VOL. 3 PRELIMINARY UNEDITED TRANSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOD: 10:00 a.m. - 1:00 p .m. FRIDAY, MAY 5, 1978 NO. 51 • ' f i. i l' r ~ l..

May 5, 1978 Tape 1871 PK - 1 The House met at 10:00 A.M. Mr. Speaker in the Chair. MR. SPEAKER: Order, please! I would like to welcome to the House of Assembly Mr. Lloyd Morgan,who is Vice-President of Lions International,from Lower Hutt, New Zealand. Mr. Morgan is accompanied by the Newfoundland District Governor 1Mr. Cal Reynolds. SOME RON. MEMBERS: Hear, hear! MR. SPEAKER: I would also like to welcome to the House of Assembly on behalf of all hon. members fifty Grade IX students from Grant Collegiate in Springdale accompanied by members of the staff, Mr. Harold Tremblett, Shelia Drover, Mr.

Barry Jackman, and Mr. Joe Wells. SOME RON. MEMBERS: Hear, hear! STATEMENTS BY MINISTERS MR. SPEAKER: The hon. the Minister of Justic~. MR.. HICKMAN: Mr. Speaker, I wish to announce that the Province is presently negotiating a U.S. dollar bond issue in the European market. It is anticipated that the issue will be for $50 million (U.S.) and as such it will be one of the largest the Province has ever floated outside of North America. Present indications from the investnent ,community are that the issue is being very well received.

It is also anticipated that the issue will be priced at 9.25 per cent, and that it will mature in 1990. Final negotiations with regard to the issue terms will be carried out in Paris on Tuesday, May 9, 1978. The issue has been arranged through our European Syndicate which is headed by the Province's lead managers in the Euro market, Credit Commerical de France and A.E. Ames and Company Limited. MR. SPEAKER: The hon. the member for Burgee-Bay d'Espoir. MR. SIMMONS: Mr. Speaker, just a word or two on the minister's announcement. It is very difficult to react in any substance when you just heard the item.

The question I had for the minister, it was raised here in the House earlier, the question of what is happening as a result of the currency fluctation, particularly, the Canadian dollar·? What is happening in terms of our commitments on American issues, for

May 5, 1978 Tape 1871 PK - 2 Mr. Simmons : example, and on the European issues for that matter? Perhaps the minister either now or later could take a moment to indicate that to us. And, also, a second question; we assume what he has announced today is part of the government's borrowing programme for this year, of course. MR. SPEAKER: The hon. Minister of Justice. MR. RICKMAN: It is imnroper for me to speak a second time on ministers' __ s_tatements. _ Mr.

Speaker, But the cruestion that the hon. gentleman refers to is to the effect of the devaln«tion '1f t~~e Canadian dollar vis-a-vis the America dollar, and then again the Canadian dollar vis-a-vis Eu~opean currency as it relates to our various bond issues over the years is still being worked on in the Department of Finance, which means - I do not know if the hon. gentleman from St. John's East (Mr. Marshall) realizec the a~ount of work he created, but it is in a good cause.

They told me that hopefully by this time next week they will furnish me with all of the details so that I can make a proper statement to the Rouse giving all of the details as it relates to the valuation of the dollar. They do not have it ready for me yet, and I am sure that han. gentlemen will realize that is the kind of information that has to be very precise indeed. ORAL QUESTIONS MR. SPEAKER: The hon. the Leader of the Opposition. MR. W. ROWE: Mr.

Speaker, one or two questions for the Premier, all designed , Sir, I might say, to try and clear the air, and to come to the bottom of some of the gross allegations that have been made concerning this administration. Sir, with regard to the Carbonear Hospital, the building of the Carbonear Hospital, and the design of same, and the managem~nt fees in connection with the

::ay 5, l!l78 '!ape 1872 DP - 1 design and building of the Carbonear Eospital. .'\s I understand it, Sir, the original esti~ate for construction of that hospital was somewhere arounc $3,650,000 - ~fR. llEAP.Y : J.t was announced, ~'es. ~~. lJ. ~1. ROl·7E : - as announced at the beginning, if I remember correctly and if my figures are correct.

I stand to be corrected, Sir, but I believe I am at least 1.rithin the range. ~!ow I do not think it has been announced but I have heard information from various sources that the revised cost,the actual cost of that building may have been in the area of S?,40n,ooo- ~m. ns\~.Y: Pnd the actual completion cost Has more. - and perhaps the completion cost was even more then that, l'r. Speaker. Now these are serious matters, serious allegations a very serious situation.

First of all I would like to ask the han. the Premier t.rhether he can con~irrn or deny ~that I have just said,if I am in the ballpark at all on this matter or w:-:~ther the infor.nation I have is totally wronf! and erroneous, ·/hether in fact perhe.ps the $3 million or so original figure was in fact the figure that the building was completed for? Can you ~ive me some information on that? ''tF.. SPEAK! 'D..: The han. the Pre~er. Hell, ~·r. Speaker, as I said in the Fouse the other day ,and my colleague t'1e "inister o"f' nuhlic Por1<s and Services ("~r.

I'oody) can talk on this as Hell, that department is preparing a full statement on the consnl tapts acrui tO'!e methor'oJ "?Y "n the Pealth Sciences ~o~nlex, a that is not· ready as yet. r~garding the S3.h 7.illion, I never heard a figure that ~ 1ave :;,een at ou.e of t~c t~·7 o so~~ ::ur!a. i:t~ periods in t:le :'lis tory of t~e r::arbonear r:ospital. E'.!t I t~inl: t~e lo;;.;es t figure I :1ave ever heard regardin~ tO'!e Carbone.:r l:ospital \vas uhen t:,.e I I ,., I · I . !l • .. - ')'.

"ay 5, 1"73 Tape 1~72 pn_E~;n; r. ::OO".::S: first plar.s 'nere ::o::-.e to get an estimate of w:Oat it woule cost, and if I remember the figl.!re correctl:r I t~ink it sorr£where arounc $1~ million for cost. And I rr~ ~~t s ay ~at the 8art.onear ITospital Has much greater than S !'1 oillion to ~ 12 :nil lion and certainl y ,,;hilst I do not have the accurate figure ,the original cost estimate l<as much higher than the Leader of the Opposition mentioned.

Certainly the cost was much higher than the final cost he mentioned and certainly these two figures we can get accurately for then. · ~.,- . ~.J . ~ r. !tO HE: A supplementary, ~1 r. Speaker. ~lR. SPEAY.EP.: A supple~entary.

I must say, Sir, in the li ght of all that has gone on,the allegations.perhaos allegations of criminality, bordering on criminality, certainly l.mprop-iiety, · I do not t!-linl; it is good enough for the people of this Province or for this House to merely accept a ministerial-not a ministerial but a depart~ental stateir.ent of cost and figures on this matter. !-!auld not the I'reClier agree that in the light of the allegations made by this ~an Davidson and other people,the questions that have been asked in this P.ouse, Sir, that the only way to clear the air in t!-!is matter is to have a public inquiry ~nto the building of the Carbonear Hospital,all matters pretaining thereto including allegations of kickbacks, allegations of arm-twisting for political donations~ tremendous cost overruns, hiB:tly inflated costs at the end compared to Phat was estinated at the beginni:J.g? ~ !auld not a public inquiry clear the air "-nd at t he same ti~, Sir, re-establish hopefully the reputations of mini s ters who may have been implicated by allegations? ~'P .

SPE!.Y.:E!'.: The han. Premier. PREHIE'!'. ~ COORZS : Two thi!l!;S, :-<r. S;>eaker; first of all,there is a criminal investigat i on undeivay by the ~C'P which hopefull y w ill exoose any wrongdoings by anybod y . These allegations are just t hat,allegations,and I would suggest, Sir, that if ever y capital project that t~is government or any other government during ...

:!.ay s ' 1 8 . ape ! B 72 - 3 the past seven or eig'~t years , durin~ t..'le time of <dcked inflation,if · e had to ~.ave a public inquir; for every estilil2.te tilat did not come in on targec:,taat vas inflater!, we would have even 1<10re public inquiries t..'len the leader of t! e. Op!>OS.i cion would li~ ·e us to e.p!.JOint anyt·le.y. ~. !•: .N. ?O'.!I!: A supplell'.entary, Sir . ~ !!>. .

SP _o\:{S'> : even i. this time of rafr!lant inflation whether too many .costs '.vent up .y 100 or 2!1'1 ~er ce.'lt or ,,:hate e the case. ~y ~e to et he:: ~nth allegations of i.!'"~ropriety and vrrongdoing and kickbacks &~d political ?arty finaglin~, Sir . ~at is the reason ~hy we s~ould 'lave a ?U~lic inquicy . ~<ow, Sir, let ne as: t=:e re.m.ier this 1~ic:-. regard to the fi= I believe called "eriti!".e Po .;er "on sultant~,t~e a!le~ation has been made by : ~ r.

DavidSOQ t~at i!l re::urn for h.is s.ignin ~ j>aper that t.."'e Premier ·of the rovince had no personal knotdedg e of paY!"en:::; o the ! a-rty ~n ance C ~airman "who I think was designated by : . Joyce in one of t~e pape rs ·~a gv4n ',the ?reoier ~ad no ~erso a 1 to "r . Green e t he Finance Chair.nan of the

:t ay 5, 1978 r:c - 1 P.C. · Party,this :l a-ritime Power Consultants ·,..o uld immediately &et a $10,000 retainer fee and so much wor k th.at they •..roulci not be able to co p e wi t h it . , ow, will the Premier inform t h e Ho use, Sir, whe t er he h as any personal or indir ec t knowledge of such an event h a v~n g ta ke n place ~ a signing by David son t hat the Premier oi the P rovince had no knowledge of suc h pay~ents having been ~ade to t h e P.C. Part y in retur n for this ~ ariti m e Power Consultants getting a high retainer fee and so much work that t h ey could ~ot cope with it r 1-:R .

SPEAICER; he hon. t he P re mie r. P R_:.;r Eit :rOORE S ; F irst of all, ~ r. Speaker, as I said before, this is the sort of alle g ation that is under active police investigation and if there is any wrongdoing there it will be e xposed and the people wh o are uilty will b e prosecuted irrespective of who t h ey may be , a:;d that is the way it should be .

I might say that I know of no comoitment to ~a r i t im e Power Cons ultants , which I ~nderstand to be Xr . ~ av~d son. that he would be gi ven so much work h e would not ·no ~ what t o do wit h it, I think, Sir, th3 t the ~ecord spea k s for itse lf in that regar d . :m . :r . ~= . ROlvE ; I g uess the paycent was no t ma c e . A supplementary, Sir. :tR . S?E AKER; A supplementar y , the orig ina l qu estioner. :! . ~! . ~1. RO~ Z: Will the Premier inform the ~o us e whe t he r in fac: he has i n his p oss e ssion a paper or a letter signed by ~r. Da vidson to the effe c t tha t h e

}! ay 5, 1978 Tape 1873 EC - 2 HR. {.,r. N. ROWE: Premier had no knowledge of payments having been made to the party bagman, :~r. C::reene? }!R. SPEAKER: The hon. the Premier. PREl1IER HOORES: I do not have such a letter in my possession, Mr. Speaker. tl R. lV . :r. RO WE: Another supplementary, Sir, if my colleague does not mind. HR . SPEAKER: A supplementary, the original questioner. XR. l'l. N. ROHE: Will the Premier inform the House whether such a paper, document, letter exists now or ever existed to his knowledge? MR. NEARY: Signed by Davidson. HR. 1i1. N. ROl'fE : Signed by Mr. Davidson . XR.

SPEAKER : The hon. the Premier . PRD1IER MOORES: Any papers I know of are in the hands of the police, .Mr. Speaker, and they are the best ones to deal with it. MR. NEARY: But he said there was none. MR. SPEAKER: The hon. the member for Le wisporte. MR. H. N. RO l-lE: Sorry, Sir, if I may pursue this if my colleague does not mind. MR. SPEAKER: ~ !:'. • ~·Ji ilT E : !·!R. 1'1. N. ROHE: The hon. gentleman yields? Yes, ' 'r. Speaker.

That seemed to be a bit of ambiguous, equivocal statement to sa y the least, Sir. an Is there or was there or was there not in existence, or is there or is there not in existance a paper, whether it i& in the possession of the police or not , si g ne d by Mr. Davidson to the effect that the Premier had no personal k nowledge of payments ma d e to the P.C. Part y collector? MR. SPE AKER: The hon. the Premier. PRE}1IER MO ORES: lrr. Spe a ker, t h ere are l ot s of things of interest to the Leader of the Opposition. I would '~ I

:ray 5, 1978 Tape 1873 EC - 3 PRElHER HOORES: suggest that the affairs of the P.C. Party is not one of them, only as far as if there is any criminality,.\n~ - if there is, the police, I am sure, will find it as they would in the Liberal Party or as they may do in any party _or with any individuals in any party. MR. H. N. ROWE: Sir, he is obviously not going to answer the question 'yes' or 'no' so one is left to draw one's own conclusions,unfortunately. Sir, the actions of the P.C.

Party, the Liberal Party or any other party are of great importance to any political figure in this Province if they are involved in any shenanigans which may have defrauded the public of the best possible deal that they might ~ave gotten in a particular contract, Sir. So in that way the P.C. Part~ although I am not interested usually in their goings on I am certainly interested in that aspect of it. If the Premier will not answer it, Sir, let us see if he will answer this question. It is alleged by l!r.

Davidson that the party collector, the party bagman, Hr.~reene collected contributions not only from companies who already had contracts let by the government but from companies on the basis of work to be promised in the future. ~Hll the Premier inform the House whether he, personally, directly or indirectly has heard tell of instances where companies contributed to his particular party,or any member thereof for that matter,on the basis of promised work to the firm· which made the particular contribution? NR. SPEAKER: The han. the Premier. PRE!!IER ~100RES: The answer is no, Mr. Speaker. ~:R. HHITE: Hr.

Speaker. l-1R. SPEAKER: The hon. the menber for Lewisporte. ,. I I I I r li ; - { 1 •

~'ay5 , 1!'78 EC - 4 0:)\'E: ·•r. Speaker, i!' I oay !:-e ~CR . SPf.A'E!t: :O:ill the hon . gent !er-.an y!eld? ':?. . l:;!I'!t: Yes, "r. Speaker. '~. ''. ::. ~Ot:E: I am sure r.y colle&gue does not mi~d. :re ~otill show thea today. Ah! Pazel is ~tone. ~!r .

H .~ : . !\Ot:'E: Hou!d the Pr ecier i:'lcicate, Sir, to tile House ·.:~ether he has any personal or indirect knowledge of situations ;;here fi:-rns Cl.!ri.ng this periocl of ::il:le wit!l rerard co Scrivener , with regar d to the Health Sciences rentre or rar~onear hospital, whether firr..s Here encouraged ~Y ~i1:1 or ?y any of his colleagues or by t he party collector to out in 1~; ~ids on the assurance that as t he job progressed that particular fim t:oul d ')e given ext:ras from :.thich they could recoup t!"le money ar.d profits which they would have !"lad iE t:-:ey had put in a hig.'ler ':lid?

The hon . t!-le Pre aier . r l i 1. ! I l

}Jay 5,1978 Tape No. ld74 AH-1 PRE!1IER ;,!QORES: Absolutely not, l·ir. Speaker. HR. 1-.'HITE: A supplementary, ~fr. Speaker. HR. SPEAKER: Hon. member for Lewisporte. :·JR. WHITE: Hr. Speaker, ~y supplementary is to the Xinister of Labour and Xanpower and it deals with a question that was asked the minister in the House a couple of days ago concerning allegations made by :·.!!:'. Davidson in his television pro&ra=e in reference to the minister's name. The minister said that he was going to check the transcripts of the tapes and then tell the House about that. I wonder if he has had a chance to do that? HR.

SPEAKER: The hon. minister. HR. ROUSSEAU: Yes,I have, Mr. Speaker, and what I said that day in the House still stands. ;.JR. l-IHITE: A supplementary. HR SPEAKER: A supplementary. :-!R. WHITE: ~r. Speaker, the minister is telling us nm·t that he ~ c -'?s no knowledge of any meetings with Xr. Davidson with respect to a letter that would be signed, by the Premier? Can he clear up tnis for us? 2lR. SPEAKER : Hon. minister. MR. ROUSSEAU: That is correct.

It is not that I did not have meetings,I was in contact with Hr.Davidson but never on the the question that was asked me the ot11er day by the hon. the member for LaPoile (Mr. Neary), I did not threaten in any way in which Mr. Davidson suggested in respect to any letter. ~JR. W.ROWE: A supplementary, Sir. !·JR. SPEAKER: A supplementary. l·!R. W. ROWE: I would like to revert back, Sir, to a question I asked the Premier. I ask him whether he had knowledge of companies being encouraged to submit low bids on the assurance that t hey would be given extras later on and the Premier said absolutely - f i ' I I ' '

~~ay 5, 1~7t T"!pe 1:174 not. !<'ell, ~·rill thE> Premier infom t)le l'ouse, Sir, •..;h.etl1er to 'lis knouledge or to the !~nm.rletlge of his ar:rrinistration firms such as Noel's !'lectrical, I believe is o,-,.e· of them - l'ecker. "? .. H.~!. '!OFE: Becl~er -~as another one, "ere in fact ~iven surstantial amounts of extras of any: jobs involvinp these tFo projects, especially the F.ealth Sciences Center Hith particular reg:ard to that structure, ' l '>'hether they in feet got substantial e:o:tras on their contracts? I !'lave no idea, M'r. Speaker.

I !'ta'Je never heercl of Bec!:er, by the way, but I am sure they were active if the Leader of the Opposition says so. But I have no idea who got extras or "~10 did not get extras or why they got then or if they got them, but certainly once again in the Jepartment of Public C!orks report on this "e can certainly find out. A supplementary, Sir. ::EAJ'.Y: -If Jour Honour would rwt mine'.. HR. SPEAKER: A supplementary. !IR.W.ROWE: ~ese are serious matters. Mr.

Speaker. _Does the Premier not agree - this may or may not be crimL<ality, The police may not dig up anything which is criminal in nature but if these things are in fact as alleged, I•lr. Speaker, we are certainly bordering if not on criminality then on gross and grave irregularity,mismanagement, negligence perhaps, perhaps skulduggery of some sort which may skirt the criminal law but certainly should come out.

Now would the Premier not agree that if there is any germ of truth to some of these allegations whatsoever,that there should be a public enquiry to get to tile bottome of it if for no other reason but to clear the names of the Premier and his colleagues and other people, including ~!r. ~reene, for example,wno may have been involved? Should we not have a public enquiry on thase matters? c!R. SPEAKER: TlE hon. Premier. PRlli-liER l!OORES: I have already said, Hr. Speaker, the answer is

:-lay 5,1978 Tape :<o. 1874 AH-3 PREHIER L-IOOR.ES: no, we nave a police enquiry. I ,have also said to this hon. House this morning, maybe the Leader of the Opposition l~s a hearing problem, that the Department of Public l~orks and Services will gladly prepare all the information that is being requested. To ask me what extras a fi~ ~ot on the Health Sciences Complex is about as inane as you can possibly get. How would I know what extras any singular firm got in any project of that nature?

I said that the Public Works Department would get this information, will supply it to the House, will supply it in such terms as can even be understood by the Leader of the Opposition and we will do it as quickly as possible. HR.W.ROWE: A. supplementary, Sir. :-JR. SPEAKER: Leader of t~e Opposition. HR. W .ROWE: Llaybe inane to the Premier, Sir, is not inane to ~e. If a coupany or companies have been involved in any kind of skulduggery involving the public funds,ana if the government has been involved in the ~e it is not inane, Sir, it is important and that is why there should be a public enquiry.

Sir, one would i1ave thought that the Premier of the Province~ once these things became public,would make a special effort to try and get to the bottom of it and find out. Obviously he has madL no effort whatsoever. But, Sir, let me ask the Premier this, the allegation is made, by Hr. Davidson again, that he paid or Scrivener paid, I forget now the detail, he or the company,Scrivener,paid bills and the rent of apartments of senior ministers when they ~PTP in St. John's. I believe he made particular reference to Elizabeth Towers in that r~gard. Al.'i HON .MEMBER: }lo. No. Okay.

It was not Elizabeth Towers. ~ut they paid the rent and some of tne expenses of senior ministers when they were in the St. John's area. \.Jill the Premier indicate to the

I) I ,. i i. I ji I~ . ~· J. '·

Tape ::o. l"'7L n o use -:; 2 ~ther ir.. fact :~ e ~~f!.S a nv LnO'illedge of t~:.is - '~ r • • Or lookad into it. - or t:1:1et~er he \as ::oo!-:e d into this serious c.lle ga tion or Y.Thet :Ler an yo ne else in the ~overnF.~ e"!:l.t h.2s looi:ed into t ::.i s serious allegation? Joes ~1.e have any !.::_no,.v:!.edrre of it'? Can ':-:.e set t~e minds of t~e Eouse at ease on t::is matter? I r t I i' l

May 5, 1978 Tape 1875 PK - 1 MR. SPEAKER: The hon. the Premier. PREMIER MOORES: Yes, Mr. Speaker, ::ot to my knowledge, and I did talk with the ministers that could be involved some two years ago when this crazy affidavit,which seems to be the background and research for the Leader of the Opposition which he is obviously so convinced that these allegations are correct, he is obviously totally on the side with Mr. Davidson's on this. I am amazed this morning, Sir, that he has not asked us to appeal to the Supreme Court of Canada to try to get Mr. Doyle's $2 million income tax back. MR.

NEARY: What has that got to do with the Health Sciences Complex? MR. W. ROWE: A supplementary, Sir. MR. SPEAKER: A supplementary. MR. W. ROWE: One final supplementary. MR. NEARY: Your dirt is not going to ge~ you out of this one 1 Frankie Baby 1 • MR. SPEAKER: Order, please! MR. W. ROWE: The fact that the Premier seems to be so willing to drag red herrings over this is enough to raise one's suspicions in itself. SOME RON. MEMBERS: Hear, hear! MR. W.

ROl.ffi: His failure or his unwillingness to deal with the crucial issues in this matter, Sir, and to drag this red herring over it certainly prompts me to continue this probe, Sir, in the hope that a Commission of Enquiry might be set up. Will the Premier tell us, Sir, this allegation by Mr. Davidson that some $6,000 which was designated for somebody 1 s pleasure apparently, a pleasure trip, but which was apparently as alleged used by the Party Finance Chairman to purchase an Electra Buick automobile, ~an the Premier tell us if there is any substance to this to his knowledge?

Or if this is wrong what is the true situation with regard to that particular contribution? I - I

May 5, 1978 Tape 1875 PK - 2 MR. SPEAKER: The hon. the Premier. PREMIER MOORES: I would suggest, Mr. Speaker, that that question would be more properly directed to the Finance Chairman of the Party. Certainly I can say that I have never received any money for any personal reason from the Party for that nature. I can also say that that is one of the allegations I would think that the police would have to clear one way or the other. I would think any direct allegation of that sort would,of course, be for a police · investigation. I am amaxed, Sir, that the Leader of the Opposition is going through that document,

section by section, just to make political points in this House. And I am sorry, that is exactly what he is doing. SOME RON. MEMBERS: Oh, oh! PREMIER MOORES: I find it incredible. SOME RON. MEMBERS: Shame! Shame! MR. NEARY: Go down and resign! MR. W. ROWE: A supplem7ntary, Sir. MR.. SPEAKER: A supplementary. MR. W. ROWE: Sir, I could have risen on a point of order, Sir. The imputation of improper or any motives at all to me, as a member of this House, is completely out of order, Sir. SOME RON. MEMBERS: Oh, oh! MR. W.

ROWE: I am not going to bother with it because I realize the Premier is testy~upset, and certainly obviously physically overwrought here because of these quest{ons, Sir. I mean is t~e Pre~ier the Leader of the P.C. Party or not? When an allegation of gross impropriety comes to his attention concerning the use, perhaps misuse of party funds, ioes not the Premier investigate it or look into it? On this 56,000 the allegation is that it was apparently misappropriated ~nd an automaooile oougnt out of cne money. t~ o" mind you,the original appropriation did not appear from this allegation to be the most proper.

Apparently a number of people were suppose to go off on a little pleasure trip to the Mediterranean on that amount I ~ I l I f.. I

r) l

. ( ~ May 5, 1978 Tape 1875 PK~ 3 Mr. W. Rowe: of money. Now whether they went on this or not - MR. NEARY: Yes,they did. MR. W. ROWE: - is something for perhaps a public enquiry to determine , a public enquiry, Sir, because there may not be anything criminal about it. But, Sir, there i~ certainly things improper about it, if these allegations are correct. Now I ask the Premier again not to skirt around the issues, but perhaps give us a little infomation on this.

And I ask him as my final supplementary, Sir, in the light of all of these allegations,some of which seem to be confirmed from outside sources, Mr. 1-lhite' s letter, which he went on television and said was correct and not written in an alcoholic or a drugg~d stupor as apparently somebody tried to get to the press and succeeded in getting to the press, Sir, confirmed in very material particular ': some of these allegations which have beert made. That is why we are trying to get to the bottom of it.

So will the Premier, please, inform the House again whether in the light of all these allegations which, Sir, if one is correct, if one of the allegations is correct, Sir, there should be" a public enquiry so that the people .of this Province can know what has been going on, and can see what has happened with regard to large amounts of public money in this Province over the past six years. MR. SPEAKER: The hon. the Premier. PREMIER MOORES : Mr.

Speaker,first of all, there was nothing regarding the expenditure of public money that is not or c~nnot be fully investigated by officials in the department, by police if there is any criminality, and by officials in the Conservative Party, if it is there, or I would suggest officials in the Liberal Party if it was there. This sort of accusation the Leader of the Opposition is trying this morning, and this line of questioning, he knows full well that there is going to be a ,.

l-Jay 5, 1978 Tape 1876 EC - 1 PREMIER MOORES: thorough and absolute inve~tigation. It may be, as a matter of fact, by the time it is finished, too thorough and to~ full as far as some people are concerned.

But the fact is, Sir, that I do not think there is any question whatsoever, but with a police investigation, with the proper officials researchins the information that he has requested which involves public funds, with that information made available to the House, with a thorough police investigation and with the Conservative Party looking after its affairs, and I suggest, the Liberal Party theirs, I think, Sir, that will cover any aspect of this particular discussion. AN HO~T. MEMBER: !:lear, hear! HR. WHITE: Mr. Speaker, a supplementary. HR. SPEAKER: A supplementary.

HR. 1-lHITE: My supplementary is to the Minister of Labour and Hanpower, Mr. Speaker, and I just want to clear up this point - it was not cleared up very well in the last two supplementaries that were asked - and I just wonder if the minister could tell us whether or not this particular letter that is alleged to have been signed by Hr. Davidson, did this ever come to the minister's attention at all? Did it ever come to the minister's attention before the T.V. programme the other night? If it did, when did it? &nd was it ever the subject of a discussion with Mr.

Davidson or did it ever come up in a talk or discussion with ~r. Davidson? HR. ROUSSEAU: As I mentioned, Mr. Speaker, the other night, I have heard about the letter, under ·..rhat circumstances I do not know. As far as discussion with Mr. Davidson in respect to the letter, not to my recall. I have heard of allegations of the letter. I do not know i i · - !' :_ ; I I

'• ~!ay 5, 1978 Tape 1876 ::c - 2 NR. ROUSSEAU: where the allegations came from : That was a few years ago. !!R. ;miTE: Did you ever have discussions with (inaudible) ~cR. ROUSSEAU: 3ot to my knowledge. Hie. NEARY: (Inaudible) "There he heard about the letter. Did he hear about it from the Premier or some other source? 1!R. ROUSSEAU: This is what I am saying. I remember something about a letter from Mr. Davidson. I do not recall where it came from. HR. NEARY: But the Premier told us there a half hour ago he did not have one. 11R.

ROUSSEAU: You know, it 'could have been somebody saying it in the House, I do not know, But I seem to recall somebody saying _ something about a purported letter. It might have been in the House and it might have been the han. member, I do not know. HR. NEARY: A supplementary, Mr. Speaker. MR. SPEAKER: A supplementary. HR. NEARY: Mr. Speaker, when the hon. gentleman was Minister of Public Works did he have occasion at any time to discuss various projects like bridges and so forth around the Province with }!r. Davidson; any work for Mr. Davidson's company? :!R.

SPEAKER : The han. the Minister of Labour and :1anpower. :m. ROUSSEAU: The only project I recall, Mr. Speaker, at the time, was the Conne River Bridge when I was Minister of Highways for which Mr. Davidson received no money. MR. :lEARY: ~!r. Speaker, a supplementary question. I ... . , ' t r I r

·;· I llay 5, 1978 Tape 1376 EC - 3 ~m. SPEAKER: A supplementary. HR. NEARY: Perhaps the Premier might want to answer this one, or the ~inister of Fisheries. ~r. Davidson was paid $5,000 for a project called the Gri:c.sby project. Would somebody indicate who authorized this project with Mr. Davidson! Was it the Minister of Public Works at that time? Uas it the hon. the Premier? Who authorized the Grimsby project? ;.m. SPEAKER: The han. the Pre:c.ier. PREMIER MOORES: I am checking it, Sir, with the Planning and Priorities Secretariat which is basically under =Y office. AN HON. HE!li!ER: Planning and Priorities.

MR. SPEAKER: The han. the member for Burgee - Bay d'Espoir . MR. SHH10NS: On a different subject altogether, Mr. Speaker, I want to direct a question to the Minister of Finance. It relates to the matter contained in his ministerial statement earlier today in the House. The specific question I want to put to him relates to the matter of debt retirement by the Province, repayment of loans, etc., and specifically the matter of the additional costs wh1ch are accruing because of the currency fluctuations and the devaluation of the Canadian dollar.

I realize, as he said, that getting these figures within his department must represent a fairly intricate and complicated task. I T.ras a bit surprised, Mr. Speaker, if I may

preamble for a sentence, a bit surprised at the Finance Department. If I interpret the minister correctly, the Finance Department is not geared to insure that the Province's payables are up-to-date and accurate. And it puzzles me, because I cannot see how else the Province can know what its total liabilities are at any point in time. I i· : I r ;

:Lay ) , 1975 Tape 1876 r:c - 4 l!y question to t he ::~inister ; ls there some partic ul ar reason why an ac cur ate total o! the Provin c e's payab l es is not in exist e nce in the De part ment of Fin a nce at t his particular time? Is it a staff shortage or is it t he unusual f lu ctuation of the dollar at this particular ti~e? :rR . SPE.<\KER.: The han . the l!inister of Finance. !lR . lUCK~l.AN: I have just ans'l.>ered t he question . t·:il you pl ease go over ar.d tell : ~e hon . t he member .for Ba ie d '~spoir. Mr .

Sp ea ker , let us not confuse the t"'o i s sues . ~umoe r one , let me say that the Depart~eut of Finan ce has a v~r y str o n g and,I think, adequate .. f' I, ., •t I~ ·' ~i :({ ,, '• ..

~fay 5, 1978 Tape No. 18 77 NM - 1 :'1R. HICIC'!AN: staff now. I am sure >·le could still use more- who could not?- but it is an exceptionally well organized Department of Finance and I ~muld put it up against any Canadian Department of Finance right now, staffed by highly trained,professional chartered accountants and others. Of course,you know,there is no trouble for them to get me the information on the amount of the payables and keeping them up to date. That is not what we have been asked to get. What '~e have been asked to get by the hon. member for St.

John's East (Ifr. :f<l_rshall) i" the cost of each individaul issue, as I understand it, as it relates as a result of the devaluation of the dollar. TI1at is what is taking the time. And that was the question that was asked me by the member for St. John's East. And that ~s why I ~11 not have it until next week. With respect to this particular issue, the indications are that it is going not only very well but llR. SIHMONS: You are mi·ssing the whole point. :1R. HICKMAN: Well, if I am missing the whole point I will certainly be prepared to start all over again. l1R. SIMMONS: (Inaudible) • 1-fR ..

HICIQ!AN: May I finish this first? MR. Srfr!ONS: If he is answering the question he may, Mr. Speaker. MR. HICIQ·IAN: With the - ~- SIMMONS: No l On a point of order, Mr. Speaker. I have sat here now for several days and watched the Minister of Justice abysmally abuse the Question Period, •,dth long lectures on not v.ery related subjects. ~low the question I asked the minister was very specific, Hr. Speaker, It was not how well the bond issue is going that he announced this morning. It was not when he was going to give an answer to the member for St. John's East (Hr. :-!arshall). I did not ask any of this.

I asked a question. Here is the question. Tne question is, is there some particular reason why an accurate "· \; .. '~ I· I :.

May 5, 1978 Tape No. 1877 NH - 2 :1R. SI}~10NS: total of the Province's payable is not in existence in the Department of Finance? Now the question presumes that it is not in existence so the most the minister can do is take the liberty to tell me that there is a wrong presumption ln mv question, that it is in existence already. I do not think it is. But otherwise if it is not in existence, then the answer would require that he give me the reason why i~ is not. And that has nothing to do with the bond issue,I submit, Mr. Speaker, whatsoever, and he is straying from the answer and abusing the Question Period. !1R.

SPEAKER: The hen. Minister of :1ines and Energy. MR. PECKFORD: Mr. Speaker, obviously that is not a point of order. The hen. member for Burgeo - Bay d'Espoir (Mr. Simmons) perceives or disagrees ;nth the kind of answers that are being given by the House Leader. ~. STI1MONS: That is right. MR. PECKFORD: He disagrees with him. It is a difference of opinion bet;1een two hen. men:bers. And talking about the abuse of the Question Period, Mr. Speaker, let it be recorded that the Leader of the Opposition and most hon. members on the other side,but especially the Leader of the Opposition (Mr. W. Rowe).- ~.

SIMMONS: Make the point of order now. :1R. F. HHITE: ralk to the point of ord~r. MR. PECKFORD: - has from time to time, today and on other days during the Question Period, made observations and comments, lengthy as to answers that were given to questions rather than just asking questions. So if we are going to get into the question of abuse of the Question Period, Mr. Speaker, there is blame on both sides. MR. NEARY: Hr. Speaker. ~!R. SPEAKER: On the point of order? }!R. NEARY: No 1 Sir. l I F 1: ·'· ,_ " '" I ~- t I . • f· r - :

~1ay 5' 1978 Tape No. 1877 NM - 3 MR. SPEAKER: No. Well there is a point of order before the Chair ~1hich MR. NOLAN: I want to speak on the point of order, Mr. Speaker. ~1R. SPEAKER: I will hear the han. geutleman. MR. NOLAN: I rise on the point of order because what my han. friend staces in reference to the hon. House Leader opposite is quite correct ~~d everyone who attends this House in any capacity notices it. The hon. member opposite, the han.

Minister of Justice, whether it is on a question of Justice or anything else in this Province, if that gentleman were reading his grocery list he would make it look like tablets of stone coming down from the mountain. And we are fed up with it and he is abusing his right. MR. SPEA...'<ER: Order, please! Order, please! The han. !.finister of Justice. MR. RIC!C·!AN: To that point of order, and that vicious , unprovoked, uncalled for attack that has been thrust upon me by the han. the member for Conception Bay South (Mr. Nolan).

I have got a very solemn responsibility that I find so difficult to discharge because I have to spell it out in baby talk so that the hon. gentlemen opposite can understand what I am saying. Because right now I am faced with a question by the hon. member for Burgee- Bay d'Espoir (Mr. Simmons), that I am sure he has not the slightest comprehension as to what it all means. So I have to go back and explain it to him. But I will continue on as soon as Your Honour rules on the validity of this point of order which I am sure is not a point of order. HR. SPEAKER: Order, please!

The essential allegation of the point of order was that the Minister of Justice was out of order in the nature of his answer. I really cannot sustain that at this time. Han. members might disagree ~•ith the way he answered

May 5, 1978 Tape ~o. 1877 C.'M - 4 HR. SPEAKER: the question or began to answer it or his way of going about it 1but I cannot say that he is out of order, I cannot say that. ORDERS OF THE DAY: !!R. SH~ONS: Is the ~!inister going to answer the question? ~IR. SPEAKER: Time is up. I I. . . . : ... . , . ' t I

:l ay 5, 1978 Tape 1873 EC - 1 On ~otion, : .lat the ·ouse resolve .itself into Commi.t tee of the Whole, ~ r r . Speal , er left the Chair . COmHl'T"EE 0!'" 1' -IH~ WHOLE I!R. CHAIR.IA.;•;: Order, please! A bill , "An Ace: To !!:mpower The St. John's ~unicipal Council To ~ aise A Loan For .:unicipal Pu r poses ily The Issue Of Bonds," (Bi.ll .lo. 4). On moti o n, Clauses (1) t hrough (9) , ca r ried. !:IR. l-I"HITE:: !lr. Chairman, Clause (10) . ~!R . CHAIR MAN: The hon . the me mber for Le\.-isporte. HR . '.H!ITE: Kr .

C 1ai.Iman, I do not kno~ if the minister h as any de t ails on this or not, or caybe it is t otally the responsibility of the City, hut $aybe t h e w.inister could enlarge on. the situation ;dth respect to t:: e City's indebtedness in terms of t~e dollar going down in the United States . Wbat k i nd of effect is it having on the City of St . John's and its ability to raise money1 ~!l. . D INN: ~lr.

Chairman , hat, I would imagine , would require quite a detailed res?onse and I could ask the City, but r do not know Lf they have any obligation at a l l to tell me, as they do not come ~~der the Municipal Af f •ir~ and Rousing Act . With respect to the City I am a messenger and if they gi~e ~e their budget at the end of the year and they co-me in an d they as k that the bill go thr.ough th.e House for $10 mi lion i.n _oans and for. looking afte r sinking funds and so on - set up sinkin g funds - and I wo u ld have no idea. On motion, Clauses (10) and (1 1) , earried . -----;...,---- -· i' I t: I -l j f . '

~~ay 5, l97S !ape 1878 :::c - 2 ~otion, that t~e coo~ittee report having p a ssed the bill ~ithout a~endment, carried. 3 i 11 :I 0 • 13 . A bill, "An Act ~es,ecring Unfai r And Uncon s cionab l e Trade Practices," (Bill tlo . 13) . On motion, Clauses (1) through (7), carried . ~!R . T.(RITE : ~!r. Chairman, Clause (8) .

T~e bon. the ~ember for Le1dsporte. :1R . ~mrn:: !he ~inister of Consumer A!fairs and Environment is not here, but I wonder if the :!inistet of Justice, the Government ~ouse Leader, could indicate ~hen this ~ew director to carry out the ?OSitions in t~is 'Unconscionable Trade Pr actices Act' will be ~ired? ~ill he ~e hired righ~ away?

I speak subject to correction, because I am s u r e t he ~on. the ~inister of Consume r Affairs a n swered this y e s t e r day. r heard the tail end of his answer and my recollection was he said that after the Act becomes l aw t h e n t he Public Service Coamission will ~e asked to adve r tise, following ~~ich the ~an or ~oman wil l be appointed . On motion. Clauses (8) throush (22), car r ied . Motion. that t h e committee repo r t having passed the ~ill without amend~ent, carried. !ill ~0. 14. A bill, "An .~ct To Amend The St. Jo:tn's Rousi~g Corporation .'>Ct, ' ' (3111 ::o. lL}. 1

~lay 5,1978 Tape No. 1879 AH-1 On ~otion clauses (1) through (4) carried. llotion, taat the co=ittce report having passecl the bill without amenciment, carried. A bill; "An Act To Amend The Industrial Standards Act." (Bill No.3) On motion clause (1) carried. !-lotion, that the committee report having passed the bill without amendment, carried. A bill; "An Act To Authorize An Impost Upon Certain Hineral Holdings In The Province . " (Bill No.5) On motion clause (1) carried. :·JR. STRACHA..'<: Hr. Chairman. l!R.

HI CIC..!A.'<: If Section (2) would stand aside until the minister gets off the phone because there is an indication of a wrong word in there and he is checking it out. If we could go on to Section (3) and come back to No.(2). ~JR. srRACHA:-1: I want to speak on a n=ber of parts in

Section ( 2) • HR. HI CK!·!A.'I : llell here ile is ':lO\v. :·JR. CHAIR.'11u'l : Hen. member for Eagle River. ~JR. STRACHA..'l: 2(

a) of this Act. I wonder if the minister could explain to us the assessor appointed under this Act because I have heard some indications from some people. How is this tax assessed and ho'v is it paid? Is the gover=ent going to collect it? How is the assessor appointed? I understand that in some cases for instance in large companies that many people may ha•re pieces of land which could be assessed under this Act as I understand it, and are owners of land under this Act. I wonder how tnis assessment is made? Some people may not be infonned of it ar may not know about it. How is this tax collected? }JR.

PECKFORD: Mr. Chairman on that point, I explained part of it last night. Under Sections 10 and 11 of the Act all the ,. l l j;

~lay 5,1978 Tape No. 1879 AH-2 ~'iR. PECKFORD: companies and taxpayers so-called in

Section 11 under this Act, they will contact them when this Act goes through, explain the situation as it relats to it and the various sections pointed out to them,that they will now be obligated to submit under

Section 11 a full detailed statement of their name, their address, the amount of acreage they hold and the amount that therefore they will be entitled to pay or the amount of money they have ,spent on exploration expenses in it. It is in this way, through this way that the companies will be fully informed and will fully inform us. If the han. gentleman is implying that some other tactics will be used which are less than proper. I know he does not mean illegal, but less than proper -it is done in consultation with the companies and we will be issuing them the proper foremat of forms to submit to us as prescribed under

Section 11. HR. STRACHA.'l': I wonder if the minister on the same point, assessor, are we only talking here of companies specifically involved in mineral exploration who hold title,tP land or hold concessions or whatever way it is to land for mineral exploration but is there a possibility that,for instance,people in the Province, individuals or small companies who hold small acreages for various other purposes but which gives the title to the mineral holdings for instance in Che Province, is there a possibility they are obviously assessed under this Act?

Are they also going to be informed or involved or are there ;nany of thea? lu:e t:1ere many people, for instance 9 •,.;ho could find in a few years time that they :1old lanJ on uhich there is an assessment of tax which has not been paid and they may possibly lose that lana in a forfeiture move. ;.JR. EECKFORD: No. There is no possibility of that.

We have identified all the fee simple grants where you ;1ave individuals involvec1,and they total close to 2CC1 and we have indentified all the ownerships through Crown Lands and through ourselves and in many cases,as I pointed out last night,you cannot, there is no ownership .: r - ~ ! ~-

lfay 5, 1973 Tape ~o . 187 9 AR-3 HR. PECKFORD: and a lot of this land will revert back to the Crown under t .he t::ndeveloped Minerals Act. But where there is ownership and where it is identifiable these people will be contacted. The - -total amount bv the wav, in 1979 of the tax ,taking all the individuals and all the fee s~ple grants,only amounts to $4000, that is for the whole 200 and of that 200 most of the I ! j;

~ · 1 ay 5, 1')78 Tape 1?~"' ~T .. rr::r.:rcrl:): mmerships are un!cno~m anc' c.;ill revert back to the Crovm in any case. l.'here they <:.:>:"e identifiahle thev will be contacted. 'IlL CHAIRHAN: The han. Qember for Eagle ~iver. Could the minister indicate then w-hether there is any need for instance under this Act to im?ose a tax on these people, ~the few of them wno are remaining then wno own this land and 1.;ho have mineral title to the lane and obviously do not intend to do anything ·..;ith it but at the sar:Ie time t!'ley may hold the land for other purposes?

Is there any need to assess anything at all against them~ And referring back again to our sliding scale that we are possibly talking about 1 the same 1.;av as the slidinl! ~cale in the :!'etroleum Act,I wonder whether t!'lis 1vould also come into being in this Act here. NR. CHAIR!-!.A.c'T: The han. ~'inister of 'fines ar..d Energy. ~!B.. rt.CK"PORD: It 1·7ill not matter much in any case because,as I havE indicated,the a~ounts payable will be smalr·or none and tne ownership question is such that most of the properities will revert back to the Crown.

So, the point, albeit valid anc! worthy of note,~.;ill not have "ny great effect uoon anv of the individual lanc1 owners who have .:"" simple grants. I mean, it just will not because you are talking about 200 and of those 2'JO there are only a few w::o that can identify,so that will eliminate completely really any taxes that particular individuals 1;rho have fee simple mining grants in any case. The han. rrember for Eagle ~iver. And 2 (

c) of the Act does "exempt mineral interest" J.nd of course one needs to be to ~o rl.own through some of things, one has to a la1·ryer to understand exactly what terms exactly mean in all t~e cases here. But I am wondering whether in the "exempt mineral interest" exactly how oexe is the ' l i l ' f ! l'

''ay 5, 1'178 Tape 11::~0 relationship between this Act and the Petroleum and '1atural Gas Act because as tve envisage in many cases the Petroleum and :·latural Gas Act is almost solely

an Act dealing with petroleum and natural gases in a seabed we !"lave almost become a fixation in this Province t!1at it is in the sea. That can he of course on land in most cases are, obviously, known. Petroleum and oil naturally is on land usually. I wonder tvith relationship bettveen this and

article 2 (c), the relationship bet·1een t!"!is Act as a :Tineral Impost Act where it is going to be applied anrl ,.,'hat is the relationship bettveen this and the petroleum regulations the r>inister brought in. !he hon. ~inister of "ines and Energy. l'R..

PECKFORD: There is ::J.one, ,~nd all this siryly clearly defines, because if you do not say it I guess silence c•!Ould perhaps create the idea that t!J.ere can he some application to it.. ~ 0 therefore you !lave to specifically say 1because I guess ey learned colleague to my le "t would concur Hi tC1. this thing: I am trying to get across,so that therefore you have to say it that is the only reason I !::now.

So that therefore there is nothing unc'er this bill as it relates to imposing a tax upon people •vho have mineral holdings in the Province 'las r.o bearing ''7hatsoever on permittees u!"!o are issued !lermits under t':e Petroleum and Yatural Gas Act,none whatsoever.

So it is cotepletely separate ~~ .• CHAil'J!A'T: TI-.e hor .• l!'emr.er for Fag:J.~ P1ver. ~-- STrA~'1MT: In other tvords, the 111inister is indicating here t~1at t~is Act then a·s such a'!! assessrr<ent and inpos~ ~·;ill :,e on consessions or t:1e old consession system. of rat::er t,-:~.n un,::er t 1 :: e:.:istin5 "!:."egulations -:.1hich get a'" ... ?ay fran t!le old conses- sions on to a more rroderate and rr~re a?plicable l!'~thod of taY.ation Precisely, exactly aE it applies to the Petroleum and ::atural Gas Act and also as it applies to :"he :lineral .l.ct an·i. !r,e.

Quarry :'aterials ,\ct because. these 2re netv Acts I I I· I I

:.zy 5 ' 1 ~ 7 ~ Tape !CC'> ~w - 3 t ~at came L~ i~ 1 ~ 7 6 w~ich ap~lie d to areas of t~e Pro •linc ce -.:!1ich were not under concession ancl t here- fo r e in t heir normal provisions and rules ancl regulations are ~uch t he same anc Eoll ow t he relinquishin g pr ocedu res and taxing policies c ~at are now being applied to t~e concession areas, 'T.. ST~\C~:.~· : Could r~ e minister - '!!',. PEC;<:Or.D: This streamltnes all the land: in the Province . The hon . reember fo r ~agle P~ve r. Could the ministe r then indicate to us whether on land exactly ._.tat act will apply and under ~•hat regulations the re will asses=cs under this

section 2 he r e,assesstr.en t s on pet :-oleul!l , - for instance, if i t is ~~ere? There have been a ~umber over t he years of small, l~ ttl£ strikes he re and there.

One never knot:s for instance whet her there Pars ons ?ond or variou s oc:1er places - •.-;let::er t here coul rl !le .one is never sure .;~h et h er ~a :.abu-1o r there coul c' '-e although it definitely looks unlike).y at U:e mtte:tt, one is :teversure! t:ha t is t he re la tions hip be t ueen them !>ecause as the Pet role um <\egulations· apply 1 they apply - again I am ge tting back t o the argument of the sea and that wr.ole ques t i on of t he seabed ~he r eas if something is on land exactly •Jhere would t he r~ z:ul ations apply?

Would it come under the ?et roleum and ~latu ral Cas ~egulations or woul t\ it come under the ".ineral Ili'I?OS t and e,xactl y -.;hat is the relationship be ~~een the two? r I I; ~ J ,, :: . i. f I j r

May 5, 1978 . Tape 1881 PK - 1 Mr. Peckford: Up until now,as the hon. member knows,we have only called, and we have not called for permits in the first round offshore. And therefore anywhere like Parson's Pond and Port au Port areas where there have been mineral rights issued to companies who have done some drilling and have discovered small amounts of oil, they come under the Mineral Act. They come specifically under the Mineral Act, the new Mineral Act of 1976, unless otherwise exempted and unless otherwise under some concession area which we are now trying to eliminate through this Impost Bill.

So I do not know the specifics of it, but it will depend on what area of the Province it is, and whether it is on a concession area. If it is, then this Act will apply and you will have to pay taxes and relinquish, and as they relinquish then it comes under the Mineral Act. So one or the other applies. It is either concession now1 for which this Impost Bill will have some affect,or it is not a concession area and therefQre it comes naturally under the Mineral Act. MR..

STRACHAN: In other words, let me get this right, the minister is saying that a piece of land which is under a concession, an old concession whatever it is, that if that was relinquished it would then come under the Mineral Act passed last year, I believe, was it? MR. PECKFORD: Right. MR. STRACHAN: And if there is oil - MR. PECKFORD: If it is not relinquished well then this Act stays into effect until such time as it is relinquished. MR. STRACHAN: If it is not relinquished this Act will stay in effect effect. MR. PECKFORD: Yes.

MR, STRACHAN: In other words our revenues possibly,if it stays - our revenues for many oil and gas on land will be tied to this Act here. MR. PECKFORD: Until we get down the road to where we want to declare the Petroleum and Natural Gas Act as to apply. ·- . s ! - i-

May 5, 1978 Tape 1881 PK 2 MR. STRACHAN: Yes. MR. PECKFORD: Which we are not interested in right now because the areas otherwise are more prospective. MR. STRACHAN: Oh sure. It is purely hypothetical what I am arguing. It is really a hypothetical case because there has not been any real deep finds and so on.

But I am interested in whether under such a situation the tax applied, In other words, are returns for any oil and gas exploration which would be on land would come under this Act would be in effect very, very low returns compared to whether returns are under oil and gas regulations, I mean, there is a difference of the concession. MR. PECKFORD: Yes. I do not know because I do not know the exact provisions of The Mineral Act what the revenue would be as opposed to under the oil and gas regulations. You know, I would have to get that information for the bon. member.

All I can say right now is that The Petroleum and Natural Gas Act and the regulations that are made under that Act apply in the first instance to areas that we have declared, which are the areas offshore, and that all of the land areas right now are either under The Mineral and Quarries Act or under concession agreement. MR. STRACHAN: One last point on this one here. And I do not mean to be facetious, I am not throwing out a ridiculous case.

But we talk about land, and it has always interested me,from a personal point of view, as to whether offshore islands, for instance, and Labrador is crowded with offshore islands, the bankson which drilling is occurring, there are a multitude of islands. In fact there are so many islands in many cases that the hydrographic charts • r:. \ the charts used by CN now show many of these islands to be three miles four miles out of place.

Some waters in fact are very poorly charted. ! i What I am arguing here then is that if the oil . t and gas regulations apply specifically to seabed exploration, what is this situation vis-a-vis land, islands, small islands such as the

~!a y 5 ' 1978 Tape 1881 PK - 3 Mr. Strachan: Cocks and Hens, for instance, Bulldog Island, Jonathan Island, all of which are under Nain Bank, for instance - I kn~w very well bec.au10e I go out there duck hunting, - what is t;he relationshiP. of these islands?

Should they at any t:ime be regarcded as a solution to some of the problems, and I am not suggesting that they are thinking of this at all, b..it should they be regarded as a solution, as a base, or a site for well drilling, you know, these islands, that the wells, in fact, instead of being in a seabed two miles off,or whatever it is~will use as a - and I do not know whether it is totally feasible at all, it is a thought in my head. MR. PECKFORD: How do you mean used as a base? MR. STEA.CHAN: What I am thinking, not as a base, not as a supply base or anything else. I mean actually the wells - MR.

PECICFO.RD: Actually drilling? MR. STRACHAN: Actually drilling - MR. PECKFORD: Okay. MR. ST!tACHAN: - on these is.lands because there are .many, illaily clusters of them a.ll over the banks. And obviously if one hits a very large field or a fairly large pool of oil, then one would not need to consider sinking wellheads and tapping into it. or being cons .idered with ice problems because one could use the islands virtually as your oil structure. I am wondering what relationship under this / •

-r I Hay 5, 1978 Tape ~lo. 1882 NH- 1 }fR, STRACHAi~: act these islands come under because obvicusly there is no title on them now.

Nobody has anything on them now and I am wondering exactly whether they are in the blocks of concessions, they come underneath the oil and gas regulatinns and do the oil and gas regulations, which apply particularly to the sea- bed, do they apply to the island as well, and is the island regarded as seabed or could there possibly be an argument made by the companies that it would come underneath maybe this act here rather than that and therefore pay less revenues to the government because there is nothing to pay on this one? MR.

PECKFORD: It would not come under this act because there is no concession agreements, or long-term concessions entered into, or long-term mineral rights given on islands, so that is straightened away. This act does not apply at all, zero. Number tv7o, the regulations or the Petroleum Natural Gas Act does not apply either,I do not think, primarily because the areas that the companies are applying for do not include the islands and there is no prospective hydro-carbon resource based on their exploration activity to date to indicate that any islands are involved.

So that it is just not practical to consider islands offshore as possible areas for drilling because the seismic work that the companies have done have indicated that the prospective areas are on the sea bed and our geological structure is on the sea bed. And the islands. which they have flown over too no doubt, as the hon. member says there are many of them, have not shown to have any anomalies to the degree that would lead the company to go in and drill on that island because it just does not seem to have any great prospective or any potential to it. So that is the reason.

But if in fact, to take the hypothetical case, a number of islands offshore, off the Island or off Labrador - f i' I

May S, 1978 Tape No. 1882 NM - 2 ~!R. PECKFORD: did show up and some company applied for a permit to do drilling for oil and gas,then they come under the oil and gas regulations and under the Petroleum and ~atural Gas Act. But there are no islands as of this date which so :1ave been applied for for permits, or l{hich show to have any interest to the companies for drilling or for offshore exoloration. :1R. STRACHAN: I do not know why they do not. Obviously this bill has nothing to do wit!1 oil and gas regulatinns and I do not ~~ant to get involved in it.

But I was trying to relate the content of this bill to oil and gas regulations. I do not intend to ~ursue this business of islands but I just wonder whether the minister would agree with me that it is highly unlikely, but there may possibly be. For instance,if one was in the Grand Banks and drilling on the Grand Banks, and the Virgin Rocks,you k.;ow,are not far beneath the surface of the water, In Labrador we have many shoals and lands which come up in small islands, Would the minister just inform me that if this did occur there would be some way of handling that kind of situation?

That is all I am concerned about. MR. PECKFORD: Yes, absolutely. They would come under the oil and gas regulations and would have to apply for a permit if they wanted to do any drilling or wanted to get involved in oil and gas.

I think the hon. member realizes that the way the geological structures run, that they are identified as - all they are is that they will be under the seabed and from the seismic - it is just like a hill, take any hill and that hill is in under the floor of the ocean, it is just a hill that they can identify from seismic, with a dome kind of - it has the hill shape to it, the top and the sides going down.

And what they have done to date, so they identify these structures through seismic work that are on the seabed or below the seabed and when they are identified then they cross over them a hundred times over and get I ' ~ f ,. -r i t I

N:ay 5, 1978 Tape No . 1882 ~~- 3 l.ffi.. STRACHAN' : \>here the best anomalies are and then drill. And usually they dr ill on the cop of the hill,if you will, in the centre of the geological structure. Now the geological structure migh t be ten miles long and three miles wide, some of the largest geologic -al structu r es in the world are off our coas~s, like the Saudi Arabi an structures, and that is how t hey have been done co date .

So the · question of islands and shoals and so on do not come into play because through the seismic work the companies have done they hav e no t proved to have any potenti.al for hydro- carbon reservoirs . :·1R. CHAI~IAN: The hon. member for Windsor Buchans. 1-IR. FLI GHT: Thank you, Mr. Chaipnan. t would like the minister to address himself to a couple of points I will raise here . ~!ow I understand that most of the land that "'e are talking about, in as fa.r as this impost a ct relates, will be land given to compa~~es under concession fo r the right of exploration .

How does the minister propose to deal with - let us take Pri ce (Nf ld . ) f-or an example, when Price in this Province owns,I think~three categories of land; one ! think is fee simple, one has got timber rights only, and they have got vast tracu of land <.~here they 't::

:·Jay 5,1978 Tape No. 1883 AH-1 ;•!R. FLIGHT: have tiLlber rights, water rights, mineral rights granted. The minister knows that the Bucbans deposit was discovered in the first instance by the Price (Nfld) people cruising for timber limits. The minister says that if a company who holds land for concessionary purposes and do not explore then they will either pay or tile land will revert back. How does he intend to apply this to the holdings of Price (Nfld) in as far as Price has the mineral rights, timber rights, the total rights to large tracts of land?

For instance~ you cannot take land back from Price (Nfld) simply because they are not exploring for minerals if in fact they own the land and own all rights to it, so that to me is germane. It would appear to me that Price (Nfld) will be able to sit on a lot of land for a long time in as far as mineralization is concerned. NR. PECKFORD: What we do then, if they do not spend the money they are suppose to spend so that they can substract from the tax that is going to apply to them because they are on ef the concession holders, then they will loose their mineral rights.

The hon. member is correct in saying that Price (~fld) does have tracts of land on which they own outright every ki.."'ld of right you can have to it- forestry, and as you say hydro power, you name it, they got it, it is an unbelievable situation, Or.e of their concessions that I was readin" last night when we were going t'1rough the principle of the bill, I mean it is just totally unbelievable, incredible.

So what we do is we take away, take back the mineral rights; they have to relinquish their ri~hts, number one, and number tYo, they have to allow any other company who applies for that mineral right the right to go in and explore for minerals. rfR. FLIGHT: Has the minister got all the legal - HR. PECKFORD: So it is the right,not the land itself or ownership, it is the mineral ri£ht that will be taken back or which they will have to relinquish. ! r ~ I~· ,E i! ~-.. - 1-. r - . r e. i· _I r ,. - L ... i , i:

' ~' . . p· :ray 5,1978 Tape No. 1883 Al:l-2 1lR. FLIGHT: Has the mL~ister got all the legal authority and all the legal advice he needs to guarantee this f:iouse that he can indeed do that with Price (1Hld) given the conditions under·which they own those lands? ~at. PECKFORD: So I am told. This is why it has taken so long, We have had to change it on a number of occasions, ~-Y hon. colleague to my left, his people in Justice, our own people and other people in the field are convinced that we have the wherewithal and the legislative clout through this Act to do that kind of thing.

NR.NEARY: I hope you are right becuase I would like to see the rigb~s revert. HR. PECKFORD: I woulJ too but I am pretty sure t~ut - 11R. NEARY: (inaudible) like powder puffs over there. :m.. FLIGHT: Hr. Chairman. "!R.. CHAI R.'1AN: Hon. m~ber for Wincisor-Buchans. ;1R. FLIGHT: I agree with the llon. member for LaPoile {Mr.

Neary). if it is put to the test I would imagine,having known what Price have done in this Province or the larger corporations when t i1ey pull in t ileir lawyers to defend their cases, it will be very interesting to. see what happens when you decide to taba back a portion, take back a certain right of a whole lot of rights that Price (Nfld.) has got. dR. HI CIG·.<AN: Before t!1e hon. member :>ays anything, i1e should read some of the court decisions. I do not think you will find thac that is true.

It is correct that corporations have very competent lawyers representing tilei:l ,but do not overlook the fact that we have very competent judges. Y .. r::.. FLIGHT: To this point we have not been able to apply the forest managenent tax. .-m. c!EAB.Y: We may have competent lawyers but we do not have a competent minister. The Minister of J~stice does not become involved in civil cases. :lR. FLIGHT: At this stage I would remind the minister that you

,'iay 5. 197tl Tape No. l8o3 .m- 3 ~·fit. FLIGHT : have not been able to apply against 3owaters the lana oanagement tax whereby Bowaters for instance pays. 11R. PECKFORD: Says who? ~!R. FLIGHT: Says the member. HR. PECKFORD: Oh, I see. <\!right. HR.. FLIGHT: Says the member - tlR. PECKFORD: Okay, l:r.

Chairman, if the hon. member would like me to respond to that, the fact of the matter is that under our new mineral taxation act which came into effect which supercedes concession agreements to companies whereby they were only supposed to under those acts pay a certain rate to the Newfoundland Government that we have been able to~. as I indicated during my estimates, to increase that over 400 per cent and to completely nullify previous agreements that were signed between the government and the companies at the time that the concession agreements were signee and that they have not challanged the validity of that legislation and have coug hed it up.

The hon. member. :·UL FLIGt!T : l1r. Chairman, I just ~~ant to use t.1is on a comparative basis because I can visualize this province getting into one hassel with Price Glfld) on - not on the land that they hold for concessions for mineral rights but on the land that they hold in this province, granted land,whereby they have all the rights, timber, water, under the water, in the air, over the land practically sewe~ up. HR. PECKFORD: Rig:~t. ~!R.

FLIGHT: Now to use an example, we brought in a new land taxation act that was supposed to l1ave applied to the paper companies . whereby t :le paper companies that did not practice the proper management,and proper management as approved by the Department of Forestry or t ile Government of Ne~>foundland, would pay a CJ.igh rate of tax. ·f r - ?

May 5, 1978 Tape 1884 EC - 1 MR.

FLIGHT: And Bowaters,and the officials in Forestry admit,that in the vast, vast holdings of Bowaters; for instance, where there is no reforestation. where there is no land management going on over and above what ever went on, which is nil, that Bowaters is not paying that high tax because the Province has had no choice but to accept that there is good forest management going on anyway, which has the effect of letting the paper companies go on the way they always have gone the past fiftv years, and has the effect of not having any revenue for the Province or any more control than we ever had.

So I am wondering in the case of companies such as Price who have the kinds of titles, the kinds of rights on certain blocks of land,if we might not find ourselves in the same position. llowever, that is long enough to go on that. The minister can assure the llouse, but it might come ·back to him one day when we get into a situation where we decide to attach some of Price's rights on this particular holding. Now, Mr. Chairman, you get close to home again, the Buchans situation.

The minister knows that there is a barite deposit in there - not a deposit as such, but as a result of fifty years of mining there are vast quantities of barite lying around the bogs everywhere as a result of the tailings from the ASARCO operations. And there have been tests done. The various companies have been doing some market research, but they have not shown at this point a desire to bring the barite into production, which would have the effect of creating roughly twenty jobs over as long a period as the barite would last, and I have been told that there are years and years of supply.

How long, for instance, in this particular case ~ow they own it. re have to presume they own it; They mined the I I ' ~ : ' . [ ' L

:~ay 5, 1978 Tape 1884 EC - 2 :!R. FLIGHT: original mineral and the bari"te came as a result - how long, for argument sake, the minister knowing that there is a potential industry in there that would employ twenty people - There is nothing more distracting than to be talking to a minister and have somebody else leaning across him, ~r. Chairman, and between the Speaker and the ministe~ NR.NEARY: A point of order, !!r. Chairwan. ~!R. CHAIRMAN: A point of order has come up. HR.

NEARY: It is against the rules of this Rouse, Sir, to get between a speaker and the Chairman and the minister that the hon. gentleman is addressing his question to. It is the height of ignorance, Sir. If it is not against the rules then it is the height of ignorance, and I ask Your Honour to let the hon. gentleman cross-examine the minister, Sir, as he is trying to do, without being interrupted by the Minister of Forestry and Agriculture. SO~E HON. MEMBERS: Oh, oh! :-!R . CHAIRHAH: Order, please! Order, please! It is my information that one should not pass between the Chair and the member who has the floor.

The hen. the member for Windsor - Buchans. H~. FLIGHT: I would like the minister now when he gets up to address himself to the barite situation in Duchans. He knows there is a potential of, at least I have been told, twenty jobs. The supply of barite in. Buchans is apparently unlimited - not totally unlimited, but there is no question of a long life expectancy for a . ! barite operation. ASARCO or Price (Nfld.) Limited owns it to the extent that they min~ the original ores from which the barite came. There is a market - all the oil drillin£ rigs. T

}lay 5, 1978 Tape 1884 EC - 3 MR. FLIGHT: So I wonder if the minister would indicate, number one, if his department has done any rese~rch on markets for barite, bearing in mind the job potential? And how long,for argument sake - this is a unique situation - how long is he prepared to allo w Price or ASARCO to sit on those barite deposits before he would authorize some other company to come in who is in the barite production business and salvage and market that barite? I am not sure the minister understands the relationship between ASARCO and Price (Nfld.) Limited.

He made a statement a couple of days ago that I question. ~e indicated that Price (Nfld.) was funding the exploration in the Buchans area totally, and my infornation is that is not right, Sir. My information is that it is still a fifty/fifty deal on the cost of exploratio~ that ASARCO can veto the exploration on certain holdings in the Buchans area, particularly around the twenty-five mile circle of the mines, that ASARCn can vet~ MR. PECKFORl): If you are going to get into the detail, yes, there are certain areas that ASA~CO can veto. You have to - MR.

FLIGHT: Right, and ASARCO is funding whatever dollars that Price (~fld.) - b~cause the only amount of exploration Price is doing is in the immediate Buchans area at this stage, and ASARCO is funding 50 per cent of that exploration. We will just have to hold off, I guess, while the minister is out. :!R. F. ROWE: Can we just hold off and discl.lSS something else while the minister is out? ;IR. NEARY: I move, ifr. Chairman, that we lay the bill on the table of the House until the minister gets the information and go on to the next item of business.

~1ay 5, 1978 Tape No. 1885 N11 - 1 ~R. HIOO!..I;N: Sir, the han. gentleman is still on his feet. ~-!R. NEAP.Y: ~To. No. I have made a motion. }fr. :hai rman, the hon. gentleman from Windsor - Buchans (Hr. Flight) ~;as still standing and obviously had given no indication to yield and ~;as a~·laiting for the han. Minister of ~ines and Energy to come in here to - ~'R. NEARY: Mr. Chairman. MR. CHAIR¥.A!'1: Order, please! MR. NEARY: I would like to draw Your Honour's attention, There is no quorum in the House. Order, please! I would ask the Clerk to count the Committee. A quorum is present.

The han. member for LaPoile. MR. NEARY: ~r. Chairman, a point of order, Sir. MR. CHAiru'!P ... 'f: Mr. Chairman, when a quorum was called, Sir, it ~•as not the Party whip on the government side who ran out of the House to tell members to 'come in, it was none ether than Your Honour's countepart, the ,\ssistant Chairman of Committees ~·lho ran out to try to get the members to come into the House. Nm; in my opinion, Mr. Chairman, this SOHE HON. ME:-!BERS: Oh, oh! ~1R. CHAIRl'!A.J.'!: Order, please! HR. NEARY: Hr. Chairman, this,in my opinion, Sir, is a very important matter.

In my opinion it undermines the impartiality of the Chair and I would ask Your Honour to put a stop to this nonsense of having either the Deputy Speaker, or the Chairman of Committees, or the Assistant Chairman of Committees, running out of the House because he heard my hon. colleague su"gest that we were going to call a quorum. TI1is is not right, Sir, and I would say if it continues, ~!r. CI1aiman, if it is allowed to continue that it is going to undermine the - not only, Sir, must the Chairman be impartial but he must appear to be impartial. A.." RON. ~'~ER: That is the point. ~ \ f ' J ! - ~ f f r - ~ ! i.

i·lay 5, 1978 Tape No. 1685 ~!R . NEARY: A."1d that is t '.te point, .lr. Chairtnan, and so I woul d l ike Your Honour to report it to the Speaker and put a stop ·to it . MR . YOUNG: :!r. Chairman, to t.1a t point o.f order. :m. Cfu\.I~!AN : The bon. member for Har bour Grace. ~ . YODfG: I feel that I am a member of the government and when ~'le quorum t<:ls called SOME HON . !1EMBERS : Oh, oh! !-!R. Y'OUNG : Order, please! I am sorry. SOME HON. !1EMBERS : Rea;-, h,ear! MR.

YOUNG: W.1en I looked around, Sir, and saw that we only had a few members, I went out and said, "There is a possibility we are going to get a qcorum call~ And I was present in this House when the quorum was called. }!R. NEA:.'ItY: You ran out before I got a chance to call the quorum and you (inaudible) "'- MR. YOUNG: I t1.i~ you are accusing me in - I can go out at any- ti~ an~ say we have no t got e~o~h m~mbe r s in the !ouse . MR. TN. ROTNE : Sir, on th9-t point of o rd.er . The hon. Leader of the Oppositio n . HR. ~-.

ROWE: You know it is easy to di~ss it as a frivilous sort of thing but i t is in fact impo rcant, Si r. T.1ere are certain han . gen t l emen , includin e Yo ur Honour, th e Speaker , of co urs e , anC. the hon . gencleman oppos i ce,w h.o have to, from time to t.ime, occupy a place in which t hev have to exercise the utmost in impartiality and give the appearance of doing so, Sir . I I f I ~ t ~ ~.

Nay 5, 1978 Tape 1836 !':C - 1 !ell. \'I. ~l. ROPE : Therefore, when these three hon . . gentlemen are not in that particular place they should not undermine the confidence that we on this side of the ~ouse have in them by ?ivin~ evidence of partiality with regard tn such t~ings as quorun calls or anything else. That is the si~ple point cade by ay han. friend.

It will redound to the han. gentleman'~ disadvantage, I would suggest, Sir, in that it under~ines the appearance of impartiality of himself when he might assume the Chai~ Although we know he is not partial it may give the impression that he is, Sir, and we should not have that. And therefore, he should conduct himself with the utmost impartiality on all matters affecting this House. r:R. !IICK~~A~:: ~~r. Chairman. erR. CHAIRHA~!: The · hon. the Rouse Leader. c!:ct. IIICK:!AN: 'lr.

Chairman, I have to rise to that point of order, because it is not a point of order, but the last few comments - you know, I did not take the comments of the han. the member for La~oile (Mr. Neary) seriously, but now his leader has gotten up and repeated the same thing which suggests that it may in some way reflect on the impartiality of the han. the member for Harbour Grace (~r. Young), ~r.

Chairman, it is so fundamental that when an han. gentleman is not sitting occupying the Chair that he has the same rights and privileges as any other han. member sitting in this House on either side, and to say that for the han. gentleman from Harbour Grace to get up having looked around,seen that there is not a quorum here, in the discharge of his non-partisan duty as a member of this Legislature to go out and say, 'We need a quorum in the Committee. Afew of you fellows had better I I

~!ay 5, 1973 Tape 1886 :::c - 2 :m. HI ClG·lAN: come in, to say that that even smacks of anything but total impartiality is frivolou~ and vexatious. MR. F. ROWE: Can he call;' Order, please!" Irrt. ~lEARY: To that point of order, :·!r. Chairman . l!R. CHAIRMAN: Order, please! I feel that I really now should :.rR. ::<EARY: ~r. Chairman, could I say one thing before Your Honour (inaudible) because I was the one who raised - SO~E HON. MEXBERS: Oh, oh! !-!R. CHAIR~!A!-1 : Order, please!

Having heard argumentsfrom both sides I would suggest that if I were to hear further argument it should go on --I should hear arguments from both sides again. I feel that I have heard sufficient, and so as not to delay the Committee I ,,•auld have to say that I do not see that a point of order has been raised that applies to the Committee or the Chair in Committee. I do not understand that the hon. member r raised any point that involves the Chair of Committee as the Chair is presently constituted, in other words, the present occupant of the Chair, and this was the substance of the matter raised.

MR. ::<EARY: I will give Your Honour notice that I will be reporting it to the Speaker when the Speaker comes back in the Chair, Your Honour. ~! R . CRAIP, MA~!: Order, please! The han. member is quite within his rights, of course, that if he feels that there is any matter which should come up in regard to the Chair, partiality or otherwise, that this should be done on a substantive motion put before t h e Chair. AN HON. MEMBER: That is right, Your Honour. ~<It. CHAIRMAN: The hon. meMber.

Tap!! 1885 EC - 3 MR.. FLIGHT: Mr . Chairman - LiR. WOODROW: To that poin~~of order also. MR. CHAIRMAN: Order, please! Order, please! MR. NEARY: Sit down~ boy. Oh, oh! ~!R . CRAIRXAJ: Order, pleas ·e. .here .is not a ?Oint of order before the Chair unless the han. me- be r t{i shes to bring a point of order before th.e Chair. 'I!L HOODRO ·! : I feel I have just as uch right as any hon. member to spPak here and I want to let the hon . the member Eor La'Poile (Mr. Neary) kno·w that. The questio n is, ~r. Chair ~n, who is to supply the quorum ?

Is that incum~ent upon the governmen t o r is i t incumbent upon all embers of this Rouse! . ccordins to '5' here, "If notice is taken by a member tltat there is no t a qu or um p r e s en t in tile Committee of the Hll.ole tr.e Chairman follows the cour~e pursued ~y :he ~ ~eaker i~ the Rouse . If he ascertains that fourteen me ::~ bers are not pre s ent he leaves che Chair, t he Rouse i s resumed, and, on his report the Speaker courts the ~ouse or :.a1 cause the Rouse to be counted by one of the Clerks of t~e ~ ouse, a ~d if there ~e not then a q uoru m he aust adjourn the House forthYith." The question is .. r.

Chairman, who is to supply the quoru m? :l;l. • C!.AI ~.:· !A~! : rder, please! To that point of order, Sir. l ~R . C'!'!AI::'.:r.q; May I just first, please? I am not s ur e that I understand t e point of order. :>:here was a certain amount of pre~cb e there includ:ng the :. R . •.00011..01-l: ~ r. Chair~a n , th e point of or~er is sioply, ~ho is to supply the quorum Eor c~e ~ouse of ,ssem b ly? '~ ' "

~:ay 5, 1978 Tape 1886 E:C - 4 Orcler, please! :-;p,. ~ ,700D!tOH: Are we not all ne~bers - :·!P.. CRAIRc!Al:: Order, please! Order, please! I cannot accept that there is a point of order before the Chai;::. In other words, a question asked of the Chair is really not a poiTit of order and it really is improper to ask the Chair a question as to the Standing Orders. Does Clause (2) carry? .. ·-: I . I ! - i I

''"ay 5, 1973 Tape 13R7 :_1!7 - 1 '~. CHAI!'.''NT: !!on. member. '•T.. S . ~EARY : Is t~e ~on. gentleman going to make a point of order? The :ton. member for Pindsor - Buchans. :m. l·J. N. ROWE: Somebody has to protect him over there. His mm Rouse Leader ~•ill not. ;~. G. FLIGHT: Yes, Jlr.

Chairman, I wart for ' I a minute to pursue this relationship between Price (~7fld.) an<' Asarco. :;o~r the minister \I feel, is not totally conversing with exactly what the situation is. ror instance, as I understand it, Mr. r:hai=an, the only rel2tions".ip between Asarco and "rice ("fld.) is ~'ithin the imme"iate bounciaries of the Buchans area. Now L .'sarco m-ms large tracts of lane' under concession in ~Te~•foundlanc'., l: as the minister · knm·IS. They are sitting on a tungsten deposit in t'rey River. Is Price (~'fld.) involved in that tun;'!sten deposit that Asarco dis cave red and explored?

A knm-rn tun~sten deposit, "r. Chairman, that there has been no e:cploration or clevelopment been done on it for ten years. So , ~'r. Chairman, Asarco has uncovered,in four or five 2reas in Newfoundland on 'i.ts holdings,deposits. In some cases they continueQ exploration, in some cases they left exploration. They are holding~ v2st, vast tract of lan~ that has got nothing to do t-rith there relationship Hith Price ()!fld.) in the Buchans area, Right now we are talldn::; a':> out Price (Nflcl.) in the Jluchans i'lre2 by anc' larze.

"JJ until a couple of years ago when "e found ot:t we <tere not even aware Price (~Tfld.) was involved there. And which one of the comp<mies· uill be responsi'Jle foi: · the Impost Tax w!:.en you :1ave a. -co-tenancy situation like Asarco and Price right now~ Fill both of t:1em - will the Impost Tax apply to b0th companie,? f. Yes.

::ay 5, l')78 7a;>e l337 r FLIOH':': Or 1-1ill one pay on !lehalf of ~he co-tenancy or vhat is the situation in that situation? And T ~ave to go b acl~ , ::r. C.aircan, ::o t~e si.~cation •.;i.e!': Price (::flc.) . l can understand ~1at if a company !s aolcina concessions in this Province and ~hey do not e:...~lore it to the point the gove rnment feels t:1a: t:1ey should have e2>.-plored !.t, they pay a tax or t!-:ey give up t!le right to the concession . Eut they do not have anyt hing to ~ive up.They do not ~old title to it in the Eirsc inst~~ce , they simply have a concession .

Hor• about :'rice (~!fld.) 1.-"ho ~as ace outrif!ht grants of tracts of lane! anc ~r.-:o cio not carry on t:!ineral eA))loration? So is the govenl"en!: .>ayin g ~!\at assu:~ing t:hat Price C'!ld . ) c!o not pay t!le tax t!lat they ;;ill expropriate? Because that starts a '!.:hole danger ous i)-recc rlc:1t. s:>::r ~o: : . ::r:-eE!'S: Hear, hear! ;~. r: . F'l..!G:rr: !·:i1at abou: -t c soc:e - what about if l.'e take :!-:at a little far~!-:er? !'riee (N:ld . ) has got out-right t~tle to land L~ t his Province. !:R. !'Er:'r(FORD: "::!\at should ':>e a r::o~el of it. !·::t. G.

FLif:JIT: Price (~<fld . ) has got outright title - .~· l!O!I. l!!:!:lln: He does :1ot im0\1 ~;ha :: i.e is talkin g about . '}'.. c. rt. rr:m:: co land :.-:~ this Pr ovi:'lce on '-"hic:1 they hold t:Uoeral tights. ·.:ater rights, dm!:ler ::::i.gC:ts, oucri~ht freehold grant, ::r .

Chair::l<ln . .A..nd the mi.-lister is sayin~t t~at if !>dee (:iflc!.) do not sa cis fy t heJ:J that they are doin~ the explora~on that this IQpost ~ax is supposed to fo-cce them to do that the onlv evidence in a speec!l uo u:1til now is the onl; recourse against t~e peo?le hol~g ~~at . kind of concess:.or.s :!s ~hat t!!e lane would revert ::.ilc:• to t!le Crow-n ir. riS:lt' of Rer '!ajest:; . ... , . •

:•ay S, 1?78 Tape 1887 ! all'l suggesting, Vr. Cha.irman; in a situation 1ike Price (:1fld . ) o.r Bo~·ra ter s that o~m~ land and legal agreements that they own t he mi:1eral rig!lcs, then I am suggest!n~ t!:P. minis ter will find h imself in a vecy difHcul t sit\l<ltion in havi.n .g a:q lands 1Jl'lder those circumstances tur:1e c! back . ~e ~;ould have to be prepared to e:11.-pr~priate. AI::d, ~~t. Chairman, that is a valid point and let us he a~ the minister clarify the situacion when he stands up.

The hon . ~ 'inister of ~lines and Energy. ~!r. ~ai.r-...an, one of t!1e first points that 'rere made lvas the business of the tax, ~.rh ether it is valid or not,whethar it can stand up in court and so on. 1\nd I am just going to rein terate what I said before,t hat as far as Ne are conc erned it is valid legislation, it ca.n stand up and none of ~e com9anies can validly ' win or go to court on the basis of t'-..is legislation and contend that it does not apply t o then . l~e think ~1e have done our ho11!e"-'10r!t <'n it and thac this is a valid •\ct and that the tax -..:ill have to be paid.

So I 6Uess t he best test of, that is a test of ti~e and (~he t!ler any of c-.1-te co.mpa.nies do in fact cake us to cot •rc on ~ he legislation ~ha t ·,;e are here not~ proposing . On the ~U2stion of t~e !>a rite , the latest ! knot~ on t'lat is triat !'rice (Nfld.) is Still t:orking on cryi.'lf co develop it and to bsurp c!<at e1:e:tt;' or thirty job:s are there P..£t~ r t?le !"'ain t~ ·inZ: closes down. '. 4 ,. l:~.test infomation is t~at ;;he!' Rre i. t ;.:

May 5, 1978 Tape 1888 IB-1 MR. PECKFORD: still eager and it looks like they will be going ahead with that barite .production. I have heard nothing to indicate that they are not. And I think it was only a couple of months ago the last inforffiation I heard on it and they were moving ahead to get that barite production underway and were spending a fair amount of money on it, Now, the hen. member suggests that I do not know the Price-Asarco agreement. All I can tell the hen. member is that whether he thinks I do not understand it or not is entirely up to himself.

All I can tell him is that I am· stating as I understand the agreement and as I had it confirmed by lawyers and other people who have read the agreement. Now Price (Nfld.) on most of the areas there have · ownership, mineral rights, timber rights and so on. MR. FLIGHT: In the Buchans area. MR. PECKFORD: In the Buchans area. There are a couple of exceptions to that where Asarco still has outright ownership and mineral rights to it 1 the tungsten deposit in Grey River being one for example. That is totally Asarco's. That does not come into it. MR. FLIGHT: That is one on a vast concession. MR.

PECKFORD: And then the mineral impost applies to that concession area that Asarco has. New the money that is being spent on exploration in the Buchans area right now is 100 per cent Price money. Let the hen. member for Windsor-Buchans (Mr. Flight) swallow and digest that. It is 100 per cent Price money that the co-tenancy agreement allows for the exploration part of it to be totally done by Price because they want to do it. They are the aggressors now on that score. Asarco is limited simply to the operational aspect of the existing mine.

And outside of there being a number of areas,particularly the Grey River area, the tungsten deposit which is still totally Asarco the rest comes under that kind of an arrangement. :7.. FLIG!l'!: What about Burnt Pon d ~ MR. PECKFORD: It is 100 per cent Price money now going into the exploration budget in that area. And I have just had it checked again this morning since the question came up. I I. " . - ~

~y 5, 1978 Tape 1888 IB-2 MR: PECKFORD: What else did the hen. gentleman want to know? I do not think there was anything else there. I can later on perhaps give some more information to all gentlemen on other points which are of a technical nature or even after the bill goes through. MR. CHAIRMAN: ~oes clause (2) carry"! MR. PECKFORD: lMr. Chairmanl somebody else has given the member - MR. HICKMAN: Line four one, two , three four from the bottom of 2 (g). Strike out the words fifteen hundred and substitute therefore two thousand .• On motion amendment carried. On motion clause 2 as amended carried . MR.

CHAIRMAN: Shall clause 3 carry? The hon. Leader of the Opposition. MR. W. ROWE: One little question here. I have b~en reading and rereading clause 3 of the bill, Sir, which defines the term•mineral area: Now it strikes me that for practical purposes there may not be too much danger although there may be.

But certainly in the area as far as legal rights and so on are concerned if a person has four or five acres of land and it happens to fall within this description, a conveyence from the Government of Newfoundland since 1334 which conveyed 'as part of the land or separately,any estate, interest, licence~ permit, authority,concession or other right to minerals or to search for and win minerals or to acquire any rights to do so 1 1 '"h.at pervents the government - maybe it is in the other part of the act.

I confess quite freely, Sir, that I have not studied it in a legal way and that there may be an appropriate legal answer to this. I have studied it in terms of policy. But from the legal point of view,which would of course take a great deal of study,and perhaps the question has already been answered by people in the Department of Justice and the minister's own legal advisor, but what is to prevent the government to suddenly start imposing a tax on me? Now mind you 1 the tax would not be very much but it )o··.

May 5, 1978 Tape 1888 I3- 3 MR. W. ROWE: could be made ;o.ore perhaps by regulation at a later date~for e."Ulllp 1 e . That cou ld go through the Houae and I could find myself paying out money, maybe $100 or $200 or $1,000 a year because there happens to be ln somebody' s opinion mineral holdings or m.ineralization in the land that I have a country cabin on,for example. :!.?. . F!.!CET: A good reascm for you to (inau ri f.hle) to vo .. r 1 ,;,,.o~. MR. ~. ROWE: Yes , that is right. Well I may be holding it for that purpose like anyone else in the Province and sudden ]v - [

:-1ay 5, 1973 Tape No. 1<:!89 .P-1 - 1 I find myself saddled with a tax. Now let me make quite clear as well that perhaps there is room for a vacant land tax in the Province to keep people from holding land and spectulating on it and making a killing later on down the road in the future. Land that was worthless at one point may !;ecome valuai.lle so ?eople holri on to it and drive up the prices, especially for housing developments,and perhaps there should be some ta".

But what I am wondering about is is not t:1ere a possibility of getting in throug;l ti1e back O.oor ltere so~aething whic:1 if it is doue should be done by the front door? Is '.:here a dauger frow a legal point o£ view of people finding themselves pernaps subject to this tax on small holdings because there may be so~e mineralization there?

From a practical purpose or a political purpose the danger may not even be there because I would say that any government who started to slap on a t~~ on country cottages or land held in small holdings like this would not survive very long as we have seen from the i·Iinister of Forestry and Agriculture who tried to get a $20.00 tax more or less on land which people are more or less squatting on or holding adverse title to. But I \."ould like to hear the min.!.st<:.r on this. Is there a legal loopl1ole there?

Is there a danger there from a legal point of view that other lands other than those envisaged by the minister and his expert advisors in the department, other lands than those may in fact turn out to be subject legally to this ta.~? llR. STRACHAN: Do you want to answer that? MR. PECKFORD: No, I will answer th~m all at once. I am waiting to see if there are any more. :•!R • CHA IRI!A.l'i' : The bon. member for Eagle River. HR.

STRAC.lifu'i': I want to get into this taineral area defined and also I will probably bring up the se~tion of forfeiture because I suggested last night,and I am trying to suggest again,that one of the real problems of our mineral areas~and I will use B~I}~ as an . t - ~: I

Hay 5, 1978 Tape i~o. 1839 .n1 - 2 llR. STRii.CHA.'I: example, is t~at they may l1ave huge holdings. And I am deeply concerned that their maintenance of these hu~e holdings can be that they have\for instance,the uranium mine in the Kitts-Hichelin area which could provide the revenue.for instance,or to offset this tax, »hereas further North in the Bruce and !loran Rills ahd further ~Torth of that in the Seal Lake and Harp Lake area,there are indications- of at the moment - I am only saying there are indications, I am not saying it is co~ercial- there are indications of copper and fairly large copper.

Now obviously at the moment the copper market in ti1e 1<1orld is down, deflated.

But I am wondering whether this mineral area defined should not define smaller blocks of acreages, and if it cannot be done because of people's title to the land, if it cannot be done because of concessions already given for large areas of land like the BRINE..'{ concession,I am wondering w:1ether in any forfeiture of lands because of this act, as a cause of this act,whet:.er the minister would consider that if there is forfeiture of lands in large holdings that a certain maximllill size of mineral area be defined to be held so that large corporations.or anybody else for that matter,cannot hold large tracts of this Province in the palm of their hand, paying no taxes because they have a development in one small corner of it,whereas in other areas of it there are minerals which they are sittin~ on probably speculating on, minerals which they are waiting for markets ,which is a justifable reason.

If he is arguing that

i) it ib obviously not advisable to go ahead and develop copper when the copper market is low then the future looks gloomy. But I am wondering whether the minister could define whether obviously~ as I stated earlier- I do not know if you got the _ point that I stated earlier_ ~·?e cannot do it to companies who already have large concessions. They obviously own these lands or have ti~le to the lands or the rights to the lands 7 1vhatever the concession is. ,. But in- and I describe this again in the forfeiture clause _ in any forfeiture in future that we have the same kind of arrangement as used i !

-f l1ay 5, 1978 Tape No. 1889 Jl:f - 3 }.!R. STRACHAN: in the sea bed in which blocks are mapped out and there is a maximum number of blocks of that land which can be held as a ~ineral area defined under this act. So that,for instance, BRINEX' s land at the I:lOment held, should it be forfeitured or is there a possibility in this bill to impose 011 tllem that there are different blocks in tira.t area so that in that large area there are five blocks,or four blocks or three blocks~and that in uranium mine ~ ''

May 5, 1978 Tape 1890 IB-1 MR. STRACHAN: one corner of one block,an expenditure of money on that block will not give them the right to hold on to various other large tracts of land elsewhere forever or for the life of that mine~for instance. As long as they can keep showing they are putting something in there,they can sit and hold that until they feel that it is necessary to go ahead.

So from my point of view I think it is a very valid point, that this mineral area defined because I ob_iect in principle to corporations awning great,large tracts with all encompassing rights to it which they never intend to do anything with or certainly do nat intend to do any exploration or preliminary work. And this is the case in Labrador 7 of course. Much of Labrador is not geologically explored. There is a paucity of information on Labrador and exactly what there is in Labrador. The minister's department has been one of the departments working, for instance, North of Kiglapait in the Torngat Mountains.

And obviously as I understand it is not an area which is minerally rich because it has been partly striped of everything and pushed into the sea 1 but I am wondering about for the South of that, in the back of the Harp Lake, Seal Lake, these huge areas where there should be a maximum size to a mineral area defined and companies can own four or five or six or seven or eight or ten of them 1 that is as their rights are to own them or get the concessions on them or whatever way they want to do it. But they must under this act do exploration in each of these areas or forfeit these areas.

And I obviously do not mean to say that~it would be foolish to have the size too little of the area defined so that if there was uranium in one earner and • I another piece here and another piece there that they would have to tie these all together to make it economically feasible or commercially feasible to have a uranium mine. For instance, it would be stupid to have Kitts as one little block and that is the maximum you can hold and Michelin as another little black. Nobody is arguing that.

I am arguing a size which would give them a reasonable size but yet would confine them sufficiently to do exploration rather than to continue the way they are, holding large areas and offsetting the

May 5, 1978 Tape 1890 IB-2 MR. STRACHAN: holding of these large areas by one development, small or large, in one area. MR. CHAIRMAN: The hon. member for Windsor-Buchans. MR. FLIGHT: Mr .. Chairman,just to add to that for a second, a perfect example of what the member has been talking about this past ten minutes is the American Smelting and Refining Company, Asarco,concession and the Price concessions.

Price (Nfld.) will probably spend enoug~ money in exploration this Summer whether there was a tax applied or not,they will probably spend enough money in the Buchans area, diamond drilling, deepening holes, natural exploration, that would offset any tax they collected on any of their holdings anyway. But it is being all spent simply because they know it is a highly mineralized area, they are trying to bring in an ore body. They will spend enough money that if they want to justify not doing any more exploration on all their vast holdings, then they just sit on that land and it is not being explored.

As long as you have a situation like Buchans that has got a fifty year life to this point that geologists all across Canada has recognized as one of the most highly mineralized areas in Canada, then Price (Nfld.) has indicated that they intend to continue exploration. So Price (Nfld.) presumably can spend all the money required by the Newfoundland Government in exploration in that immediate Buchans area where there is a great chance they are going to bring in another ore body. Then all of the holdings outside of the Buchans area just sit and be unexplored. It is a very valid point the member for Eagle River (Mr.

Strachan) raised. And the perfect example of course is the Asarco holdings and the Price (Nfld.) holdings. Mr. Chairman, I would just like to refer for a second to the point the hen. Leader of the Opposition raised. That is in the situation where you have people in this Province holding by a grant a piece of land five or six - let us make it a little more complicated. Let us assume that land is held adjacent to a highly mineralized area

May 5, 1978 Tape 1890 IB-3 MR. FLIGHT: or adjacent to a discovered 1Di.ne. No reason to believe that it is mineralized. But it would appear to me that the way this bill reads that all s010e person would have to do is come to the Deparcment of ~lines and convince s010ebody, "!=ook there may be mineralization there. We would l ike to e.'q>lor ·e it .' Now either the guy is put in the position where he is t.a.'Ced because he personally does not intend to explore, he is taxed,as the Leader of the Opposition said 1 or we find a move to e.'Cpropriate the land so somebody else ,j i . .-

:lay 5, 1978 Tape No. 1891 :m- 1 :rn.. FLIGJIT: can explore or at least it ~~11 be a very good reason to use, and I think those are two valid points, ?1r. Chairman. The hon. !1inister of :1ines and Energy. :-!R. PECKFORD: l·1r. Chairman, I do not know if hen. members really understand what we are trying to do here. I thought it 1vas clear just what tne act was trying to do.

In reference to what the Leader of the Opposition says, I suppose anyone cot:ld, theoretically_ and I think this is the ;.;a;· he is talking about it in any case, I think the Leader of the Opposition understands what the act was all about -:. taltdng theoretically about it I suppose one could make the point that if government, under

section three, or under some

section of this act is moving into a particular area and forcing attacks on o~mers of land, mineral rights owners in the Province who had a previous agreement, that someho<v then the gov~rrunent could look at it from that point of view and say that ,you lcnovr, this is setting a dangerous precedent in the sense that-lvho knows, you know? ·rhe government, are they going to do this? Some day they coul~ decide to move in on somebody else who has got a grant from the government, and move in and impose a tax. You know it could.

Theoretically I suppose there is some validity in that point that if governments can do this I suppose they can do other things as well, but I do not think any government would ever ret away 1vith it. The whole ourpose and intent of this act is to get companies v.1to have large tracts of land from ti1e govermaent under mineral rights for long periods of time with very low commitments, to do something on these lands, to explore their mineral rights that they have gotten for a long oeriod of time. l~re:~ tr~ets of land, having to do very little with it.

So what we are tryi~g to do is to, in the public interest, because these agreements and concessions are not what people in 1973 consider to be reasonable as it relates to doing something with our resources, that we have the wherewithal through this Legislature, even though these .. _I ' - ~ r

~lay 5. 1978 Tape No. 1891 NH - 2 c·!P.. PECKFORD: concession agreements said that you could not do it or whatever, to bring in ne~1 legislation to force these companies and these owners of mineral rights in that category to get on crith the job and to at least bring the level of exploration to a certain level or otherNise you are going to have to pay tax on it. You will pay tax on it or if you do not want to pa.y the Ca.'!: then relinquish some of your acreage to give somebody else a crack at it. Tnat is the whole intent of it.

But you do run the risk theoretically, as the Leader of the Opposition l:..nows, to leaving your self open to that kind of idea or suggestion being put forward. But I do not think it is realistic. I think it is a good academic argument to have but I do not think it is realistic.

Man decided a long time ago when he needed to be organized that he was :. going to decide to do certain things in the public interest and after you make that first principle kind of situation where we decide to get organized and come out of the cave, I guess everything else sort of follows from there and it is only a matter of degree and no longer very much a matter of kind. In any aase we cvill not pursue that kind of argument any further. I think we decided that a long time ago. But you do leave yourself open to that from a theoretical point of view, as the Leader of the Opposition fully points out.

I mean,let us get straight what we are trying to do here. We are trying to ensure that a certain level of exploration activity must occur. Now whether that level of mineral exploration activity is sufficient, time will only tell and the test of time will tell and if it is not in the first two or three years that it COI".es in then cJe are going to have to change the formula. ~. FLIGHT: !7ho is (Inaudible) MR. P~CKFORD: Just keep quiet, the hon. member for Windsor- Buchans (Mr. Flight). I am trying to address myself to

~~ay 5, 1978 :n!- 3 ~fP. . PECK'!"0!W: ~he kind of things that he just ment ioned . Now in the case of Asarco and Price, as the hon. member for Wi:tdsor - Buchans (~!r. Fligbt) is uc:-:t to talk about on some occasi ons, regular though they may be , he says , you know, oe amou:tt of tax if Price (Nfld . ) wer e not spe.'"lding it at such a level that they are spend.ing much more t~an that in any case, so that therefore you are not goi:tg to be collecting anything . Fine. Great . Excellen:. Because if Price is spendin~ Sl million in explo ration a year that is good, therefore - !'!R.

FLIGHT: On one ~quare oilc of the vast concessions. ~ . PECKFORD: All we can do in t.he first instance is establish a level . !his is not perfec: and there is no ":o~ay you are ever going to get it perfec t. Okay. So •.;e start somewhere, so we have started some\rhere and where ""e have started in the Price cRSe, r 1 I ! I '

~lay 5, 1978 Tape 1892 EC - 1 !·;R, PECKFORD: because of the rates applying they will pay in 1979, 1980, 1981 and it will gradually escalate and they will get up to a fairly high level. They know now after this bill goes through that each year,whether their idea was different. Some year like Price, okay, they are spending way over now, fine. Perhaps they are not very successful and they can see now in 1980 that in 1981 they are not going to want to spend very much. But they are going to be either forced to spend at a certain level or pay the tax or r~linquish. They are going to.

So we have established a standard which was not there before. There was no standard there before, and now we are giving a standard, and it will have to be the test of time. Now as it relates to a particular area that they are going to spend all their money on because of their seismic shows at· that, I agree, But it is hard, it is difficult for a government to have enough data there to force companies to not go there but to go somewhere else if that is not very prospective. All we can do is set a fairly good standard, a fairly high level of taxation if they do not spend some money on it. That is all we can do.

Now as we go down the road, I agree that you may be able to define, as I said last night, smaller areas. Now the hen. the member for Eagle River U:r. Strachan) does not seem to understand that if the companies decide to relinquish instead of paying the tax or instead of spending explorat~on collars because they have better areas somewhere else and they relinquish, what happens then? And what happens then is that that land immediately comes under the ~ineral Act. Goes to the Crown. ~IR. PECKFORD: Is back to the Crown. And then anybody else going in on that land and claim staking it I I .. l ' , - ~ t:

~!ay 5, 1978 Tape 1892 EC - 2 ~:R. PECKFORD: comes under that Mineral Act that' was passed in 1976, which has provisions in it,like the oil and gas regulations, and which forces the companies to do a fair amount of work on identifiable blocks, the very thin~ that the member for Eagle ~iver (!-l:r. Strachan) is talking about. So all the member for Eagle River has to do now if he t·Tants the total an.stver to that question is to refer to the ~ineral Act, 1976, which applies in the case where relinquishments occur.

It comes back to the Crown, it goes open for claim staking and then people go in and have to commit certain nu~bers of dollars on those blocks - we do have blocks. That is the ~ineral Act. But as long as they are boldine on to it and their concession azreements come under - and ~e have identified t~e ones that do - well then they co~e under this ~ct in addition to the agreement conditions that were signed under the concession. And that is all they come under.

Up until now, Brinco or Brinex, Reid Newfoundland and their mineral rights, LM and E, ~alec and so on have only had to live u~ to the conditions under the concession agreement that was siGned years ago . In the case, for exanple, of !lrinco, every five years, $1.2 million on all their lands. And what are we saying now? Ue are saying now, starting in 1979 that company uill have to spend at least $4 nillion. If they spend any less, the tax is $4 million in 1979, they will have to make up the difference or relinquish land, and then th~t land comes back to the Crown and some other company gets a crack at it.

And that is the way it is working• ~ow whether that level of taxation is high, low or indifferent - and it escalates, it goes up to $18 ~illion for !lrinco if they did not spend anything. As a matter of !. ~, ' ,. I -- i~ ~ • .. F - t r F t -r I ' •· i.

i~ ay 5 , 19 7 8 !apt: 1892 ~c - 3 :n .. PEC~:'O!l.D: fact, as t h e membe r for Eagle River (::r . Strachan) has soid on a number of occas io ns, the Brinco company - 3rinex -have spent a lot of money. And I ju st found out this mornin g c h at t h ey intend to spend about ~3 mil ion in Labrador t ~is summer. And tal king about Labrador and i t not bein g explored very much, as the memb•r fo r Eagle River did, that is rue. And ~e are tryin g to correct that s~tuacion throush g ettin g a total ca~ping and geolo~y of that area done .

As a matter of fact, by t h e end of this present mont h we will h av e 150 men in the f iel d in Labrador with t ~ ree or four heli copters and one ~ixed wi n g aircraft to continue t h e mapping p ro g ra ~me that ~as started las~ year under the ne~ min eral dev elopment agreement .

So 150 people - geologists and four or five he lic opters and a fixed ~ing aircra ft- a re ~oi n g in en asse until about Octo be r or Jovember in t o Labrador u nder t his mineral development agreement to identify and to do t h e proper mapping so that this infor mation , hopefully attractive, will then bring other compan~es i n to Labrador to do t he exploration that is badly ne~ded. L ~ :i ., j~ . I~ • £ l

May 5, 1978 Tape 1893 IB-1 MR. CHAIRMAN: The hon. member for Windsor-Buchans, MR. FLIGHT: Either I do not understand the minister or he does not understand me, but, Mr. Chairman, before there was an Impost Tax in this Province, before we ever heard this,American Smelting and Refining Company for twenty years at least, and I was associated with it for twenty years, spent $500,000 to $600,000 a year in exploration. That is far more than they would be required to spend so as not to have to pay any taxes under this act. But they spend · it because they are making $8 million or $10 million a year in Buchans.

It was a tax writeoff anyway and as a result - and I mean they spent it by and large in the immediate Buchans area which meant all the concessions they held all the way from Buchans in a V-shaped concession to the South Coast, a massive holding. they would not be required under this bill to do any exploration on that land as long as they ran that kind of an exploration programme in Buchans.

A few days ago on CBC I heard that Daniel's Harbour, there is a mining company in Daniel's Harbour which discovered last year ~. orre million ton deposit in the immPrii;,tp vicinity of the mine and it has indicated that it is going to have a $500,000 or $600,000 exploration programme for the next three or four years in the immediate area of the mine. So how do any other holdings apart from the immediate area of the mine get any exploration?

So if the mine in Daniel's Harbour is making money for the next twenty 1 years,any holdings they have in this Province will not be explored for the next twenty years because all their exploration effort will go into the immediate area of the mines. They will spend enough money to satisfy the act that they will not owe any taxes and if possible under that situation that vast areas in this Province will go for the next ten or fifteen years where you have an operating, profitable mine with no exploration. On motion clause 3 carried. MR. FLIGHT: He is not going to answer it. MR. CHAIRMAN: Shall clause 4 carry?

The hon. member for Eagle River.

May 5, 1978 Tape 1893 MR. STRACHAN: I wonder if the minister will explain to me clause 4. A mineral holding determined refers to a specific mineral. That is,there are concessions or rights given for a specific mineral, to mine a specific mineral __ ~hat is my understanding of it - that if they mine other minerals - I just do not understand this at all. If they mine other minerals~for instance,is that regarded as something separate under this act?

For instance,if someone has a permit and goes in there specifically for one mineral, uranium for instance, and there is copper there and they move in copper or whatever else it is, how does this act work in relationship to different minerals if specific minerals are mentioned? Because I think this

section here, 4 - I am trying to be very specific with the

section , you know, I am not talking the principle of it, I am talking very specifically the section. The government House leader agrees. And I wonder what relationship this is to the biJ.J. and what IB-2 would happen? Do they pay only tax on that

section ·? Does the money, for instance, they put in it for exploration of one mineral,if it is a specific mineral holding,apply to other minerals? Can it be taken off other minerals? What is the relationship there. It is a little bit complicated that

section there. Often it could have, I think, certain loopholes on this section. MR. HICKMAN: Double protection provided by a very assiduous legislative draftsman who nods his head. MR. CHAIRMAN: The bon. Minister of Mines and Energy. MR. PECKFORD: I just scanned the

section then and I cannot give a full explanation that the bon. member might want. All I can indicate is that where specific minerals are mentioned in other documents for mineral rights that we are making sure that those kinds of documents are covered too, when there are specific minerals mentioned. I can elaborate as I understand it. Usually when mineral rights are given, mineral rights are given and the mineral rights defined are mineral rights, m-i-n-e-r-a-1 r-i-g-h-t-s. But in some cases there might have been mineral rights given in the

!-fay s, 1978 Tape 1893 IB- 3 MR. ?ECKFORD: way of specific minerals and in such like cases then we are ensuring that those kinds of rights are also covered unde r the act so that this kind of taxation system that we are putting in here would also apply to large concession holders who have particular agreements which relate to specific minerals . That is all I can get out of it. :iR. liiC~fAN: You should be called to the Bar fotthwitb. MR. CHAIRMAl'~ : The bon. member for Ragle Rive r. ' -f L

"fay 5, 1978 Tape No. 1894 OP.1 - 1 MR. ST!ACHJIN: In other words what the minister is saying is that- and I ~vender if there are any concessions given for a speci~ic mineral. ~!R. PECKFOPJl: Not if we can avoid it. ~1R. STRAC:lAN: Then •what the minister is saying is that regardless of whether we are working at mineral, or any other minerals for instance, it will re covered under this act. HR. PECKFORD: Exactly. Exactly. }!R. STRACHAN: He can assure us of that. I guess I just do not understand the legal - :m.. PECI<.FORD: That is all I can assure you of right now in my

interpretation of it. On motion clauses (4) and (5), carried. MR. CH.Aiill!.AJ.~: The han. member for Eagle River. HR. STRACHAN: Clause 6, the paramountcy of the act, in ot~er words states that this act is paramount over everything that has ever come before, it is supreme to concessions, agreements, titlea, deeds and so on. ~!R. NEARY: Setting up company towns and - HR. HICKHAN: It is an

interpretation provision. ~- NEARY: - policing the area. ~·!R. STR.ACHA."l : It is a what? HR. HICI0!Al'l: It is to aid the courts in

interpretation. ~- STP-ACHAN: But in other words if it is put in here to aid the courts in

interpretation,it is felt necessary to put it in in order to spell out verv clearly that you feel, if it is an

interpretation, you feel it is paramount. ~IR. HIOO!A1'1: Yes, that is right. Do not forget the pro tanto-. - l MR. STR.ACHA.~: When I get down to another section, because I intend to debate this- not debate ,but question ,if I am not allowed to debate, SP.Ctions of it. MR. PECKFORD: I hope so. HR. STRACHAN: Specifically here, the paramount.c:y of the act, I am thinking of the Reid Newfoundland arrangement, the paramountcy

Hay 5, 1978 Tape No. 1394 mr - 2 ~!R. STRACHAN: of the act. Where is that now, later on? MR. STRACHAN: Later on there is forfeiture and there is also discussion about negotiation. l1R. HICKY.A..'<: Yes. l·!R. STRACHAN: And I am wondering whether this act, should a situation occur with Reid Newfoundland, I am wondering whether this ~ct would be able to supercede and override all their considerations and arguments and especially on the basis of discussions with the government at the moment.

They have obviously been having di,.cussions for five or six years when they started this, , I am wondering whether the act does give powers,because this could be a tricky case. I believe it could be a very complicated case, the case of Reid Ne,vfoundland. Would the Minister of Justice like to - MR.

PECKFORD: All I can tell you on that, like I told you last night, it is no different, I mean 11ve have negotiated with Reid Newfoundland and we are now convinced under the provisions outlined in this act that we are covered in the event that everything has to apply here, which, . y ou know, it is going to once this act is passed that we are covered. Now whether it is going to be a tricky case is a matter of opinion, you know, The hon. member for Eagle River (~r. Strachan) believes that it will be.

I have been assured by the people who are used to doing these things that we are covered in case we do go to court and that this act will apply and will override any previous or existing agreement that we have with Reid Nev1foundland. ~lR. STRACHAN : I accept the minister's explanation. I am sure that one of the duties that I have as a me~ber in this House is to ask the member for the same reassurance that he gets in drafting the bill from the Justice Department and sc on - MR. PECKFOP.D: I did not think I questioned that in my answer.

~ay 5, 1978 Tape No, 1894 N~1 - 3 ~1R. STRACP.AN: - that you know I also have the right to have that information - ~·JR. PECKFORD: Absolutely, ~lR. STRA~~: - and be assured that these angles are all covered, ~R. PECCFORD: I did not think the debate was whether you had a right or not. I thought the debate was whetter or not I could reassure you that Reid Newfoundland ~~ill be covered under this act, And I thought I had given you that reassurance. HR. STRACHAN: Yes. That is what I am asking. MR. PECKFORD: That is what I ~ave you. HR.

STRACHAN: You are putting in the record and stating that there are reassurances in this case - }fR. PECKFORD: Right, Exactly. !-!R. STRACHAN: -because it could be, as I understand it, a very tricky case, a very complicated one if they wanted to. ~. PECKFORD: Could very well be. HR. STRACHAN: Surely, you know,I am stating to the hon. House Leader then, the Minister of Justice, that it is my right to question, I cannot just let the sections go past if I am not quite sure of what is going on there. I would be derelict in my duty~surely. MR. CHAIRHAN: The hon. Minister of Justice. ·; f !-JR.

HI CIC1AN : May I explain to the han. gentleman from Eagle 'r,' River (?1r. Strachan) that that is not what I was saying when I was in my seat when I should have been standing, that any competent legislative draftsperson in preparing a piece of legislation tries to envisage as much as he or she can foresee that may arise in the future out of the

interpretation of any particular piece of legislation_. Now this will not stop, in case any of my colleagues at the Bar are here listening~ this will not stop actions from coming to the courts. But 7

:·lay 5. 1978 !\}{ - 4 :.!R. SlC.tC!Wl: you try ~,d make certai n that t he legislation is made as clear an·d unambiguous as possible and I have no hesitan~y in saying that right now in this P•ovinc e, we have servants of thi.s House, a legislative division, t."lat knows no peer anywhere. The hon . member for Eagle River. ~!R. STRACHAN: In getting back to the !".inister of Justice and the House Leader, I am seating chat surely eben the minister will agree

~ray s·, 197s Tape No. 1895 .r.f - 1 HR. STR..-\C!U-i..'l': · t:Oat legislation of tnis nature,which is extremely complicated anci difficult to put into farm,and once it is put into fo