSEMBLY OFMANITOBA 165

work, so a ballot went to our membership on that issue. the other side of that and some of the earlier speakers I guess it was somewhat of a referendum that we held, talking about the press of yesterday or today about the and all the unions held, with that. new technology. We arethere. The argument is that it is too long tomak e business decisions, and we heard today I had an opportunity, I believe it was this last winter, it took two or three days to make a decision about the to hearMr. Filmon speak in Dugald,Manitoba, a meet­ sale ofMTS. and-greet coffee/lunch that I think Mr.Fi ndlay had put on at the hall. It was my first timeto be able to go and sit We hadan incident this summer, an issue whereMTS and listen to the Premier andlisten to Mr. Findlay speak. was bidding on burial cable in Ontario, and the company I was really captured by the content of his speech and contactedus within threedays. We had about a one-hour when he talked about round table discussions that meetingwith the comp any. Therewas no union dragging involved the decisions that government makes with them back. We had a meeting with the company. They Manitobans, I cannot remember the exact words, but it carneto us. Theysaid , here is the deal. We have to have was that the Progressive Conservatives liked to have a tender in by the end of the week, and this is what we round tabledisc ussions. Ifthere is an issue that is going want to do . We said, yeah, do it. There was nothing to affect Manitobans, get the people involved that it is holding themback. Apparently, they were the lower bid, going to affect,so that everybody is aware of it. I believe but they still were not accepted on the tender. that was back, I think about January or Februaryat some time. Soall these things, they do not seem to add up. Same with the selling of the cable. I really believe that was a Since that time, there were no discussions withMTS mistake. I have heard that right now one of the cable employees' unions about the privatization issue. There companies-! think there were some cable companies in was nothing. We waited; we waited to hear, hoping that eastern Manitoba that were sold. One of them is somebody would explain to us what was going to apparently up for resaleright now. I believe the regulator happen, but that did not come. In May, when the is going to be ruling on that, and the person is going to announcement carne, when there was a news conference, make a good dollar on it. Again, like I say, we really do I was asked by the media to make a comment on, well, not have all that information. what do you think of this breaking news that they are going to be puttingMTS up for sale.? I had to tell them, Dan Kelly was on CJOB sparring with the telephone I said, like, I do not know, that we have not had any critic today, and he made a comment that he believed that information. I could not make an educated comment, MTS employees were buying into this. I think Mr. Kelly what is this going to mean. It was like buying behind wastaking my comments from this spring, but they were curtainNo. 3. I have absolutely no idea. I am not going out of context, and that was, yeah, maybe there are to buy into something if I do not know what is behind opportunities. Please, by all means, let us know. We there. would like to hear them. That was back in May. I made that comment and I thought, well, maybe somehow somebody will pick that I guess in summarizing this,our big concern, I believe, up and think, we should be talking to the unions, and we is theprivatization thathappened in Alberta and how that should maybe get them onside at the round table thing, equatedto job loss, big job loss. Now in Alberta, ifyou but it never happened. That gives me some concern. I want to get a telephone out there, you phone AG T, they really cannot see how the International Brotherhood of tell you, we can comeout and do it for you, but it is going Electri cal Workers canbuy into the sale of MTS when we to cost you so much-I am not sure what the fee is, but it still have not been properly informed. I know our is an exorbitant fee, but we have a list of people who members are continually asking us what is going on, usedto work for us, and they will come out and do it for what is happening with it, and we do not have an answer you for thirty bucks. So it really seems to take a toll on for them because we are not hearing anything. the workers when we talk about good paying jobs .

I have heard some of the arguments, thatMTS cannot Now should this legislation go through, we have grave copewith the new technology, and I think we have heard concerns on our pension, and the CN trucking example 166 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

did come up. We really have some concerns about the * (00 10) wording on that. Mr. Fritz: Therehave been someongoing meetings with the workers at Manitoba Telephone System. I just found Mr. Chairperson: Seven minutes left. out last week the new abbreviations that, I guess, everyone else has beenfa miliar with. IPO, I believe, is Mr. Fritz: Okay, thank you. Some of the other what it is referredto. I am not even surewhat exactly the concerns, too, that I can see are the pay per call that we abbreviation stands fo r, but this has been going on fo r, I heard about tonight that is happening in B.C. This is think, aboutthe last two weeksor three weeks, that there going to happen. I mean, it starts in Europe, it works its has been presidents, CEOs going around the province way through the States, and here it is coming up through doing these little spiels. I caught wind of it, just by British Columbia. It is not going to take long before it chance, at a union meeting thatthere was going to be one . works its way over this way. I think that is just part of StilL wehave neverhad an invitation to one of these, and the evolution, but I really believe that this group should I attended one. I guess you could call it crashing the reconsider this legislation, look at it. I do believe that party, whatever, but I sat in on one just to find out what there might be some hope that you may look at it and was happening. Sitting through one of them, I mean, I consider other alternatives, such as the Hydro Bond issue. talked tosome of themembers afterwards, andthere were You know, other than that, there is this perception out still no real answers. I think one member phrased it as there that this is just a cash cow, not just our union still smoke and mirrors; there was no concrete membership, but I thinkthe people of Manitoba need an infonnation. I realize someof the information, from what education on where we are heading with this and that wehear�you know, people went there wanting to know information is not available. Thank you very much. how much the shares are going to be, what kind of deal there was going to befo r MTSemployees. None of those Mr. Chairperson: Thank you for your presentation. questions were answered. Questions now. Mr. Ashton: I wonder, in fa ct, if we can get some Mr. Ashton: Mr. Chairperson, I want to foc us in on indication of what an IPO is. I have seen that wording what you are talking about here in terms of speaking for around. I wonderif the minister can explain to members the employees at MTS and, particularly, people of the public what that refers to. I am not trying to put represented by IBEW. You know, one thing that struck the ministeron the spot; the process is going on anyway. me as absolutely amazing about what has happened is So this is to do with the share issue with employees. that the government talked about various things in its announcement. I was going through the document right Mr. Findlay: What is your question? now, that this is the document they announced May 2, two daysafter they received the report, when they decided Mr. Ashton: About the IPO meetings that were taking to sell off MTS, and they talked about this opportunity place in terms of the share issue, just to perhaps explain fo r employees to buy shares, et cetera. what thatprocess is. I have gotten calls, too. I have had people who are quite confused. I am just wondering if Are you saying that the government never once sat the minister can explain what is going on with that? down withyou, either as anemployee or IBEW, not once, to discuss the sale or anything to do with how it would Mr. Findlay: When the legislation passes, then a impact on employees, or even the participation of prospectus will be filedwith the SecuritiesCommi ssion, employees in the share, and never once did that before and the details will come through that process. The they sold it off? Securities Commission has to approve the prospectus, and it ispremature and notrespon sible for us to comment Mr. Fritz: I have not heard a thing. on what the Securities Commission might eventually rule as the process. They have a lot of say in that. Mr. Ashton: So it was notjust before the sale. Now we are the end of October, the same year, they still have not Mr. Ashton: I am wondering, too, by the way, if there talked to employees about the future of the company? has been any explanation about the reality of what October29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 167

happens when you end up with a privatized company. I Mr. Norman: In order to shorten my presentation, have some information which I will be tabling in the unless there is some question about the Manitoba Legislature fairly soon, which tracks the share value of Chamber of Commerce, I will be very brief about the privatized companies, and I am wondering ifthere has background of the organization. Of course, everyone been any explanation that often governments have tried around this table will know that the Manitoba Chamber to discount shares tomove them,but that many privatized of Commerce counts 275 leading corporations in this companies now are trading for far less than people province as direct members. We represent 63 local actually pay for them at the beginning, British Telecom Chambers of Commerce from all over Manitoba and as shares beingan example. The best Canadian example is such speak for over 8,000 businesses, and is the single AirCa nada, which is trading at an amount which is way largest business organization inManitoba. less than similar private companies. The resolution that I have distributed was passed at the last annual general meeting at theManitoba Chamber of I amwondering ifthere hasbeen any explanation of the Commerce, and the issue of privatization of government fact that when you are dealing with shares, you are enterprise was debated. While it is generally accepted in dealing with a significant amount of risk-and that it is the business community that government should not not like buying a bond-that you could lbse money on. compete with the private sector, it is also true that there is concern about the impact on business when the Mr. Fritz: Mr. Ashton, I am still waiting to find out candidate for privatization is a major supplier of the what the definition of a share is. I am sorry. That is goodsand services to business. It was therefore felt that where I am startingfrom. I mean, as far as all those other rather than developing a resolution for every government intricacies, I really could not answer that. The only thing enterprise, what was needed was a process of why, when that comes to mind is what I have heard from other and how government enterprise would be privatized that people, that some of the CE Os or presidents of some of thebusiness community was comfortable with and which these privatized companies have shares as part of their would reconcile those competing interests. compensation package and that in the event of mass layoffs, the shares go up so that it becomes profitable for The resolution has been distributed and I will not that CE O or chairman to announce layoffs because the spend my time in rereading it. The resolution deals, stock is going to go up. I am sorry, that is all I have been essentially, with fivemain factors to be considered which told. I wish somebody could educate me more. are, namely, fair competition, public interest, public consultation, taxpayer protection and other economic Mr. Chairperson: I am sorry, the time is expired. considerations. Thank you very much for your presentation. The following is an analysis of these concerned in the Mr. Fritz: Thank you very much. presentcontext: Firstly, with respect to competition, the question that is asked: Is the marketplace being Mr. Chairperson: I have been advised that we have efficiently and competitively served by the private sector? four presenters thatwish to still present to the committee. There alreadyis intense priv ate-sector competition in this So I would like to call the first presenter Lance Norman industry. Indeed, as the communication industries are to come forward to make his presentation. That is No. 16 converging, government-owned telcos are now the on your list. Do you have copies for distribution, Mr. exception rather than the rule, and so under the first Norman? prong of the first part of the resolution MTS is an obvious candidate for privatization and therefore we Mr. Lance Norman (Manitoba Chamber of proceed on through the resolution. Commerce): Yes, Mr. Chairman, I have copies of a resolution passed at the annual general meeting of the The next interest, the second prong of the first part of Manitoba Chamber of Commerce in April. the resolution, is public interest considerations, and the question might be asked: Is there a demonstrated public Mr. Chairperson: Thank you, you may proceed. interest orconcern thatcannot be addressed by regulation 168 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

or licensing? It is the consumer that is the beneficiary of hold $475 million in debt. So it completely balances if the intense competition in this industry. Residential rates one understands a balance sheet. can be expected to continue to rise at the same rate that they would without privatization. However, CRTC, of * (0020) course, does and will continue to regulate the industry and control rates. From the Manitoba Chamber of If the$700 millioo wascash that generated through the Commerce perspective, there are simply no consumer sale was applied to the public debt, it would free up protection issues in this debate. [interjection] I will be approximately-taking into account interest happy to debate this outside differential-$30 millioo per year that would otherwise be spent on interest. That is better than what MTS does in Mr. Chairperson: Order, please. profits. This is very good fo r the taxpayer.

Indeed,investment in a telco must beconsidered a very Mr. Norman: The third issue under the resolution is risky endeavour, and I am going to quote from Bernard one of public consultation, and the question that flows Courtois who is Vice-President of Law & Regulatory fromthe resolution is hasthe public been made aware of Matters for Bell Canada. This is a quote that was the proposed privatizationand hasrelevant information referred to in The Globe and Mail Tuesday, September been disseminated? This issue is one of notice and of 12, 1995, and I quote: I do not think anybody's making public consultation. Thisprocess is necessary not only to money on long distance. Inthe case of Bell, we have lost ensureinf onned opinion anddebate but to allow business more market share than even our competitors have to plan fo r change. In this instance the government planned. He says the competitors are suffering because certainly made the public aware that privatization was they have chosen to slash prices, leaving them with being considered and did commission a barrage of paper-thin margins as a result. It is certainly arguable experts to prepare detailed financial and cost-benefit that not privatizing MTS would be irresponsible from a analyses. However, if there was one point of criticism taxpayer's point of view. with respect to the process, the government did not release that analyses and recommendations prior to making its decision,and while the decision is a goodone With respect to the next point in the resolution on and endorsedby the Manitoba Chamber of Commerce, it ecooomic development, the question that fo llows is what has not allowed fo r any informal debate prior to the effect will this have on MTS employment, especially in setting of an agenda or a critical path fo r privatization. smaller, rural conununities. I would point out, obviously But in fa irness, of course, the changes will require I do not have to repeat this fo r the members present but legislative changes, and so this is the opportunity fo r the perhaps fo r the gallery, that the Manitoba Chamber of public to have input and fo r this question to be debated. Commerce represents 63 chambers, the Winnipeg Chamber of Commerce being but one, so ours is an organization that is certainly alive to economic develop­ The fo urth topic is one of taxpayer protection, and the ment issues in Manitoba and alive to the concerns of the question that flows from that part of the resolution is business community and communities in general what will this cost the taxpayer of Manitoba? As stated throughout Manitoba. in theresolution, the overwhelming consideration in this process, the process of privatization, is protection of the taxpayer. In simple terms, MTS owes the taxpayer of Clearly there is a concern of chambers that the effect of Manitoba $850 million. The taxpayer of Manitoba also privatization will have on the MTS workforce. Certainly happens to own the equity in MTS of approximately workers for MTS COOlprise some of the customer base fo r $300 million. The government is going to sell $375 those businesses. MTS even as a Crowncorporation has million of that debt and the equity of $300 million had to operate as a commercial entity. In fa ct, at the through a share offering-IPO stands fo r initial public same convention, same annual meeting in the spring, we offering. The sale is expected to generate, quite passed a resolution calling upon those Crown rightly-we all know our mathematics-$700 million in corporations that would not be privatized or other cashapprox imately, and the government will continue to government enterprise to act in a more commerc ial October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 169

fa shion, andwe outlined a number of considerations. So MTS, manyof whom arechamb er members, will have an MTS has to operate as a commercial entity. opportunity to become an actual owner without government as an intermediary. This is everyone's Theexternal economicreal ities in this industry will not opportunity to buy local. change becauseof an internal recapitalization. However, many have suggested that government has and can use (Mr. Vice-Chairperson in the Chair) Crown corporations like MTS as a vehicle fo r economic development and employment and that a privately held Mr. Vice-Chairperson: Thank you, Mr. Norman, for company would not do that. Thatis quite true except that your presentation. this interference by government always, always results in market artificialities, unfair competition fo r private Mr. Ashton: Thismotion that you prepared was passed business and increases the debt of the enterprise, and if at the convention of the Manitoba Chamber of anyone has a question about that, one only need look at Commerce. the balance sheet of MTS and the accumulated debt of other government enterprises to see this unfortunate truth. Mr. Norman: Yes, that is correct.

Finally, with respect to other questions, what will Mr. Ashton: Did that convention also endorse this sale prevent huge and other fo reign interests from taking ofMTS? control of MTS? There are restrictions that we are satisfied withon individual and fo reign shareholdings to Mr. Norman: The resolution was bornfrom a concern prevent majority in shareholdings and takeovers. In about privatizationand about government competition in addition, in this legislation is maintenance of universal private industry. specified services and service levels, maintenance of the head office inManitoba and a restriction of major transfer Mr. Ashton: I asked whether there was any motion disposal of assets, and also there is provision for supporting the sale of MTS at the same convention. Manitoba citizens and MTS employees to get first crack at these shares. Mr. Norman: That resolution was passed so that we would not have to, as I indicated in my submission, In conclusion, therefore, the application of Manitoba revisit the issue of privatization of government industry. Chamber of Commerce policy to this issue leads The application of that principle to the sale of MTS has inexorably to support fo r this legislation. One fm al note, been endorsed by the board of directors of the Manitoba the opposition to this legislation has been stated as Chamber of Commerce representing 63 Chambers of fol lows: The government is selling my share as a Commerce in this province. taxpayer in MTS without consulting me, without giving ine anything fo r it and then letting me buy it back. This Mr. Ashton: The reason I asked that is because I know is clearly erroneous and must be corrected. Collectively, individual chambers have expressed concern about the taxpayers now own the debt and equity of MTS in the sale. In fa ct, I believe there are some resolutions that amount of$ 1.1 billion. After privatization, collectively, have been passed by individual chambers so- taxpayers will get $700 million in cash and MTS will still owe us $400 million. The arithmetic adds up. Mr. Norman: Not to my knowledge, sir.

With that $700 million in cash, the taxpayer is going Mr. Ashton: Perhaps Mr. Norman may wish to call the to get its choice of one of the fo llowing: lower debt, Dauphin Chamber of Commerce. I can actually provide reduced taxes, more services or improved infrastructure. him a copy of that resolution. It flows. Those are the only fo ur options that are available. This debate should not be over whether or not I am just wondering why the board of the Manitoba to privatize MTS, but rather this debate should revolve Chamber of Commerce would not consult with the other around what is to be done with the proceeds of the sale. Manitoba Chamber of Commerce members on this issue, Manitobans who fe el a strong emotional commitment to specifically given that I think the resolution itself 170 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

refers-and I think it is a goodre solution, by the way. It Mr. Nonnan: Thefac t that you say that causes me some refers to the public input being necessary, and concern. It is clearthat you do not understand the basic information We can debate some of the criteria that concept, the basic business-[interjection] might be used, but would it not make some sense to perhaps canvass the member chambers because I know Mr. Vice-Chairpenon: Point of order. therehas beenconcern expressed on the issue and even a resolution passed opposingthe sale. * (0030)

Mr. Nonnan: Afterboard the of directors, the Manitoba Point of Order Chamber of Commerce considered this issue with reference to MTS. A memo was distributed to all 63 Mn. Mitchelson: A pointof order, Mr. Chairperson, I Chambers ofCommerce throughout this province on May know the hour is getting late and a lot of people have 2, 1996, advising the decisionof the board of directors been here fo r a long time, but I think we as committee and analyzing in great detail the legislation for all members have paid very close attention to all of the chambers. To my knowledge, sir, no Chamber of presentationsthat have been made and I have not noticed Commerce has passed a resolution in opposition to this. a disturbance in the background. I would appreciate if everyone gave the same consideration to all of the Mr. Ashton: I can settle that by providing the copy. presenters that they have receiv:d. So I would just ask if think it might be the best way of resolving this. you might ask that there be some respect shown to everyone who makes a presentation. I am just wondering, I am surprisedthat the Chamber of Commerce would suggest that--or the board, pardon Mr. Vice-Chairpenon: The honourable member does me, in the presentation todaywould suggest that there are have a pointof onkr, and I would ask the co-operation of no consumer protection issues. Are you aware of the way all people in theaudience out of respect for all presenters the CRTC operates and particularly the fa ct that who are going to be making presentations here tonight essentially what the CRTC- and in the future. It is a disturbance and the Chair will not stand fo r that. I can tell you that now. [inaudible]

* * * -$6 a month passed on a tax liability that related to the privatizationof thatphone company, and what the CRTC does is regulates an ROE of between 10.25 and 12.25 Mr. Vice-Chairpenon: Mr. Norman, to finish your percent. I also have a document here which was tabled-it response. is part of these MTS technical briefing notes which indicates that in 1995 the return on equity of MTS as a Mr. Nonnan: The whole point is that private industry publicly owned company was approximately 6. 7 percent. has always complained that government-run enterprise does not have to pay taxes and therefore that is unfair So I am wondering why the Chamber of Commerce competition. would not see that under that regulation, what you essentially have is a private company can go and say, we Secondly, there is not the ability of a government are not requesting the same level of return, the 6. 7 enterprise to play by the rules,that is to say that ifthere percent. We want the 10.25 percent that is available, the are losses that would normally fo rce a private sector 12.25 percent. and that is the range fo r private utilities. business out of business, those same rules do not apply In what way is that not a consumer issue? In what way by government-run enterprise because the taxpayer is does thatnot affect rates? When a private company gets always there to subsidize or bail out the government-run a regulated return on equity guaranteed by the CRTC, enterprise. So the very fa ct that you asked that question obviouslythat is going to affect rates ifit is a higher rate belies a misunderstanding of what business is saying. of return on equity than we have currently with a public The principle is that government-run enterprise in the company. private sector is unfair fo r those reasons regardless of its October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 171

size, whether it is tree trimming in the city of Winnipeg the mistake that that private company made, and guess or running a telephone company in Manitoba. who is paying the price?

Mr. Vice-Chairperson: Excuse me, the time has run Mr. Vice-Chairperson: Order, please. Mr. Ashton, do out. you have a question that you want to pose to Mr. Norman? If you do, would you please pose it now? Mr. Ashton: Mr. Chairperson, there was a point of order during that. I would like to ask at least one more Mr. Ashton: Mr. Chairperson, I asked ifthe presenter question. I think, in terms of time, it would be fa ir. was aware of that, and I appreciate that a lot of this information was not available. By the way, I do agree Mr. Vice-Chairperson: What is the will of the with the Chamber of Commerce on one thing, not- committee? Mr. Vice-Chairperson: Order, please. Have you posed An Honourable Member: Leave. your question, Mr. Ashton?

Mr. Vice-Chairperson: Leave. �eave has been Point of Order granted. Mr. Ashton: Mr. Chairperson, just on a point of order. Mr. Ashton: By the way, I can make this available to Perhapsyou were not listening very carefully, but I asked you. It is obvious that the Chamberof Commerce has not the member- seen this CRTC decision. Mr. Vice-Chairperson: Are you speaking on a point of Mr. Norman: I am familiar with it, sir. order?

Mr. Ashton: By the way, I am wondering ifyou are Mr. Ashton: Mr. Chairperson, I am speaking to you, aware that in this decision, the private company, AGT, and I am asking- not a publicly owned company, which made the mistake on its taxes, underestimated its tax liability directly Mr. Vice-Chairperson: No, is it on a point of order? resulting from the privatizing, went to the CRTC and said, ifwe do not get the $78-million increase that we are Mr. Ashton: Mr. Chairperson,recognized you me. I am requesting in rates, which was $6 a month, we will only speaking- get a 2 percent return on equity. Do you know what the CRTC did-and I have the decision here as well. Maybe Mr. Vice-Chairperson: No, you have been recognized the Chamber of Commerce was not aware of this, I to pose a question to the presenter. appreciate thatfa ct. They said, that is going to be passed on to the consumers. In fact, what happens under Mr. Ashton: Mr. Chairperson, on a point of order, if regulation under the CRTC, in fa ct, what happens with you had been perhaps listening to what I was saying the Public Utilities Board, is thatyou have regulated rates instead of trying to interrupt me you might have heard of return, and in this case it means that an error made by that I asked the presenter if he was aware of what a private company, not in a public company, that error happened in Alberta when this did take place. That was was passed on to the consumers of Alberta in the form of a question. In fa ct, I was just stopping that question to a $6 increase. allow the member of the public to give that presentation.

I am wondering how the Chamber of Commerce can Mr. Vice-Chairperson: The honourable member does say, representing, by the way, a lot of small businesses not have a point of order. who pay business rates and will be impacted by that regulation, that there is no difference under this when the * * * CRTC is on record, 19th of February, 1996-this, by the Mr. Vice-Chairperson: Mr. Norman, would you care way was before the decision to privatize-they passed on to answer the- 172 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Mr. Nonnan: Yes, aware of the decisionof the CRTC, rural rates to obtain recovery of the costs of rural phone aware of thefunction of the CRTC, aware of the function service. ofthe Public Utilities Board and also aware of the basic principle of running a business that costs arepassed on In short, a private corporation's first duty is to return a to the consumer. profit to its shareholders. The owner's interest in profits overrides the customer's interest in affordable service. Mr. Vice-Chairperson: Thank you, Mr. Norman, fo r your presentation. The Manitoba Societyof Seniors is also concerned that under privatization the Manitoba Telephone System's The committee callsDr. Mary Pankiw, No. 17. It is on commitment to service may be doubtful. Crown your list. Dr. Mary Pankiw, please come fo rward. Do corporations have led the way in providing state-of-the­ you have copies of your presentation fo r the committee. art telecommunication services to their consumers. Community netw

(Mr. Chairperson in the Chair) The Manitoba Society of Seniors questions what benefits, ifany, privatization will bring to consumers. A These reasons enable Crown corporations to offer company that pays shareholder dividends, corporate services at rates below what equally efficient private income tax and raises debt capital in the private market sector telephone companies can offer. The Manitoba is likely to require a higher rate increase than a public Society of Seniors is concerned that the privatization of sector corporation. A private sector company that is the Manitoba Telephone System will have a negative accountable to its shareholders is less likely to engage in impact on local telephone rates. public projects, such as the expansion of individual line service or community networks on the Internet. Look at what happened in Alberta. In the six years since Alberta Government Telephones was privatized * (0040) rates have continually increased. Albertans now pay 34 percentmore than Manitobans dofo r basic phone service. The Manitoba Society of Seniors of 14,000 members Further, AGT has applied fo r another $6 a month stronglyurges you torecons ider your decision to privatize increase. AGT has also indicated its intent to increase the Manitoba Telephone System in the interests of October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 173

conswners, especially therural , northern and low-income I am wondering what you fe el, what the Manitoba Manitobans. Society of Seniors fe els, about the document that the government issued called MTS Answers where they are Thank you fo r this opportunity. trying to suggest that we do not have to worry about rate increases when, in fa ct, you canjust look at Alberta and Mr. Chairperson: Thank you fo r your presentation. see what has happened under their system. Questions? Ms. Pankiw: Right now, we are living in a society Mr. Sale: Thankyou, Dr. Pankiw, fo r your presentation. where costs are continually going up and actually seniors, My riding has about 24 percent seniors in it, many of and evenpeople where both parents are working, have to whom are very low-income people, although there are really juggle their money and outline their priorities others who are quite comfortably off, but many of them because they donot know what to pay. I also know that are low income. Could you just explain fo r the as fa r as seniors are concerned, they have to say, well, I committee, what may not be obvious to all of them, in do not know ifI can buy my medication; I do not have regard to the essential nature of a telephone fo r a senior, enough money; furthermore, I may have to look at particularly a low-income senior? stretching it and skip a day or two. So these are some of the things that are happening. Ms. Pankiw: For seniors, many of them are home­ bound, actually need that telephone fo r their medical Now, you look at this item. Ifthey have to give up appointments, fo r any emergencies that may arise. They their phones, what contact do they have with the outside may not be able to go out and buy their things, their world? What is their other recourse fo r security, fo r groceries, fo r example, and they may have to do their safety? How are they going to contact police in the case orders by phone or other services, and it is part of their of danger? How arethey going to notifY fa mily in case of daily living. Also, it is their only means of contact emergencies? This is a basic to everyday living, and a socially fo r many of them, and fo r their general mental government who is of the people, fo r the people and by health, that also is important. the people cannot tum a deaf ear to a basic necessity.

I think preventative measures also play a role in Mr. Chairperson: Mr. Ashton, to ask the last question. looking after our seniors. Our seniors have made a contribution to the history of Manitoba, and they still are Mr. Ashton: I just want to foc us in on the perspective making a contribution, and they certainly are role models of seniors here, and one of the most interesting phone fo r future generations. calls I have hadwas from a senior a fe w months ago who said she couldnot come to any meetings, certainly would Mr. Ashton: I fo und it very interesting, Dr. Pankiw, that not have been able to come to this committee room, and you referenced Alberta because, once again, I have the one of the things she said was that she remembered the Alberta decision here, that I am going to give a copy to days when phone service was pretty well something you Mr. Norman. What happened in Alberta, when they put had to be fa irly well offto be able to afford. in that application, one of the groups that opposed the increase was the Alberta Council on Aging. It is very interestingbecause the people who put the brief together I am wondering if you can comment on that from the fo r the Council on Aging in Alberta on this particular perspective of seniors, and her concern, by the way, was increase, which went though, as you pointed out, and that she does not want us to go back to those days. results in Albertans paying more fo r their phone service, outlined the very things that you are pointing out in this Ms. Pankiw: I can remember when I was a little girl, brief, that under a private company, because of the tax and it is true, phones were a luxury, and because my implications, becauseof the differences in the way equity father had a fuel company, it was a must that we had a capital is raised and, in this case, because of the fa ct a phone. Inthe entirevillage, all the people would come to private company has to make a profit to pay its our place to use our phone because we were the only ones shareholders so rates will go up. with a phone. 174 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Now, as you know, many seniors also cannot get out. Asindicated before in letters to the Minister responsible Some have canes. Some have walkers. They are most fo r the ManitobaTelephooe System, Glen Findlay, and to dependent on that phone ifit is to notify a loved one of the Minister of Labour, V.E. Toews, Minister charged whatever they need or ifit is to get contact. Maybe it is with the administration of The Civil Service Act, The even to reach their pastor at church to give them some Civil Service Superannuation Act, the Manitoba comfort or console them about something. Telephone System has served Manitobans well since 1908. The rates have been reasonable and the service So this is something that they actually depend on, they excellent. MTS has the lowest phone rates in North need fo r security, they needfor saf ety, and as I mentioned, America, and we are certainly proud of these for mental health reasons. Ifwe take that away from achievements. them, what else do they have left? Tell me.

* (0050) Mr. Chairpenon: Time has expired fo r questions. Thank you very much, Dr. Pankiw. How long will a private company keep this in place? Experiences in other provinces has shown that private I would like to now call Emile Clune. I understand, companies are likely to increase rates much fa ster than Ms. Clune, that you are wishing to make a presentation publicly owned companies. AGT in Alberta recently fo r another person on this list. received a six dollar a month increase compared to only $2 a month in Manitoba. MTS employs nearly 4,000 Ms. Clune: Yes, that is correct, Mr. Chairman. people in Manitoba. Many of these jobs could be transferredoot ofthe province or disposed of completely. Mr. Chairpenon: Okay, then I would have to ask the leave of the committee fo r you to do that, and the The profits fromMTS stayin Manitoba andhelp keep intention is that you will make a presentation fo r Winnie our phone service affordable. Since 1990, MTS has Chanas. Is there leave of the committee-[interj ection] made more than $100 million in profit. In the first six No. 39. So Ms. Clune would make a presentation fo r months of this year, profits were $15 million. Let us Ms. Chanas. keep profits,jobs and decision making here in Manitoba. Whenwe own MTSpubl icly, we have a say in its future. Mr. Ernst: I have no objection, Mr. Chair, fo r the lady This will change when a private company takes over. to do that. I just wanted to ask the question, do you The government cannot be ttusted to privatize MTS. It intend to make your own presentation? has sold offcable assets which were worth $50 million fo r $11 million. The government of Manitoba has no Ms. Clune: Yes, I do. The reason I did not make my mandateto sell MTS. It is not theirs to sell. The people own presentation tonight was that simply I did not have of Manitoba are the shareholders of MTS. The one it ready, so that is why I did not present tonight. decision that must go to the shareholders fo r ratification is the sale of the company. Mr. Chairperson: So is there leave on the committee fo r Ms. Clune to do that? [agreed] Please proceed. Are there copies fo r distribution? The govenunent deliberately kept the shareholders, the public, in the dark to get past the election. During the Ms. Clune: Yes, there are. Just to correct you, Mr. provincial election and in the Legislature after the Chairman, my name is Emile Clune. election, they said they were not going to sell MTS. The government hasnot held any consultation with the people Mr. Chairpenon: Emile Clune, I am sorry. of Manitoba. A big ticket item such as MTS should not be rushed. If the government believes in democracy, a Ms. Clune: That is all right. I have been called worse. referendum should be called to give the people of Manitoba a chance to express their wishes. Since the Thefo llowing are some of my concerns regarding Bill election, the government maintained the charade so it 67, the privatization of the Manitoba Telephone System. could privatize. Quite frankly, they lied. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 175

In 1957, pension rules were antiquated. When an MTS Ms. Clune: I find it absolutely outrageous-absolutely fe male employee married, she could not belong to the outrageous. Civil Service Superannuation Board. Many women lost years of their pensions. Now Bill 67, Section 15(8), Mr. Chairperson: No more questions? Thank you very states that employees are deemed to have consented to the much fo r your presentation. removal of their pensions from CSS to a new private pension plan. I did not give my consent. I would like to now call Holly Cain forward to make a presentation. Number 55. The government of Manitobadoes not have the right to presume for me; this is my money, not theirs. I am Ms. Holly Cain (Private Citizen): No handouts and it concerned. Ottawa neither guarantees pension plans nor is extremely brief does it protect them. There are fe deral rules aiming at some assurance fo r employees that their plan cannot be Mr. Chairperson: You have no handouts? abused by thecompany. These rulesdo not safeguard the pensions themselves. Ms. Cain: No, and it is extremely brief

Are thelessons of privatization and c�rporate takeover Mr. Chairperson: Please proceed. to be learned thehard way? MTS employees, current and future, can expect a decline in the quality of their pension Ms. Cain: The Manitoba Telephone System belongs to fund anda rapid stripping of any surplus funds that could the people of Manitoba and that decision to sell should have been used fo r improvement or just fo r long-term be made by all of the people of Manitoba, not the small stability of current benefits. Moreover, in a privatized handful of politicians who had to play word games in restructured MTS, management will be able to extract order to get elected. Manitobans who desperately wanted concessions from employees, gutting the pension plan to hang onto the Winnipeg Jets re-elected the Tory fo rever and Ottawa will not come to the rescue, Findlay's government and are now paying fo r it with the loss of assurances notwithstanding. their telephone company.

Mr. Findlay states in his letter that the new pension I personally see no difference between politicians plan will provide benefits that are equivalent in value to selling off MTS andthose criminals who sweet-talk their the pension benefits that such employees have or will victims into opening their doors just so they could rob become entitled to under the Civil Service them, robbing them not only of their valuables but of Superannuation Board of Manitoba. Mr. Findlay, Mr. their trust and humanity. If the Tory government really Toews and Mr. Filmon, where are all the answers to our wants to prove to the people of Manitoba that they are concerns regarding indexing, surplus, amount of dollars genuinely concerned for their welfare, then let the real transferred, representation of retirees, full representation? owners, the Manitobans, everyone throughout the whole These questions have not been answered in our letters province, make that decision as to what is best for them. written to you, nor have they been answered at the MTS pension information meetings or MTS public brochures. Mr. Chairperson: Thank you fo r your presentation. To be fa ir, these questions should be answered before Questions? Bill 67 is pushed ahead. Thank you, Mr. Chairman. Mr. Ashton: I thank the presenter. I think there is a Mr. Chairperson: Thank you for your presentation. consistent theme tonight. A lot of people are saying that Any questions? the government does not have the right to sell offMTS, and I find it interesting that you reference the election. I Mr. Sale: I just have one question. I believe that you am wondering, too, you obviously do not fe el the must knowthe presenter, who is a pensioner presumably government should be doing this, what is the talk of ofMTS. Do you find it as arrogant and unbelievable as people that you are talking to? Is there a lot of support I do that people are deemedto have agreedto something out there for selling off MTS, or do they want to see it that they have never had a chance to even discuss? publicly- 176 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

Ms. Cain: There is no support fo r the Tories, that is Mr. Chairpenon: Thank you very much fo r your what I could say. They want to keep Manitoba presentation. Is there anybody else in the audience that Telephone System,but when they hear the word "Tories" would still like to make a presentation to the committee they knowwhat that means. Unfortunately, they know as tonight? soon as they hear the word "Tory" that they cannot trust them. Seeing none, committee rise until tomorrow, October 30, at 6:30 p.m. Mr. Ashton: This is one area that I have had some difficulty with in the sense that I have been told to my COMMITTEE ROSE AT: 12:59 a.m. fa cein the Legislature that the government has no intent of selling offMTS and, of course, we are seeing that that WRITTEN SUBMISSIONS PRESENTED was not the case. BUT NOT READ

Bill 67-The ManitobaTelephone System Reorganization What is interesting, too, the most bizarre part was we and Consequential Amendments Act, presented by Bud in the opposition were the ones that basically put the Shiaro, Selkirk, Manitoba issue on the agenda in the sense of when they appointed these investment bankers, it waswe in the opposition that A Manitoba Heritage fo und that out and forc ed them to give the first indication theywere looking at selling MTS. I am wondering ifyou In 1908 the Manitoba Telephone System became the fee l it is appropriate at all fo r this government to not only first government-owned telephone system in North not run in the election and then repeated the same sort of America. The system was established by a Conservative thing in the House, but it made the decision to sell off government in order that all people in Manitoba might MTS in two days. They got their report April 30 and two have affordable access to telephone communications. days later, they decided to sell offMTS. Do you think Much has changed since those early days of that is any way to run a province? communication. The people of Manitoba have become the owners of a very valuable technological resource, a Ms. Cain: Ofcourse it is no way to run a province, but resource that has placed Manitoba in a strategicposition it seems to be that it all seems to be word games. It is envied byother prov incial governments that did not have kindoflike one will say something while the other one's the fo resight to establish a government-owned system, a doing it behind their-he is planning. He says, well, I do technological resource that would allow the government not know what he is doing. Well, he may not know to develop the ability of the province of Manitoba to exactly what he is doing at that moment. That is why he become leaders in the informationage. can say, I do not know why he is doing it. It is all word games, andthat is how allthese things are getting passed. Sincethe Manitoba Te lephone System was established in 1908 it has met and exceededits mandate to provide Mr. Ashton: I am wondering then, too, given that fa ct, low-cost telephone service. The people of Manitoba whether you think the only way to deal with this issue is enjoy telephone rates that are amongst the lowest in not through this bill and through this committee but to North America. While meeting the mandate of low cost put it to a vote of the peopleof Manitoba. telephone service to all areas of Manitoba, the MTS has madea profit toreturn to the people of Manitoba. Since 1990 MTS hasmade more than $100 million in profits. Ms. Cain: Yes, I do. I do believe that all Manitobans In 1995 MTS made more than $15 million profit. should have a say in this. The fo resight of successive governments in Manitoba Mr. Ashton: I realize it is late, and I want to thank the since 1908is being discarded. The Manitoba Telephone presenter and everyone that stayed this late and thanks System has now become a symbol of the loss of again fo r your presentation. demoaacyin our province. This has beenacco mplished in a matter of months. Over 90 years of fa irness to the Ms. Cain: Thank you. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 177

peopleof Manitoba is being thrown aside in the name of info rmation age." Furthermore the report states that privatization. The people of Manitoba are once again "cable operators could use those wires to offer local being put in theposition of subsidizing the private sector. phone service and may one day steal away hundreds of millions worth of MTS business." Misplaced Trust When Mr. Findlay, as the Minister responsible fo r The Filmon government's so-called sale of the MTS is MTS, was questioned about the report he stated "the nothing short of a political con job. Telling the people of valuation we had was $7.5 million." When pressed fo r Manitoba that they can buy what they already own is details Mr. Findlay stated "I cannot remember the nothing less than a shell game. It certainly is less than company but somebody was hired to do it." Mr. Filmon that which the people of Manitoba have a right to expect stated that he and his government operate on a pragmatic of a government in a democratic society. The most basis. Surely there is little sensible about giving way glaring example of this less than democratic approach to nearly $60 million of public money. Surely it is anything governing by the Filmon Conservatives is the fa ct that at but pragmatic to put a person who suffers apparent no time during the last provincial election did the memory lapse in charge of a Crown corporation with the Filmonites state that ifelected they wopld sell offMTS. economical and strategic value ofMTS.

On May 24,1995, Mr. Ashton of the NDP asked Mr. Mr. Filrnon oversaw a deal that give Faneuil, an Filmon in the House "if he can indicate whether this American telemarketer, a $4 7 million contract that government has any plans whatsoever to privatize part or included the right to use the MTS customer database fo r all of the Manitoba Telephone System? In fa ct, will he seven years. Faneuil gave up $16 million in shares fo r assure Manitobans we will maintain public ownership of the right to the database. Mr. Filmon gave up $47 the Manitoba Telephone System within the province of million and control over the way in which MTS could Manitoba as a Crown corporation?" Hansard, Vol. take advantage of a multimillion dollar industry. XLV, No. 2. Mr. Filmon responded by stating "I can Winnipeg Sun, June 5, 1996. indicate that we do not have any plans to do that. We continue always to operate on a pragmatic basis. We Mr. Filmon stated unequivocally that he operates in a continue to always look at ways in which we can ensure pragmatic manner on behalf of Manitoba's society. our economy will grow, that we will take advantage of Giving up $47 million to make $16 million is less than new technology, of all the things that are important to us pragmatic. Giving up control ofthe portion of a business as an economy and society." with a multimillion dollar potential is simply a manner of operation that more closely resembles obtuse than Now if one was to answer a question in an obtuse pragmatic. manner then one might give any manner of meaning to the words of our Premier. However, ifone is to continue The Filrnon government has chosen to ignore to believe that Mr. Filmon believes in and practises all Manitobans who are the owners of the MTS. A public aspects of a democratic and caring form of government, utility with assets in excess of $1 billion represents a then one must believe that Mr. Filmon clearly answered large portion of the wealth owned jointly by all Mr. Ashton's question in an unequivocal manner. Mr. Manitobans. Surely the Filmon government must seek Filmon clearly stated that he had no intention of approval of all Manitobans prior to making any decision privatizing any or all ofMTS. to privatize the MTS. Perhaps the most important thing that MTS now represents to Manitobans is the loss of Then Mr. Filmon went on to partition and privatize democracy in our province. This loss can still be MTS. He sold the cable operations of MTS fo r $11.5 reversed. million. An internal MTS report released three months before the sale stated that the value of the cable portion Restoring Confidence of MTS to be greater than $70 million. Winnipeg Sun, May 10, 1996. The report went on to say that the wires The government should consider the fo llowing reasons and transmission equipment are "a little gold mine in the to withdraw Bill 67: 178 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

( 1) The special share that the Manitoba government all Manitobans. This is after jobs are created and paid will hold in the privatized telephone system is likely to be fo r, capital is invested in and new workers are trained relatively short tenn in duration. Section 13(8) of the bill alongwith the upgrading ofpresent long-term employees. provides for the redemption of Crown shares by the This type of investment in our people and our corporation. This section is entitled Crown vote ceases. communities cannot be assured by the government once It would bebetter ifit were noted as public control of the it privatizes the telephone system. Bill 67 has the Manitoba Telephone ceases. potential to rob the people of Manitoba of this economic planning power. The fo llowing is an example of why Bill 67 will put the people of Manitoba at economic risk. Withdraw Bill 67

Theprivate insurance companies claim to be one of the This government should drop this bill. If the most competitive private industries in Canada. This government is not preparedto drop this bill then it should industry has balked at banks getting into the insurance findthe courage to call an immediate election. Make the business, claiming that the banks would have an unfair sale of Manitoba Telephone System the platform upon advantage in an already lean, competitive marketplace. which this government goes to the people of Manitoba. Let the people of Manitoba decide the fa te of their In spite of this assertion by the insurance industrythe telephone system. Manitoba Public Insurance Corporation states that Manitobans arepaying some of the lowest insurance rates * * * in Canada under the publicly owned Autopac. (Road Wise information leaflet.) Brief to the Legislative Committee on Bill 67, The Manitoba Telephone System Reorganization and In fa ct, the government leaflet which accompanies all Consequential Amendments Act by Save Our Telephone notices ofrenewal indicates that weare second only to the System, presented by Paula Mallea public insurance of Saskatchewan. We are also at approximately one-third the cost of insurance in the Save Our Manitoba Telephone System newest heartland of competition, Toronto. I. Introduction It would seem prudent to reconsider the need fo r this bill and to further consider the advantages to all The original Manitoba Telephone System was created Manitobans of owning their own telephone system. by a Conservative government in 1908. Premier Rodmond Roblin said it was a good commercial (2) The cable television industry is seeking cable rate proposition and profits would belong to the people of deregulation. Winnipeg Free Press, October 10, 1996. Manitoba. This telephone system was created at a time The Free Press article goes on to say "The cable when large numbers of telephone companies were television industry wants to charge what the market will competing fo r business. Although today's government bear in Canada's largest communities by early 1998." insists that it is compelled to sell MTS because MTS no The article notesthat "Major phone companies also have longerenj oys a monopoly, it is important to note that the their eyes on the market." It would seem to be good system did not enjoy a monopoly in 1908. Yet the business sense to attempt to lessen one's losses. A government of the day clearly believed that a government­ government that has literally given away its cable ownedsystem wasthe best solution fo r providing service component of its telephone system should admit its to Manitobans. mistake. This government should not put the people of Manitoba at furtherrisk in the marketplace. The record of the MTS has been excellent, both in serving all members of thecommunity and in maintaining (3) This government has an obligation to consider the fiscal health fo r the company. This is true even though well-being of all people in Manitoba. Presently the long distance services have recently been opened up to profits of the Manitoba Telephone System are returned to competition, and even though the company has been October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 179

divested of some of its most lucrative services through value to the corpomtion. Despite this, MTS has now lost sell-offs to private enterprise. one of its best revenue generators.

Although the present government cites as one reason 2. Telemarketing. Another significant source of fo r privatizing MTS the fact that it has over $800 million potential revenues fo r MTS was in the area of worth of debt, it is also true that MTS has somewhere telemarketing. Faneuil ISG obtained a $47-million between $1 billion and $1.5 billion worth of assets. A contract with MTS through the good offices of Mike substantial portion of the debt was incurred in paying fo r Bessey, a friend of the Premier (Mr. Filmon) and the Service fo r the Future program which upgraded the influential member of his inner circle. Mr. Bessey, system in rural and northern Manitoba with fibre optics, according to John Scurfield's report, had a personal extending individual line service to some 47,000 $400,000 armngement with one of the officers of Faneuil. multiline residential and business customers. Atthe same time, NDP MLA Timothy Sale has accused Approximately $650 million of the debt is related to this a fo rmer senior servant, Charles Feaver, of departing to single effort to provide affordable services to all become a senior executive at Faneuil shortly after he had Manitobans. been influential in arguing down the price of the cable network befo re the MTSs board of directors. Since 1990 MTS has made profits of over $100 million. In 1995 MTS made more than $15 million in Both the sale of the cable network and that of the addition to paying down its debt. It has done so while telemarketing contract have resulted in the stripping of providing affordable, province-wide services and despite MTS's assets and consequent ability to generate revenues. thefact that long distance is now open to competition. It It is remarkable that the corporation has been able to has also done so despite the fa ct that some of its most generate profits in recent years as well as manage its profitable services are now in the hands of private debt, in view of the government's seeming inability to businesses. recognize the damage which is being done by selling off assets piecemeal and fo r a fraction of their worth. II. The sell-off ofreven ue-generating services. III. Effects of privatization of other telephone systems. I. Cable. In 1993 a report by Ernst and Young said that the fa ct that MTS owned the cable network placed In Alberta the telephone service was broken into a MTS in a rare and fo rtunate position. Other telephone number of components in 1990 and then sold. As with companies were in the business of trying to acquire such manypriva tizations, shares were undervalued in order to cable assets because these are thought to be essential to attract buyers. As inManitoba, the government promised thefuture success of phone companies. Inthis light, said to try to keep ownership of the shares in the province. the report, it would be most unfortunate fo r a telephone However, fe wer than 10 percent of Albertans bought utility to lose control over coaxial cable that it currently shares in AGT, and shares of the company now trade on owns. the Toronto Stock Exchange.

A valuation and commentary of MTS's corporate As in Manitoba, the original mandate of AGT was to business planning department dated January 10, 1994, province low-cost service. However, it is now one of the shows that the cable distribution network had a strategic most aggressive phone companies in Canada in terms of worth in the order of$63 million. Yet Minister Findlay mte increases. Although local mtes remained fa irly stable indicates that he relied upon a report ofDeloitte Touche fo r several years after privatization, they have shot up which gave the asset a book value of $7.5 million. dramatically in 1996 in order to increase investor's return Adopting the bookvalue approach resulted in a fa ilure to on their money. It is expected that the next increase will recognize the actual economic value of the asset, and the double the price of the local phone calls within the next cable network was sold fo r only $1 1.5 million. year.

It has also been suggested that senior management at The most current information available on AGTs rates MTS did not support the sale of the cable asset and show that residential rates have increased between 42.9 believed that it was given awayfo r much less than its real percent and 54. 1 percent between December 1995 and 180 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

February 19, 1996, in a little over one year. Proposed of MTS. That is not true. Although the legislation increases for January l, 1997, will see residential rates stipulatesthat head the office of MTS must remain in the increase between 78.7 percent and 108.5 percent from province (S. 12), this does not confer control to December 1995. The CRTC decisions in February 1996 Manitobans in any way. Already, the corporation is provided AGT with a $6 per month increase, while at the being run more or less from the outside. Since the same time approving only a $2 per month increase in restructuring into fo ur separate components, the highly Manitoba. This shows the difference between the way paid CEOsof those components have all beenhired from theCRTC deals with a private corporation as opposed to elsewhere. Two have worked for the American owned a public one. cosmetics company Mary Kay. It is rumoured that at least some of these new presidents continue to live out­ Albertans now pay 34 percent more than Manitobans of-province andcomm ute, at our expense, to their jobs in do for basic phoneservice, and AGT has said it will raise Winnipeg. rural rates to achieve a fullrecovery of the costs of rural phone service. Ifthe same is done in Manitoba, western Similarly, although a majority of the directors of the Manitobans will pay $35.56 fo r residential rates as corporation shall be ordinarily resident in the province, opposed to the $12.90 they pay now, and northern (S. l 3(4)), it is axiomatic that directors of a private Manitobans would pay $48.64 instead of $11.75. corporation only exist to do the bidding of their shareholders. If most of the shares are owned by people When AGT privatized about fiveyears ago, all ofthe wholive outside Manitoba, and under the legislation it is phone centres were closedand 4,000 employees were laid possible that all of the shareholders may be non­ off. Some of the centres were later reopened, but AGT Manitobans, then it is non-Manitobans who will dictate then applied for a 13 percent rate increase on local the policy of the new MTS. service from the CRTC, which ultimately granted an 8 percent increase. The final tally on employment is that Although thefirst board of directors is to be named by thenumber of jobs has beenreduced to about 50 percent the government (S. l3(3)), no term for holding officeis compared to before privatization. stipulated. Thus, the first board of directors may be removed and replaced at any time. At this point the The model which the Manitoba government is government may name only fo ur of the nine to 15 considering fo r MTS appears to be the same as the directors (S. l 3(5)). Then, once the debt is paid off, Alberta model. MTS has already been broken into four another matter which can be dealt with speedily, separate components. Now the Manitoba government is shareholdeJS wiU elect all of the membersof the board of readyto legislate, without public input, a public offering directors, (S. l 3(8)). of shares. Individuals are restricted to owning no more than 15 British Columbia has also privatized its telephone percent of the shares ofthe corporation, (S. l8(1)), but the system. It is now seeking from the CRTC the right to government may grant an exception to allow for charge fo r each and every local telephone call. individuals to own up to 25 percent. As well, nonresidents of Canada may own up to 25 percent of the Both the B.C. and the Alberta telephone systems are shares other than by way of security only, (S. l 7(l)). paying dividends to shareholders of slightly more than 5 Thusone individual who is a resident ofCanada plus one percent. This is money which is going into a fe w private nonresident could control 50 percent of the shares of hands, when it couldhave beenused for the future benefit MTS. Neither of them need reside in Manitoba and of all ofthe taxpayers of those provinces. Like B.C. and neitherwould have any particularcommitment to serving Alberta, the Manitoba go ent is raising rates, selling vernm the people of Manitoba. Even worse is a possible offassets and cutting jobs in order to guarantee large · interpretation of (S. l7(1)) which would permit any profits to the new private buyers. number of nonresidents of Canada to own 25 percent each. The legislation is drafted in such an ambiguous IV. The legislation: No guarantees. fashionthat one could argue it permits this result. In this The Manitoba government has claimed that under its event, MTS could fa ll under the control of non­ privatization scheme Manit

Completely unambiguous are Ss. 11 and 14(3) of Bill private shares in the company would be to contribute to 67, which say that once the debt is paid off,virtually all thewell-being of our public corporation through a type of of the above guarantees are repealed. Thus, MTS can be builder bond like the highly successfully HydroBonds. owned by a single buyer from outside Manitoba almost Thisway, thosewho canafford to support the utility may immediately. do so without removing the control of the company from the hands of all Manitoban taxpayers and placing it in a The government hasalso indicated that Manitobans are few private hands. expected to be the majority shareholders. Yet there is nothing in the legislation to indicate that this is a likely Otherexperts aremore skeptical about the privatization result. There are, in fa ct, no guarantees. The details of of MTS. Independent financial counsellor Lyle Atkins the share offeringawait the filing of a prospectus with the has said he would reserve judgment until he has seen an Manitoba Securities Commission after the legislation investment prospectus from the province. Again, such a privatizing MTS is passed. So fa r the legislation merely prospectus will only be made available after the says that residents of the province shall be entitled to a privatization has already taken place. One might preference with respect to a majority of the common interpret his reservations as a real concern that the shares issued to the Crown under Clause 7(l )(b), legislation being proposed is not sufficiently detailed. S.l 6(2). However, Clause 7(l)(b) says that the number of such shares shall be determined by the board in Bill Stanbury, a teacher of competition policy and consideration and satisfaction of such amount of privatizationat the University of British Columbia and a indebtedness to the Crown as is determined by the supporter of privatizations in general, also says the government. How many such shares will there be? Will Manitobaplan raises serious questions. Among them he they be affordable to ordinary Manitobans? Will the says, the effect of a share offering to Manitobans could be special sales period for Manitobans, ifthere is one, be to redistributewealth fromthose who do not buy to those adequate, and will it beadequa tely advertised? These are who do. He points out that initial share offerings of all questions which remain unanswered. Crown corporations usually are underpriced to avoid failure and that in the Manitoba case the share price In a special bulletin of the MTS Employee News dated might have to be even lower ifthe province intends to May 2, 1996, Premier Filmon is quoted as saying, our restrict the sale to Manitobans, with the result that MTS firstpriority is to ensure Manitobans continue to control would be sold for much less than its economic worth, just MTS. That way, all theyhave come to love and trustwill as the cable network was. He says that normally less be protected. The government proposes that there will be than 10 percentof thepopulation buy shares and then the a buy-Manitoba preferential share offering which will shares almost immediately shoot up in value. This grant Manitobans special treatment by offering them the happened, fo r example, in the cases of CN Rail and opportunity to purchase shares during an exclusive AGT. Manitoba only-sales period. Minister Glen Findlay says, this will be a widely held public company with the Thus, a relatively small number of people could profit majority of shareholders expected to be Manitobans handsomely from an asset for which the rest of the themselves. population has paid. Professor Stanbury predicted that the government of Manitoba would likely only net about Experts differ widelyas to their assessment of the type $225 million. This is not a reasonable return for a of privatization scheme which is being proposed here. corporation whose book value is $1.5 billion. Stanbury Bob Meaden, a financial adviser at Midland Walwyn, also warned that it would be difficult, if not impossible, says he thinks the MTS stock will be reasonably priced, for the shares to be kept in Manitoba after thefr rst sale. with a minimum purchase of $1,000. He says this will be a good value fo r the retail customer. V. The government's reasons for privatization.

A minimum purchase price of $1,000 will be beyond (1) The effects of competition. On May 24, 1995, the reachof most Manitobans. For those who can afford PremierFilmon said that the government had no plans to this price tag, a reasonable alternative to purchasing privatize MTS. We are not driven ideologically or are 182 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996 hidebound, he said. On September 26, 1995, after MTS The evidence is that MTS has been competing was broken into fo ur divisions, Minister Glen Findlay extremelyweU despitethe new comp etition in the market. said thatthe restructuring was done for reasons that have The most recent available figures show that MTS has nothing to do with privatization. Privatization, as a retained 96 percentof the residential long distance phone principle, is not driving the organization, not at all. Yet market and 86 percent of the business market. Even in December 1995 the government hired threebrokerage though some market share will have been lost of late houses to evaluate MTS and make recommendations. because of the advent of Equal Access, permitting easier Richardsons Greenshields, Wood Gundy and RBC access to the competition, MTS has been making an Dominion Securities naturally recommended the excellent showing. This says much for the efficiency of privatization. This is notsurpr ising, since brokerages are MTS service and muchabout the loyalty of Manitobans in the business ofseeking new and attractive investments to theirpublicly ownedcaporatio n. Although it can only for their investors. To say that their evaluation of MTS be expected that consumers will try out the competition was superficial would be to understate the case. when it frrst becomes available, there is evidence that dissatisfaction with rates and service is sending people Thegovernment annotmcedon May 2, 1996, that MTS back to MTS. If the government has its way these would be privatized. This was two days after the consumers will have no publicly ownedsystem to return preparation of the 1995 Annual Report of MTS, which to, but only another aggressive AT&T or Sprint clone. lauded the company fo r its successful year, made no mention of imminent privatization, and spoke of coping The annual report further says that the corporation with changes in a climate of trustand co-operation, p. 7. maintained its customer base in an increasingly Thus, it is unlikely that the decision to privatize was competitive marketplace, expanded and upgraded its based upon the opinion of the three brokerage houses, networks andadded new services while continuing with since their evaluation is also dated April 30, 1996. On itsefforts to cut costs, streamline operations and position the contrary, it appears that the government decided to itself fo r the future, p.8. privatize MTS and then sought support for its decision, and advice on a good selling price, after the fa ct. It During the past year Manitoba became one ofthe first would appear that ideology rather than good sense has Canadian provinces to offer certain services such as been the motivating fa ctor behind Bill 67. digital switching, p. 12. In Ontario and Quebec, where Bell Canada runs the system, nearly half a million customers are still served by antiquated, electro­ This particular ideology proposes that competition is mechanical switchingdevices . Manitobans enjoy private­ always healthy for an industry andthat it results in better lineservice everywhere in the province while Bell is still service at lower rates for the public. The evidence is to struggling to provide this service to 61,000 of its the contrary. See the histories of B.C.Tel and AGT. customers in Ontario Queand bec. Manitoba's program Manitoba rates are among the lowest in North America, for access to the Internet, Blue Sky, is one of the best in and its service is among the best. the country, and our government wants to sell MTS?

There would clearly be no incentive for private Sprint and Unite), AT&T Canada, are already enterprise to continue offering services in rural and aggressively offering cut-rate long distance services in an northern areas of Manitoba, where we know substantial effort attractto people away from MTS. Past experience subsidies are required in order to continue providing has shown that as soon as these private companies have those services. Private corporations bent on profit lured customers to their service, their rates rise making will not continue with a money-losing relentlessly. The government argues that rates have to proposition. Service to all Manitobans will not be their rise somewhat over time. However, the people of No. 1 priority. Similarly, there will be no incentive to try Manitoba would preferto have their own publicly owned to keep local rates under control; rather, the incentive will MTS making submissions to the CRTC rather than an be to maximizeprofits fo r shareholders. What this could aggressiveAT&T which has nocoouni tment to providing mean in Manitoba is that the new private owner will see service to all Manitobans. Ifit turns out that the CRTC profit only in servicing Winnipeg. disagrees with MTS's present mandate to provide a October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 183 public service at cost, thenthe logical response would be These additional costs will be paid fo r by rate hikes if for Manitobans to take on the CRTC and fightfo r this MTS is privatized. mandate, not to privatize the system. The MTS debt is fully self-sustaining and is not Any profits which accrue to MTS presently are returned unmanageably high although more funds would have to the peopleof Manitoba. These monies can then be put been available to defray the debt ifthe government had to use purchasing new technologies, paying down MTS's not sold offtwo of the most lucrative assets, cable and debt, providing better service at affordable rates. Once telemarketing. Nevertheless, there is no evidence that a the controlof MTS goes into private hands, these profits publicly-owned MTS will be unable to manage its debt will be distributed as dividends to those individuals who in the future. The government says on the one hand that have been wealthy enough to be able to purchase shares it does not wish to risk the monies of the people of while the rates will continue to go up in order to pay fo r Manitoba in sucha high-debt situation. Yet on the other the shortfall. The result will be a massive redistribution hand it is apparently prepared to forgive a large part of of wealth from rural and northern Manitobans to the debt once the corporation is sold to private investors. shareholders of the new system. Why should Manitobans paythe debt on behalf of private investors who then will own an asset which used to (2) Thesize ofMTS's debt. Minister Findlay says we belong to Manitobans? cannot continue to risk the money of the people of Manitoba in purchasing new technologies when MTS no VI. Serious problems with privatization of MTS. longerhas a monopoly. Yet it is the people of Manitoba (1) Job losses. MTS injectsabout $450 million into who own this corporation and who should be able to the Manitoba economy every year. As well, it employs decide what technologies to buy, whether to buy them and nearly 4,000 Manitobans. There is no guarantee that how to pay fo r them. The people of Manitoba would thesejobs will remainin Manitoba or that the millions of prefer to tackle MTS's debt through the purchase of dollars worth of business will not be siphoned off to bonds rather than by privatization. other provinces and countries. MTSs debt-equity ratio is higher at 75-25 than that of When Unitel carneinto the Manitoba market virtually private corporations,but is not high for a publicly owned all of the jobs associated with that operation were utility. For example, it is not as high as that of Manitoba removedto Ontario. It is expected that the privatization Hydro--90-10. The ability of a publicly owned MTS to of MTS will result in large job losses throughout manage its debt is enhanced by the fact that it does not Manitoba by way of layoffs as well as the migration of have to deal with additional cost factors which accrue to jobs to Winnipeg or out of the province. Further job privately-owned corporations, viz.: losses will occur indirectly in other businesses which presently supply andgoods services to MTS. There is no 1. Private corporations must raise equity capital in the guarantee that the new owners will continue to use local private market; that is, they must pay dividends to services, goods providers. Those jobs which remain will shareholders. suffer from the uncertainty of the new regime. For 2. Private corporations must pay corporate income tax, example, will these jobs be union jobs or will the new something MTS is not required to do. owners fightto keep unionsout? Whatwill this mean fo r the levels of pay and benefits of whatever jobs remain 3. Private corpomtions do not have their debt guaranteed here? by the Province of Manitoba. Thus, they must pay full market rates to borrow money, not the preferred rates There is a double punishment inherent in privatization available to MTS by virtue of its status as a Crown fo r rural Manitobans: They can expect to lose a number corporation. In the spring of 1995, as an example, the ofjobs, and they can expect to pay much higher rates fo r Dominion Bond Rating Service revised the credit status their basic telephone service. of MTS upwards while at the same time revising the private sector Stentor telephone companies' credit rating (2) Security offo rmer employees in doubt. Another downwards. area of concern involves the security of fo rmer employees 184 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

of MTS. This part of Bill 67 is extraordinarily exists that the people of Manitoba are opposed to this undemocratic and arrogant. The legislation specifically privatization. Hundreds have signed petitions, and handsover to the new shareholders all responsibility fo r 15,000 returned ballots between January and April this the Civil Service Superannuation Fund, and it does so year in which 90 percent which said they wanted to keep without the need fo r notice to those employees affected, MTS publicly oY.ned. Fifty out of 57 municipal and and with their deemed consent. band councils have passed resolutions opposing the selling of MTS. The group insurance benefits under The Public Servants Insurance Act willalso be controlled by the new VII. Conclusion. shareholders. 11ris leaves fo rmer employees uncertain as There is nocompelling reason, other than ideology, fo r to exactly what benefits will be provided under the new privatizing MTS. The publicly owned utility provides schemes. excellent services to all Manitobans at an affordable (3) Rate hikes and loss of service to particular price. It does so while competing successfully with Manitobans. Among those Manitobans who stand to lose private corporations, and continues to manage its debt the most from the privatization of MTS are those who and show a profit each year. rely upon local telephone services. Rural and northern Manitobans will be unable to afford the much higher Any private corporation which pays dividends and local rates which can confidently be predicted under a corporate income taxes and which raises capital in the private regime. Elderly people who rely upon the private market will require greater rate increases than telephone to stay in contact with the world and to MTS. No private corporation which is accountable to its summon emergency help will have to fm d some shareholders is going to engage in public-minded, alternative. Anyone on a fixed income, seniors, those on unprofitable projects such as the expansion of individual social assistance andso on, will have trouble meeting the line service or community networks on the Internet. additional costs of local rates. Women in isolated and Private-sector companies, as in the case of Alberta's abusive situations will have no means by which they can system, will act aggressively to drive local rates towards call urgently fo r help. Countless nonprofit organizations their stated costs. which rely heavily upon the telephone to conduct their In addition, the legislation which has been drafted to business and raise money through local telephone calls accomplish theprivatimtion ofMTS does not provide the will be unable to continue. Small businesses will suffer guarantees which the government claims it does. It can as well. confidently be predicted that, within a very short time (4) Failure to consult the public. MTS is a publicly after privatization, MTS will be controlled by fo re ign owned corporation. The government has no mandate to corporate interests,jobs willbe lost and those that remain legislate its privatization without the consent of the will be downgraded, ex-employees will have lost some of public, andthe Premier specifically stated less than ayear the benefits fo r which they have already paid their share, ago that he had no plans to privatize. The 1995 rates will have risen dramatically and many Manitobans provincial election might have been decided differently will no longer be able to afford a telephone. had the voters known of the intention to privatize MTS. The wishes of the people could have beencanvas sed at The fact thatPremier Filrnon's government is acting to that time, but this government was determined to proceed privatize MTS without consulting a people who are with privatization willy-nilly. clearly opposed shows a contempt fo r democracy. We request thathe pull this legislation offthe table and hold Under TheCorpor ations Act no corporation registered public hearings on the subject of the privatization of our in Manitoba is permitted to make such fundamental telephone system. changes without at least a two-thirds vote by its shareholders. Manitobans are the shareholders of MTS. Paula Mallea It is undemocratic in the extreme fo r this government to Brandon Committee, Save Our Telephone System proceed with a public offering ofMTS without consulting the people and gaining their approval. Much evidence * * * October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 185

The Union of Manitoba Municipalities The province has often cited MTS's $800-million debt Presentation on Bill 67, The Manitoba Telephone System as a reason fo r selling the company; however, it is Reorganization and Consequential Amendments Act. important to examine what this debt represents. MTS has incurred this debt because it has provided affordable The Union of Manitoba Municipalities appreciates the phone rates and made tremendous capital investments opportunity to appear before the standing committee across Manitoba. The debt represents crucial initiatives considering Bill 67, The Manitoba Telephone System such as the installation of fibre optic cables, the Reorganization and Consequential Amendments Act. installation of digital switching, and perhaps most The UMM represents 166 municipalities, including all of importantly, the conversion of party lines to individual the 106 rural municipalities, 14 LGDs, 23 villages, 20 phone lines in rural Manitoba. MTS has spent over $620 towns and three cities. The mandate of the UMM is to million in the last six years upgrading the rural phone assist member municipalities in their endeavour to service. It is interesting to note that even with larger achieve strong and effective local government. To populations, the private telephone companies in British accomplish this goal, our organization acts on behalf of Columbia, Ontario and Quebec have not extended our members to bring about changes, whether through individual line service to all areas of those provinces. legislation or otherwise, that will enh�ce the strength · and effectiveness of municipalities. Most recently, MTS, along with the Cityof Brandon, played a vital role in the establishment of an enhanced The UMM is here today to state our opposition to Bill 911 emergency response system for rural Manitoba. In 6 7 and the privatization of the Manitoba Telephone fa ct, MTS is currently spending $2.5 million to purchase System. When the province announced the privatization and install network-related equipment and activate new of MTS earlier this year, we received a number of computer systems to fa cilitate the operation of the resolutions from our member municipalities expressing emergency system. The 911 service was only viable objections to the province's plans. The resolutions fo llowing the installation of private lines. We believe it outline concerns about the loss of jobs and the increase in is impossibleto measure the socialand economic benefits telephone rates which will result from privatization. In which rural Manitoba has gained through these less than a month, delegates to the UMM annual initiatives. Clearly, the current and previous provincial convention will debate and discuss another resolution governments also recognized the importance of these opposing the privatization ofMTS. programs for rural Manitobans when they authorized their implementation. Aswe areall aware, MTS hasa long and distinguished history of providing affordable, quality telecom­ munication services to rural and northern Manitoba. Over the years, the UMM has been able to discuss a When MTS was created in 1908, it was the first rangeof other significant issues with the MTS executive government-owned telephone system in North America. and the Minister responsible for MTS. For instance, the The province established the Crown corporation in part UMM and other organizations were participants when to ensure that areas outside the city of Winnipeg would MTS held the first public hearings in Canada on call receivetelephone services which were not being supplied management features such as call display and call trace. by the private companies in operation at that time. Inthe last fe w years,MTS has instituted annual meetings with the UMM board of directors during which we have Providing service to rural Manitoba has never been an discussed the destruction and replacement of survey easy or profitable task for MTS. Nevertheless, it has monwnents,the placement of MTS cable, cellular phone been achieved becauseas a Crowncorporation, MTS has service in rural Manitoba and grants in lieu of taxes. been driven by public policy considerations rather than Many of these matters have been successfully addressed being solely concerned with profits and bottom line because, as a Crown corporation, MTS has a public efficiencies. Rural Manitoba has benefited from the interest in working with municipal government. It is political will of provincial governments to subsidize rural difficult to imagine that a privately owned company and residential rates with revenues from urban and long would have the same incentive to pursue these public distance phone rates. policy issues. 186 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

At the same time that MTS has beenmaintaining low Presentation on Bill 67, a bill to privatize MTS rates and providing quality services and programs, it has proven itself to be competitive in a rapidly changing I am here to express my displeasure with the telecommunications industry. According to the government of Manitoba regarding Bill 67 authorizing corporation's 1995 annual report, MTS had net earnings the sale and privatization of the Manitoba Telephone of$15 million and was also able to reduce its outstanding System. Manitobans have been betrayed. Many times debt. In the first quarter of 1996, MTS made a profit of we were told by this Conservative government that they $9 million. In addition, the corporation has been able to had no plans to privatize MTS. I am glad that I did not maintain its customer base in the long distance market bet the farm on those statements. despite the increased competition in this area. The minister himself has recently stated that by keeping 80 Bill 67 outlines how privatization will proceed and percent of long distance revenues, MTS has one of the hidden within the agenda we fm d that our pension is better records across Canada. being manipulated away from the CSSB. The words in 15(8) read: "The persons described in subsection (2) are We acknowledge thatthrough Bill 67, the province has deemedto consent (a) to termination of their participation provided short-term protection for Manitobans through in the fund; (b) to the assignment and transfer of assets, the issuance of a special share to the Crown. This will liabilitiesand agreements from thefund to the new plan; ensure that the company's head office stays in Manitoba, (c) to the determination of all rights under the new plan that Manitobans have a majority of seats on the board without reference to The Civil Service Superannuation and that the company cannot dissolve or dispose of a Act, the fimd,or anytrust agreementrelating to them; and substantial part of its property. However, as soon as the (d) to termination of their participation in the group new company pays offthe debt owed to the province, the insurance plan established under The Public Servants special shareis surrendered andthe protective provisions Insurance Act and to the assignment and transfer of are all repealed. The control of the company which monies and investments, liabilities and agreements provides such an essential service could then be taken related to such group insurance plan. away from Manitobans. I would like to say fo r the record thatI do not consent Inconc lusion, it is clear thatManitoba currently has a to anychanges which would allow MTS to administer my competitive telecommunications company that has pension. provided universal, quality services at affordable rates. MTS has over $1 billion in assets, contributes $450 In its annual report to the legislature the Crown million annually to the provincial economy and employs Corporations Council stated that MTS has a high 4,000 Manitobans. All thesebenefits will be jeopardized business risk with a negative risk trend because of when the company is privatized. industry uncertainty and its high debt-to-equity ratio. With release of this report the Minister of Finance, Eric In themost recent MTS annual report, Chairman Tom Stefanson,said thathe recognized the financial problems Stefanson stated that in its operations, MTS recognizes facing MTS and saw the need fo r something dramatic to its obligations as a provincial Crown corporation. Mr. bedone . Onecan only speculate what dramatic thing the Stefanson wrote: "We are the caretakers of a maj or ministerhas in mind andsurely no present or future MTS provincial asset-its communications infrastructure-which pensioner would want to become a part of it. is strategicto the economic and social development of all Manitobans." The UMM strongly agrees with this A privatized MTS may sell offany or all of its assets. statement and we therefore urge the provincial Each division will beentitled to part of the MTS Pension government to maintain MTS as a Crown corporation. Planand anyportion which is removed will cease to be a part of the plan. As the pension fund becomes Thankyou fo r the opportunity to express our concerns fragmented, benefits could decrease or cease entirely. on this critical issue. As a private company MTS would be free to "sell, * * * lease ordispose of all or substantially all of its property, October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 187

cease to carry on business or be dissolved or liquidated Since all this money is in the present fund now, and is and dissolvedunder The Corporations Act or otherwise". only payable to the pensioner, therefore no one else has my permission to take or use this money. MTS employees need no reassurance when they contribute to the Civil Servants Superannuation Board. All pensioners, employees and citizens should receive It is not a controversial issue. The CSSB pension plan is their pension value in shares of the newly fo rmed well funded and managed and has earned the well ManTelCo (private). deserved confidence of contributors. William Sharpe

In 1985 the Federal government passed the Pension * * * Benefits Standards Act to ensure full funding of pension obligations. This money ($350 million) is presently Re: Bill 67 owing to the CSSB to clear up MTS' unfunded liability. This Filmon government has fo rmulated legislation to Multifaceted Attack on CWB No Accident. Is pressure allow manipulation of the pensioners and employees to sell MTS unrelated? money away from the CSSB and will allow MTS to manage/mismanage our funds. A note of introduction: This paper was first targeted to those who are familiar with the advantages of the CWB We have not been consulted on these matters nor given (Canadian Wheat Board). With slight adaptation, other an equal opportunity to make any changes or deny any venturessuch asco-opemtives , joint ventures, even union changes to the existing plan. movements, could easily be substituted for the CWB, as a means to better understand the type of fundamental shift in democracy and economic self-determination being Without meaningful dialogue the motives of the advanced by the Filmon government within their current government and MTS are suspect. legislative agenda. Now to the paper.

Ron Rudiak, Retired MTS Where and on whosebehalf does thereal pressure to do awaywith the CWB really come from? Those of us who * * * have some genuine gripes about any large institution whose own inertia is slow to address valid concerns not Presentationto the Board of theManitoba Government of fe lt by the many are not the source. Our bottom line is Mr. Filmon change the bathwater, not the baby. Regarding MTS Pension Plan Then there are the Sawatsky/McMechans, the This MTS pension plan is controlled and held by the McQuire/Palllisters and their organizations. After Manitoba provincial government, Civil Service stopping to think, can anyone seriously believe that they Superannuation Board. We , pensioner in Steinbach could be the real source and force of the current, nearly area, respectand trustthis arrangement we have accepted continuous, onslaught? Or are they, despite their own and see no reason to take the money to pay our pension puffed egos, simply pawns in an even bigger game, away from them. We do not know or trust our money in perhaps even ignomnt of their own misguided intentions? the hands of the appointed people that are tryingto move in on our pension money. Please, do not get me wrong. I am no apologist of theirs. But I am looking seriously at what might be the We have varied types of pensions which have different bigger picture and note their significance, if any. guarantees. My own pension is a 15-year guarantee plan which asa $1,067.14 permonth payout and cost of living Accepting as a given the validity and added value additions. This is a cashamount of $128,056.80 at least. achievable collectively fo r a mass of people through a IfI live beyond 85 years it continues at the going rate. pooled single desk, I would like to direct attention to 188 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996 internal and external pressures that might contributeto a This might be easier to see by looking at a more meltdown of such an institution as the CWB. fa miliar example. Every fa rmer/entrepreneur knows that if a bigger operation can still be managed as adequately Most people would be more familiar with internal asthe smallerone, the economy of scale of the larger one pressures. These may range from internal inequities not will be more fo rceful than the smaller one. In order to adequately addressed as they arise within the pooled survive or gain more opportunity, this is one reason why community, to the commonality of the community not farm sizes are expanding. Likewise for the myriad of receiving sufficient nurture-reasons fo r pooling are headoffice suppliers ofgoods and services to the fa rming forgotten. At either extreme, the aggrieved or community or purchasing from them. marginalized may then give up on the bathwater and the baby. While still within the protected environment, It is therefore worth repeating that some of these nothing might seem worse than the immediate injustice enterprises' economy of scope now rival the economic fe lt. This makes fo r the proverbial jump from thepot to clout of many countries, one where even the U.S.A.� the fire seem an alluring alternative, until it is too late. touted asthe strongest, cannot now make domestic policy Some of these misguided fo lk are calling for the decisions without some transnational flexing their impossibility of a dual market, a concept that advances musclesin a menacing way ifthey disapprove . Domestic someone else's goal and solution. So much fo r the well­ interest rates and currency values are now among the intentioned, even if not enlightened. Another internal most visible indicators of all countries' haltered and destructive element comes fromthe parasitic or vulture­ compromised positions. orientatedwho tryto increase their share of the pie, even ifit means shrinking the total pie. And this is more than However, there is anotherwave of increased economic enough said of them. poolingbeing organ izedunder one corporate roofref erred to as an economy of scope. Vertically integrated On thehand, other though we maybe less fa miliar with companies are one fo rm of such newfound strength, those externalto the pooled group as to why they would concentrating several diverse economies-of-scale want an end to our combined strength, they nevertheless operations into one economy-of-scope operation do exist. Once we view this from this perspective, not controlled by fe wer and fewer private hands, not unlike much additional effort need be spent before a lengthy list today's fe wer fa rmers operating bigger spreads of land comes to mind, a list not limited exclusively to and animals than yesterday's far mers, only phenomenally fo reigners, but also those within Canada who stand to bigger. gain if fa rmers as a group are made more vulnerable. Another quantum leap towards increased economy of From this vantage point, the agenda of companies that scope possibilities beyond the industrial-technological have a lifetime much longer than any human becomes age are the advancements through computerization. Not more visible. Advancing their own self-interest, they only do computers help to manage greater amounts of will, once an attempted coup fa ils in one generation, try information than ever before, through the ongoing to do better with the first subsequent generation that has digitalizationtrend, historically diverse venturescan now fo rgotten why they ought to stick together. Furthermore, be serviced with one piece of newfound technology some external fo rces are getting bigger and better at common to all. undermining the combined strength of the pool. This trend is very visible in the information The trendfo r repeatedattacks over generations and the transporting industry and is called convergence. increasing severity of attack is apparent not only with Broadcast-TV,etcet era, telecommunications-phones, et regards to the CWB but virtually every public institution cetera, and cable are naturally migrating like a seesaw, where the public bands together fo r mutual advantage. tipping towards the more economic powerfully Transnationals now threaten the self-determination efforts consolidated operations into one super information even of nations. Witness simply Canada's own highway. The gatekeepers of such a system have increasing weakness in setting interest rates, let along a economic and political power like none ever known growing list of domestic policy issues. before. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 189

The real question of survival fo r the masses has now Highways? We did have two railways which are quickly become, who will better serve the long-term interests of becoming one. The same with our two airlines, only a the masses, a democratically elected directorship called little further delayed. So why, with all this experience government, even ifindividual representatives from time and an existing first-rate telecommunication system to time arewilling to sell their own down the river, or an nationwide, why are we now duplicating the telecom­ unelected board which runsthese massive transnationals? munications and cellular networks?

Here in Manitoba, the current government has first In Manitoba, after Filmon created these changes, first removed the single-desk delivery system of telephone by allowing the government-run monopoly to have called monopoly service and allowed others not only to "competition" and now that he says we have competition, compete but that MTS must pay 70 percent of the entire the government has no business running MTS. costs to hook up these new entrees to our local system. Even though long distance rate reductions after Reviewing the sell-off from a governance point of "competitive entry" are still regulated by the CRTC, it is view, the final bottom line as noted earlier is this. Who, the regulator and not the competitors that have provided withall this convergence andmergers likely to take place, fo r the reduction in long distance costs and simultaneous who do you trust to do a better job running our phone increasingpressure on local monthly chmges. And lastly, system in our best interests, we, the people of Manitoba MTS is prevented by the Manitoba government and electing some people to do this on our behalf or some CRTC fromlowering its long distance rates to match the nonelected off-shore owner? Clearly, I prefer the fo rmer. competition until they have 30 percent of the market. And when is this government's claimed advancement of increasing choice, actually a move towards a totalitarian Furthermore, despite the trend towards convergence, state, not controlled by a king, but by the CEO of some Filmon's team has required MTS to get out of the transnationalcompany? Is this what Filmon has in mind computer/fax hardware sales, has sold offtheir cable-the when he says we are open fo r business? A fm al Portage area cable interest was "valued" at $450,000 to liquidation sale? Seems so to me, as to the net effect of $500,000 and later "resold" by the new owner fo r $6 these transfers of public ownership into unknown private million-interest and required MTS cellular to have a hands over whom we even less control than our elected completely separate administrative and billing representatives. department from MTS in order not to have a competitive advantage over their "competitors." This information is Finally, during the government's steps to remove the verifiable through PUB documents. Filmon has also monopoly, they fa lsely advised the public that long fo rced MTS to not use their telemarketing expertise and distance prices would be driven down by competition. equipment but get this service from an American newly All MTS rate reductions to date have been regulated, not created company calledFan euil. He even prevented MTS responses to competition. from providing a multimillion dollar expert technological service to Malaysia. All at significant lost opportunity to MTS and Manitobans. Now that that part of the dismantling has been accomplished, the government is now saying that even One final point on this matter. Convergence reduces when sold, MTS will continue to be regulated. What the overall need fo r costly infrastructure while duplicating they are not saying is once MTS fa lls into the hands of the pipeline, is more costly and must still be paid fo r by someone like AT&T or some other transnational, their the same population base. Now take our growing cellular expertise and interest in running MTS their way will be infrastructure. How canone well-regulated MTS cost the brought tobear. Over time, the CRTC will be a regulator entire consumer base more than the current Filmon­ more in name than in reality. If this sounds fa rfetched, supported method which requires a costly duplicated consider fo r a moment how fo reigners already influence cellular network and administration? our domestic policy on interest rates and currency, and less directly but still quite noticeably in all of our other By parallel, why is it that Canadians no longer consider social fa bric and safety net programs. The fo reigners that it economically viable to have several Trans-Canada have such an impact are not your ordinary fa mily type 190 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

bondholder but large transnationals, some of which are transcript segment-<::BC Questionnaire, 1985-where I financial institutions. was caller No. I and ended up embarrassing the NDP Financeminister into acknowledging a problem after too A final point of consideration before you either leave long a period of inaction. Both host and guest knew that this matter or are aroused into action, consider fo r a it was I called,who as is impliedby Jim Ray's slip of the moment the simplicity and effectiveness of a mousetrap. tongue and first referring to me as a fa rmer, only to then Enticing morsels are seemingly available to anyone, an correct himself outright gift, no strings attached. But before the first bite is swallowed, there is no going back. It is also a ofmatter public recordthat I was a member ofthe NDP at thetime of the conversation, embarrassing Ifselling MTS is such a good long-term decision, then them into better action. That is a part of what I believe surely a public enquiry is the least we should have before it means to be on the inside. One has the responsibility we make such a fm al decision. tospeak out more stronglythan theoppositionwhen our own are simply not getting the point that is so obvious. Thestatements Filmon hasmade publicly to justify his Thiscoun runs terrulturefor most people, but I do believe concept of "competition," deregulation and selling off such is in fa ct our responsibility. MTS into a number of privately held pieces are highly erroneous and misleading. Were his statements made as Insimilar fas hion, I embarrassed Gary Doerinto some part of an administrative tribunal judgment, those correct action, adding SFX to his list of some 20 decisions could be legally reversed because of their lack communities fo r his government telephone enquiry. of foundation in fact. When he finally said yes, they would come to SFX, he also said they did not have an advertising budget left to Popular "opinion" may leave you incredulous at my advertise our meeting. Again, on Questionnaire, with assertion but before you dismiss the above, I will give Don Orchard as another pre-election guest present, I you some fa ctual, independently verifiable information thanked Doer fo r "granting" us the request, thereby concerning my credibility. ensuring the public knew of it, as well as somehow miraculously freeing up his own schedule, for prior to Access to information: Usually, on behalf of that he could not make that newly scheduled meeting. CONECTS-<::itizens Opposing Non-equitable Charges for Telephone Services-! have been a full participant to To Mr. David Newman, MLA for Riel: virtually every Manitoba Telephone System, Public Utility Board hearing form 1985 until and including Mandate to govern is no blank cheque: As the Chair of when MTS was placed under fed eral CRTC regulation. the legislative committee for Bill 49, the regional health This canverified be onthebasis of the public recordwith act, I bring to your attention and the public's a serious the pub. Through such participation, I naturally carne breachin dueprocess . Failure to act on these allegations across a tremendous amount of in-depth information on would be equivalent to confessing that the mandate the basis of which I can firmly and with conviction state Filmon received was a blank cheque, a position, I am that Filmon isnow continuing tospeak misinformation in sure, neither you nor the public would find acceptable. his attempts to privatize MTS.

Integrity of information: With reference to the above, Background: I myselfwas preparing fo r Bill 67, a bill many people are fa miliar with my campaign to improve which, when passed, will authorize the Filmon telephone service, particularly fo r rural areas, of which government to sell our telephone system, one that is the elimination of party lines and toll-free access to owned entirely by Manitobans, to one that is owned by neighbours are among the major achievements. some Manitobans who may then sell to the highest bidder, eventually placing MTS into foreign-dominated Another subject in which I raised public attention, control. I asked to appear before your committee when I beginning in the early 80s was on the then little-known heard news reportson the nature of the public's objection recognition of the fa ct that fa rmers were being gouged fo r to Bill 49. I was disturbed into further action when I their purple fuel, as may be noted in the fo llowing heard that their reservations were similar to the ones I October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 191

was having with the MTS bill, namely that Filmon was sitting member on committee required to assess fa irly the promising more regional interests would be served while concerns raised before that committee. Filmon's actually givinghis own administrators more power to act comments were uttered before the committee had a as they themselves saw fit, and that this power grab was chance to report to the legislature their findings and conducted by a misuse of the political system, refusing to recommendations. hold truly open and public hearings, a matter promised but reneged regarding MTS. I suggest these actions by two separate government members, ifallowed to stand, makes the committee stage Allegations of misconduct: You may recall that I process ofbill evaluation into a sham and one of simply appearedbefore your committee on Wednesday, October going through the motions. 16, 1996. Then, as now, I wish to express my thanks fo r the courtesy extended to me by the committee and the I believe in public due process. I also hope the manner in which my presentation was received. This was hearings you conducted were more than simply going much appreciated and I again thank you. through the motions. I ask that you look into these allegations and advise me of your own findings and steps Now I must also raise serious questiqns as to whether taken to ensure that Manitobans may continue to have the legitimacy of these required proceedings has been confidence in the democratic process, which you as a compromised through the actions of a fe llow committee member of government have the sacred trust to uphold. member Ben Sveinson, MLA for LaVerendrye, and I await your full and expeditious response. Premier Filmon's public statements.

Sincerely, Eduard Hiebert While leavingthe committee hearings, someone whom St. Francois Xavier, MB. I had not met fa ce to fa ce before engaged me in * * * conversation which we took outside the room. Shortly thereafter, while the hearings were still in progress, Ben Sveinson, PC MLA fo r laVerenchye, made an unwelcome Brief to the Legislative Committee contact with the person I was with. Just as rudely and On Bill 67, The Manitoba Telephone System stridently he then advised me that he now knew where I Reorganization and Consequential Amendments Act stood on the matter just presented and that was all he needed toknow . He was also adamant that I was there as The Brandon and District Labour Council represents part of some union-orchestrated protest. approximately 4,500 members from 25 affiliated local unions including the CEP Locals at MTS. We have been Only then did I find out that the person I was talking involved in the Brandon Save Our Telephone System with was a union rep, one that Sveinson had come to (SOTS) Committee since its inception. know in his earlier days when he, perhaps with duplicity, worked fo r a union. I submit that his actions and Since 1908 the owners and the customers of the assessment of my presentation on the basis of my Manitoba Telephone System (MTS) have been the same associations areuna cceptable under the best of times and people-the people of Manitoba. We already own MTS completely intolerable from a person responsible to hear so why should we pay fo r it again? Yet Bill 67 will public comments on proposed legislation before it is transfer ownership from the people of Manitoba to passed. private shareholders without the people having any say. We fa il to understand why this government is so intent on Premier Gary Filmon then added injury to these giving away the Manitoba Telephone System since all proceedings when news reports the next morning advised their arguments can easily be dismissed. We can only that despite any concerns the public may have expressed come to the conclusion that the sale is based on to the committee, the bill would be passed as is. ideological reasons rather than on common sense.

Response requested: Sveinson's expressions of bias We also believe thatthere has been a conspiracy by the occurred while he still had an administrative duty as a Progressive Conservatives to give away Manitobans' 192 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

MTS assets at the lowest possible price. Not even Mr. - Bill 67 does not guarantee that Manitobans will Findlay is so incompetent to sell the cable system worth continue to own MTS. It is so ambiguous that fo reign $63 million fo r only $11.5 million. Other reasons had to ownership is probable. When Albertaprivatized AGT, be dominant especially when MTS was making a profit it was to be held by Albertans. Only 10 percent could of $1.9 million on revenues of $5.8 million, especially afford shares meaning that 90 percent of the population when every othertelephone company is trying to acquire gave their company, their ownership, to the richest 10 cable systems. This was a sell-out of the most percent. Now AGT is traded on the TSE. At the same treacherous kind. timeAlbertans pay 34 percent more than Manitobans fo r basic phone service. AGT justapp lied fo r another $6 per The second sell-out was the telemarketing. Faneuil month increase. The CRTC does not provide the ISG received a $47 million contract with MTS but this protection that Mr. Findlay claims and he knows that he was suspicious due to apparent interference by Mike is lying about it. Bessey, the Premier's friend. Bessey also had a personal financial involvement of $400,000 with an officer of Mr. Glen Findlay, Minister responsible fo r MTS, haS Faneuil. In addition, Manitoba senior servant, Charles indicated that MTS needs millions of dollars to improve Feaver, left to become a senior executive at Faneuil. the technology. MTS bonds could be issued to raise capital, the same as the highly successful HydroBonds. But the biggest deception is this sale. The minister, in Or Mr. Findlay could give the $400 million that he is the mostcowar dly fas hion, refused to take this legislation writing offto MTS to buy ne\L' equipment. to the people of Manitoba. He refused to hold public informational meetings with the people who own MTS. Mr. Findlay said that the debt load is too high. Yet it He refused to defend this legislation with his peers, was Mr. Findlay and his government that spent $600 relying instead on the Tory majority in the Legislature, million to provide individual phone service to all hoping that no one would know what he and his gang Manitobans. Now we all have access to Enhanced 911 wereup to. Now to sweeten the pot, this government has emergency service. Neither Ontario Bell nor Quebec announced that it will pay off one-half of the Bell, both private companies, provide this level of debt-approximately $400 million. That is $400 fo r every service. MTS is not only paying all its debts, but it is man, woman and child in this province. Not only is he also making a profit which is reinvested back into the swindling the people outof their telephone system, he is system, improving services to Manitobans. charging themfo r it andthen trying to sell them shares on top ofit. What a traitorous act. It is the same as having Mr. Findlay has stated that MTS is burdened with a house with half a mortgage, selling the house and government interfe rence, therefore cannot make timely keeping the mortgage. Stupid. Shameful. Consider the decisions to counteract other private telephone company fo llowing: decisions. Mr. Findlay and his government have had eight years to correct this problem. Perhaps Mr. Findlay - MTS has the second lowest residential rates in North is lying. It only took three days to sell MTS. Perhaps it America. is Mr. Findlay that needs changing.

- MTS employees-3,700 people-all in Manitoba. Another government scam appears to be the pension Control by a private company could mean the transfer of changes. Employees/retirees have been denied half the these jobs and profits to anywhere in North America, seats on the board. The issue of surpluses has not been seriously impacting Manitoba businesses. addressed nor have improvements. Federal regulations donot guarantee pensioos; they only give a framework to - MTS, as a publicly owned company, has a mandate govern the pensions. to provide the bestphone service at the lowest rates to all Manitobans. Its policy has been to keep residential rates And why do MTS shareholders have to pay $400,000 low, so that each household can afford phone service. fo r Tory propaganda? MTS has not been sold; yet, under The more residents spend on telephone service, the less the MTS logo, a double-sided sheet of Tory lies and half they spend on other goods and services. truths hasbeendelivered to every Manitoban household. October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 193

We strongly oppose our money being used fo r your Canadian, management will be accountable not to the propaganda machine. We strongly ob ject to this elite public, but to shareholders who, according to John Tory advertising without any consent from the current Douglas, will get 6 percent dividends on their investment shareholders. This is the same government that is plus tax credits all at customers' expense. passing labour legislation, Bill 26, that requires every person represented by a union to be contacted prior to any As a public monopoly, MTS has provided universal, advertising. Does not this government believe in its own affordable service all over the province. When a private legislation? Is this a crooked government, intent on lying corporation fm ds that good service to poor customers, to Manitobans? e.g., northernManitoba communities and good wages fo r staff cut intoshareholders' profits, who will win? Look MTS is ours. It provides decent paying jobs and a fo r downsizing, layoffs and rate increases. Since Alberta competitive service. Its privatization will seriously Governmenttelephones was privatized, 4,000 employees impact residential customers, small businesses, nonprofit were laid offand local rates rose dramatically to boost organizations, people on fixed incomes, seniors, the investor profits. disabled, Internet users and those that lie in remote or rural areas. We cannot afford privatization. We cannot Since CN was privatized, the CEO holds himself · afford Tories. responsible, not to Canadian employees, not fo r services to northern Manitoba but only toshareholder s, 65 percent Respectfully Submitted, of whom are American and have no stake in Canada's Ross C. Martin, President northern communities. Why should we expect anything Brandon & District Labour Council, CLC better from a privatized MTS? There is limited comfort in knowing that phone companies are regulated by the * * * CRTC which first imposed deregulation on our telecommunications industry with the full co-operation of Presentation to Hearings on MTS Privatization by the Manitoba government. Martha Owen The CRTC recently granted private AGT a $6-a-month If the government were to sell offyour property, you increase in local rates, as opposed to a $2 increase fo r would object. Ifyou were offered the first right to buy public (so far)MTS. Somuch fo r equal treatment. Even shares, would that help? The government of Manitoba is now some phone companies like Hamilton-based London selling your property. Those Manitobans with money to Telecom Network are competing fo r business in invest will have the opportunity to buy shares Manitoba, unchecked by any regulatory approval and individually in MTS, a company which, collectively, they without any local staff. already own. There will be no referendum, even though the government has novoter mandate to sell MTS. Since The Manitoba government claims that the sale is the government does not even listen to its own experts necessary, because MTS is too heavily indebted. Who unless they parrot its agenda, we can hardly expect them say so? The Crown Corporations Council, that is an to listen to what we say here. Still, we cannot keep agency created by the Tories to study Crown silent. corporations. What kind of recommendation can we expect from an agency that is created by a government They say thatManitobans through share purchases will that is ideologically committed to privatization at all retain control of MTS. That is a fa rce. Only those with costs? CCC president Doug Sherwood admitted to spare cash will buy shares, and they will be free to resell having privately recommended privatization, but he did them. When MTS is publicly traded there will be not make the recommendation public because it might nothing to stop fo reign companies like AT&T from prove controversial. When the Free Press obtained a taking over and moving profits and jobs and offices copyunder The Freedom of Information Act of the CCC abroad, regardless of government assurances to the report, I 0 of its 27 pages were blanked out and others contrary. We have seentoo often that we cannot trust any heavily censored, further proof that the government is of this government's assurances. Even ifMTS remains acting behind our backs. 194 LEGISLATIVE ASSEMBLY OF MANITOBA October29, 1996

The government ignores all the good things about F aneuil was in arrears to MTS fo r almost $1 million in MTS, e.g., profits fo r the first half of '96 were $15 long distance charges. In June, Findlay said the account million, equal to thetotal annual profits for '95 and a vast was cleared up. Did Faneuil pay any interest charges? majorityof Manitobans (96 percent of residences and 86 percent of businesses) still subscribe to MTS in spite of Four hundred thousand dollars of our tax money is all the other choices. That speaks well fo r a company being spenton anad campaign to promote the sale. That that has been sabotaged in so many ways. How much campaign includes a two-page letter to all subscribers better could MTS dowith the support of our government? signed by MTS president and CEO Bill Fraser and Why not sell MTS bonds, just as we sell HydroBonds? defended in the Legislature by MTS chairman Tom Much of MTS's debt was deliberately engineered by the Stefanson. The letter is filled with disinformation and Manitoba government. motherhood statements, e.g., "The industry is changing. Therefore, MTSmust change." What profound wisdom. Competitors have been allowed free access to MTS There is a saying that you should never believe anything· phone lines. Is that good business? The cable network, until it hasbeen officially denied. valued at $63 million in internal MTS documents, was sold fo r $11.5 million to private companies. According During and after election. the Tories officially denied to MTS's own corporate business planning department, thatthey intendedto privatize MTS. Now they officially that sale left MTS open to potential revenue losses of deny that the sale will be harmful toManitobans. They $300 million; $300 million could have gone a long way havealso begun tomake official denialsabout their intent to improving the debt/equity ratio. In 1993, an to privatize Hydro and Manitoba Public Insurance. independent study by Ernst & Young reported that the Unless we find a way to stop them, we will lose ownership of the cable network placed MTS in an everything. enviable position and strongly recommended that MTS retain ownership. Glen Findlay claimed that neither he * * * nor theMTS executive committee eversaw the report and that he would have considered it irrelevant in any case. Don't Mess with MTS and our Pensions

In September '95, Filmon claimed to have no intention The fo llowing are some of my concerns regarding Bill to sell MTS. A few weeks laterhe hiredthree brokerages 67, privatization of the Manitoba Telephone System. to study the sale. They are Wood Gundy Inc., RBC Dominion Securities, and Richardson Greenshields of As indicated before in letters to the Minister Canada Limited. Obviously, he knew in advance that responsible fo r the Manitoba Telephone System, Glen they would recommend privatization. What Bay Street Findlay, and to the Minister of Labour, V. E. Toews, brokerage which stands to make handsome commissions (Minister charged with the administration of The Civil on the sale of shares will endorse continued public Service Act; The Civil Service Superannuation Act): ownership? (We were not told what the studies cost us.) Only days after the reports were in, the government The Manitoba Telephone System has served announced that MTS was fo r sale. If decisions can be Manitobans well since 190S. The rates have been made soquickly, it puts the lie to the government's claim reasooable and servicethe excellent. MTS hasthe lowest that MTS reacts too slowly to market conditions because phooerates in North America and we are certai.qly proud of its cumbersome bureaucracy. of theseachievements . How long will a private company keep this in place? Experience in other provinces has Earlier, the Tories gave MTS's $19-million data base shown thatprivate companies are likely to increase rates to Faneuil inreturn for only $16 million worth of Fan euil much fa ster than publicly owned companies. AGT in shares. The Provincial Auditor calls that a $3-million Albertarecently received a $6 a month increase compared subsidy to Faneuil. They negotiated a $47-million to only $2 month in Manitoba. telemarketing agreement with Faneuil while Glen Findlay, the Minister responsible fo r MTS, admitted to MTS employs nearly 4,000 people in Manitoba. Many knowing little about the joint venture. In May of '96 of these jobs could be transferred out of the province or October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 195

disposed of completely. The profits from MTS stay in pensionfund and a rapid stripping of any "surplus" funds Manitoba and help keep our phone service affordable. that could have been used fo r improvements or just fo r Since 1990, MTS has made more than $100 million in long-term stability of current benefits. Moreover, in a profits. In the firstsix months of this year, profits were privatizedrestructured MTS, management will be able to $15 million. Let us keep profits, jobs and decision extract concessions from employees, gutting the pension making here in Manitoba. When we own MTS publicly plan fo rever, and Ottawa will not come to the we have a say in its future. This will change when a rescue-Findlay's assurances notwithstanding. private company takes over. Mr. Findlay states in his letter that the new pension The government cannot be trusted to privatize MTS. plan will provide benefits that are equivalent in value to It has sold offcable assets which were worth $50 million the pension benefits that such employees have or will fo r $11 million. become entitled to under the Civil Service Superannuation Board of Manitoba. The government of Manitoba hasno mandate to sell off MTS. It is nottheirs to sell. The people of Manitoba are Mr.Findlay, Mr. Toews and Mr. Filmon, where are all shareholders of MTS. The one decisio1;1 that must go to the answers to our concernsregarding indexing, surplus, the shareholders for ratification is the sale of the amount of dollars transferred, representation of retirees, company. The government deliberately kept the fu ll representation? These questions have not been shareholders, the public, in the dark to get past the answeredin our letters written to you nor have they been election. During the provincial election and in the answered at the MTS pension information meetings or Legislature after the election, they said they were not MTS public brochures. going to sell MTS. The government has not held any consultation with the people of Manitoba. A big-ticket To be fa ir, these questions should be answered before item such as MTS should not be rushed. If the Bill 67 is pushed ahead. government believes in democracy, a referendum should be called to give the people of Manitoba a chance to Sincerely, Winnie M. Chanas express their wishes. Since the election, the government maintained the charade so it could privatize. Quite * * * frankly, they lied. Re: Bill 67. In 1957 pensionrules were antiquated. When an MTS female employee married, she could not belong to the I amhere today on behalf of the 1,700 members of the Civil Service Superannuation Board (CSSB). Many Communications, Energy and Paper Workers Union who women lost years of their pension. Now Bill 67, work at MTS. subsection 15(8) states that employees are deemed to have consented to the removal of their pension from I am here to tell you that this legislation remains CSSB to a new private pension plan. I did not give my seriously flawed; this process is divisive and hurtful to consent. The government of Manitoba does not have the many people;should you railroad this legislation through right to presume fo r me. This is my money, not theirs. in order tomeet artificial deadlines, you will sew seeds of discord, and later you will reap the whirlwind. I am concerned. Ottawa neither guarantees pension plans nor does it protect them. There are federal rules As Manitobans, you should all fe el a profound sense of aiming at some assurance for employees that their plan shame. You are selling the fa rm. You will be cannot be abused by the company. These rules do not responsible for the losses to our province and our safeguard the pensions themselves. communities that result.will You are disposing of one of the most importanteconomic and community institutions If the lessons of privatization and corporate takeover in our province-ourMTs-and as a province we will have are tobe learned the hard way, MTS. employees (current nothing to show for it except broken commun ities and and future) can expect a decline in quality of their unemployed workers. 196 LEGISLATIVE ASSEMBLY OF MANITOBA October 29, 1996

You should also be ashamed of this process because important to MTS atthis time? Because that is what this there is no consensus in Manitoba in support of this privatization is intended mainly to achieve. Less privatization. Whatyou are doing is rooted in an extreme workers, less wages, less services to Manitobans. ideological position and not the needs of ow communities. Why notbe halest. This government does nothave the courage to sayclearly that it wants rural telephone offices I want to highlight two issues which underscore what closed down, workers fired and telephone rates fo r rural a bad deal this is fo r MTS employees and users. users ina-eased dramatically. It will not say these things because Manitobans expect and demand a more First, do not let anyone tell you that there is labour compassionate government than that. peace at MTS or that the essential employee issues relating to theprivatization are taken care of There is no Is this not what Mr. Baines is talking about when he current contract fo r half of the workforce, and they are goes around the provinces saying that privatization is frankly losing patience with the prolonged negotiations. about freeing the company from government restraints? Otherthan serving the public interest, just what are these The pension plan fo r MTS employees remains an government restraints anyway? outstanding, unresolved issue. We have heard a nwnber of platitudes from MTS and government officials to the Be under no illusions. We are fully aware that a effect that ow pension plan is secure. However, ow privatized MTS intends to ruthlessly contract out jobs, independent advisors have told us in no uncertain terms close telephone offices and increase rates dramatically. thatthere is plentyof insecurity fo r the plan as a result of Northern users fa ce a 300 percent increase or more in this privatization. their rates tofulfillthe user-pay, profitcentre conceptthat this government has fo r telephone services. I draw to yow attention the statement on Satwday by Professor Vorst of the University of Manitoba who said Manitobans will pay more, muchmore , and they will in the Free Press: Ifthe lessons from privatization and losejobs which are vital to theeconomic viabilityof ow corporate takeover elsewhere are to be learned, MTS communities and to the social strength of ow fam ilies. employees can expect a decline in the quality of their pension fund and a rapid stripping of any surplus funds As I mentioned to you at the outset, sow discord and that could have been used fo r improvements or just fo r reap the whirlwind. We all saw the television coverage long-term stability of current benefits. of the struggle at General Motors over contracting out. You are organizing that futwe fo r Manitoba because we Our members currently have securepensions through will not give up andmeekly walkaway from our jobs and Manitoba's superannuation plan. I say to you that the ow communities. province of Manitoba has a moral obligation to these members to protect their pension earnings now and in the This privatization is a shameful act. It will lessen futwe. Manitoba It will hurt people and communities. It is not supported by a majority of Manitobans. You have the The pension issue is not all right. We do not have any ability to ram this through in the coming days, but you assurance that ow pensions will be protected in the will be held responsible fo r yow actions. future. To proceed with privatization while these issues are outstanding is enormously irresponsible. Maggie Hadfield Communications, Energy and Paperworkers Union of Secondly, the people of Manitoba must know that the Canada, Local 55 purpose of this privatization is to fa cilitate downsizing and contracting out. The principal reason why we are * * * without a contract after almost a year of negotiations is that the company is demanding the unrestricted right to Bill 6 7, The MTS Reorganization and Consequential contract out jobs. Why? Why indeed would that be so Amendments Act October 29, 1996 LEGISLATIVE ASSEMBLY OF MANITOBA 197

My name is Dr. Mary Pankiw. I am the president of than in other parts of Canada. In essence, the Manitoba Manitoba Societyof Seniors, Inc. Telephone System provides affordable rates, good service and makes a profit. The Manitoba Society of Seniors opposes Bill 67, The MTS Reorganization and Consequential Amendments Government has the option of acting on alternatives, Act. such as fo llowing up on Saskatchewan's offer of amalgamation with their publicly owned phone company The Manitoba Society of Seniors believes that a well­ SaskTel. Further, the issuance of MTS bonds fo r run Crown corporation canprovide less expensive service fm ancing MTS expansion is another possibility. than a comparable private sector company because: l. Crown corporations do not pay corporate income tax; 2. The selling of the Manitoba Telephone System is the Crown corporations do not raise equity capital in the firststep to higher rates and poor service. When rates go private market; 3. Crown corporations have their debt up, phones are not affordable. Our concern is fo r people guaranteed by the Province of Manitoba and, therefore, on low incomes, and fo r people who live in rural areas do not have to pay full market rates to borrow. and up North. People will be fo rced to give up their phones, which area basic necessity and not a luxury, and These reasons enable Crown corp�rations to offer canbe the difference between life and death. In 1996, the services at rates below what equally efficient private Year fo r the Eradication of Poverty, the sale of the sector telephone companies can offer. ManitobaTelephone System is definitely a poverty issue. People on low incomes will be unable to afford phones. The Manitoba Society of Seniors is concerned that the privatization of the Manitoba Telephone System will The Manitoba Society of Seniors questions what have a negative impact on local telephone rates. Lookat benefits, if any, privatization will bring to consumers. A what happened in Alberta. In the six years, since Alberta company that pays shareholder dividends, corporate Government Telephones (AG1) was privatized, rates income tax and raises debt capital in the private market have continually increased. Albertans now pay 34 is likely to require a higher rate increase than a public percent more than Manitobans dofo r basic phone service. sector corporation. A private sector company that is Further, AGT has applied fo r another $6-a-month accountable to its shareholders is less likely to engage in increase. AGT has also indicated its intent to increase public projects, such as the expansion of individual line rural rates to obtain recovery of the costs of rural phone service or community networks on the Internet. service. In short, a private corporation's first duty is to return a profitto its shareholders. The owners' interest in TheManitoba Society of Seniors strongly urges you to profits overrides the customers' interest in affordable reconsider your decision to privatize the Manitoba service. Telephone System in the interests of consumers, especially the rural, northern and low-income The Manitoba Society of Seniors is also concerned that Manitobans. under privatization, the Manitoba Telephone System's commitment to service may be doubtful. Crown Thank you for this opportunity. corporations have led the way in providing state of the art telecommunication services to their consumers. Dr. Mary Pankiw, President Community networks arefa r moredev eloped in Manitoba Manitoba Society of Seniors Inc.