Mr. Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Industry, Trade and Tourism. Does the honourable Minister of Industry, Trade and Tourism have an opening statement?

Hon. Mervin Tweed (Minister of Industry, Trade and Tourism): Yes, I do, Mr. Chairman.

Mr. Chairperson: Go ahead, Mr. Minister.

Mr. Tweed: Thank you. I am certainly pleased to be before the Estimates committee to review the '99-2000 Estimates for the Department of Manitoba Industry, Trade and Tourism. Before I go into some of the details of my department's programs, I would just like to express my thanks to the staff who have helped me prepare for this and hopefully will continue to serve with me as the questions come. I do have a fairly lengthy statement, and I would beg the committee's indulgence. Just again, being a new minister, there is a lot of good news, and I would like to have the time to put it forward.

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Mr. Tim Sale (Crescentwood): If it would help the minister, I would be glad if he would table it, and then we could both read it overnight and come back tomorrow with a real sense of this opening statement. I would be very pleased to receive it that way.

Mr. Tweed: In the sense of again, I guess, first time out, I would like to read onto the record my comments.

In short, Mr. Chairman, 1998 was a very good year for the province of Manitoba. The conditions were created in the early to mid-'90s as Manitoba's exports expanded dramatically, especially to the United States, and our growth in exports was soon echoed in overall manufacturing shipments, capital investments, job creation and low unemployment.

The most dramatic and concrete reflections of these developments were a series of major new ventures, announcement, relocations and expansions that have taken place in the last year. Looking at economic growth and investment, our economy generated $28.5-billion worth of goods and services last year which was a record high. Manitoba's economy outpaced the national average for a third consecutive year in 1998.

The province's unemployment rate has remained the lowest in the country in the first four months of 1999 and more than 2.5 percentage points below the national jobless rate. Manitoba's overall unemployment rate has been the lowest in Canada in seven of the last eight months. More Manitobans were working than ever before in 1998, a record of 546,100 persons. In the last four years Manitoba's economy has created 35,000 new jobs, of which almost 31,000 of those have been in the private sector, nearly 90 percent of our total job gain. Statistics Canada data shows that all of our growth over the last four years has been in full-time employment, a total of 35,000 new full-time jobs. That is a 9 percent increase in full-time jobs for Manitoba, above Canada's 7.8 percent gain and the third-best performance among the provinces. Only Ontario and Alberta did better. Almost 440,000 persons had full-time jobs in Manitoba in 1998, and that is the highest percentage of full-time workers since 1989. Our strong job gains over the last four years have pushed the unemployment rate to just 5.7 percent in 1998, which is the lowest in Canada and the lowest for Manitoba in nearly 20 years.

For experienced workers ages 25 and over, the rate was even lower, just 4.6 percent, again, the lowest in the country. Manitoba's jobless rate has been on a steadily improving trend for six consecutive years, our best performance in at least a quarter of a century. Over the last four years, the number of unemployed Manitobans fell by more than 19,000 people, a 36.9 percent drop. That is the largest improvement in unemployment of any province and more than twice the improvement at the national level.

The province's exports to the United States outpaced the national average for the fifth straight year in 1998, reaching a record $6.1 billion. Our growth rate in 1998 was 13.1 percent, following a very strong 19 percent gain the previous year. The value of Manitoba exports to the U.S. is now almost three and a half times what it was in 1990. Manitoba now has had seven consecutive years of double-digit growth in exports to the United States. Through the past six years, the value of Manitoba exports to the United States grew by 227.6 percent. That was the second strongest export performance among the provinces and far above the national gain of 143.7 percent.

Equally important to maintaining our economic momentum is the fact that new capital investment by the private sector recorded a seventh consecutive year of solid growth in 1998, reaching a record $3.9 billion. Total private-sector investment in Manitoba is now nearly $1.7 billion higher than it was just a few short eight years ago. Consumers remain confident as well. Total retail sales were a record $8.8 billion in 1998. In the last four years, retail sales in Manitoba–

Mr. Chairperson: The honourable member for Crescentwood, on a point of order?

Mr. Sale: No, Mr. Chairperson, I am just wondering on a point of clarification if I might ask the minister, I just was not sure of something he was referring to. Was he referring at all to the level of import growth in the trade deficit, or was he just speaking about exports?

Mr. Tweed: I was referring strictly to the exports.

Mr. Chairperson: The honourable minister, to go on.

Mr. Tweed: Thank you. In the last four years, retail sales in Manitoba have grown by 25.4 percent, the second strongest gain among the provinces and again well ahead of the national increase of 19.1 percent over the same period. On other fronts, Manitoba manufacturing shipments rose 7.1 percent in 1998, the best in the country, and more than twice Canada's 3.1 percent gain for the same period.

Last year also marked the third consecutive year in which Manitoba's growth rate has outpaced the national average. Since 1996, the value of Manitoba manufacturing shipments rose by 28.5 percent, more than twice Canada's 13 percent gain and the second strongest gain among the provinces. In fact, most of this decade has seen very strong gains by Manitoba's manufacturing sector. The total value of shipments has gone from $6.2 billion in 1991 to $10.7 billion last year. That is a 73.1 percent total gain, the second largest increase among the provinces, as well above Canada's 59.8 percent increase over the same period.

Employment in Manitoba's manufacturing sector averaged 64,000 persons in 1998, a total gain of 4,100 over 1997. That equates to a 6.8 percent increase, the best performance among the provinces, and above Canada's 3.9 percent average. Our longer term performance has also been excellent. In the last five years, '94 through '98, Statistics Canada data shows that Manitoba has created an estimated total of 14,400 manufacturing jobs, for a growth rate of 29 percent. That is the third best performance among the provinces, as well, above Canada's 18.8 percent increase over the same period.

For all of 1998, Manitoba recorded 1,856 housing starts in urban areas, an 11.5 percent increase over '97, second place provincially, and far stronger than Canada's 5.2 percent decline. Last year was the second year in a row that urban starts in Manitoba have outpaced the national average. In 1997, Manitoba recorded 1,664 urban starts, a 33.9 percent gain over the previous year. That was also the second best performance among the provinces, and again well ahead of Canada's 21 percent increase.

The role of Manitoba Industry, Trade and Tourism is to use its policies and programs to help maintain the momentum of our economic growth, working for the most part with individual companies or within specific industrial sectors. I should remind members that my department is divided into four main program areas: Industry Development, which focuses on key industries across the province; Manitoba Trade, which promotes trade and inward investment in the province; Business Development, which provides information, advice and other support to small businesses; and Tourism or Travel Manitoba, which oversees and co-ordinates campaigns to attract visitors to all areas of the province.

The department also has official responsibility for the Manitoba Call Centre Team, the Industrial Technology Centre and the Economic Development Board of cabinet, which is chaired by the Premier.

In 1998-99, consulting services staff of Industry Development provided a core competency in Manitoba's industrial sectors. It takes a leadership role in identifying and assisting companies to pursue opportunities for growth. It provides sector expertise that identifies opportunities for trade and investment, and supports the development of new and existing industry.

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The Consulting Services branch is responsible for leading industrial development in many sectors of the provincial economy. Current activities are focused on the development of three technology platforms. These are considered to be the drivers of the economic development in the 21st Century. These three platforms are the information technology, IT, biotechnology, and advanced materials in manufacturing. In the traditional manufacturing industry sectors, efforts are focused on enhancing quality standards and introducing technologies that lead to increased global competitiveness.

I would like to now just mention some activities in a few economic sectors. In food and beverage processing, our largest manufacturing sector, our department is working closely with Manitoba Agriculture and Manitoba Rural Development as well as the Manitoba Food Processors Association. A good portion of our government's activities in this area have centred on promoting the hog and pork industry abroad, especially in Asia Pacific, mainly by working with the industry to encourage more companies to export and expand value-added production.

Our staff has been working with several manufacturers as well, including Winpak, with an additional $25-million expansion for the manufacture of vinyl-based packaging film. This company was originally located in Chicago but moved to Winnipeg because of its previous experience in dealing with our province.

K & G Mushrooms in Portage la Prairie, with a $5.3-million expansion, will create 40 new jobs and maintain 130 others. It is an environmentally friendly operation with all production exported to the United States. Castle Metals in June '99 will be officially opening a new $4.5-million steel processing facility in Selkirk to supply steel components for customers in the aerospace, agricultural machinery, and transportation equipment industries. The new plant will also create 18 additional jobs. Inmetal North America Limited has established a $2-million manufacturing facility in Pierson to produce precision metal castings using state-of-the-art lost foam technology. It is anticipated that the facility will create 40 jobs in its first four years.

Manitoba's biotechnology industry made significant strides in 1998-99 with several announcements made including the establishment of a Monsanto Crop Development Centre, expansions of the Cangene Corporation, the establishment of the National Centre for Agri-Food Research in Medicine at the St. Boniface Hospital Research Centre.

Another continuing initiative of note is the Manitoba Centres of Excellence Fund, which seeks to attract and maintain world-class research and development activity and to produce economic spin-offs for local companies and nonprofit agencies. The fund provides grants to research projects at the University of Manitoba contingent upon support under the federal government's network of Centres of Excellence initiative. Manitoba's contribution amounts to 20 percent of the federal total.

Meanwhile I note that increasing access to risk capital for small- and mid-size Manitoba companies continues to be a major priority for our department. We have been working hard in partnership with industry and the financial community to address this difficulty.

A recent study by the Business Development Bank found companies backed by venture capital were creating jobs at a 23 percent annual growth rate, sales at 31 percent, exports at 36 percent, and taxes paid at 39 percent.

The Manitoba government, working with private sector partners, helped boost the annual supply of venture capital in Manitoba from less than $4 million in 1993 to roughly $30 million in each of '96 and '97 and $20 million in 1998. The goal is to increase this supply to $60 million by the year 2000. To do this, the government has sponsored several significant venture capital funds for loans in the $100,000 to $3.5-million range. These funds include the Vision Capital Fund, the Manitoba Capital Fund, the labour-sponsored Crocus Investment, and ENSIS growth.

Our department, through our Financial Services branch and the Economic Innovation and Technology Council, has also been working to match potential investors with promising young companies seeking financing. This year 20 companies made presentations to investors at the Invest Manitoba Venture Showcase '99, the fourth investment forum of its kind in Manitoba. To attract much needed capital to small businesses with the potential for rapid growth, the Manitoba government committed $7 million to create the Renaissance Space Capital Manitoba Ventures Fund. This fund aims to attract up to $7 million of private risk capital, which it will use to assist companies in information technology, health care, communications, and value-added agriculture.

Finally, the Manitoba Equity Tax Credit Program announced by the Minister of Finance (Mr. Gilleshammer) is expected to leverage up to $20 million per year into risk capital for local businesses. The details of this program will be addressed by the Minister of Finance. The Manitoba Trade and Investment Corporation, or Manitoba Trade for short, is the focal point of Manitoba's efforts in promoting more exports to an ever-widening range of world markets and at the same time encouraging inward investment in this province. A large part of its work is to help exporters and export-ready companies to enter new markets by leading strategic trade missions, hosting delegations from our major trading partners and helping companies attend trade shows in various industrial sectors and regions.

Specifically, Manitoba Trade's objectives are to increase exports of value-added goods and services to $10 billion by 2001, to continue to increase the number of actively exporting companies by 10 percent per year and to increase investment in Manitoba. Mexico remains a high priority for Manitoba companies. In 1998, Manitoba's exports to Mexico totalled $105.7 million, an increase of 14 percent over 1997. Manitoba Week in Jalisco, Mexico, last October was highly successful with more than 24 companies, businesses, education organizations and Manitoba visual and performing artists represented. This was Manitoba's largest trade mission outside the country in 1998. Manitoba Week resulted in a significant increase in Manitoba's visibility in this important market and provided an opportunity to showcase the upcoming Pan American Games. The governor of Jalisco is scheduled to bring a 90-person delegation to Manitoba this summer for Jalisco Week in Manitoba.

In 1998-99, Manitoba Trade supported 73 new exporters and 45 companies undertaking market diversification in the U.S. Our trade specialists continue to work closely with Manitoba companies to help them qualify as new exporters and also to assist businesses in their efforts to diversify their markets. While Manitoba Trade is helping companies to diversify overseas, the continued development of the U.S. market is important, as was demonstrated by the downturn in Asian markets. Priority sectors included health industries, food and beverage services, processing, apparel, building products, original equipment manufacturers and subcomponents, including agricultural equipment and machinery.

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In 1998-99, Manitoba Trade organized and managed seven group trade show events in the United States with 35 Manitoba companies taking part. The companies reported a total of $4.5 million in projected sales as a result of these shows. Meanwhile, South America continued to be a priority export market for Manitoba companies with specific focus on Brazil, Argentina and Chile. Within these countries, Manitoba Trade has centred its efforts on regions that are compatible with Manitoba's capabilities. Manitoba Trade managed four missions to South America in 1998-99 involving education, agribusiness, building products and construction. During 1999-2000, we will be looking to identify other markets within South America for Manitoba companies.

Japan, despite the economic crisis, continued to be Manitoba's second largest trading partner for 1998 with exports to Japan totalling $319 million. Agricultural commodities make up a large portion of these exports, although in recent years Manitoba building product companies have seen a dramatic increase in sales to Japan, notably in the prefabricated houses.

We are confident that conditions in Asia-Pacific will continue to improve. In the meantime, it is important that we maintain our presence in these markets. Manitoba Trade is currently helping to represent building product companies in Osaka at the 15th Annual Construction Material and Equipment Fair. In September 1998, Manitoba hosted the Kansai-Canada West Business Forum, continuing to establish recognition in Japan for our province and our province's businesses. China continues to be a priority market, and my predecessor led a successful mission to China last June when eight companies, including both experienced exporters and companies new to the China market, participated. The mission resulted in supply contracts for power transformers, simulation equipment for the hydroelectric power sector and the opening of a joint venture education facility.

The Middle East is also growing as a market of interest to our exporters. We have established relations with the government of Egypt and have been active in Saudi Arabia, Iran, Israel, Turkey, and Morocco. I expect to be announcing some further developments in our Middle East activities within the next few days.

Europe continues to be very important to Manitoba exporters, and we will continue to maintain our export promotion activities with trade foreign representatives in the UK, The Netherlands, and Italy. We will continue to provide leadership in the development of the Mid-Continent Trade and Transportation Corridor. Manitoba Trade is an active participant on the Manitoba-Winnipeg Corridor Partners Committee and supports the activities of the Red River Trade Corridor and the Central North American Trade Corridor. It represents the province on the North American Superhighway Coalition and has been successful in promoting Manitoba as the northern gateway to the corridor.

Finally, making use of foreign trade representatives continues to be a highly successful strategy for Manitoba Trade to assist companies planning to move into certain regional markets. In addition to Europe, Manitoba Trade has representatives in Hong Kong, Japan, Mexico, and Chile. This use of part-time contract agents has been recognized as best practice by many other jurisdictions in Canada who are beginning to follow Manitoba's lead.

On the investment front, Manitoba Trade has developed high-quality promotional materials, and it is also leading a number of provincial and federal departments in establishing a common investment strategy and is actively participating in the development of a national site selection database project.

In 1998-99, Manitoba Trade initiated 20 investment projects and attracted 15 new business immigrants to the province. Since 1990, business immigrants have invested over $17.5 million and created over 500 jobs in our province.

A word about our department's special operating agency, the Industrial Technology Centre. It provides a wide range of technical services to clients, which vary from start-up entrepreneurs and mid-size companies to large firms seeking specialized technical assistance. The centre's expert capabilities in forensic document services are unique in Canada, and it actually provides services to clients across the continent and abroad. It is proving to be yet another example of the SOA special operating model for delivering public services. It will further reduce its reliance on government funds in 1999-2000 by enhancing its own sources of revenue.

Meanwhile, the Manitoba Call Centre Team, a joint venture led by my department, continues to market this province as a premier location for call centres, despite the keen competition. This team has done an admirable job in expanding this industry so that it now includes more than 20 major call centres and a workforce of more than 8,000 people. Last year it saw several high-profile call centres, including the Royal Bank, Air Canada, Gage Marketing and Angus Reid, expand employment opportunities in Manitoba. The team is also working closely with the Manitoba Call Centre Association to develop a qualified and sustainable pool of human resources to meet the demands of the growing call centre industry in Manitoba.

The Call Centre Team has been one focal point of special strategic initiatives by Manitoba's Economic Development Board. The Economic Development Board helped attract several of the call centres I mentioned, as well as other major economic projects. These include companies in diverse sectors. For instance, in value-added agriculture, the emerging Maple Leaf Foods plant in Brandon will ultimately employ approximately 2,200 people; the Isobord strawboard plant in Elie will employ 100 staff; and agricultural research will gain from Monsanto Canada's recent announcement of its intention to create a $10-million crop development centre at the University of Manitoba.

Mr. Sale: Just to clarify, the minister just said that the Isobord plant will employ. I thought the plant was open, I thought they already did employ. Could he maybe clarify?

Mr. Tweed: Mr. Chairman, it is my understanding that when it is in full production, the plant will employ. It is currently in production, but is gearing up to go into full product, at which time the staffing will be 100 people.

Mr. Chairperson: The honourable minister, to continue.

Mr. Tweed: Just on a side note, I would certainly encourage members opposite to take a tour of the Isobord plant in Elie. It is a wonderful example of innovation and technology, and we look forward to your comments. [interjection]

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Mr. Chairperson: Order, please. I am having a little difficulty hearing the honourable minister. The honourable minister, to continue.

Mr. Tweed: In the film industry, Prairie Production Centre's plan to create a $7-million state-of-the-art sound stage in Winnipeg will further reinforce Manitoba's recognition as Hollywood of the Prairies.

In manufacturing, American Biaxis Inc, a joint venture company with Winpak and a Japanese firm as partners, will build a $25-million plant in Winnipeg to produce nylon film for packaging.

In venture capital, the newly created Renaissance Capital Manitoba Ventures Fund will invest in small- and medium-sized Manitoba businesses, helping to support new and expanding businesses in Manitoba.

The Tourism and Business Development Division of my department is also a high priority. Job creation is one of the most important economic contributions made by small businesses, and small enterprises remain one of the driving forces of the Manitoba and Canadian economy. In 1997, there were 50,655 business establishments with less than 50 employees making up 96.7 percent of the total business establishments in the province of Manitoba. Over 17,000 of these enterprises were self-employed entrepreneurs. It is estimated that there are over 70,000 home-based businesses now operating in Manitoba.

I am pleased to share with you some of the successes of the Canada/Manitoba Business Service Centre, a very successful partnership between the federal and provincial governments that opened its integrated service delivery on April 1, 1998. During the first year of operations, the centre responded to 67,000 business- and trade-related inquiries, including 7,050 business counselling sessions. The number of Internet requests for information was 257,000 for the year ended March 31, 1999. The centre continues in its strong support for the growth and development of small business through a wide variety of business development tools from resource manuals, electronic publications, comprehensive library services, access to information through the Internet and business counselling. The centre responds to a wide variety of specialized needs for the woman business owner, young entrepreneur, persons with disabilities and the growing aboriginal business community.

The Business Start Program, originally introduced in 1989 as a five-year program, is again extended for another two-year period. This program, which provides a training workshop and a $10,000 loan guarantee for working capital, has assisted in the creation of 1,790 jobs since its inception.

My department continues to support the Economic Development Committee of Bilingual Municipalities as it focuses on raising the profile and economic success of Francophone communities and businesses in Manitoba.

The new Manitoba Cooperatives Act, introduced through the Department of Consumer and Corporate Affairs, facilitates the creation of new generation or value-added co-operatives, something that the Minister of Government Services (Mr. Pitura) takes great pride in seeing come to realization. My department will be proactive in the promotion and support of new generation co-operatives designed to add value to agriculture, to add value to resource-based production, creating new jobs and economic growth in rural communities.

Tourism has started off on a positive note for 1999. Travel from the United States increased year over year by 14 percent or 7,000 visitors in the first two months of this year.

In 1998 Manitoba experienced an increase of 6 percent in the number of U.S. direct entries to Manitoba and a 19 percent increase in the number of direct foreign entries. The most exciting and largest tourism event of 1999 will be the Pan American Games, scheduled from July 23 to August 8. I extend a personal invitation to all in attendance to partake in the games in some form. The games, as we know, are the largest ever sporting event to be hosted in Canada, and it will position Winnipeg and Manitoba on the international stage creating a new level of awareness for our capital city and our province.

In terms of direct expenditures and indirect spin-offs, the games themselves are expected to pump some $225 million into our provincial economy. The 100,000-plus visitors are predicted to spend $28.5 million and spin off another $14 million right here in the province of Manitoba. The Pan Am Games economic development initiative will focus on fostering long-term cultural and business relationships between Manitoba and the participating countries.

We will deliver a business hosting program for visiting delegations to increase the awareness of business development opportunities with Latin America. We will deliver a media tour program targeted to the 1,000 visiting media representatives to maximize media exposure to the province of Manitoba.

Mr. Sale: Mr. Chairperson, again, if the minister would indulge me just to clarify where–he is talking about an initiative in tourism, and I am unable to find it. Perhaps he could just point me to where he is referring to.

Mr. Tweed: It is part of the Pan Am Games economic development initiative.

Mr. Sale: That is what I am having trouble finding.

Mr. Tweed: Well, perhaps when we get further into detail, we can flush it out for the member.

Mr. Chairperson: The honourable minister, to go on with his remarks.

Mr. Tweed: Mr. Chairman, we will deliver and produce a series of Manitoba vignettes in partnership with the CBC and Tourism Winnipeg featuring Manitoba's unique products, places, and people. The Travel Idea Centre at The Forks will be renovated to showcase Manitoba as a great place to live, to work, and do business, and a great place to vacation.

A dynamic new marketing campaign with a strong focus on adventure, travel, and ecotourism will be launched to position Manitoba as a prime destination in the new millennium. The Travel Manitoba interactive Web site, which attracts over 100,000 hits per months, will continually be updated to ensure that potential travellers receive the latest in information.

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In order to become a prime tourism destination, Manitoba's tourism businesses and communities must continue to strive to deliver quality services with high standards. The objective of tourism development is to ensure that Manitoba capitalizes on viable product development opportunities that will generate new tourism revenues, lever private sector investment, and create long-term employment.

To support the industry and our communities, my department will offer the following programs: support for the tourism standards consortium through the Manitoba Tourism Education Council, which provides training and education within the tourism industry; product development grants, which will provide support of up to 30 percent of approved capital project costs in support of new tourism market development initiatives by individual operators, regional groups, or consortiums of tourism operators; product development grants of up to $10,000 for new marketing and development initiatives.

With the support of the Sustainable Development Committee of Cabinet and in partnership with Natural Resources, a trails co-ordinator will be hired to work with the Manitoba Recreational Trail Association, the TransCanada Trails, and all other stakeholders to develop policies and initiatives relative to trails development in Manitoba.

Support is being provided for the newly organized Manitoba Aboriginal Tourism Association dedicated to the development of aboriginal tourism products in Manitoba.

We are extremely proud of the entrepreneurial spirit in Manitoba, and we will continue to assist and support the growth of small business and tourism as an important segment of our economy.

Mr. Chairman, on this note, I would like to conclude my overview of the main initiatives and activities of the Industry, Trade and Tourism department and my introduction of the department's Estimates for '99-2000.

It certainly promises to be an exciting and productive year for the province of Manitoba. I look forward with all my colleagues, staff, and outside partners to another year of challenge and growth.

Once again, Mr. Chairman, I would like to thank my department for their continued support. In the time that I have served in the department, I have found them to be knowledgeable and helpful with the idea that good service provides good service to the people of Manitoba and will continue to enhance the growth and productivity of the province of Manitoba. With that I will conclude my remarks.

The Acting Chairperson (Mr. Helwer): We thank the minister for those comments. Does the official opposition critic, the honourable member for Crescentwood, have any opening comments?

Mr. Sale: I do, Mr. Chairperson, but I wonder in light of the fact that it is five minutes to five if we might just call it five o'clock and start this again tomorrow.

The Acting Chairperson (Mr. Helwer): Is it the will of the committee to call it five o'clock? [agreed]

The time being five o'clock, committee rise.