PRELIMI:NA.RY UNEDITED TRAJ.~ SCRIPT HOUSE OF ASS:C:HBLY FOR THE P:SRIOD : 10:00 a.m. - 1:00 p.m. ~·10NDAY, ~AAY 9, 1977

~~Y 9, 1977, Tape 2322, Page 1 -- apb The House met at 10:00 a.m. Mr. Speaker in the Chair. MR. SPEA...r.a:R: Order, please! PRESENTI~G PETITIONS MR. SP:::Ai\ER: The han. the member for Trinity - Bay de Verde. l1R. RONE: Mr. S;:ieak.er, I beg leave to present a petition on behalf of thirty-one residents of the community of Ne~., Harbour in the electoral district of Trinity - Bay de Verde. The~e residents, Sir, live in eighteen homes. I wish to read the prayer of ~~e petition which is reallv in letter form.

"'i'ie, the undersigned residents of New Harbour in the area known as Up-Around-The-Pond,have been wi~hout a supply of water for ~~e past ten to fifteen years. New homes have been b14)-lt i.n this area and t."'le fe~.v sutiace wells that were used have become polluted. We have tried for government assistance -to have artesian wells drilled for the ?ast four to five years. O~~er areas of New Harbour haYe had artesian wells drilled and are receiving good service. Our area has not had any at~ention as yet!' : 1There was a good supply of ~.;ater just recently installed to service the two fish ?lants in New Harbour.

We understand this supply will be opera~ed by the Depart~ent of Municipal Affairs and Housing . ~nd _ t~e water serv-ice division. If we ·,yere considered - as I feel- thev should - and permission was granted for the eighteen families to have ~.vo inch lines connected to this ~ate: supply, a distance o£ approx~~ately 1,700 feet, we all agree to 9ay the ::-ate for .,...ater as is being charged to the fish ?1-ant~ where a meter has been installed. This -would solve our prcbla~.

Could you arrange wi~~ the depart.~ent of government concerned to have permission for us to connect tp this new system and advise us of tbe: necessary action '.¥e should ta.k-:: to get this projec-t ,_

May 9, 1977, Tpae 2322, Page 2 -- apb MR. ROWE: started." Now, Sir, this is a very small petition from one

section of New Harbour and it does point out the desperation of people living in large but unincorporated communities. It also points out, Sir, the confusion that ~~e people experience with respect to what division, or what avenue, or what area of government to approach for the purpose of getting water services brought to ~~eir homes. Now, Mr.

Speaker, this is a case where we have eighteen families - and there are other groups and pockets in New Harbour, and in fact, in Green's Harbour and ot.."ler ·u.."llncorporated ccmmuni ties where the people have a water line going past their houses to, in this case, two fish plants - and reasonably they cannot understand why they could not connect up to t~ese water . lines and pay the same ·.va ter rates as the fish plants are paying to the Department of Municipal Affai~s and Housing when the Depart~ent of Municipal Affairs and Housing agreed to take over the r~nning of that particular water line.

But, Sir, areas or communities such as New Harbour with 188 homes, 188 households, and Green's Harbour with approximately the same number of households~should not have to depend upon the Water Services Division of the Depart~ent of Municipal Affairs and Housing for a 'Nater supply. I~ fact, t~at one comrnlli"lity alone, ~ew Harbour, I would suspect, if they had everz request granted in New Harbour would t~~e up the total ~Tote for the Water Serv·ices Division, certainly the ~NO communities concerned would. So Nhat I am getting at, Mr.

Speaker, is t..~e desperate need fer incor?oration of communities the size of New Harbour and Green's Harbour and other s~ilar communi~~es, ~ot only in Trir.ity - Bay de Verde, out ot."ler .s.i..'!lil.a.=

May 9, 1977, Tape 2322, Page 3 -- apb ~. ROWE: conmunities throughout the Province. Now I realize that the minister probably has good reasons for not incorporating on a massive scale, last vear or this year or the next year, and I would suggest that the minister - I hope that he '~uld reply to the petition because

~ay 9, 1977 Tape 2323 (MOrning) Mr.

Rowe: I think an explanation is required if for no other purposes. for informational ·purposes so that the people of New Harbour and other similar communities realize what the situation is with res~ect to try to get water services to their homes when they are in fact not incorporated but they belong to a relatively large cOlmllunity., whic.."l should be incorporated, and PK - ~~e only thing I could plead with the. minister and his administration to do, Sir, is to incorporate communities the size of New Harbour so as the peo~le then can quali.~ for the various grants and get government guaranteed J oans and this sort of a thing so that they can in fact get ~~ese water services brou~t to their homes.

There are ewe aspects of this, Mr.

Speaker, if I may just briefly close - ~o aspects of it; number one is, the economic situation of the Province and the ability of the Province to incorporate communities. ! think the peo~le should be given a clear explanation of that; md secondly, that peep le in ~n~corporated but large communities where waterlines to fish plants are passing by their door should be given soae explanation of the difficu~ies or the reasons why ,they cannot in fact connect up to this fresh water running by their homes, and they have to go out and use polluted wells to wash their clot~es in and then they have to take their trucks and go off ten, fifteen and ~Nenty miles to get unpolluted ':.later for drink~g purposes which they would have to boil anyway.

So it is a hard situation to believe in ~~is day and age, but , Sir, I do give ~~is s.malJ ~ut important petition- and by the way, t might add, Mr. Speaker, there have been a number o£ other petitions from ~ew Harbour and Greens Harbour signed by all residents asking for virtually the same thing, this is s~ply one little pocket of New Harbour ~~at are asking what a large petition asked for before. Sir, I ask that this petition be placed upon the table of the House and referred to the department to ~hich it relates and I give it ~y fullest support. 1

~y 9, 1977 Tape 2323 (Morning) PK - 2 ORAL QUESTIONS MR. SPEAKER: The hen. Leader of the Opposition. MR.. ROBERTS : Speaker, a question for the Premier arising out of a very happy conclusion of his visit to Grand Falls. I did not hear the Premeir's statement so I ~ill be pardo~d, I ~ow, if I quote it incorrectly. wnat I understood him to have told the people in Grand Falls, the Hospital Board, was that: their hospital or the expansion of the hospital •..;ould be given the first priority in the government's hospital ?rogramme ~hen it resumes. If that is not so, perhaps ~~e Premier could correct it.

My question is this, Mr. Speaker, where does that leave the Burin Peninsula Hospital and the Claranville Hospital,both of which are large regional struc~ures? ~. SPEAKER: The hen. the Premier. PREMIER MOORES: Mr. Speaker, ~hat I said at Grand Falls,~hich I ~ill gladly say now, ~hich I think I probably said here the other day,was that the Depar~ent of Health will be proposing a 11 -- those health needs for ~~e Province, not just for acute bed hospitals, but also for conval~scent hospitals ~d clinics.

This ~ill be brought in based on ~Jo ~~ings; first of all, the health needs for the various regions, and how they are incorporated in the general I provincial plan; and also the cost of those, and ~hi~, ones are physically able to commence first. Regarding the people in Grand Falls,they ~ere advised that they were on the priority list. Certainly I do not ~ant to commence the construction beca~se thev are the only ones with the plans fL~ished. However there is no cammionent at this time until the government has the funds to allow us to go ahead. XB.. ROBERTS: A supplementary , Mr. S!;!eaker. ~.

SPEA...~: A supplementary. MR. ROBERTS: I thank the P!'emier. 1N'here does that leave the hospitals on che Burin Peninsula and in Clarenville? And then I mi~nt as vell ask a fur~her supplementarJ while I am on my feet! ~here in turn does that leave the hvspitals at Placentia, Channel-Port aux Basques and 3onavista, all of ~hich have been told

~ay 9, 19i7 Tape 23.23 (Morning) PK - J Mr. Roberts: by ·various ministers, and by the Premier himself perhaps ,from time to time that they were the first priorir::y~ MR. SPEAKER: 'the hon. the Premier. PREMIER MOORES: Mr. Speaker, as I said this plan when it ~ll be announced this year will involve all ~~ese plus some of the smaller hospitals that are presently not operating at capacity. It Will involve health clinics,-

:ray 9,1977 Tape 2324 (Yotning) AR-1 P~IER ~OORES : wh!re t~ey should be anc what tY?e they should be so that everybody in the Province will ~now exactly when and how their hospitals will be constructed. MR. ROBERTS: A further supplementary, Sir. MR. SPEAKER: A supplementary. MR.. ROBERTS : I thank the Premier,and just so that the Eouse understands it correctly, is the Premier really saying this,that the government are preparing a plan for the development of hospital construction- you know,the big capital projects in the next little while,and will that be announced shor'tly ?

And if -~hat is .the case Sir, are ~ie then to assUme that at this s'tage no priori ties have been set? Because the Premier will not indicate or ~as no't indicated- whether he will or will not is another s'tory - · has no't L~dicated jus't what the government's ?riorities are in the capital construction field. MR. SPV..KER : !'1U'XtER ~OORES : The hon. Premier. ~r. Speaker, it is far from that, !he health c;uestion in this Province is very much a priority and those hospitals that the Leader of the Opposition mentions are all priorities.

The fact is in the last five years we haye spent so~thing over S118 million,! think it is,in capital constr~ction on hospitals. The five hospitals mentioned ~y the Leader of the Opposition ~ill cos~ approximately $70 million,so hopefully we can bring it on in a ~re rational manner so that it can be spread over a five,six or seven year period, ~r. Speaker, and this is what will be done at that time. ~.ROBERTS: ~. 51'! • .\..tC'ER : Double talk, double ~alk. Ron. member for LaPoile follow-ed oy the ~on. gentleman for Trinity -Bay de Verde. MR. ~TEARY: ~-ir.

Speaker, my cruestion is for the hen. the Premier. \olill the hon. the ?remer indicate to the House -:hat because fifty per cent of those who are uneM?loyed,looki~g for jobs in the Province at the present cime~are in the age grouu

~!ay 9,1977 Tape 2324 (Horning) AH-2 ~. ~TEARY: beeween seventeen and twenty-five and ~he obstruction in the way of their get~ing permanent jobs is the fact that they do not ha~e any experience when they go to an employer to look for a job, would the Premier indicate what action, if any,the govermnent have taken to ove.rcome this problem so that these '· young people can get the necessary experience :o get permanent jobs? The hon. Premier. PREMIER MOOP.ES : I think what the hon. member for LaPoile says is absolutely tr.Je, ~r..

Soeaker, and it is a ver~r real problem. :.;e have talked to t~e 'federal people about it and equally we have talked to employers about it. I think one of the problems is ,articularly in the field o:f vocational training, the young men or women or •Nhatever go in and come out and,as you say,the;r have no - and as the memher says they have no ex~erience.

I think probably one of the ~ays around that is if we could come un with a government ~rogramrne to do some kind of a-.sandwich course.,:.There the government ?a~d so much during the training period until the people became adapted in a job and so on, not ~~like the old a?prenticeship systam ~ut certainly geared towards that: particular problem ~-1hich t~e hon. member mentions, •Jhich is a very ge~Tere one. ~!R. ~lE.A ... ~Y : A supplementary question, ~r.

Speaker. would the hon the Premier indicate to the Rouse if action will be taken along the lines t~at t~e ?~emier just indicated, in view of t~e fact-that ~~ousands will be coming out of c~e College of !=ades and University, the Vocational schools and high schools in ~he ne~ month or so,and ~ould the P~emier indicate - I will make it a double-bar~elled, Sir, so that I ~ill not have to ask another SU'?plementary -if ::~e Premier has di=ected his ~.inister of ~anpower :o ap~oint an individual or a g~oup ·~chin the depart~ent to •..1ork r...'"'ith Canada ~~a.nnower to get :nore on the job ::raining . ? ?rogrammes go~~g.

~ay 9,1977 Tape 2324 (Morning) AU-3 MR • SPEAKER : The hon. Premier. R..~!ER MOORES : I •Nill answer t~e second part of the question first, ~r. Spe~~er.

I certainly ~ll do it; I have not spoken to~the hon. minister about it yet but I understand the department is working on it,plus the fact that we have had formal meetings with the federal government on it, not just for the i~diate,whi~~ is also a concern,but to look at the curriculum of the vocational and te~~ieal schools to see if ~e cannot change it to get more practical imput into some of the curriculum so that ~hen they do graduate they are already part of a won forc ·e rather than just a graduating student lookL~g for his first job. ~. ~n::.ARY : ~- Speaker, the answer was a fairly good answer.

I •Nish to debate ii during the late sh~ on Thrusday~ just: to be helpful mere than he dis_tTUct ·i ve. ~- SPEAKER: Ron member for Trinity-Bay "de ilerde. ~!R. ROWE: In view of the enthusiastic support given by the Minister of Hunicipal Affairs and Housing after presenting the petition this morning,~ould the minister care to Lidicate wat the .deparn:~ent' s plans are with respect to the amalgall'..at:ion of the multiplicity of ~ater committees within unincorporated communities? ~- SPE.-Ll{ER: The hon minister. ~. D~~l: Yes, Mr. Speaker. First of all 1 I might apologize.

I thought there might be some~ne on ~~e opposition side that would sup?Ort your petition and therefore I could get up after that. But with respect to that, in the depa~ent •..;e are atte~ting ~o get a more formalized policy for a starter on water committees within communities and possibly have that before the end of t~is session. ~ ·fR . RO'WE : A su~~lemer.tary, ~r . S~eaker. A su~p lementary.

May 9,1977 !a-pe Z3Z4 (Morning) AH-4 Mlt· ROWE: !he minister of course is aware of the fact that: peo'Ple are seiJ.l going down. to the \vater services diVisions to get a~lications for the setting up of water service collmlittees, is there going to be an embargo or halt put to thae in view of the fact that ~ometh~g is going to come up befo·re the end of the session?

May :-' 1977 !-m. ~!.AKER: ~. DI~T: Tape No. 2325 !he hon. Minister of ~unicipal Affairs. ~r. Speaker, it is very difficult ~o say now what is going to happen, but the fact of the matter is we got a fair amount, if and when we get our estimates through the House,for the Water Services Division with respect to unincorporated communities and we are attempting to get a oolicy with respect to how much ?er family we will supply as a government and so on. MR. ROBERTS: But there will not be a change in the basic concept of wa~er committees as such. MR. DINN: ~o, that is right.

Outside of the fact that NM- 1 we are hoping that one water committee would represent a community rather chan have four or five or six within a community. ~. ROWE: A further SUl'Plementary, Mr. Speaker. ~. SP'E:AKE!t: A supplementary. "!R.

ROWE: Could the minister indicate, Sir, in view of the fact that the !udget indicated that the local councils are going to be expected to take a greater responsibility for financing t~eir own affairs, would the minister indicate whet~er communit±es the size of New Barbour and Greens Barbour, with,you know, approximately 200 households will be incorporated within the near fu~~re or whether the ~resent freeze on incorporation will continue for some period of timer ~. S?E.AKER: The hon. Minister of Mu1:1icipal Affairs. ~. D!NN: Mr.

Speaker, we have auite a number of requests for incorporation in the department right now and we are a~tem~ting to look at all of t~se ·Jith the vie~ to incorpo%ating different communities, We like to see s~rong suppor~ from the people in the communi:y indicating that they want~for ~~amule~a community council or a town counc!l or ~hat have you and we have gone througn the list now of the,say,thirty, there are about ten that have ~hat we consider to be the requirements for incorporation.

There are some that,for example,set~ing up a c~unicy council you ~ave to have in that .:.onmuni=:1 a ma.jo-.:ity of the peo'Ole ant to a.

May 9, 1977 !ape No. 2325 NM- 2 ~. DINN: meeting and then a ~jority, ·sixty per cent plus one,voting for incorporation. So we have not got ~;at in a lot of cases and until we get that of eourse we will not incorporate. MR. ROWE: A further supplementary. MR. SPEAKER: A further supplementary, the original questioner. MR. ROWE: Could the minister be a little more specific, Sir? He has just given the aouse the information that we already know, but he did say that,you know~a~praximately ten in fact are qualified to be inc.orporated. !'hey have me.t all the requ:t.rements.

Could the minister give some specific indication of the time when he thinks he ~-11 be able to hzve these communities inco~ated, you kncw,the month or the week possibly, or the date of t.he month. AI.~ RON. !1EMBER: The year. ~~. ROWE: Even the -well a year,I mean,that is obviously a breakthrough. ~. DINN: Mr. Speaker, with re~ect to those ten,I would hope before Novenb.er so that we could have elections when the elections are called this ye.ar. ~. ROBERTS: Mr. Speaker. ~. SPEAKER: The hon. Laader of the ~position. ~. ROBERTS: ~.

Speaker, a question for the ~nister of Finance, Sir, in his capacity as the- I am not sure:in his capacity as the Chairman of the Linerboar:i L.i:nited,or as chief disposal agent, ~hichever is the correc~ one - can the minister tell ~~, ~r. Speaker, whether he has met ~th the union or the representatives of the union,which in turn represents the em~loyees at the mill, and whether the question of the severance pay has been se~tled.

I understand that there are q~estions, perha~s there are even differences of o~inion, that the plan announced by the minis~er here in the House last week does ~ot in the opinion of ~any meet the ~eed as well as it could. So could the minister ?erha~s tell us • .,here -;.;e are on that now and if it !.~ ne-e settled iol'bat

May 9, 1977 '!a-pe Mo. 2325 MR. ROBERTS : steps are being taken to resolve it? MR. ~EAKER: The hon. Minister of Finance. MR. DOODY: Mr. Speaker, I have been notified by the ~ster of Manpower and Industrial Relations that the union has asked for a meeting and •,o1e have agreed to meet with them tcmor~ow morning at nine o'clock in your office and a1: ;hat eime we will discuss the problems, whatever they might be,and hopefully resolve them. MR. ROBERTS: A further supplementary. ~.·SPEAKER: A further supplenentary. NM- 3 ~. ROBERTS: I thank the minister, ~r. Speaker.

Could the minister tell us whether the announcement he made here in the Rouse last week.ahout the severance pay,which I understood hil:ll to say at· that t:ime was based on some contingency planning which had been done some little while beiore the government decided tn close the mill at Ste1=1henville, can the :::linister tell us whether that represents the adminis.ttation' s final position ar ±s that subje~t - I do not want to use the word negotiation because it is not a normal union/management sieuatio~but is that subject to change and improvement as a result of further consultations? ~.

SPEAKER: '!he hon. ~inister of Finance. ~. DOODY: As I ±ndicated,the paper that we circulated which outlined the tarmination policy of the company was indeed the· termination policy of the COmt'any and ! also

May 9, 1977, Tape 2326, Page 1 -- apb MR. DOODY: inidcated at that t~~e that if there were anomalies, or if there were certain discrepancies there which had not been foreseen, we would be willing to discuss th~~. Presumably that is what we will be doing tomorrow morning. But the company policy is as I o,utlined it at that time. Certainly nothing is iron cast or concrete. MR. SPEA1<ER : A further supplementary. MR. ROBERTS : I hope nothL~g is ironclad, including the decision to close the mill. Mr. Speaker, a furt...~er supplementary for the minister.

Nas there any consultation with the union or •,.;i th mill management before ~~e severance policy was worked out, ~~e policy as was announced: Of course, the minister says it was the company's policy and that is fine, but in this case, I thi~~, the policy decision, ~~e decision-making ?art of ~~e process was on the government side of Labrador Linerboard as opposed to the operating of the Stephenville side. Those decisions, i~ other words, were taken here in St. John's by the minister and by his colleagues in the Cabinet and so forth.

Can the minister tell us whether there was any consultation, first of all with the union and secondly with the management at Stephenville, Mr. Sweeney and the men wi~~ him, as to the form this ?Olicy should take,or the details,once it was decided which form it should take? MR. SP E.A.T(ER : The hon. ~~e Minister of Finance. MR. DOODY: The government certainl? discussed it with the management of the mill,anc the detail as worked cut. As to ~~e discussion at ~~e mill bet·,.;een management and _staff, I cannot ~1eri£y that one way or the other, I honestly cannot say, Sir. MR. ROBERTS: (First

part inaudi~le) manag~~ent out ~~ere (inaudible) . MR. DOODY: I wou . .l.d accept t.'la t as nor:nal

May 9, 1977, Tape 2326, Page 2 -- apb ~~. DOODY: business procedure. I did not think it necessary to - MR. SPEAXER: The hon. ~~e ma~ber for LaPoile followed by the hon. the member for Trinity - Bay de Verde. MR. NEARY: Mr. Speaker, would the Premier ir~icate to the House whe~~er the weather is warm enough yet for the two by-elections, one in St. John's West and one in Ferryland? MR. SPEA...'!{ER: The hon. the Premier. PREMIER MOORES : the time, Mr. Speaker. MR • NEARY : Speaker. MR. SPEAKER: MR. NEARY: The wea~~er is L~proving all A supplementary question, Mr. A supplementary. Mr. Speaker, will the.

Premier indicate to the House whet..:,er the by-elections '"'ill be called before-my hon. friend the member for Twillingate (Mr. Smallwood) resigns from his seat, or will the Premier wait until my hon. friend resigns and then call the ~~ree by-elections at the same tL~e? MR. SPEAKER: The hen. the Premier. PREMIER MOORES: Mr. Speaker~ if ~~at was a promise or a ~~reat I am not sure, but either way it will have no bearing on the two by-electi .ons. Certainly the hon. member's mentionL,g the member for Twillingate resigning, I think, Mr. Speaker, a lot of us have heard t..~at before.

Running, resigning, leading, all t..~ese things that he has done at different times, ~.;e are still waiting, ~1r. Speaker. MR. SPEA...>a:R: A supplementary. MR. NEARY: I know my hen. friend has resigned more ti..."nes that ~!ohammed .:;li but I believe he really means it this time. . Mr. Speaker, would the Premier indicate if the stadiuw will be started on the Sout..~ern Shore befo=e ~he by-election is called?

May 9, 1977, Tape 2326, Page 3 -- apb PREMIER MOORES: The what? MR. NEA-~Y: The stadium that was promised in the last two by-elections, if that will be started before the by election is called? MR. SPEA-~R: The han. ~~e Premier. PRE...'!IER MOORES: I have no idea, Hr. Speaker, at this present tL~e, but I would seriously doubt it. MR. SPEAKER: The han. the member for Trinity - Bay de Verde. MR. ROWE: Mr.

Speaker, in view of the confusion caused by certain educators recently, with respect to the undersupply or oversupply of teachers, I wonder if ~~e Minister of Education would enlighten ~~e House as to whether· or not we have present~y at ~~is point. in time an undersupply or an oversupply of teachers, and what is anticipated in ~~e months and years ahead wi~~ respect to under and oversupply of teachers? MR. SPEAKER: Education. HR. HOUSE: The hon. ~~e Minister of Mr. Speaker, we have been gettL,g reports from the university that in two or three years t..."lere could be a shortage of teachers·.

It stated 'maybe' , they were not definite about it. We ha~.re been doing research at the Depa~~ent of Education, in the Statistics Di ~.risicn, that shows that we are going to continue to have an oversupply of teachers. I believe there were something like 565, last year, teachers draw~ng unemployment insurance, they could not get jobs. M..~. ROBERTS : ·reachers •,.;ho had been teaching and who subsequently were laid of£? MR. HOUSE: Right. Or quit - for some oarticular reason and then qualified tor unemployment insurance. ~1R. NEARY: We should shut the unive.=sity down for five vears.

May 9, 1977, Tape 2326, Page 4 -- apb XR. HOUSE: There were a number of young teachers who are trained - MR. ROBERTS: Give is some thought 'Frank',you could save $40 millions a year right there. MR.. HOUSE: - we do not have the statistics on that but we k.'low t.~ere is a sizable number trained, working in - MR. ROBERTS: Tempting 1 is it not? MR. HOUSE: -other jobs, such as in the Avalon Mall and well,

May 9, 1977 Tape 2327 (Morning) PK - 1 Mr. House: all around the Province. MR. ROWE: Some of them are in politic~. MR. HOUSE: And same of them are in politics, of course. So it does not seem to us from the research that we have done that we will have any problem with teacher shortage. And nationally and internationally, I read an

article a few days ago where the United States will have by 1981 four million qualified teachers to fill _t;f~o million jobs·. MR. ROWE: A_supplementarv, Mr. Speaker. MR.. SPEAKER: A supplementary. MR. ROWE: I tend to agree with the min~ster's analysis of the situation, Mr. Speaker, and therefore I wish to ask him the foll~ing question. In view of t..~e fa.c.t that there is obviously an oversupply of teachers at the present time- I would think that we are going to have it for a number of years - when does the minister int2nd to implement a third phase of the student-teacher !'atio, Hr.

Speaker? !ofR • SP"E.c\..KER : ~. HOUSE: The han. Minister of Education. Mr. Speaker, it has been deferred for this current year. The third phase consi~ts of ewo parts; one was the one to twenty-five ratio,and the· other •.;as anotber 30 per cent :nore specialist teachers. I think that may be a little further in the future. The one to twenty-five is just about in effect now. As I said the other day in t...'le House of l.ssembly, in this House ra~~er>that it would give us another one hundred teachers in the P'!'ovi.'"lce if we had the one to t".Nenty-five ratio, which represents an average of three per board.

And most of these would go to the la.~er boards. ~. ROw"E: A supplem~~tarJ, ~r. Speaker. AN HCN. ~ER: ~. S:PE.A..T<ER: MR. ROWE: A sup~lementary, Mr. Speaker. The original questioner has a supplementary. Now I think I might have forgotten the question or the supplementary, but -~1\f RON. ~ER: Did it have to do •;ith cost?

May 9, .1.977 Tape 2327 (Morning) PK - 2 ~. ROWE; Yes,cost. Right. Mr. Speaker, would the minister indicate whether or not finances are the reason why we do not have implementation of the third phase of the student-teacher ratio? MR. SPEAKER: The hon. !tinis ter of Educa.tion. MR. HOUSE: Mr. Speaker, perhaps indirectly.! think perhafs it is desirable, we may think it may be desirable.

I do not think,and the department does not think that the implementation of the one to t-.renty-five ratio would have a profound effect on the quality of education, but there are other priorities in education that we have to look at. You know, we have to try to improve the special educat·ion programmes, and it cannot all be· done at one time. So while it may be directly related to cost it is not for the exact cost of these numbers. We have to try to i:nplement other. programmes and that is where •N'e want to direct our effort. MR. ROWE: A further supplementary, ~r. Speaker. A further supplementary..

A final supplementary. MR. ROw""E: w"hil.st I .agree with the minister ~.nth ·::-espect to the probably oversupply of taa~~ers at the present ti:ne, ~r. Speaker, I was ·,..ondering if the cutbacks on scholarships to the Uni•;ersi:y whether it is an anticipated possibility of a shortage of teachers caused by that, because students may in fact go to other universities indicated by a number of educators - go to other universities in Canada and probably not return to the Province and this might be one of the reasons suggested for a possible undersup~ly of teachers in the years ahead? ~. SP!A ..

T<ER: The hon. ~tinister of Education. :-ffi.. HOUSE: Xr. Speaker, I do not think it will have any affect on the teachers supply, or the students attending t~e university. ~. RO:SERTS: ~r. Speaker? - ~•e han. Leader of the Opposition. ~. ROBU7S: ~r. Speaker, a question :or the :!inis ter of ?isheries, and I ,.;ould like to come back co . ' ... . .... ~ "' . . ~ lnse-au-Loup wnere L asKea n~

~fay 9, 1977 Tape 232i (Morning) PK - 3 Mr. Roberts: sometime ago a question about the de•1elopmen t of herring precessing facilities at L'anse-au-Loup. And he was kind. enougb subsequently to have one of his officials call me and give me some information and the undertaking then was that the minister would make a further statement. The minister has noe yet, Sir, and I i.;onder if he could tell the House precisely what is going to be done this year.

It is his decision.or the government's decision,as to whether there are going to be an_Y; , and. ~f __ so _?ow many herring operations in the Southern Labrador part of my district.

I have suggested to the minister that there ought to be t.""lree on the experimental basis this year, one at L'anse-au-Loup, one at Red Bay, and one at L'anse-au-Clair . !here were ~~o operating last year,as the minist.et' k.nows,at L 'anse-au-clair in the South and Red Bay .to the ~orth, and there were some problems which I think would be moved / towards resolution by ha.,rin~ ~t"'~ at L' anse-au-Louo. r:nnl,:l the minister tell us~please.,wher:her there is going to be an operation at L' anse-au-Loup t."lis year?

And if so, can he assure us that :.~ere will be no effect upon the operations at L'anse-au-clair and Red Bay i:1 that they will continue to operate? There is a question of product supply and chat can only be resolved by putting it to the test. My feeling, Sir, as I have indicated to the rninister~is that we ought to have all three operations this year,including the one ae L'anse-au-Loup. Could the mL~ister tell us what he is going to do, Sir? ~1R. SP"E.A ... ra:R: The han. ~nister of Fishe!'ies. ~. W. CARTER: Mr.

Speaker, I apologize to the hon. member, I did p~omise to make a public statement, release a statement in this ~ouse in that regard, but he ~ill have to maybe bear •Nith me for one more day and ! promise :hat I will have it ready tomor~ow morning for ~im.

M~y 9, 1977 Tape N'o. 2328 MR. SPEAKER: The hen. member for LaPoil.a. ~. ~~~Y: ~r. Speaker, my question is for the Minister of Trans~ortation. Spring has sprung and the grass is ris, would the minister tell us nOTN what is going to be done •N"ith t~e Trans-Canada Highway? Has there been an agreement yet with the Government of Canada to re~air, widen, repave and upgrade the Trans-Canada Highway? NM- 1 ~. SPE.A..."a:R: The hon. ~inister of Trans~ortation and Communications. ~. ~ORGAN: ~..r.

S-peaker, the indication was r ec ei ved, in ~ ar: t on F~day past,that the federal government's Cabinet decision will be relayed to this government, to this administration in a matter of days, so ••e will be hearing hopefully this week with regards to the agreement. MR. ~ARY: A su~lementary question, Mr. Speaker. ~. SP~: A s.upplementary. ~. ~~Y: Would the minister indicate if tenders are ready to be called for the bad sections of the Trans-Canada P~ghway because we are now getting into the construction season and it is rather urgent that everything be ready to roll ii Ottawa .2ives a favourable reply, HR.

S1'~.AK!R: The hon. Minister of Transportation and Communications. ~. ~ORGk'l: Mr.

Speaker, i~ we get the green light•and hopefully it w4.11 be a green light, we have received no indication other.Jise to date from Ottawa- if we get the green light we can commence work immediately and we plan to zero in, and w~en I say we, the depar~ent, to zero in on the wors~ sections of the Trans~ Canada. !wo areas we are concerned about; one is in the Wester~ par~ of the Province, L~ :he Crabbes Ri7er -Georges Lake area,and the other is in the area just west of the national park ~oundary towards Gander, in the Gambo - Glover~own area.

So these are the ~o worst sections,but of course ~e can go on with other sections that are in real bad condition as well in

}f..a,y 9' 1977 Tape ~o. 2328 NM - 2 ~. MORG1L~: the Ra.ntem area out there and sections between - oh there is a whole list of sections we have listed off in priorities with reg~ds to the worst sections. So if we get the green light this week, Mr. Speaker, we can call tenders almost ~ediately, Within a ~tter of days, we can arrange to call tenders and commence work on the worst sections. MR. ROBER'l"S: A sup~lementary to tr.e Minister of Trans1)ortation and Cammuniciations. ~- SPEAKER: A sup~lem.ent.ary. ~. ROBERTS: The millister ta.l!cs about this green light and t~is is very encouraging.

C~uld he tell us whether the light will be bright green o-r sort of a dim green? And what I am getting at is, is t~is going to be fifty - fifty money from Ottawa,or seventy-five - twenty-f~ve,or •.rl.ll we reach the Valhalla of ninety - ten, the ninety obviously be~g the Ottawa share of itt And growin~ out of that, Sir, could the minister tell us how much in his official understanding is involved in this ?raj ect? Jl!St what are we talking of?

Hopes are being raised., and I ho1)e validly, because the road is in inc:redibly bad shape and sometb.ing has got to be done and the government have defer=ed all action and are awaiting word from Ottawa and the minister tells us word is coming. Well what kind of word is it going to be? Are we taL~ing fifty - fifty money,as ! heard, or are we talking seventy-five - ~enty-five or even ninety - ten,which would be rJ ho1'e? ~. S'P~ ..... ~: The hen. ~nister of Trans\)ortation and Communications. ~. ~ORGAN: ~r. Speaker, we are hoping for a very bright green light.

The p~o1'osal put fo~Nard by the four Atlantic Provinces back in ~rch 1966, that proposal was calling for a uine~y - ten participation, f ede~ally - provinci..a.lly and ~.;e have received no indication from Ot"tawa, no official indication of any ki..""td:-:rlth regards to !"..Ot acceptin2 that proposal. Of course if they come less t~an ninety - ten ~e could not l~ok at

May 9, 1977 'ra'Pe No. 2328 NM- 3 MR. MORGAN! too much ?ar:icipation ourselves~simply because we cannot afford it. And I am sure this view is shared by my counterparts in the Provinces of Nova Scotia, P.E.I., and N~., B't'llswick. At our meetings together as ministers we have told ~.

La.ng, the federal minister,in no uncertain terms we wanted ninety - ten and we could not see how we could not ?articipate much below that because if we were offered an· agreement along the lines of less than that fr0121 Ottawa t:hat the provinces simply cannot afford to put their allocation in this year and it woul.d mean very little ·.rork being carried out. So we are lockin~ forward to a br_g!U: grf!t!n light from Ottawa:, a ninety - ten basis. ~. RO'BERTS: ~. SP"!.l\KER: Mr. Speaker, a further sup-plementary. A further supplementary, the bon.

Leader of the Opposition,and the hen. member for LaPoile has a suppl~entary I believe. MR. ROBERTS: I think we are getting a little closer to it, but can the minister-and I :hank him :or the inf~tion. ! assume he gave it as minister and not in any personal or unofficial se~se. I ~as glad to see he met his fellow :inisters as minister, I do not know how else they could have met, Sir - but ~. Spe~~er, my question is this; have the Province taken the ?OSition that unless it is ninety - ten it is simply too rich for our blood and ~e ~ot afford to go into it? Or are we

May 9, 1977 Tape :2329 (Horning) PK - 1 Mr. Rober~s: negotiating- you know~ there is~at monster in , __ Intergovernmental Affairs, and I. do not-mean the minister, the minister is no monster at all, Sir. I would not dream of calling the minister a monster, but,you know,that monstrous secretariat dawn there-are they talking 75-25 o~ even 50-SG money~or is it 90-10 or nothi~? MR. SPEAKER: !he hen. Minister of Transpor~ation and Communications. MR. MORGAN: Well, Mr. Speaker, I cannot disclose any possible or potential negotiations that might take place.

And we have had no discussions - rMR.- ROBERTS: Nor your officials? MR. MORGAN: - wi.th regards t.o the fi:landal participation based on e..~e fact that we have not received any indication from Ottawa that they will not accept the 90-10 proposal. MR. SPEAKER: 'The hon. member for La.Poile. MR. NEARY: Mr. Speaker, would the minister - a sup-plementary then - would the minister tzl1 the Rouse if the Government of Canada comes through with the 90-10 deal, as the minister ho9es they will, in tb.e priority areas along the Trans-canada Highway, will they be just upgraded-, reconst-ructed and repaved?

Or will there be widening of the Trans-Canada High~.ray in those areas to make it a four lane highway in certain sections of the highway from here to Por~ aux Basques? ~. SPEAKER: The hon. Minister of Transportation and Communications. MR. MORG&'t: Well, Mr.

Speaker, the amount of funds :hat we are talking about in the proposal put for.1ard by t.he four ?!'evinces in the Atlantic Region, ~~e amount of funds itself would inciicatei ii we are talking about a fairly substantial reconst~ction and upgradL~g job on ~,e Trans-eanada, the proportion of ~ewfoundland's involvemen~ in the submission made to Ottawa is S250 million, approximately a quar~er of a billion dollars, around that figure, MR. NEARY: Over what period of time?

May 9, 1977 Tape 2329 (Morning) PK- 2 MR. MORGAN: We are talking; for example, - MR. NE..\R.Yi Ove~ what period of time? MR. MORGAN: four laning some - initially we talked about a ten year programme because looking at 525 million to $30 million per year allocated for this particular work , this work project en the Trans-Canada Highway,_ we are tal~ing about now ~our loiaing ;iOtne :Sections in that proposal and primarily a widening out of the Trans-canada all the way from St. John's t:o Port au..oc Basques.

We are not just talking about upgrading t:he bad sec.ti.ons, we. are talking about ~ridening out and recapping and four Laning some sections. MR. NEARY: Mr. Speaker. MR.. SPEAKER: The hou. :nember for Port au Port. MR. J. HODDER: Mr. Speaker, a question for the hen. the Minister of Fisheries. I understand that negotiations are going on with t..~e Federal Government aver a lobster insurance plan. I •.;onder if t..~e minister could tell us at what stage these negotiations are at present? !1R. SPEAKER: The hen. Minister of Fisheries. MR. W. CARTER: Mr.

Speaker, about a year and a half ago the Feceral Government indicated that they were going to introduce a lobster rot insurance plan. They requested certain participations on the p-art of t!'le Provine~~ to •,.;hich •.;re agree~_ and later for some reason or other they decided to defer the implementation of the ?lan. But certainly my understanding of it, i.t is still under consideration, certainly the we ~ave i~dicated our intention to go_ along ~ith it, anci the moment they are ready to ~ove we will certainly be there with them. OimERS OF TRE DAY ~. SPEAKER: ~1otion 6. The hen. Minister of Finance.

SOME H.ON • ~ffiERS : Hear, hear!

May 9, 1977 !ape 2329 ('Horning) PK - 3 MR. DOODY: I rather suspect that the desk thumping was more in sympathy than in congratulations, Mr. Spe~~er. The motion before the Eouse, Sir, we are to move:

Whereas Labrador Linerboard Limited, a Crown Company, has operated the Linerboard Mill at Stephenville since 1973 pursuant to The Stephenville Linerboard Mill (Agree~ent) Act, 1972; And

Whereas Labrador Limited has suffered serious financial losses in each year of operation, which loss in 1976-1977 ~ounted to torty Millicn Nine Hundred Thousand Dollars ($40,900,000.00); And

Whereas a review of the marketi.."'lg and financial outlook of the Company made by the Province and an Advisory Board of ~xperier.ced businessmen has concluded that fur-:her substantial fin·ancial iosses would be incurred in future years of operation; And

Whereas Government has decided to phase out ~,e operations of the Linerboard ~ill at Stephenv~lle; Be :t Therefore Resolved that this House debate the closing of the Linerboard ~ill so that government ~ay have the opinions and ~,e assistance of hon. members in its efforts to assist all persons involved in the operations of the Linerboard ~ill.

May 9' 197"7 Tape No. 2330 EC - 1 HR. DOODY: Mr. Speaker, it is my duty at this time to present to the han. House the series of events which led up to this governm~~t's difficult but necessary announcement in the recent budget of a few days ago of the proposed shut-down of the Labrador Linerboard operations in Stephenville. It is not a very pleasant duty, Sir, and it is not one that I welcome. It is probably the most difficult task that I have been as~igned since accepting office. here in this administration.

I propose, Sir, to give a brief outline of the history of this unfortunate and 111-star~ed mill, how it came into being, and the events leading up to the present time. This is not to say I mean to place -or al:tempt to place blame, or question motives, or use the divine gift of hindsight. Such .a course of action, Sir, would, in my opinion, not help the situation as it applies to the Bay St. George area and to the Goose Bay - Happy Valley area.

Tne digging up of the :·!elville - Doyle, etc., details ':.~'ill not help one little bit, e.."'!:cept perhaps· illustrate once again ~ur unfortunate, tragic histo~y of trying to ?lace an industrial base in our economy. The John Doyle stor:' is a ~attar of record. So let it be for me, for purpose of this debate at least. The question facing this House, Sir, is the frightening fact :=:.at this Province is no~-1 approximately $300 million committed to the mill, and would be expected to provide at least $55 ~illion for the caning year - to keep it going.

I hope to demonstrate, Sir, that even this fig'..lre of $54.8 million is' a verJ sensi t::ive- and very optimistic figure. I will hope to demonstrate this in my fev remarks, and will show that the mill, historically, has been, unfortunately, far out i~ its budgeti~ forecasts. Witness lastyear 1 s budget of $25 ~llion. Sir, ~mich ended at close to $40 million. These are staggering sums of money, Sir, and no responsible admi~istration could conceivably continue to commit t:le taxpayers of this Pr-ovince to such sums. I realize for many of the han. members of the House, the histor;r of this Ulill is • . .;ell known.

Sut I feel. that an understand- ing of the sta?s involved in the establishment of Labrador Linerboard

May 9, 1977 Tape No. 2330 EC - 2 ~1R. DOODY: L~ited is essential before the ~ecessity of the decision taken by this government can be fully understood. The first step, Sir, in what was to result in the establishment of a Linerboard mill at Stephenville took place in 1967, when, as a result of discussions be~~een Melville Pulp and Paper Limited and Melville Forest Products Limited, 3Ubsidaries of Canadian Javelin, and the provincial government of the ~ime. le~is- lation was passed authorizing the government to enter into certain agrea1ents with these. companies.

As a result of this legislation, the government entered into an agreement, in 1969, with Canadian Javelin and three of its subsidaries, under which the government •..;as to guarantee the debt associ.a ted wit."l the consttuction of a Linerboard mili in Stephenville and a woo~-cutting oper~tion in Goose Bay, Labrador, in return for a first mortgage on the assets of the :rill.

Construction of the project commenced in late 1969 •• ~a result of cost overruns and construction delays, the total estimated construction cos·t3 of the p-roject inc:.reased from the original es til':l.<l te of $53 million to $91 Million by March of '1971, a.t which time the P't"'vince' s liability was $ 75.·.5 million. The costs of the project continued to escalate, and by May,. 1971, a study commissioned by government· indicated that the to tal overall costs of the project w~uld be approximately $123 million, up from the original $53 million.

In January of 1972, the newly elected adcinistraticn was confronted with clear evidence that the project ~as in serious difficul:y. roe forecasted annual wood supply of 469,000 cords fr~ Goose 3ay i.Yas substantially less than the maxii:lum ac:hievaole •;;cod supply due to liz:lited docking facili:ies, a short shipping season, and some errors i::1 the judgement of the amount of harvestable t.;ood available.

May 9,1977 2331 n1orning) AH-1 MR. DOODY: !here was evidence that the forestry operation was in poor shape and it w~ also clear that additional funds would have to be provided if the project was to be completed. Government decided at that time that every aspect of the project would have to be studied and re-evaluated and detailed and a further study then by consulting engineers was commissioned for this purpose.

Steps were also taken by government which led to the repayment by Canadian Javelin of the $24 million in loans which had been obtained frcm the Newfoundland Industrial Development Corporation. !he consulting engineers,having studied t..'le total project including the woods harvesting facilities - th.e cost of whi~~ as well as initial working capital requirements of the entil!e project had not been included in the origional cost estimates of the project ~nd other related facilities ,submit~ed their report in ~!arc.rt of 1972 which st:ated that the estimated cost of the campletion of the project was approximatelv $15n million, L~cluding S21.4 million for initial working capieal requirements.

By that time, Sir, financing guar~~teed by this Pro-r....nce for the proj-ect had been obtained in t~e amotmt of approximately $94 milion. ~r. Speaker, by this time this government was gravely concerned about the Province's financial e~osure in the project through its guarantees. This concern,along with the gove~~ent's desire to generate employment opport~ities in the Bay St. George area and to fully utilize the forestTy resource,resulted in negotiatior~ •Nith Canad~an Javelin Limited i~ order that the Provine~ could assume control of t~e ?reject.

As a result of these negotiations legislation was introduced in ~ay of 1972 which authorized the takeover of the project by the Province and a total consideration to be paid Canadian Javelin Limited of SS million. !he legislation also authorized the con~inuation of the coust=uct:ion and the additional eX?enditure of up to SSO million. The l~gislation was ?assed with t~e full support of the House and the Province

May 9,1977 Tape 2331 (Morning) AH-2 :m.. DOODY: assumed control of the project. This government, Your Honour, in assessing the situation felt it had one and only one alternative at the time and that was to take over and continue the o-peration. Ravin~ th.at much money of the Province invested in the project, having the expectations of the people of Bay St. George _- Stephenville and Labrador areas raised to the peak that it was, ~.o1e simply could not walk away from the mill without giving it a fair try. In fact, Your Honour, ~~e opposition of the day, the Leader of the Opposition, Mr. Rowe, Mr.

Woodward and others felt th:at it ~~as the only sensible and reasonable thin~ to do . In fact, Sir, ~he o-pposition spokes~ stated that the Liberal Government in its dying days of that a~~istration were consicie~.n~ taking over the operation t-'ltemselves. It ~was stated, and I can quot~ from the Ha~sards of the day,quite clearly that the Liberal administration would be forced to take the same steps as the PC administration subsequently did. It was stated that the Linerboard mill was in serious financial d.iific:ulties back in earlY 19 71 - ~. ~fLTID'EY : ~. DOODY: Whose statement was this?

The ap-position statement? ! think it ~.;as ~ rr.

Rowe at that particular time,although several o-pposition S""PQkesmen - the Hansards ~ere quite cl~ar and are auite clear and are available. ~1-1 RO& ~ER: (Inaudible) ~~- · DOOnY: Yes, and it ~as stated then that the Linerboard mill was in serious f!n~~cial difficulties back in early 1971 and it ~as forecas~ that even ther. there ~as little likelihood that the mill ~ould be a paying prooosition .Never~heless ,£or the reasons stated we felt we had no choice :ut to ?Ut in t~e extra money to give the mil.l a chance co prove itself. !be construction ?hase of the project was complected in

~y 9 ,!977 !ape 2331 (~orning) AH-3 ~. DOODY: ~rch of 1973 at a total cost: of $1.55.4 million, far in excess of the $53 mllion origionally forecast. Since that t:ime the Province has - MR. ROB!RTS:(Inaudible)notes so I will not throw him off. AJ.'t RON MEMBER: Yes. MR. ROBERTS : Mr. Speakert my question is this; the minister .. said just now it was $155 million to complete~or at co~letion, as opposed to $53 million orlginal. Those statements are . both correct as I undentand them, but what tvas the figure to co11tplete estimated in May 19 72 when the government assumed responsibility for the project:?

In ot..+,.er words,~..ras the $155 m.illion what they said i.t 'tYOul.d c-ost to complete 01: was it greater or was it lesser?

May 9' 1977 Tape No. 2332 EC - 1 XR. OOODY: !hey say the-approximate cost of - - ·- ··· - ·- completion of the project ~as app~oximately $150 million including $21.4 million fo~ initial working capital, so that would be about - MR.. ROBElt'IS: So, it ·.ras finished - HR. OOODY: At that time - !'!R. ROBERTS : more than five per cent ove~ what it was originally budgeted. MR. OOODY: Well, the o~iginal budget was $53 million. MR. ROBERTS: Five per cent over what the goverument estimated when they took it over. in !-".ay, 1972. !1R.

DOODY: That is right - over ~e latest, or later, or last study of consulting engineers. As I have. said, Sir, sinc.e that t:ime t:he Province's investment in the m.ll,. excluding advances. far t.l-J.e purposes of repaying the debt, -- · p~incipal has grown to a total invescnent of $255 million as of ~tarc....'l .31, 1977, during which t:ime, the mill has inc~ed cumulative operating losses of $96.2 million. In a province t:he size of this, ~1r. Speake-r, these are absolutely staggering sums of money. Mr.

Speaker, I would like to address some of the reasons fo~ ~~e mill's operating losses, which arise partly as a result of the mill's market position and partly a result of its cost structure-· and for other reasons. The mill has never generated a sufficient sales ~olume, Sir, to a.llow it to ope.r;1te at full capacity, or mill nets sufficient to cover its ~nufacturing costs - mill nets sufficient to cover its manu- fac~~ing costs, ~elusive of its debt costs.

L>e sales ~olumes for the mill were approx~ately 137,000 tons, 203,000 tons, 105,000 tons and 130,000 tons for the four fiscal years respectively ~nding ~1arch 31, 1977. On ~~ese sales, Sir, the mill received average mill net selling prices of $162, $236, $240 and $200 respectively for each of the four years, and these are rounded out: Given t~e company's cost str~c~~re, whi~l-J. ! will discuss later, this resulted in operating losses, and oper- at!ng losses, Sir, for 1975, 1976 and 1977, was $21.3 million, $55.3 million and $40.9 :nillicn, respectiYely.

~-iay 9, 19 77 Tape No. 233 2 EC - 2 MR. OOODY: Mr. Speaker, this mill has not been receiving the mill ne~s it needs, and clearly requires, to cover its operating costs, quite ~~elusive of its debt redemption. The company has had a _particularly difficult r~rketing problem, in that it entered t."lo).e marketplace as a non.-i~tegrated mill at • a time when ~ket conditions were beginning to deteriora~e. The company has been unable to develop long-term contractural relationships ·~:h enough major cuseomers for a sufficient percentage of production capacity to protect itself against adverse market conditions.

Government has recognized the company's particular market­ ing problen, and, as a result, has attenpted to allow the company suffcient time to build a reputation and a customer base in the .narketplace. However, in ~~e past four years, Sir, the company has still to obtain a market for its production, or for ~ts product, which would all~v it to achieve any production level approaching capacity.

The sales forecast by the company, which have been revier..,ed and acc.epted by t!:le Advisory Board. are forecasting sales volumes for the nex~ ~~ree fiscal years, ending ~~rch 31, 1980, of 166,000 _tons,228,000 and 265,000 tons,res~ectively. The forecasted mill nets for che same year- same three year period, Sir, are $188, $230, and S268. And, shortly, Sir, I will demonstrate ~~e costs of producing the product, which we are forecasting the sales for, of ~188, $230, and $268 mill.nets. Mr.

Speaker, the sales volumes and the mill nets fore­ cast~ ·· do not a~?roa~~ the level where the cam?any would achieve even a cash break-even point~ given ~~e company's cost struc~ure,i:s cost of pro­ duction. TI~erefore, Mr. Speaker, 'he company can.~ot ~~pect an im~rovement i:l m::!.l.l !lets or sales volume sufficient to 'llake i.t a long-term, 'liable operation.

May 9, 1977, Tape 2333, Page 1 -- apb MR. DOODY: In view of the fact that the company has little control over ~~e mill nets it receives, the company has to attempt to reduce its cost of manufacturing to a level which will allow it to operate on an economi .c basis. Therefore, Mr. Speaker, I would like at this time then to review the comapny's historical and forecasted cost of production with perhaps a few words on the marketing agency of Labrador Linerboard Limited beiore I go into the cost of production.

The marketing agency of LL~erboard was a company called International Forest Products Company an ass·ociate of Rand - lf1hi tney Corporation of the United . States. It was decided by government to go this route as this company undertook to devote its entire sales ef£ort to Lab Linerboard Limited's production, and expressed an interest in later on acquiring an equity position in the company-with a view to eventually buying ~~mill from the ~o~ernment.

Obviously, Sir, ~~is has not happened, no~ did we ever approach a position where the equity question was seriously debated because of the ongoing losses and the down-the-road-forecasts. At the tL~e that International Forest P·roducts Company was selected as the marketing arm of Labrador Liner board L.imi ted, goverr.ment was faced r.'li t...,_ a choice be~~een it and the possibility of attractL~g an established forest products company. I think t...,e major one that we had discussions wir~ at that tL~e was Mac~illan Bloedel.

We debated and weighed the pros ~~d cons of going •,o~i th an experienced company that •t~as known in the marketplace, but which had a vested and prior interest in selling i~s own product and then perhaps looking to Labrador LL~erboard's production, or going with a new company which had experience i~ the =ield through its association "~ith ~and-t.;hitney but •..;hich 't~as

May 9, 1977, Tape 2333, Page 2 -- apb MR. DOODY: dedicated exclusively to the sale of Labrador Linerboard Limited's production. That, toge~~er with the prospect of eventual equity participation, tipped the scales in favour- of International Forest Products Corporation, and once again, only h~dsight can tsll us whether or not ~~at was the correct- decision. The sales contract of Internation Forest Products has been tabled in this hon. House; the detail is avaLlable in the files, or in the Library, or in the Registry or wherever. Indeed, I have no doubt that hon. members have obtained copies of it.

I have some detail of it here which I can provide if so required. Mr. Speaker, with regard to the cost structure of the product of ~~e mill which I touched on a few moments ago, there has been a great deal of publicity about the high wood costs experienced by the company. Indeed, Sir, ~~e company's wood cost has been a major contribution to its annual operating losses. The high cost of wood from the company's Labrador r..roodlands operation has been cited as a major cause of the high wood cost, because approximately fifty per cent of the company's wood supply had been obtained from Labrador.

The company maintained its Labrador T,.;roodlands operation as a result of its inability to obtain an economical wood supply on Island sufficient to sustain caFacity production, assuming, of course, ~~at the company could sell its capacity production. If the mill was ever to became economically viable ~~en a wood supply sufficient to sustain capacity production was essential.

It became clear last Fall,however, that closure of the Labrado~ ·..,oodla.'"lds operation •,.;ras necessary to reduce the financial support re~~ired from government L~ view of the fact that market prospects for sales volume indicated that existing wood supply available to t~e comp~~y on Island was

May 9, 1977, Tape 2333, Page 3 -- apb MR. DOODY: sufficientto meet forecasted production during ~~e nine month period during which the government expected completion of its study of the inventory of on Island wood resources. The Advisory Board on its_ establishment-- --assumed the responsibility for completion of this report. Although the Advisory Board has not finanized its report on on Island wood resources, ~~e preliminary estimates of wood supply proportionate to cost do not forecast sufficient reductions in wood costs.

It has been stated on several oc.cas ions, and I have no doubt that it is t=ue, that there i~_~uff~cient wood on the Island to sustain the operations of the three mills. It. has- never been demonstrated that there is sufficient ·..rood eccn .omically available under ~~e present circumstances to sustain

:1:ay 9, 19 77 Tape 2334 (~-!orning) Mr. Doody: economically the prod~f_ t;.;~:m .9t._ all three mi.lJ.~. And in thP.r~. there ~Jas a vast difference, Your Honour. The historic wood cost per ton of production for PK - 1 the four fiscal years ending ~~rch 31, 1977 were $119, $14j, $127 and $130 respectively.

If you compare these •..o1ood costs figures with the mill net figures which I gave a few cinutes ago, you will see that the wood cos~s ~~emselves bear frightening resemblance to ~,e actual mill nets that the company received for sales of its product. !he Advisory Board has forecasted that using the most economical wood sources·, both on Island and from off Island sources~ the ~od costs per ton of producttion for each· of _the three fiscaJ years ending :!arch 31~ 1980 will be $123.40, $131.14 and $137.74, Now, Sir, that is per ton of production, and it includes a substantial amount of off Island wood, something in the nature of 150,000 cords of wood which has been suggested that be bought from Nova Scotia and New Br.lnswick and this would be s-pruce budworm. kill wood, arid· also using a secondary fibre content both of which •MOuld preclude the sort of employment in the woods operation of the Province which was one of the orimarv ournoses establishing the mill in the first place.

The forecasted wood costs also incorporate the assumption that in terms of on Island wood the Price and Bowater ~lls will agree to rationalize harvesting on their l~its to achieve the l~est possible wood costs for each of the three ~ills. The Advisory Board, Sir, in conjunction with the com?any's nanagement, have ::-e~riewed the other elements of Ulanuiacturing cost, ~ow thoug:;, certain areas of cost reduction have been identified~the foracasted cost of ~nufacturing is still well in excess of the forecasted ~11 net sales revenue.

The f~ecasted cost of manufacturing is still well in ~~cess of the forecasted mill net sales revenue. And once again we exclude the mammoth debt oi the ~11 t~am these . figures.

May 9, 1977 rape 2334 (Horning) Mr. Doody: Mr. Speaker, the Advisory !oard submitted a preliminary report in which they have forecasted mill net PK - 2 sales revenues for the three fiscal years ending March 31, 1980 of $31 million, $52 million and $71 million respe~tively. They have also forecasted ~~e cash manufacturing costs for the three year period, of which they have incarporated the cost of the most ect~nomical · ·wood supply avai.l.a.ble and incorporated every area of cost saving they could discover.

The Advisory Board forecasts, Sir, for ea~~ of these three years show a cash requirement from this government, from. the tax?ayers of the Province, from the Treasury of. the Province, of $54.8 million in 1977-1978, of $38.4 million in 1978-1979 and of $24.6 million in 1979-1980 for a total t:ash require!ll!!nt of nearly $118 million. It must be emphasized, Mr.

Speaker, that this fore~t by the Advisory Board assumes~ and this is a great assumption, S.i:r, it assumes a declining cash manuf.act.uring cost per ton in these days of inflation anC. an increasing sal..as mill net per ton. ~~ainst this ba~~ground, this government had no option but to act in a financially responsible manner and announce the close out of ~,e Linerboard Mill. Mr. Speaker, I have no doubt that charges of mismanagementi waste·associated areas will be made. I have no doubt ~,at 3ame of the -rumours or reports are true.

However the amounts of millions of dollars involved in operating losses are so lar~e as to negate the possibility,even ii it ~ere demonstra:ed to be true~that there was negligence or •;rongdoing. I would also like to bring to this House's

May 9,1977 !a-pe 2335 U~orning) AH-1 ~ffi.. DOODY: atten:ion now, Sir, t~at if such are brought to t~e attention of the House, of neg~igence,or mismanagement, or wrongdoing,it can be assured that these charges will be investigated and the necessary action taken. But, Sir, these facts- if indeed there are such facts-are not of a magnitude to affect the huge costs numbers involved in t~e continued O?eration of the Labrador Linerboard mill or indeed of the costs stl:'lleture of manufactu'rin~ the product at Labrador Linerboard. Mr.

Speaker, allow me to illustrate ~~e horrible situation~ ~~e magnitude of the problem fac~d by the company in Ste-phenville.

The production costs of Labrador Linerboard Limited of 1976- 1977, the actual cos~s c~ared •;ith those of a Southern US mill , aceual cost of a southern U$ nill but for 1975 - now ! e~hasize that the Labrador Linerboard numbers are for 1976 -1977, the southern US mills which are actual costs obtaited from a ~11 for 1975, both of these have obviously gone up and c...i.anged somewhat since that time,but for demonstration ?urposes, I think they should be :,rought to the attention of the House. 1976-1977 Labrador Linerboard Limited :,udgeted costs numbers assuming sales of 228,620 tons ~as $365.25 total costs .!he southe~ US ~~11 with whom they are com?eting had a total cost of $130 .

Costof production in Seephenville,including debt interest and repayment,was $365 as opposed to the southern US mill actual cost of S130. ~~r. Speaker, it is obvious that rNhen ti!!les are good and the markeeplace is in great shape~the southern US mills can cream off a killing, they can make a bundle. ~~en marke::s are bad - as they have 'jeen ~he past several ?ears-they can cut their prices and still come out with a very, ve~t, serious affec~ on the returns to Labrador Linerboard Li~ited. I ~y say, Sir, that that budgeted figure of S365.25 included wood costs of - and I should not sa;r ••ood costs, I should say

::1ay 9,1977 Tape 2335 (Morning) AH-2 ~-!R.. DOODY : total costs, total ,u:rect materials costs, which includes the wood and all the other ingredients that go intQ the ~ufaeturing, the total cost per ton of direct materials is $184, total actual cost of the finished ?reduct in the US mill was $130. The total cost of direct materials per ton in that southern US mill that year was $61 per ton as apposed to our $184.45.

One of the major differences ·and difficulties of course is the regenerating cycle of the southern US pine -the wood reproduces itself much more quickly; also they get a return of -it takes 1.6 per ton of their product as agai.."lst 2.2 cords for our product. The mills are designed to take secondary· fiber, sawdust, waste and other materials~and ours are not so designed. And there were other reasons but tae facts remain and they sit there .1Ne can never Cont?ete with them properly because we ar~ never in a cost position to do so.

Grant vou that the cost of these US mills ~o1ere built at a lower cost than ours,which is also a great benefit to them. They had debt interest an~ ~ayment figures included in their production costs of $14.30 as apposed to our $80.38, !hat is certainly not the cost of the Stephenville mill but it is a fact of life. Our mark.et-place then was in Europe • We had to go to Zurooe to try and sell the product • The major consumption area; of :curse has been in the United Stares.

May 91 1977 Tape No. 2336 NM- 1 ~. DOODY: In times of economic recession the United States would dump its product in Europe and we of course would suffp,. the consequences. To further complicate the matter now, Sir, we have Scandanavians, particularly the Finns dumping their product into Europe,and although their wood costs are compa-rable nth ours, their indus t=Y st-ruc.ture is completely different insomuch as it is an integrated industry •..thich uses everything "from the needles on the trees to the roots.

Unfortunately we are not that sophisticated and as a result of which we find. it very difficult to compete with the Scandanavians. And a new element has entered into the marketplace in Europe, ~r. Speaker,. We have the Russians in there now for the first time, sellL~g in Germany where we ~anage to dispose of same of our produce.

They have developed a ~ethod of making li~erboard from the chaff that is left over after harvest. •flhen they ~rvest their •.¥heat or whatever they use~the by-pr -oduct, the chaff that is left in ~~e fields, the straw, as the basic ingredient in the ~anufacture of linerboard and with the controlled s~ate economy combined with a t~e of cheap material it is very, very difficult for for Labrador Linerboard to compete in her traditional market- place in Germany and France, but particularly in Ger.nany.

Many people, Sir, will probably say., "Under . these conditions ~hy did you keep the mill goi~g at all? ~ese II facts were known to you some time ago. Well, Sir, there is hone. There is a big inves~ent. ~ora i~nortantly~there is a lot of ?eo?le and so ~e tried and eried and tried to :ind a way to rationalize suending tha~ kind of ~onay in a Province such as ours ~mere •..;e ~ave demonstrated just a fe<~Y days a~o in the Budget, as has been repeated over and over again by hen. members of this House, that that kind of money just is not available.

If =here was a lightdown at the end of :he tunnel it may be a di::ferent figure. 3ut, Sir, the projections of

May 9, 1977 Tape No. 2336 ~. DOODY: the Adviso_ry Group, the industry, cur own Finance peot'le, the Federal Finance and Industry, Trade and Commerce people,did not give us reason to believe that the Linerboar.d situation will change to a profit picture. ~~. Speaker, let me refer to that NM- 2 $54.8 million budgeted figure for tile Ot'erations of the mill for the coming year. Much has been. made of the fact that it would cost $55 million to kee? the mill going.. But it will cost t:he P'rovince almost S27 million to shut it down.

This figure, Your Honour, conc~udes of course the shut- down cost and losses of S8.4 million. It does give us a positive working capital position because the inventory will be sold and i~ will give us an ±ncremeneal cash benefit of nearly $6 million. The important ele~ent in this is the lon~-te~ debt retirement, the bank line of credit retirE!!Ilent, the interest on the long-term debt, tne_ir.te~est on the short-term debt, the ~!DC repayment on principle and i~terest and the interest on the cash req_ui.rement of S26.7 million.

So to close the mill down will cost nearly $27 million, to keep it open will cost SSS million. So ~uch has been made of ~~e fact that it is going to cost you half as much to keep it going as it would to close it down. As I said, Si~, much has been made of this fact and indeed much should be made of it. It has been the core of the dilemma facing this government for the ~ast weeks and indeed, Si=, the nast !ll.onths. The decision delayed the presen~ation to this hen. Rouse of the budget document by some six weeks.

And I ~11 offer in a f~N moments, Sir, some n~~bers to illustra~e the effect on the Budget and on the financial position of the Province in a few :noments ·having decided to !lrovide the additional funds.

~y 9, 1977 Tape No. 2336 mf - 3 ~1R. DOODY: But first of'al.!., Sir, the cost o£ operating the mill~ With the most optimistic forecast assumptions possible, all of •o11hich have been questioned and called unrealistic by our own financial people ~ the light of historical performance of forecasting by the mill, . by the 'Federal Qcverc:ment 's Department of Finance, by the Federal Gove:rnment 's Industry, Trade and Commerce people~and by third party industry people.

But any way we look at these three tmmbers, these figures, o-pt:imistic though they _might be,and compare • I will take a moment Qr two of this Eouse 's time, with Your Honour's pe't'tllission later on, to dem(m.Sttate th.e sensi,tivity of these m:mbers. If they are only out one per cen~ ar two ?er cent or three per cent and so on wha'C happens, Sir, to the Province's financial position?

May 9' 1977 Ta;e :{o. 233 7 EC - 1 }!R. DOODY: · To a province of .our size, Sir, ten or fifteen million dollars is a gigantic sum of money, and we have to lear~ to realize it.

We knov how strapped we are from our recent budget, and I perceive--- to keep the mill operating over the next three years up to 1980, as I have said, it will cost $54.8 million ?rejected in 1978, $38.4 million in 1979, and $24.6 million in 1980 -projected for a total of $118 ·-- million, approx:U:.ate!y .. o\nd.. so- it would seem, Sir, to allow the :nill to operate for the next three years, it will' cost this P"L:"ovince about $118 million.

To shut it dawn will still cost ~~is Province about $90 ~lion. $113 million - cost to the Province to continue to operate the mill. ---$90 million, if we close down the mill. !tis money that we will --- have to provide anyway. So, Yol.lr Honour, the mathematics are simple. MR. SMALLWOOD: the net loss of $10 millions a year? MR. DOODY: ?ardon? ~- SMAI..L:1COD: the net loss of $10 iilillions a year. MR. DOODY: That is what I am coming to now. And, so, Your Honour, t!le mat!lematics - '!1R. S1-1ALLtiOOD: . . You ·~uld lose about $20 million? MR. DOODY! No. ~. Sl1ALLWOOD: What is the ratio? ~.

DOODY: That is all in that report that was ~abled last week., Sir. And so, Your Honour, the mathematics, as ~he non. gentle- man from ~~illingate (~. Smallwood) points out, appear to be simple, or they seem to be simple. !his P~ovince, assuming the operating costs are correct - and ~e knew the closedown debt ~~arges to be ?retty well on - it would seem · that for $9 million- , or $10 :nillion per year for t~e n~~t chree years~ we can see ~~e ~ill through until 1980, when :he forecasters, w~o have, sadly, never been right, s~y :hat we, the tax~ayers, will only have ~o provide $25 mi!lion. ~1R.

SMALL~..lOOD: \-lould CJ.1.e :ion. :ni:1iste:r say how lo!".g is left for t~e bond issues? ~ow long do we go on serricing the debe? MR. ~ODY: \ole finish it of:: in 1983 - 1984.

~!ay 91 1977 Tape ~o. 2337 RT-2 MR. ROBERTS:-· . That is the German debt. ~- DOODY: Yes. MR. ROBERTS: Where is the money that - MR. DOODY: But the money that we have already paid out and that does not incl~de the Provincial debt of course; that is in there, and we are carrying that anyway. As ! saic~ it would seem that.. fo.r $9 million or $10 million per year for the next three years ·· we will see the mill t..~rough until 19 80 '*hen we shall only have to provide - and I say, only have to p-rovide - $25 million, of which only about $6 c.illion '.rould be increi:lental cash re(lUirements.

The other $19 t:1illion or so •..;ould be debt retirement and interest and such. However, Sir, this is a simplification which Ne devoutly wished were ~ But a very sad fact is that to keep the mill open this year would cost at least $55 million; n~~t year, at least $38 million; the following year, as I ha"'Te said, at least $25 :lillian, and where do ~v-e go from there? ~~o one knows, ~1r. Spear..er.

Given t~e record of the ~ill, tbe down side risk to the people of this Province as a whole - for the sake of the future of the Province, for the sake of the credit of the Province, for t-i.e sake of productive development of t-~e Province, and our financial responsibility generally, i.le could not accept the cash cost and commit the !:laney t..."lat we do not have. For the past number of years, as hon. members are no doubt aware, the cash advances to Labrador Linerboard Limited were paid oack by Labrador Linerboard,in ~~eory, :o t~e ?rovir.ce ~y t-"le is~~ing of revenue bonds.

These ~ends were to have been rede~ed from ~he future profits of ~"le company. As a consequence of t~is, cash advances ~o the company were considered capital and were so shown. t.i'eli, •.ve ':lave been advised

May 9, 1977, Tape 2338, Page 1 -- apb MR. DOODY: by our fiscal agents and by our other advisers that this acco~~ting treatment is no longer acceptable. Indeed, I would suggest, Sir, that any reasoning, sensible person could not help but agree that since nowhere down the road has a profit been projected; ~o, Sir, the.monies advanced from government to Lab Linerboard Limited, from this year! and from this year on, could only be construed as operating grants In­ aid.

This fact, although it makes no difference,! am sure, and it is of littl.e wa....-mtb. or help to the people in the Stephenville area who are watching ~~e mill close or phase down, but it is a fact of life ~~at ~~at extra money L"'l th.e co..lr.re..'lt account of this Province and this budget this year would have an L~act ~~at- is absolutely enormous. This Provine~, Sir, cannot exist without a current account surplus. Wit-~ a current account deficit we cannot expect to borrow money, or no reasoning person can expect us to be able to borrow money to ·pay the interest on money that we already owe.

It would be as foolish as for me to go to the ~oyal B~~k to ask ~"lem to give me a loan of money to pay the interest on a debt that I already have with them. So it has been stressed and stressed again ~~at as long as we keep our C..lrrent account in reasonable shape, and our capital re~~ira~ents L"'l ~~e marketplace ~~der reasonable central, ~~at the Province can continue to survive. So Linerboa=d and the Liner~oard situation brought into very clear focus t~e fi~ancial probla'TI of this ?rovL"lce. It is not a ne•.Y problem.

It is not something tbat has not been said before, but I ~~der- line it new, and ou~li~e it now, Sir, to demonstrate agai~ ~~e dilemma with which we were facsd. A c~rrent account contribution i~ aid of t~e ~agnitude ~~at we speak of wculd have made the difference of the $8 million current

May 9, 1977, Tape 2338, Page 2 -- apb MR. DOODY: account surplus to some~~ing of the nature of a $20 m~llion current deficit. No matter how hard we cut and trimmed, no matter how hard we economized, the fact rema~ed. I know many hon. members are going to say that you could have cut otherHise, you could have trL~ed otherNise, you could have taken it from other places. That is not the opinion - MR. SJ.i.AL.L tv'OOD : Would the hon. minister mind?

When he ir..sists that a current account su_~lus is necessary, imperatively necessary, and not a current account deficit, when he does ~~at surely he means, does he not, a current account surplus of $1 million or $500,000 or $250,000, but at least to balance ~~e budget, the current account budget if it is balanced, if there is a bit more - better if there is a lot more - but if there is a bit more in ~~an is spent. Just balanced wi~~ a bit of a surplus,that will staisfy the money ~arket.

Not as much as a big current account : surplus ....,ould do, but it is not imperative,is it,to have a sizeable - it is desirable but not necessary to have a sizeable c~rrent account surplus. MR. DOODY: The han. gentleman is absolutely correct. it is obviously very, very desirable to have a current account surplus. I am sorry I used ~~at word because obviously it is not a surplus, it is a small contribution to capital account. ~ve ha~le :1ot had a surplus in ~~e Province of Newfoundland since MR. SMALLWOOD: It might be used to retire debt; it does not have to be used to ca?ital account. :1R.

DOODY: That , -.,.;:, righ t . But to use t:,e - )ffi. SMALLNOOD: It is nice to have. MR. DOODY: - word 's-:.lrplus' ..... J_._ sounds nice in t.~e marketplace ">vhen you head out looking for money. MR. ·S}f?..!.LW'OCD: Yes.

May 9, 1977, Tape 2338, Page 3 -- aob MR. DOODY: To say that a sizeable contribution would be desirable but not essential is absolutely correct. We do not have a sizeable - if one looks at the numbers - of our budget for this year, ~~is billion dollar number, and look at an $8 million contribution to capital account, one is looking at a very insignificant amount of money. It is in£L"'ltesimal. The slightest fluctuation in the equalization programme can distort ~~e whole picture. MR. SMALLWOOD: Absolutely it is a large amount, relatively very small. ~m. DOODY: That is right.

If the gover~~ent of Al.berta-dec.ides to lower its tax - if it -can find the tax tomorrow our equalization formula switches and we get less pa'Y!!len~ . from Ottawa. It is eggshells. MR. ROBERTS: t.~eir taxes . Equa~ly if Ontario increases

May 9, 1977 Tape Z339 LB-1. MR.DOODY: Exactly, exactly!And so the $8 million contribution is •ma t we ended up with. It is net a sizable amount in terms of the huge budget that we have in terms of actual cash. It is a large amDunt of money. But if you look at a $20 million deficit, to turn that around you are talking about a $40 million switch. That in this province,even in. this budget,is a huge amount of money. . That is the situation. The impact,as I say, then on switching from capital to current account is not a very sound reason from where the people sit in Ste~henville.

It is not a very sound or rational reason for the people who are looking at the phasedown or the closedmvn. of the mill. It is oct a very happy position to h~e to ourline to th~s hon. House. But, Sir, if we are to have some responsibility for the future and some res~onsibility for the fiscal position of the province and some responsibility to our province as a 'Nhole, then this decision has to be taken and I am prepa~ed to undert.ake to ar.nounce it. Nay,.

Sir, we had to weigh c..'le social and economic situation which the closing of the mill 'Mill cause in the areas affected, against the provincial responsibility of government. !bat, Sir, •.Jas not an easy decision. As hen. members opposite and hon. members on this side of the House know and can appreciate the agony and ~,e agonizing that went into the decision. I spoke earlier, Mr. Speaker, of the $55 million figure and of the sensitivity of the fi~~re.

That number, Sir, incor?orates the assumption of rising mill nets,$188 in 1977-1978 to 5268 in 1979-1980 which is a compounded annual gross rate assumed for mill nets of almost 20 per cent. That is i:1 the historinal history of the mill a ve~J,very opcimistic forecast. It incorporates the assum~tions of generally declining cash c~erating cost. .~ a matter of :act~it incorporates a compounded annual decline of about 2.6 per :er.t in operat~~g costs a~ the mill over the nex~ three years. I t is difficult

May 9' 1977 Tape 23.39 LB-2. MR.DODOY: to imagine in these days of rising costs and rising expectations that costs are going to go do~,but these are the exp~rts' figur~sso we accept them and build them into the $55 million, But as I say,they result in conservative esti..~.ates of cash requirements. On the sensitivity of that $55 million. Sir . .::~!'! ~.1" applies·tc the cash 'posit;on of the province, just one per cent approximately $300,000. A o~e_per cent variance L~ the 1977 - 1978 $55 million cash operating costs represent ap~roximately 5460.000.

So the sales volume is dawn, say, 3 per cent, it is going to cost another million dollars. Three per cent is not a great sales variance in any business. If the costs only go up 2 percent and the company is expecting them to decline.~ and assume that they decline 2~ per cent , so even if they stay constant you are looking ~. t 460 '000 times two another million dollars.

So, as I say, Sir, the down side risk ts the province and to the province's financial p@sitio~ is a huge risk and a ris~ that I do not thlnk that ~e are prepared or able to accept ~ith any degree of responsibility,with any degree of clear conscience. N~, Sir, ~ith ~,ese numbers and these ~,oices and these options and these unfortunate facts and figures and statistics in mind,we headed once again,as is the usual procedure in thas province, to visit our good friends in Ottawa. ~ole ex-plained to them the situation as it is. We presented to them,Sir, the preliminary Advisory Board RerQrt.

May 9, 1977 Tape 2340 JX- l ~-!R. DOODY: We presen~ed to them the numbers,simpllsticly as they can be interpreted,$10 million a year for three years and we may possibly see some light down the tunnel. But we wanted it front-end loaded. We needed the $30 million this year because this is the year where it hurts. This is the SS4 million-$55 million year. ·We met, the Premier and I,with Mr. Jamieson and Mr. MacDonald to explain the situation to them in great detail and I cannot help but say tha~ a more responsible, receptive and s~athetic audience was never granted to anybody. Mr.

Jamieson in par~icular was Magnificent. ~~. MacDonald summoned in his officials and told them to try to find a way out of ~his dilemma particularily for this year. .~ they went to ~rk on the numbers and t~ey went to work on t~em very quickly. TI~ey dropped every~hing because of the :.:im.e constraints our budget r..;as delayed. The people in Ottaiva understood that and they understood the impact on the employnent situation. TI~ey knew what the :mployment figures were in the ?rovince. As a matter of fact,the a:ount of information t~a~ they had about the P~vince and the mill was absolutely astounding.

Some of the fL,ance people from the advisor; committee, some of the industry people,went t:o Otta~a shortly after..;ards ~~th people from fi~nce here to e:<?lain the figures in detail •Jith the IT and C people and the finance people in Ottawa, and wene over the projections and the costs and the problems. And as I said, Sir, our request was very simple but it •.vas ·..;ery e:cpensive.

I: was a grant of S30 ~illion co get us over this year's budgeti~g probl~ at the mill and indirect:y ~he ?roblem in the ?rovince,and give us a ~reath~ng space to look at next year because by thac time the advisory board :nay ?OSsibly, hopefully,have come up ·.o~ith pes sib le al:ernative suggestions for operating the mill or indeed any one of a number of things may have ha~pened in this. Unfortunate but t-rue, the people in Otta~a were not in the 9osition to help us. I do not say that in a ~nner of trying to blame them or criticize them. I understand their position ~lthou~h I would have ~refer~ed

May 9, 1977 Tape 2340 MR. DOODY: tO rAVe had the mcney,obviously, just as every other Newfoundlander would have. Mr. Jamieson particularily took a very active interest in this. I reme~ber him learning of a sub-committee Cabinet meeting to discuss Labrador Li~erboard Limited while he was in Burgeo,and he left the meeting in 3urgeo to be at that meeting himSelf so he could present ~~Mfoundland's case.

But unfortunately the officials in finance and IT and C in going over the costs, the history, the sales ?rejections, the ~rket?lace- and they have an overview of the market place in Industry Trade and Commerce and in the ~;oods industry and the forest industry because of the huge Canadian involvement. !hey could not recommend that our request be accepted. !here are various mills in Canada in trouble today and they had~as they eX?Lained,i£ they could see some light at the end of the tunnel they may be able to find a way to justify advancing the ~ney but they could find no way. And ! honestly believe they tried.

Mr. Speaker, the outcome of that trip was•I heard somebody in this HoUse refer to as a bail-out trip and I did~not comment on it at the time~but the s~ple truth of the matter is is that is ~~ctly what it was. We went to Ottawa in the hope that ~ ve could be bailed out of this one but they could not find any rationale under which to bail us out. Mr. Speaker, a mill •Nhose · costs of production are in the $a00 area and •Nhose returns are in the $200 area cannot continue to operate.

I know, Sir, that it will be said that we are at the ~ercy of the gnomes ~i Zurich or t~e barrens of Bay Street or che scmet~i~g or others of ~all Street and I think that that is probably true, Sir.

May 9, 1977, Tape 2341, Page 1 -- apb MR. DOODY: We have to present a responsible position, ~~d as ! have said earlier, that is scant consolation and cold comfort for those people whose jobs are endangered. But cut it as you will, Sir, the fact remaL~s that ~~e Province, this Province, the Province of Newfoundland and Labrador cannot afford ~~is kind of . operation. It has · been estimated that the cost per job at ~~e mill, assuming 640 people working, and taking interest, debt retirement payment,_ CC?~t of production and ~o on, it would work out to this Province in excess of .$80,000 per job.

It is just not reasonable. If we managed to get the mill up and the woods operation going, and. brought ~1.e numbers of people employed to 1,800, the costs would be in excess of $30,000 per job. IVhat is t."le total cost per ton to make linerboard? About $400. w~at is the cash cost per ton to make 1inerboard in 1977? $325 a ton. What is the mill net return to the mill projected? $188 a ton. What is the total cost to government to date operating? About $100 million. Debt and interest $255 million.

The Province will be repaying, as I said ear1ier, the principal and interest en the Hessische and Lazard debt until 1983-84, and that totals now - the balance outstanding on interest and principal is about $80 million. I know, Sir, that this is a very difficult tL~e and a very difficult position to place a group of conscientious and hazdworki~g people in.

I ~~ow perhaps more than anybody on ~~is side of the House, or perhaps as well as anybody on this side of ~~e House~ hew hard ~~e people at the mill worked, and I sneak particularly of the unionized people, st~angely enough. ! do not know why that should be strange, but it appeared to me in the meetings that I had wit~ them out ~here ~~at they were mere dedicated to ~~e survival of that mill - - --- - -- ·- --

May 9, 1977, Tape 2341, Page 2 -- apb MR. DOODY: than any other- segment, of management, or of the town, or of any other group that I met with. They just would not accept the fact that the work,and ~~e hours,and the time, the trades that they have learned, the effort that they have put in, should go down the drain. That -is why we went~ and of course we did, we did not accept our own numbers or our own figures . :.. and had this report done by the Ad~.Tisory Board. As I have said, it is a preliminary report but t..'i-J.e numbers in it are inescapable.

It has been suggested t..~at, Why not take ~"'le wood from Bowaters? Ttfuy not take the wood from Pr~ce? Why not? There are several reasons why not, Your Honour. The viability of ~oo~~o towns~ Nould t.'ley be affected? ~iould Bowaters be adversely affected if government walked in and took some of their wood rights? I think it has been no secret. Hon. members opposite and hen. members on ~"lis side of the Hous·e know that from time to time Bowaters have expressed some concern over t.'leir continued operation. I wou~d not want to be responsible for endangering the operation in Corner Brook.

I would want to be very, very sure that t..~e thing could be made to work in Corner Brook before I took any strong­ arm steps in that direction and toward that end. As I say, the Task Force on woods study is ongoing under the direction of the advisory group and it is made up, not only of people from industry, but there are also people from federal and provincial forestry, government pecple, on that Task Force. Quite apart from that, Sir, of course, we have agreements, statutory agrea~ents with these two companies.

One does not walk in and tear up statutory agreements and still expect ":.o have any respect eithe= in t..~e business,or the political, or t~e social

May 9, 1977, Tape 2341, Paqe 3 -- a.pb !-1R. DOOOY : or any other community in the I Western World. The people at Price and Bowaters have, Your Honour, been co-operative up to the point of jeopardizing their own operations. Whether or not their own operations could or would be jeopardized by an exchange of wood riqhts remain to be seem. Hopefully that

~'!ay 9, 1977. Tape 2342 ?H - 1 NR. D00DY: will be demonstrated during the next four to six ~nths. A cost benefit analysis was ?repared and presenteci to ~overnment and this was do~e some time ago. Speaking ~.;ith members of the Opposition on Friday, I unde~took to get the background on that study for them. I spent the ~<Teekend trying to locate it and unfortunately I have not been successful as yet. ~!P... ROB!R'!S : (Inaudible.) ~'!P~. DOODY : They may or may not be. They were done so~e time ago.

Their- conditions in sales and in mill · nets and so on have ~.,.o~sened and the ~u~ers of people employed have become less. And so I would suspect that the npdate will show a more negative cost benefit result than the one that t-7e have had. But ! think it 'mr::; the rationale leading up to these decisions that were of more ~~terest to us than the ac~ numbers thenselves.

But as I say, dur~ng o~~ ~is~~ssions on Friday ':V'ith eembers of the Opposition that <;as one of the points which I undertook, one of the pieces of information which I un~ertook to p-rovic:'le and r.Yhich unfortunately I ~ave not ~een able to .~et and I can onlv apologize. I might say this gove~ment has tried to pro~nde as much infornation as possible to hon. members opposite in preparation for this debate because the impor-tance of the debate to the people in the areas affected is immense. I '.Yould much rather have hon. me'l:'.bers on both sides pro~erly armed and properly eauipred.

As I have said the advisory gTO~ studies are on~oing not only in the w-oods studies but in the conversion option. And they have looked at so~e alte~atives and have felt t~at ~hey are not economicallv feasible. :hey have rejected several cptions,including ne~sprint~ on the basis of ~ar~et forecast and con~J'ersion costs and oroduc..:ion costs on accm!rrT!odation of these factors. ,\nd so the T..ajor options ?resentl:r tmder revieH a7'e l.i..J.erboard a.T'!c variations of Linerhoarr, such as sack ~bag ?ape r, <:·7hite tap, mottle boarci, semi bleached craft ?ulP or fully :,leac..l,ed

Yay 9, 1977. Tape 2342 ~H - 2 ~~-· DOODY: craft pulp wood-free co~dity grade paper fully bleached, •.o1hich ~~ould apoear on the surface to ~a~.7e s-mall eM-ploy"Ment content in the woods operations of the Pro~nce but could perhaps be an option for the ull. As I said, t!tese studies are ongoing and­ ·~ll,if it is not possible for the advisory board to conclude an econo~ically viable alternative product line exists.

The board is cu~ntly investigating~with the aid of independent consultants, the most promising alternative product line ~v-hich potentially could be economically viable .If such a product line is founrl, then, ~-rr. Chai!'1!!an, we will cettainly e::.'td.mi.ne it veey carefully and do r.;hatever we ~ to put it into effect. ! am not trying to raise the hopes of anybody in this particular situation beca.use ! ..,ave no facts to substantiate optimism. But as I said,! have hope. Mr.

Speaker, this Province has !inanciall:r supported th i.s mill for the past four years in recognition of the fa~~ that a ~ew operation reouires a start-up ?eriod in which to resolve production problems and efficiencies, to. develop a presence in the in tarnation~.l mar..<etplace ,and to develop the l!tost ec:ono'[!lical sources of supply for its cost elements of production, it is not possible, Sir, for anyone to claim this government has not allo~·1ed this mill a sufficient period in •.Jhic..l-t to cemonstrt!.te its ca-oabili tv'.

Ho~·7ever' no gove~ment CC'.n longer justify fur~he r financial support r..rhen studies by government both federal and provincial, by independent consultants, by indtts t"!"' and finall~ by the special advisory ~nard to the co~any all conclude that the mill in its present state is a 7l.On-~riable operation. T~is govern~nt has a~lored eve=; possible avenue to enable it to c~nti~ue operations.

May 9, 1977 !ape No. 2343 EC - 1 MR. DOODY: It has engaged the best independent consultant expertise available. It established an advisory board, composed of the best ma.nagement expertise availab -le to evaluate the operation, and gave it full operatiPnal control. It requested and received evaluations and recommendations from CCt~t?anies in the industry, and government officials have spent an enonno.us amount of ti."lle in analysing every aspect of the c~any 's operations. The result has been unanimous agreement that the mill was, and is, a non-viable, long-term operation.

This government, as I have said, then app~oached the federal governmenr • to determine whether the federal government could provide financial assistance to maintain operations, but the federal government was unab~e to find rationale to supply the necessary economic suppcn:t. Mr. Speaker, this government does not want to close the mi~, but it can make no other decision · if it is to exercise its responsibility as the government of the Province.

Continuing oper~tions would have forced this government to either increase the t~~ burden on the people of this P~ovince, or to bring down a budget which, as ! have said, would have had an unacceptable, large.,current account deficit. A deficit current account in this P~ov~nce, is clearly, unacceptable. MR. ~~LWOOD: It would be disast-rous. ~. DOODY: It would be disastrous. That is right. The disaster in Stephenville, I think, Sir, could be multiplied throughout the whole Provinceo.: · if this had happened. ~.

SMALL~OOD: I would not wish the ~ister to assume, fr~ ~hat I said, chat I ~ in agreement with his ar~~ent on the mill. I say, just of its own, by itself, a c..trrent: account deficit for ~Tewfoundland, at this stage, •.vould be -a disaster. I agree completely. ~. DOODY: That is right. And the dilemma, as I have said ear~ier, ~. Speaker, in this Province is trying to separate the cost of the oper­ ations of the ~ll and the servicing of the debt from the budget of the Province, !t was an impossible pt'Oposition. The two are inexorably tied. You cannot separate them. We tried every God knows which way to do it.

We t=ied to find scme way to senarate Labrador 1iner~oard LL~ited out of

M~y 9, 1977 !ape No. 2343 EC - 2 MR. DOODY: the budget area problems of the Province, or the budget area challenges of the Province. But the simple fact of the mat~er remains · that it is a Crown co~oration, and the Crown has to accept responsibility for it. And the Crown, in this case, is the Government of Newfoundland, the ta.xoayers of NewfoundlaD:d, the Prov.ince and the credit of Newfoundland. And accordingly, Sir, this government has come to the only resp?USible conclusion possible -· under the circumstances.

And that is, Sir, as I almounced earlier, to shut down the company's ~era~ions over the next three to four months. During this period, the wood and other production materials will be converted to finished product and those pe~le employed by the mill will have a three to four mont:h perlod in which to seek alternate employment.

During this period, the Advisory Board will finalize its r~port and complete its analysis of possible economically viable alternative ?reduct lines. !he federal government has indicated a willingness to assist the governmen1: of Newfoundland and Lab-rador and the Advisory Board- to evaluate the economic feasibiliey of convertin~ to an alternate product line, and the gove~ent has certainly and gladly accepted their offer of assistance. ~is decision has probably been the most difficult this government has made Juring its term of office.

It w~s a difficult decision forced on government by the necessity of exercising its financia~ responsib~ties after it had exr4usted all other options, Your gonour. We may, perhaps, be faulted for keeDing the operation going too long- in terms of pure financial considerations. This may be true, Sir, Sir, we had to be aware, also, that the main concern is this, and ! suppose, in all major and minor decisions of government, has to be the peo~le involved. The effect of government decisions on people, straight account2ng, straight ~inancial decisions, are fairly easy to make.

When ~~e lives of people are affected, as they are here in this decision, then, obviously, the decision becomes that much more difficult, when, indeed, Sir, it takes on an entirely different asoect, an entirely different d~ension.

May 9, 1977 Tape No. 23~4 ~. DOODY: But, Sir, in the fir~l inescapable analysis as demonstrated by the various grou?S who have studied the probleM, the ~jor overriding consideration had to be in the context of what is best for this Province as a whole, and of the future of the Province. Many hundreds of people will be affected in the areas mentioned by the clcsedawn decision. The entire Pravinee would be adversely affected if it were to renain open.

I have stated, Sir, that it is hoped that NM- 1 the effect on t.~e area will be as short as possible and to this end the various levels of goveTnment have already taken the firse steps eo find a-ltentative employment for those people affected. It must seem strange to some that ~~e are taking this sad decision at a t:iJne of record hi~h employment in our Province, but Sir, t!le answer to the problems of this Province is not j cbs at any cost. That is the road to ruin. The answer has to be jobs that are pt'Oductive cmd that add to the economy and not out further strain on our already overburdened debt ?OSition. Mr.

Speaker, various parts of our Province had undergone social and economic shock before and have endured, certainly Stephenville will endure. The amount of U~oney that this Province have invested in the mill has been a major demons-n-ation of our concern over the faith of the people and of the town. I do not think the tragedy is as great really· as has been experienced by some other parts of the Province in the past. I know once again that t~at is scant comfort to the people at Stephenville. Mr. Speaker, there is little more that I can add at this present time. I have demonstrated to the best of my

May 9~ 1977 'rape · No. 2344 NM- 2 ~. DOODY: ability the options . that government was presP.nted with, tte options that renain open, the eventual cost to government as the projections demonstrated, the actual cost per job to the people of the Province, the total cos-t to government to date, the total cost to government in the future. I know that the~e will. be numerous quest~ons asked,. numerous charges presented, we should do our best to answer them, Sir. :B~.

I can only say with a feeling of p~ofound regret the responsibility for the stat.ement that I have made here this morning, the argument that I have presented has. not been an easy one bu.t I can think of no other way of p-reserving the financial int·egrity of the Provinee under the conditions . that we find ourselves in at the present time~ Thank you, Sir. SOME RON • MEMBERS : Hear! Hear! ~- • SPEAKER : The hon. Leader of the Cp!'·osition. ~. 'ROBERTS: Mr.

Speaker, we have all listened with the greatest of interest to the minister's statement with respect' to the motion now before the F~use, and I do not think anybody in the House - a:nd I know that nobody on this side - has any joy or any happiness in any degree with the situation which confronts this ProvL~ce today with respect to Linerboard Limited, the Linerboard mill, the situation which was outlined by the minister and which has emerged from the other documents and statements which have been made. ! appr~ciate very much, Sir, the way in which the ~LListe:r has gone at this matter.

I think he gave the Rn11~e quite a deal of infor.nation, some of it perhaps was new to many of t:he members; some of it in fact •.o1as new to ::ne, and I have made a study of ehe Linerboarci mill and tried to kee~ abreast of it. I think that the minister should also be complimented,and I wish to do so,because of his willingness to allow a number of his officials,and I gather the Premier concur~ed in this / ' '

~av 9, 1977 Tane N'o. 2344 ~- 3 ~. ~OBERTS: decision and I would thank him as well, to allow a numbe.r of his officials to meet with us in the ~'Position, and on Friday past in the afternoon ~•e sl)ent t:TJo or three hours, the minis.ter and one of n~ colleagues, the ~inister of Mannower - they have chan~ed it a.stain - t:h,.. M1.n:f ~!41!• 0 ~ Labour, I guess he is called n<N, bUt t:he get:ttleT!!a.n from ~enihek (Mr. Roqsseau), in any e~nt,

Hay 9, 1977 Tape 2345 PK - 1 ~r. Rober~s: together w~th two or three of their senior officials, and we asked a number of questions, and I think they were all answered as bes~ they could be. I ,.,ant to record that we did not ask any questions at that meeting that were not answered to the extent possible.

Now because of the groundrules that were established Qnd ~~e1 •ere proper groundrules ehey were established by agreement between the minister and myself-= we- did not get into policy decisions or into areas of controversy 1 but questions on facts, questions relating to same of the financial statements arising cut of some the doc~ents tha~ had been tabled and made public. They •.Jere asked, and they •.1ere an~·1ered. And I do want to say to che minister that we do a~preciate it.

I think- it is enabling,or that ' it will enable ~,e discussion here in ~he House to proceed ~ith a great deal more infor.nation on both sides,and accordingly, I believe, w~ll be a great deal better discussion. Similarly, I think, the minis~er's apprcach was one that I welcome, He could have come into the House and made a different cype of speech, and he perhaps ~ay have thought of that. If so, ! am glad he rejected it. \.;"e are accustomed to :·Ir.

John Crosbie, and ! do not like taki..."lg swi?eS a~ those ,,;ho are absent from our ~ids t, but since I said the same things when he was here ! will be pardoned I hope for saying them again. Hr. Crosbie made a ncmber o£ speeches on L.inerboard •.o1hich were filled •.Jith Vitriol and vituperation and •.Jhic:h cast c~nsiderably less light than did the ~nister, if a great . . aea.J.. more ~eat. ~!r. Crosbie was a master and perhaps :.s a master of vitriolic and violent and vicious debata. Tbat is the ~an's sty~e. I do not hold that against him, ~ecause be always stood up quita publicly and said what he had to say.

Ee also said it equally publicly outside the Eouse, behind the c~r~ai~, and other places. But the result of ~is speeches was inevitably to increase the tem~erature of the debate ~thout in any ~ay adding to the lucidity of it. And I would t~ink that is just :he approach we do not need in this debate. I think that the situation whic~ confronts the House and the Provine~

May 9, 1977 Tape 2345 PK - 2 :!r. Roberts: no~ is a very serious one, and one tha: requires the ernest attention of all members. A number of my colleagues intend to speak in the debata, and they ~vill speak with passion and io7ith conviction because the matter for some of them is particularly close to . home. ~1y friand from Stephenville (Mr. ~~~eil), my friend from Port au Port (ar. Eodder) and r:ry friend from St. George's (Mrs.

Macisaac) have all lived ~with the Linerboard Hill in a very real r..;ay in the last ~NO years since they sought election to ~~e House and were returned by ~~e people of their constituencies to be the members for those districts. They have lived with it in a very real way, and, of course, now they aust live in a very real way with the catastrophic results io7hich will come from the government's decision to close it. And in human terms these are the three members r.vho more than any o~"lers,Hr.

Speaker, will have to live with it,day by day,the tragedy of having districts io7hose people have seen their lives shattered, what they believed were secure futures, futures en which a man could plan, on io7hich a man could plan to raise his family and buy his home and all the things tirat are so much part of -::.;hat we all want for all of our people. Those d~eams, Sir, have been shattered, and it is far worse, Sir, to have a dream shattered :han neve~ to have the dream at all. The effect of the mill coming into Stephenville in the last three or four years has been to give that town a new lease on life.

And I think that lease on life is extented to all of Bay St. George. And it is the three members from these dist:::-icts, Sir, who more t:!'lan any other ':.;ill have co be t:~ere to pick up the pieces . I am glad they are there. Each of them, I ~~cw, ias a ,,ery real and a vecy genuine concern, and a ver:r real ::onvic ticn and a determination to do what can be done. They will speak _in the debate, Sir, and I ~hi~k that we should all listen with great care to what they say.

They ~ow a great de~l about this mill, a great deal about the way in which it has been run, and a great deal about the situation which confrnnts it

~ay 9, 1977 Tape 2345 Pk - 3 Mr. Roberts: now, and a great deal about the prospects of it. And they have a great quantity of veey valuable information. Some of it I will touch upon. But even the =aterial which I touch upon I hope will be expanded upon· When my friends speak in this debate, and there are other members on this side, Sir, who I think have qui~e a bit to bring to it.

!-fay 9' 1977 Tape no. 2346 Pag~ 1 - .ms M:r. Roberts. The overall si.tuation, Mr. Speaker, in my view is a tragedy that need not have happened. It is a tragedy. That is beyond argument. r..;e have a mill on the West Coast nowr ~vhich is the economic· life's blood of an area of 25,000 people, because really the mill is the ouly signiiican~ economic activity oerween the Par~ aux aasques ·area, the upper pa:rt of the Codroy Vall.ey to t.~e Sou~h,and Corner Brook to the North. There is notning in that great stret~~ of coast; that great stteech of t.~is Province.

There is nothing of significant ongoing ec.oncmic activity, basic productive activity except the Linerboard mill, and the ec.onom.ic benefits that are generated from it. Equally in many other parts of the Province the Lillerboard mill was of significant impact, in my own distti.ct in the community of ~in Brook and in t.~e communitY of Creque, in the district represented by my friend fran Baie Verte -White Bay (~. Rideout), the Roddickton area, in Lewisporte district, in Green Bay district, in Labrador itself, part-icular;; in central Labrador, in the di.str.ict represented by the gentleman from Nask.aupi (~.

Goudie) . All these parts of our Province, Sir, will feel very directly and very severely t~e effect of the government's decision, and I do not say that in any pejorative sense, I say t~t to set the frame. I do not want anybody in this Province to think that ~~e decision to close Linerboard is only hurting Ste~henville. It will hurt every part of this Province. It will hurt the areas t.ha t I have nallled directly, and there :nay be others . It "N'ill also hurt every single citizen of this P~ovince. ! have heard of people here in St. John's in the las~ week or so say, in effect;'Well, the devil '~~~ them.

You ~w, let them go i£ it is going to cost that :nuch :noney; 1 And that is a ~ery understandable at~itude perhaps, but it is a very narrow and a very shor~-sighted one and ought to be condemned. This Province is not so big that ... e can afford the luxury of standing by and watching one part of it go do~. 'Jhat af=ects one affects all.

~ay 9, 1977 ~!R. DOODY: }!R. ROBERTS : Tape no. 2346 Page 2 - ms No man is an insland unto himself. My friend ~,e Minister of Finance says, No man is an island unto hi:nself. And I would give him the second part of that couplet from John Dunne, Ask not for whom tbe bell tolls I It tolls for thee. And t~at may well be. It may well be the tolling of the knell.

I do not think the minister had any joy in the speech he gave, but I, in my eleven or ~Nelve years, whatever it is nov, as a member of t.,is House, have never heard or read of a minister who - he did what he had to do ; he did what he must do - but gave such a confession of failure and a complete di=ge • I do not want to get into :he kind of angry, heated debate that I do not think would serve the purposes of the Rouse or the p~ple, but if I could - or I ::1ean to say if I would, if I wanted to, I am sure ! could.

There is certainly a lot "Nhich could cause anger bacl~ and forth. !':'le minister in turn,and his colleagues, ~vould p-robably find soc.e angry points to !!lake as ~.tell. But I do not want to be angry. The minister did not set out to be that way, and ! ·.nll respond in kind, because I think it is the right T,;ay to go. But I think t~e minister will agree that his speech was as mournful a dirge as ;;as ever given by any minister in this Province perhaps •..tit.."l the single significant exception - there may be two.

There was a budget brought down in 1932 or 1933 -my friend from Twillingate would perhaps recall it -where ~~e education vote was cut in half, · from $1 million to $500,000 a year. MR. SMALLWOOD: !lo. XR.. ROBERTS : rN'as it not? ~. SH.AL.L:moD : If my frienci Nould allow me. I r~ember it so 'lividly. It was cut f!·cm $1 million, which it had been for about two years,ba~~ to three-quarters of a million dollars, a~d the following year, a new administ::-ation '.Jere in headed by ~r. ~fonroe and it was then cut to half a :nillion doliars. :m..

ROBERTS: My friend from !willingate.,whose knowledge of the period is infinitely greater than :nine, I thank him.

}iay 9, 1977 Tape no. 2346 Page 3 - ms Hr. Roberts. The Minister of Finance who made that budget speech was giving a dirge that perhaps was comparable and then, of course, there was the day in history when the then Prime Minister, the late Mr. Alderdice , Mr. Frederi.ck Alderdice moved a bill that, in effect, put the colony or the dominion, to use our correct tit:le conferred upon us by Westm:inster, the l:lominion of Newfoundland out of existence. But short: of that I think this speech the minister has given,. you know, will rank : and I do not say this to be unkind to ~~e ;minister.

I do not think the minister wanted to make this speech. I think he did •Khat he had to do. He has done his duty. ~-ut. SMALLWOOD: He is not the one. t.o blame. MR. ROBERTS : !1R. SMALLWOOD: !1R. ROBERTS: No , T1rf frtend - '!he one to blame is not here. My friend from Twillingate has some strong views as to •ibo is responsible. I. have st:rong views, and they are not that different . frcm my friend from Twillingate's.

:fay 9, 1977 Tape 2347 Pk - l ~r. Roberts: but the fact remai~s that ~he :iinister of Finance has inherited a situation from his predecessors, ~d has done what, I believe, he believed he had to do. And I do not fault h~ for that. I may fault what he has done, but I do not fault the way in which he has done it. As I have said, Sir, I think, the whole story of the . Linerboard !-fill is a tragedy, a tragedy that need not have happened and a tragedy for which the present government are fully and completely responsible. Now the history of it is ~ell known, Sir.

The minister did not go in1:o it in detail, and I do o.ot: need to as welL He referred to the original legislation 'Nhich r,;as enacted :,.ere i:l this House back in 1966-1967. It was ar.ended in 1968. The legislation was quite straightforward. It enabled the gove!"'nment to enter into certain guarantees. My friend from Tr..;illingate C·!r.

Small~•ood)., ~ho was Premier at the time~will speak of it in, I understand, some detail and give the Rouse some inior.nation because I would hope :y friend for Twillingate, and I understand he tends to do this, will knock on the head once ~1d fer all a foul and a base c&~ard that has been spread a~aut this ~ill. And that foul and base canard is that ~he original project -;.ras ill-conceived, that the ill-product_ t:he origL1al project,I ~ sorry, was entered into without adequate and thorough s tu.d:r, You can al:.;ays, I su?pose, :!r. Speaker, say :!:lat additional studies aught co have been done.

You c~! say t~at additional studies ought to have ~een done on anythi."lg that was ever · . .mdertaken by anybody. Bu~ :he original document .,as '"ell ::iocucented, and that is not something I am T-aking up cr something I am a~vancing as an opi:lior., Sir. '!'hat documentat:ion ~.;as :!lade ;:malic here in the P.ouse. T."e Eansards of :he periods in question of the debate on the original bill are ~ot available. They ':lave not been ;Jri.nted. They are pres~~oly ty~ed - no~ I am referring, I say to my f=iend, back in 1..967.

Tb.e bill •.o1as enacted - i:: •..;as enacted as Act :·To. t..4 of 1966-1967 and it received assent on Aor~l 25, 1967, so it is reasonaole

Hay 9, 1977 Tape 2347 PK - 2 ~fr. Roberts: to assume that the debates ~ere in March and April 1967. And I am told that those Ransards are not available. But as I recall it and ether hon. gentlemen ~ho ·.o1ere in the House at that time will recall . it, I am sure. MR. STI1HO~S: The typescr~p;s are done. HR. ROBERTS: Yes, my friend from Burgee-Bay d'Esnoir (Mr. Simmons) says,"The typescripts are done", but ~e have not had - .-- . ' access to them. I hope we will be able to get either ther. or ~~e newspaper cuttings in due course. But - the minister has the r:yp~cripts of the original debate there? A}T RON.

M:El1J3ER: No~ but I saw ~~em though. MR. ROBERTS: !hat is good.. I would like to see them. But as I recall it, and l think my memo;ey is very good on the poi:lt ~ the original bill,which became the main Melville Act, was amended subsequently to increase the amount involved, but that did not change the principle of the bill. ~e:original bill was sponsored in this House,in·a ministerial sense it~ a government measure, of cuurse . - bv three gentlemen, th-ree of them, '!:.1.e Prem.ier,as I recall it, spoke very briefly in that debate.

The burden o£ the bill, the burden of e~laining the bill and eXplaining the project, was undertaken by three ministers: t..~e then Minister of Justice, •v-ho is still the ~Unister of Justice, Re has undergoue a transformation, I would not call it a reformation, but he has gone a transformation since that time. :MR. NEARY: The three blind mice. ~. RCBEn.TS: The then ~'finis ter, I guess he "..ras, of ~funicipal Affairs and Housing, ~1r. John Crosbie, who has undergone se•1eral transfo~ations, not of ~hich can be called a reformation. Political resurrection. ~!R.

ROBERTS : And the then Minister, I believe, of Labour- ~e may have been Minister w~thout Portfolio at that cime - - MR. S~l'il'OOD: ~1inist~r w1thour Pordolio. Minister ·Nithout Portfolio at that point in time, Mr. Cly.de Wells, then the member for Rumber East. Mr. \-lells subsequently, at least for the tiQe being,has reti~ed from active politics, ~o doubt

~ay 9, 1977 Tape 234 7 PK - 3 Mr. Roberts: he will be back again, and I hope he will be, but he has withdrawn from active political life, and that 1te retired before the 1971 electicn, retired from his seat and !las not contested an election since. Be 1:1a.y. I hope he wilh :But if one w-e-re to read those speeches, Mr. Speaker, one vould see in some detail,- and the minister~ if he has t.~em there doubtless has read t..~em t..!.troUgh, and has gone through th~- a::.C. see in some detail the original project as it was conceived.

I do not intend to go into the details of it, because I do not think it would very much help the point of this debate, but I do ,.;ant to say, and r:ty friend from 'Iwillingate (}!r. Smallwood), I hope, will say it in more detail and '~th more explicit knowledge,that the original

Hay 9, 1977 '!ape no. 2348 Page 1 - ms Mr. Roberts. project as it was outlined then was as well conceived as any of the projects which have come before any Legislature in this country, I~ got the support, I believe, of every member of the aouse at that time, Opposition and gover~ent alike. And my friend from St. John's Centre (Mr •• Murphy) was sitting in Opposition then. I do not think he T.a3 Leader of the Opposition. The then member forSt ·. John's East (M:r. Ottenheimer),who is now our Speaker, was the Leader of the Opposition. But -my friend fr~ St.

John's Centre (M:r. '!1urphy) can correct me if I am wrong - as I recall it every m~er of the HotUie. - there TNere probably t:hirty-nine to the Speaker's left then an4 three. to the Speaker's right at that point in time - every member of the Rouse voted in favour of the original Melville agreement. ~y fr~end ~ods acquiescence. !1R. MURPHY : !he reason I gave the other day is that you would be something less than patriotic if you did not. This is straight fact. !~. ROBERTS: l1R. MURPHY: ~!R.

ROBERTS : wit...'l his reasons. 'l'he minister did what be believed b.est - Iha t is all . - and I respect h:im for t...'la t, and I do not quarrel We who were on the gover~ent side - I was not in_ the government; I was.a backbencher as was my friend from Conception Bay South (Mr. Nolan), and my friend from LaPoile (~.Neary) and my frier~ from Fogo (Capt.Winsor)- we vbted for it for essentially the same reasons~t~t we believed it was the right thing for !he Province to do, and,YOU know,there is no quarrel with the minister's decision. ~. ~TOLAI.'l : ~. ROBERTS: And our friend from aurin - Placentia West.

Oh, I am sorry. ~y friend from Placencia ~oiest (~. Canning) - or now Burin - Placentia ;,.;est; ':le ·.;as then the member for Placentia West -was-also, of course, a member, and voted for it* all because we believed it was the right thing to do.

May 9, 1977 '!ape no. 2348 · ?age 2 - ms Mr. Roberts. Well, the mill p~oject went on fr~ its beginning in 1969 or 1970 I guess the actual construction began - and in ~y of 1972 the governcent took it over. They took it over essentially in the circumstances the minister outlined. If it were of any value I could quarrel with some of the minister's statements, but I do not see much point in it. I think they are matters of em~hasis and matters of degree. '!he fact remains that i~ 1971 or 1972 ~,e mill had not been com-pleted. It was well under const=uction, and there were considerable difficulties in rais:ing funds that were going to be necessary to co