May 31,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 52

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

Statements by Ministers

MR. SPEAKER: The hon. the Minister of Finance.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Thank you, Mr. Speaker.

I want to inform members of the hon. House officially that a

tentative agreement has been reached with the NLTA.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: The NLTA is now going through the process of

ratification which will probably take a couple of days, according to their

process, and we all hope that the students get back to the classrooms as soon as

possible and that the vote will be ratified.

MR. SPEAKER: Order, please!

The hon. the Member for Waterford - Kenmount.

SOME HON. MEMBERS: Hear, hear!

MR. HODDER: Thank you, Mr. Speaker.

We want to say to the President of Treasury Board that we

share his optimism on behalf of the students of Newfoundland and Labrador,

120,000 of them, who will hopefully be able to rejoin their teachers in their

classrooms in the next few days; and, on behalf of the parents of Newfoundland

and Labrador, we are pleased that the possibility exists that teachers will get

back to doing what they do best, which is teach, and that this year can be

finished up -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. HODDER: - and the preparations for next year can be

completed in the appropriate manner.

We look forward to the resolution of this dispute in its

final manner with the teachers' ratification, hopefully, in the next several

days.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

Does the hon. the Member for St. John's East have leave to

address the House?

SOME HON. MEMBERS: By leave.

MR. SPEAKER: Leave given.

The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker.

I would like to say that I am very pleased that both

negotiating teams have been able to come to a compromise on the issues

outstanding during the strike, and hope that we can get back to school quickly

and that too much damage hasn't been done to the school year.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. HARRIS: I only say that it was a necessary strike,

and it is unfortunate that this had to happen due to the approach taken by

government towards negotiations.

Oral Questions

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

Last week, over the weekend, government launched another

barrage of advertizing based on no truths and half-truths in another attempt to

convince people to go along with the sale of Hydro with these colourful, $2,500

full-page ads that I'm sure everybody saw. These ads contain the same distorted

information that the government has been feeding the people of the Province for

the last eight months, and an overwhelming majority have told the government

time and time again that they don't buy it, they don't believe it.

Today the coloured ads have been replaced. Obviously the

reaction hasn't been positive. You have now, not one, not two, not three, not

four, not five, not six, not seven, but eight -

AN HON. MEMBER: What!

MR. SIMMS: - eight ads worth about $3,000 in total, I

dare say, of taxpayers' money once again. I want to ask the Premier: Why are you

persisting in this obscene waste of taxpayers' money in this desperate attempt

to try to convince these people of the Province that they should do something

which they've already told you they don't want you to do?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The answer is very simple. Mr. Speaker. We

are trying to save the economic and financial future -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Order, please!

PREMIER WELLS: I will start again,. Mr. Speaker. The

answer is quite simple. We are trying to save the economic and financial future

of this Province from the devastation that the Opposition would wreak upon it,

that they attempted to do while they were in government, and that they are still

trying to do in Opposition, to put their own political interest ahead of the

real interests of the people of this Province. We intend, Mr. Speaker, to do

whatever is reasonably necessary to achieve those results.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Mr. Speaker, we will see if we can get another

truthful answer from the Premier. The first phase of the government propaganda

campaign cost around $100,000, the minister told us at one time. I would like to

ask the Premier: How much money have you budgeted this time to spend on the

second round of propaganda, and will this second round of propaganda include any

other form of advertizing, such as television or radio advertizing, householder

mail outs, or is it simply going to be newspaper advertizing? Can he tell us

that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the government will take

whatever action is necessary to make sure that the people of the Province are

fully informed as to the real issue.

MR. SIMMS: They are already informed.

PREMIER WELLS: With great respect to the members

opposite, they've been misinformed, largely by the efforts of the members

opposite, and it is incumbent upon government to take reasonable -

AN HON. MEMBER: (Inaudible) but it hasn't worked.

PREMIER WELLS: I will start again, Mr. Speaker.

AN HON. MEMBER: You can start all you want. The truth is

still going to come through.

MR. SPEAKER: Order, please! Order, please!

PREMIER WELLS: I will start again, Mr. Speaker. It is

incumbent upon government to take whatever reasonable steps are necessary to

make sure that the people of the Province are fully informed as to the real

merits of the government policy and in fact the essential nature of following

this policy, if government is to achieve a reasonable level of economic activity

for the future of this Province, and if government is to be able to achieve

sound financial management that will avoid the necessity of increasing our debt

beyond the already unacceptably high levels. It is important that we achieve

that and the government intends to continue, Mr. Speaker.

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Mr. Speaker, it is unfortunate the Premier

can't be truthful. I asked him a specific question about the $100,000 budget.

MR. ROBERTS: On a point of order, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I have sat as have other

members and listened to the hon. member break just about every rule in the House

and I hesitate to interrupt him in the middle of his carefully rehearsed

diatribes but, he just used an expression, Mr. Speaker, which even the Leader of

the Opposition knows is unparliamentary, and I ask that he be directed to

withdraw it, please.

MR. SPEAKER: Order, please!

One member cannot accuse another of being untruthful.

MR. SIMMS: I withdraw it, Mr. Speaker and save all that

old effort.

MR. SPEAKER: That's fine.

MR. SIMMS: I would like to ask the Premier - it's too bad

he continues to be loose with the truth, is that acceptable? Because I asked

him: how much are they going to spend? I asked the Premier, how much are they

going to spend on this second round of propaganda and he gave us the big

lecture. Can he answer the question I asked him?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The truth is, Mr. Speaker, the hon. member

is so unfamiliar with truth he wouldn't recognize it if he were wallowing in it

up to his ears.

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: Is that parliamentary?

MR. TOBIN: Is that parliamentary, Mr. Speaker?

MR. SPEAKER: No, I think the same point applies across

the House and the Premier's remark is unacceptable as well. I will ask the

Premier to withdraw.

PREMIER WELLS: Mr. Speaker, that was a response to the

question -

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: You will need a lecture just as

(inaudible).

PREMIER WELLS: That was a response to the additional

question as to whether I was loose with the truth, and I told the hon. member

that I treat it the same as he does. If that's the standard to which we are -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

PREMIER WELLS: I am quite prepared to withdraw the

statement, Mr. Speaker, and I do so, but I expect the hon. member to also

withdraw that question.

MR. SIMMS: Yes, I already withdrew. A supplementary, Mr.

Speaker?

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, in this debate about who is

telling the truth and who is using the right words, I tell the Premier this: We

would be prepared to take up a collection on this side of the House to put him

on TV once again so he can tell us the truth.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: We will even pay for it if he is prepared to

do that. Now, a few days ago - he won't answer the question I asked him, How

much money do you plan to spend? How much do you intend to spend? How much have

you budgeted? That was the question, but let me ask him this other one while I'm

on my feet: A few days ago, you said in response to a press question or a

question from one of the press members during a scrum that you had conducted

your own public opinion poll on the Hydro sale. Will the Premier tell the House

what polling company was hired to do the poll? How much did the poll cost and

will he table all of the questions asked in the poll and the results?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I will find out the name of

the company and the cost, and I will table it.

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Mr. Speaker, obviously, since last Friday or

whenever this latest round of newspaper ads started - $2,500 a day, full-page,

Friday, Saturday, Sunday and yesterday - and another $3,000 worth of ads today.

Now, I'm told, radio ads have started today. Will the Premier tell the House

forthrightly, how much does he plan to spend? How much has he budgeted on this

second round of advertising?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the government hasn't

budgeted a specific amount. It is incumbent upon the government to do whatever

is reasonably necessary to cause the people of this Province to be fully

informed and to have the misinformation that hon. members opposite have caused

to be distributed around the Province corrected.

MS. VERGE: It's our money you're spending.

MR. SPEAKER: Order, please!

A supplementary, the hon. the Leader of the Opposition.

MR. SIMMS: It's an absolute outrage, Mr. Speaker. It's a

disgraceful attempt by the Premier to try to buy the people with their own

money. That's not acceptable and the people have told the Premier that.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Now, Mr. Speaker, just a few days ago, last

Thursday, to be precise, the Premier said on provincial television that he

expected Bill 1, the Hydro privatization bill, to be approved before the House

adjourned for this summer. Is that still your plan and expectation?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, what I said, Mr. Speaker, was that I

certainly hoped it would be approved. I didn't indicate that I expect it. I said

that I hoped it would be approved. I don't know what media reports - I heard the

media this morning reporting something that's totally incorrect, for example,

that I wasn't worried about what was happening in Corner Brook - totally

incorrect, I never said any such thing. So I ask the hon. member not to pay much

attention to headlines that he reads in the media.

MR. WINDSOR: Why won't you pay attention to the people?

PREMIER WELLS: What I did say to the media, Mr. Speaker,

was that I certainly hoped that it would be passed before this session of the

House rises until the fall but if it isn't, we can recall the House in July, we

can recall the House in August. The House will sit again in October or whenever

it is necessary to deal with it.

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Mr. Speaker, is it any wonder that people have

their doubts about the Premier, and his integrity is in question these days? We

can't get a straight answer from him. Now, he said, I would certainly expect so,

when asked whether he expected the bill to be approved before the House adjourns

for the summer. This is the transcript, not the headlines, it is the transcript

of your television interview, so you did say it just last Thursday. Now, do you

intend to call the bill again before the House adjourns for the summer? That is

what we are asking, and that is what the people of the Province want to know.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: We may indeed, Mr. Speaker, or we may not,

depending on what the Government House Leader does. We cannot say at this

moment, and it doesn't matter whether the Opposition Leader shakes his head,

rattles his tongue, or what he does, it doesn't alter that, government will call

the order of business when we are ready to call it. That is one of the

prerogatives that those who win elections have, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Yes, call it! Come on! Call it!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

I would like to direct a question to the Minister of Health.

The Minister of Health has now received the plans of hospitals within the St.

John's area to cope with government's latest cutbacks in funding for health

care. Now, will the minister tell the House how many hospital beds, operating

rooms, and other facilities in St. John's will be closed either permanently or

temporarily to bring costs in line with their proposed budget?

MR. SPEAKER: The hon. the Minister of Health.

DR. KITCHEN: Mr. Speaker, I can't answer that question

off the top of my head, but I will find out. The hospitals in St. John's have

been reducing the number of beds deciduously over the past number of years and I

believe there are well over 200 beds that are presently vacant. I believe there

may be some more closed, but not very many, as a result of this budgetary

exercise, but I will dig out the precise details.

MR. SPEAKER: A supplementary, the hon. the Member for

Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

The Premier stated, there is no budget for Hydro advertising,

but there sure is a budget for health care in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Now, St. Clare's Mercy Hospital has

informed its staff that it will close seventy-four out of its 279 beds, an

endoscopy unit, an operating room, for a period of eighty-eight days beginning

on June 17. Now, a quarter of the beds at St. Clare's will be closed for a

quarter of the year. Is that the average, I ask him, for all hospitals in St.

John's? And will the closures add to the long waiting lists for medical

procedures at these hospitals?

MR. SPEAKER: The hon. the Minister of Health.

DR. KITCHEN: Mr. Speaker, a couple of points to be made,

he brought in the sale, the privatization, of Hydro. I can tell the hon. member

that if we don't privatize Hydro we will be closing a darn sight many hospitals

boards than he mentioned already, and that's what it's all about.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

DR. KITCHEN: What these people are afraid of over there

is they will not face the budgetary realities that this Province has presently

confronted. You have to open up your eyes, my son, and realize where we are in

this Province financially.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

DR. KITCHEN: Now, to come back to your question about the

number of hospital beds that we will be closing, it is customary in this city,

and in other parts of the Province, to reduce the number of hospital beds in the

summer to take into account holidays in the hospitals, and things like that. I

wish the hon. member would stop inflaming people for no good reason. He is at it

again!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A final supplementary, the hon. the Member

for Ferryland.

MR. SULLIVAN: Mr. Speaker, there is a need for concern.

When this hospital was identified, or this Province, with the highest

readmission rate of any province in this country, it is time for concern.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Now, I ask the minister, last year St.

Clare's announced a temporary closure of beds, but many of the beds they

announced at that time never reopened, not even to this time. Now I ask him, is

the same thing going to happen again this year? Will some of the bed closures at

St. Clare's again this year be permanent?

MR. SPEAKER: The hon. the Minister of Health.

DR. KITCHEN: Mr. Speaker, I would like to be able to be

in a position to close even more hospital beds in this Province, because the

thing is that we are embarked on a different course of action. Our course of

action involves prevention, long-term steps to eliminate smoking, and things of

that nature, and that is what we are up to. We are attempting to keep people

healthy, and not to try to keep them in hospital beds. So the member shouldn't

be concerned, the fact that we don't need as many hospital beds as we did at one

time. That is not the case. The waiting lists are not high in this Province.

They are the lowest in Canada.

MR. SPEAKER: Order, please!

The hon. the Member for Ferryland.

MR. SULLIVAN: I ask the minister if he will table the

plan submitted by hospitals to his department on the closure of beds. I think

the only thing that seems to stay in the minister's head any more than a month

long is a head cold.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Opposition House Leader.

MR. W. MATTHEWS: Thank you very much, Mr. Speaker. I have

a question for the Minister of Employment and Labour Relations pertaining to the

situation surrounding the termination of electrical inspectors in the Province.

I have had a number of calls to my office in the last

twenty-four hours. The Member for St. Mary's - The Capes, the Member for Baie

Verte - White Bay, have had calls as well, that their seems to be a log-jam

developing in the electrical inspections in the Province. I am wondering if the

minister is aware of this situation, and could he tell us what he is doing to

straighten it out.

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Mr. Speaker, the registration that is

required for the new regulations that go into effect tomorrow is just about

complete, has been ongoing for some three weeks now, and the only thing that has

been brought to my attention are concerns by certain contractors who are either

not certain or dissatisfied with what their status will be under the new

regulations, but I am not aware of any bottleneck, whatever the description that

is, and we are not doing anything about it because I am not aware that it

exists.

MR. SPEAKER: A supplementary, the hon. the Opposition

House Leader.

MR. W. MATTHEWS: Thank you, Mr. Speaker, a supplementary

to the minister. I guess it is sort of a supplementary, but I guess as well to

provide information to the minister.

I had a conversation with the office in Grand Bank today, and

there are presently eighteen inspections waiting to be done in the area covered

by that office, and the two other members have had calls as well. That seems to

me to be a serious backlog that has developed in that particular area. People

need work done, for obvious reasons. Some of them have possibilities of being

without electricity, so I am wondering if the minister would make an undertaking

here today to immediately send someone to the Burin Peninsula area, and other

areas of the Province, where the need is there, where it is decided that there

is a need, to send an inspector into those areas to try to clear up the backlog,

because with the new system due to come on stream tomorrow, where now the

certified electrical contracts will be going in to pick up the permits, I think

this backlog needs to be cleared up before we really get into the new system, or

else the problem will be further compounded, I say to the minister.

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

Again, the hon. member in his question mentions a number

eighteen. I have no idea whether eighteen is a normal number, an abnormal

number, or whatever, with respect to the office in Grand Bank, that services the

Burin Peninsula. I'm certainly sure that the current electrical inspector who is

working his last day today will do everything that he can to inspect as many as

he normally would on a working day, because this is a working day, and that if

in fact there is a problem that he would have used the normal routine procedure,

which is to report that fact to his immediate supervisor who would have made

accommodations to make sure that there are no unnecessary delays in electrical

inspections.

MR. SPEAKER: Final supplementary, the hon. the Opposition

House Leader.

MR. W. MATTHEWS: Mr. Speaker, let me say to the minister

that the Burin Peninsula is just one region of the Province that has a problem.

St. Mary's - The Capes, a totally different region, Baie Verte - White Bay,

another region that has problems. I can say to the minister that there are

eighteen permits issued in the Burin Peninsula area covered by that office that

that work has not been inspected. The electrical inspector is terminated as of

5:00 p.m. today. In order for those inspections to be completed someone is going

to have to be sent down to the area to do the inspections. People can't wait for

weeks or months for the inspections to be done. They paid for the permits, they

deserve and they should receive the inspections as soon as possible. Will the

minister undertake today to contact his officials and have an electrical

inspector sent to the Burin Peninsula or to the other areas if necessary to get

this work cleared up? Will he do that?

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Mr. Speaker, again, the inspections, even in

the areas where the ten electrical inspectors are laid off as of the end of work

today - it is not that inspections cease. Those inspections that are still

required under existing permits will be carried out by the remaining ten

inspectors. The inspector who is stationed in Clarenville has responsibility for

the Burin Peninsula. I've been assured that there will be timely visits to the

Burin Peninsula for any inspections that are required, whether they were

registered today, before the new regulations, or tomorrow, and that there should

not be any unnecessary delay with respect to electrical inspections.

MR. SPEAKER: The hon. the Member for Baie Verte - White

Bay.

MR. SHELLEY: Thank you, Mr. Speaker. My question is for

the Minister of Forestry and Agriculture. Kruger's recent announcement that it

will close number 4 machine will adversely affect many loggers, as the minister

knows, as well as unionized and private contractors like there are in my

District of Baie Verte - White Bay and also in Green Bay. Actually, the

announcement was that some 355 loggers will be affected. Can the minister tell

the House if these will be permanent lay offs or a reduction in work time for

these loggers, and what will be the equivalent loss in person years of

employment?

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: No, Mr. Speaker, if Kruger, Corner Brook Pulp

and Paper, closes number 4 machine on July 24 as they've indicated they may be

doing they will have a 25 per cent less wood requirement. Roughly one-quarter of

the wood requirement that they need now.

At this point in time we are not certain. We are talking to

Kruger on a daily basis. That is to determine exactly what they are proposing

with regard to wood supply. The early indications are that they will reduce the

wood supply that is the most labour intensive, because of course that is

obviously the wood with the greatest cost. The high cost wood will be reduced.

At this stage in time we don't know exactly what their

proposals will be. I might point out, Mr. Speaker, that although the media is

using a figure, 355, Kruger's statement said that 355 or thereabouts will be

adversely affected. They didn't say there would be 355 jobs lost, and we know

there will not be 355 full-time or temporary jobs lost. They may be affected.

One could assume that where a given logger has ten weeks work he may now only

get four. We are waiting until Kruger clarifies exactly what they intend to do

with regards to the woodlands operation.

MR. SPEAKER: Supplementary, the hon. the Member for Baie

Verte - White Bay.

MR. SHELLEY: Thank you, Mr. Speaker. As the minister is

aware there was also an announcement prior to the announcement about the number

4 machine being closed down. Kruger has also changed its policy for assigning

contracts to cut pulp wood to private contractors, as I spoke with the minister

before about. Traditionally, companies distribute the work among all contractors

that usually supplied pulp wood to them. Now the difference is they are calling

for tenders on all these. As a result of course there are fewer contractors,

therefore fewer loggers will be working this year. Does the minister know how

many jobs have been lost as a result of this change in the policy?

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: Mr., Speaker, I'm not aware that any jobs

have been lost as a result of the policy. The contractors are still there. This

year Kruger decided to use the process of calling tenders for their wood supply

on private lands. It would seem to me that they will still require the same

number of loggers to supply the same amount of wood that they required last

year. The process may have changed but I'm not aware that there's any reason to

believe there will be reduced numbers of loggers required.

MR. SPEAKER: A final supplementary, the hon. the Member

for Baie Verte - White Bay.

MR. SHELLEY: Thank you, Mr. Speaker. All I can say is I

hope the minister is right because what I'm hearing from my district and from

the Green Bay district is that there are going to be less people working on the

private contracts this year so I hope you are right.

As a result of Kruger's announcement also, loggers are saying

- and I've been told this by many calls I've had and in my district - that after

July 24, when the machine will close down, they will not have enough weeks to

qualify for UI this year. That's a fact. Will government do anything to help

those loggers? For example, is silviculture work being considered as an option,

an alternative?

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: Mr. Speaker, we intend, at this time, to have

at least the same level of silviculture that we had last year which is roughly

about $8-$10 million spent on silviculture. Mr. Speaker, we're hopeful, we take

the positive view that things may happen that will cause number four not to have

to shut down but in the event number four shuts down, no, Mr. Speaker, I'm not

aware of anything at this point in time that government can do to provide

alternate employment to the men who will lose their jobs as a result of that

company decision.

MR. SPEAKER: The hon. the Member for Kilbride.

MR. E. BYRNE: Thank you, Mr. Speaker.

My question is for the Minister of Justice. Can he confirm

that the government is seriously considering reducing low to medium risk

prisoners back into the community and into society and then monitoring those low

to medium risk prisoners by electronic surveillance? If so, if he can confirm

that, can he table any information related to the decision or pending decision

government is about to make in that area?

MR. SPEAKER: The hon. the Minister of Justice.

MR. ROBERTS: Mr. Speaker, the hon. gentleman asked

whether I could confirm that we're seriously considering it, the answer is yes.

That was in The Evening Telegram I think about two weeks ago. I confirm

here what I said there. Can I table information? Not at this stage. We're

preparing a package that would be provided to members as well as to the press

and to the community generally. Nobody has been released on electronic

monitoring, nobody is about to be released on electronic monitoring and nobody

will be released on electronic monitoring until we have first taken adequate

measures to inform the public, including members of the House of Assembly.

MR. SPEAKER: A supplementary, the hon. the Member for

Kilbride.

MR. E. BYRNE: Mr. Speaker, I read The Evening Telegram

a couple of weeks ago. I say to the Minister of Justice that this is a serious

issue. What steps is he and his government planning to take when it comes to

informing the public on the process of electronic monitoring? Can he give us any

information today on what those steps will be, whether it be public hearings or

whether it be public consultations? Can he inform the House at all what steps he

plans or his government plans to take in that area?

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I agree it's a serious issue

and that's why, when the gentleman from the telegram approached me two weeks

ago, I gave him the story. That's why, I assume, that the TELEGRAM ran it

on the front page. They took it as being a serious and an important issue and I

agree completely. Now nobody has been released on this and nobody will be

released until there's been adequate public information or adequate information

made public. I hadn't thought of whether we would have hearings.

I mean the hon. gentleman may not be aware that at any given

time significant numbers of prisoners are allowed out through an administered

process. It goes on here and all over Canada. All we're doing is expanding it a

little using a device that's in use, if memory serves me, in forty-eight states

and four provinces, but I am subject to correction on that. So it's nothing to

get excited about. It's simply another measure we're taking to try to alleviate

the extraordinary pressure that's been caused by the fact that the length of

sentence - prisoners incarcerated in the provincial system has doubled in the

last five or six years and the number of prisoners being incarcerated has

increased significantly as well and yet we have not added any bed capacity

except through the double bunking which really is triple bunking.

MR. SPEAKER: A final supplementary, the hon. the Member

for Kilbride.

MR. E. BYRNE: Mr. Speaker, I thank the Minister of

Justice for the lecture, as unwarranted as it was. Let me ask him again, what

steps will he and his government or what steps are he and his government

planning to take in ensuring that there's proper public consultation on this

issue? A very simple question and if he can at this time, who will do the

monitoring of the electronic surveillance? Will it be done privately or will it

be done through the government agency or the Department of Justice?

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, it's a very simple question and

deserves a very simple answer. Adequate steps will be taken, is my answer.

Now his second question is, he asked who will be doing the

monitoring, public or private? It will be a combination because we'll be using

officers of the correctional system, officers of the police system and we'll be

using the telephone company, which is a private utility in this Province,

subject to public regulation.

It is the same system that has been used in forty-eight

states and I believe in four other provinces. The hon. gentleman should simply

possess his soul in patience; I assure him that when we are able to bring

forward this initiative, which was also I should say in the budget process, if

he had been at the estimates committee discussion of the Justice Estimates,

there were some very good questions asked by his colleagues. His colleagues were

there and asked some very good questions, we dealt with this; so he should

simply possess his soul in patience. I can assure the House, Mr. Speaker, that

we will not be releasing anybody who in the judgement of my officials, presents

any undue risk to the community and not only that, we will not be releasing

anybody under this new system until we have first taken adequate steps to ensure

that the people of Newfoundland and Labrador are informed.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

In the absence of the Minister of Works, Services and

Transportation, I would like to ask questions to the Premier about the proposed

new four-lane Trans-Canada Highway in Pasadena.

Three years ago, the Premier's administration made a decision

to locate the proposed new highway south of Pasadena, around the town. Has the

government recently changed that decision as the minister has proposed, if so,

what is now the proposed route? If there has been no change, will the government

stick with the decision made three years ago to have the southern bypass route?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I think the hon. member is very much aware

that for the last number of months the government has been planning an alternate

route. As nearly as we can determine, there is really little or no harm to

Pasadena and would save the people of this Province some $10 million in

construction and many thousands of dollars in future operation and maintenance

and I believe, although I am not discussing the matter daily with the minister

and his departmental officials, but I believe that that is currently the route

that's favoured by government. Whether or not they have made a final decision, I

can't say at the moment, but I undertake to inquire and advise the House, Mr.

Speaker.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

I would like to ask the Premier if he is troubled by the fact

that the minister's proposed route has not been studied by qualified highway

designers, is opposed by almost everyone in Pasadena, would divide the town with

spoiled farms, interrupt tourism businesses, and would involve at its central

stretch through Pasadena, an eighteen-foot deep trench. The minister's plan

involves having the four-lane divided super highway go under a level community

road where Lakeland Lodge & Motel Ltd. now stands. Is the Premier troubled by

any of that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I am not troubled by the fact that a

four-lane highway, being the Trans-Canada Highway, will go right through Grand

Falls - Windsor, as it always has; I am not troubled by that fact. I think

appropriate arrangements have been made to provide for reasonable access to and

from Grand Falls - Windsor, appropriate arrangements have been made for the

highway going through Grand Falls - Windsor so I am not troubled by that.

Government has to live within its means in terms of the building and operation

of highways.

Pasadena, as important, as pleasant as it is, as nice and

pleasant as the people of Pasadena are, we cannot put the people of Pasadena or

the community of Pasadena in a privileged position that no other community in

the Province would enjoy, I don't think that that would be the right thing to

do. I don't think, at least I am told from those who do the design, and I think

the hon. member asked about whether or not the plan had been submitted to

highway designers, the plan was done by highway designers who had been employed

in the department for many years before we took responsibility for power and we

operated on the assumption when we took over, that the people employed were

competent, and so far we have no reason to believe that those designers are

anything less than competent and we accept the advice that they have given us so

far. I think the matter can be resolved on that basis.

MR. SPEAKER: Order, please!

Question Period has expired.

Notices of Motion

MR. SPEAKER: The hon. the Minister of Social Services.

MR. LUSH: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill, "An Act To Amend The Social Workers

Association Act".

Petitions

MR. SPEAKER: The hon. the Member for St. Jonn's North.

MR. L. MATTHEWS: Thank you, Mr. Speaker.

I rise today to present a petition on behalf of the Pippy

Park Land Owners and Residents Association. It is addressed to the hon. House of

Assembly, Province of Newfoundland in Parliament assembled. The petition of the

undersigned residents of the City of St. John's humbly sweareth:

WHEREAS people who own property and residences within the

boundaries of the Pippy Park Commission pay the same taxes as all other

residents in St. John's; and

WHEREAS the Pippy Park Commission enforces unfair

restrictions on residents and property owners within the park; and

WHEREAS the Pippy Park Land Owners Residents Association was

formed to address concerns about these restrictions, and to preserve and protect

the environment and lifestyle of those living in the park, we the undersigned

request the House of Assembly to subject us to only those buildings and property

regulations which govern all taxpayers within the City of St. John's.

We further request the House to ensure that the provincial

government play a primary role in the enforcement of provincial regulations

affecting forestry, wildlife, environment, and policing within the boundaries.

As in duty bound your petitions will ever pray. It is dated

February 9, 1994.

Mr. Speaker, I present this petition today with pleasure on

behalf of approximately 190 residents and landowners who currently reside within

the boundaries of Pippy Park. The Pippy Park, of course, is an area that has

been in existence for about twenty-five years. During that period of time it has

had it`s boundaries somewhat expanded.

I should say at the outset that these people who own property

and reside within the boundaries of the park are delighted to be able to do so

and take great pleasure in being residents within the park and within the City

of St. John's. Over the years these residents have had two interests really at

heart. One of the interests is to ensure that they continue to enjoy the

property rights and the every day living rights that they would otherwise enjoy

as residents of the City of St. John's, and in addition to that they are most

interested in preserving the natural beauty of the park, and also ensuring that

those who use the park use it in an environmentally friendly manner, and do not

abuse it in terms of the activities that are carried on there.

Some difficulties have arisen, Mr. Speaker, over the years

with respect to certain aspects of things that can be done by residents and

landowners of the park, particularly with respect to the disposition of property

and also as it relates to them being able to otherwise improve their property as

they need to from time to time to accommodate growing family needs, and that

sort of thing.

Essentially what the residents of Pippy Park and the

Landowners Association are asking in this petition is to be able to live in the

park and to be treated as residents of St. John's because that is after all

where they pay their taxes, and not to be unduly burdened or incumbered with

additional regulations and rules that grow out of an appointed body being the

Pippy Park Commission.

The Pippy Park Commission, as we know, has a mandate of its

own and it relates to the preservation of the park and it relates to the

activities that can go on there. It can happen there in a commercial sense, in a

residential sense, and in a recreation sense, so the people who live in this

area believe that they have an interest in the park that is equal to, if not

greater than, even the Pippy Park Commission, so they are essentially only

asking that they be given a couple of things, really.

Number one, they would like to be more adequately represented

on the Pippy Park Commission so that their concerns can be addressed in a more

direct manner. Secondly, they want to ensure that their property values are not

unduly prejudiced or deflated by virtue of the fact that some of the regulations

which say that at one point the park would only be obliged to pay 10 per cent

above property value for extensions that they put in. They want to see that is

done away with. They want to see that the regulations with respect to the usage

of firearms and the usage of things like cutting Christmas trees, hunting, and

that sort of thing in the park, are carried out in a manner that protects the

park, not solely for their benefit, but certainly for the benefit of all the

park users and in the interest of the Pippy Park Commission.

MR. SPEAKER: Order, please!

The hon. member's time has expired.

MR. L. MATTHEWS: By leave, to clue up?

SOME HON. MEMBERS: By leave.

MR. SPEAKER: The hon. member has leave.

MR. L. MATTHEWS: In short, Mr. Speaker, the residents of

the Pippy Park area are simply asking to be taken into confidence by the Pippy

Park Commission. They are asking for the opportunity to be able to work with the

Pippy Park Commission so as to ensure that their rights and privileges as

citizens of the city, and as residents of the park, are taken into account into

rules and regulations made by the commission, and also to assist the commission

where it can, and as best it can, in ensuring that the park continues to develop

and continues to be the place that it was meant to be, not only a place for

government buildings and that sort of thing to be lodged there, to be housed

there, but also a place where people can come and enjoy the myriad of

recreational activities and beauty that is contained in the park.

These people want to work with the commission. They have an

interest in the park. They have an interest in being treated only fairly. They

are asking for no more than fairness and justice, and I commend to this House

the prayer of the petition that has been presented, that I presented today on

behalf of the residents.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker.

I would like to speak to the petition. I can support parts of

what are in the petition, but I have to say that it is impossible to have it

both ways. If you are going to preserve the need of the park, the importance of

having a park implies that there are special regulations that apply to people

who live there. If what the residents want is to be treated exactly the same as

every other resident of St. John's, then that would be incompatible with having

a park, so I can't support that part of the petition.

I would say that I think part of what has happened that

prompts the kind of response from home-owners and landowners in the park is the

cavalier attitude which government has toward the park as an entity, as seen by

the attempts to build this useless road through the park at great expense of

$110 million of direct expenditure from the Roads for Rails Agreement, with an

additional $30 million or $40 million that it is going to cost the municipality

of St. John's, and perhaps the provincial government, in building access roads

to it.

So once you start saying: Well, yes, it is a park but we are

prepared to put a four-lane highway through it, prepared to avoid proper

environmental studies to the point where one group has to try and take the

government to court to do a proper job, we are going to do all that, where the

government has that attitude, this government has that attitude toward the park,

I am not surprised that the residents are saying: Well, why shouldn't we be

treated as everybody else? If you are not going to respect the park, and build a

four-lane highway through it, which is a useless, unnecessary road, and hasn't

been proven to be necessary, then how can you expect us, as residents of Pippy

Park, to accept restrictions on our property development, restrictions on our

building extensions in our home, extensions that are causing us to lose some of

our property values that we have had? How can you expect us to do that when the

government has no respect for the park as a whole?

I understand where they are coming from, and I understand why

they are upset, but I can't support the petition where it says that they should

be treated like everybody else in St. John's.

I do think, though, that there are special problems with

living in Pippy Park, and living as part of a park, and I think - we do have an

appointed board. I would certainly support any effort to include on the board

representatives of an association that has been chosen by residents and

home-owners, or landowners, in the park, to have a say and have their voice

heard directly on the authority itself. I think that is only fair.

We have had situations before where parks have been imposed

or superimposed on people, and they have been kicked out of the park. Gros Morne

is a good example. Eight or ten communities along the coast were excluded from

the park, and their traditional use of the park lands had to be fought for and

be recognized in order to be accepted, and I think that was a mistake, and here

in Pippy Park where there are people and families who have lived there for many,

many years and generations, they deserve to have a little more say than they

have been given, and I would support that part of it.

I wanted to speak on this petition because I support some

aspects of the petition in that it is necessary to give full and proper

consideration of the needs of people who live in the Park, but at the same time

I don't think that it would be compatible with the purpose of the Park to have

all of them treated exactly the same as if there were no Park at all, which is

what the end result of accepting the full petition would be.

I would end by saying that I call upon the government to

change its mind on building this four-lane highway through the Park. That $110

million that is being accessed, some of that could be used to have a more decent

highway through Pasadena, and there would still be plenty of money left to solve

the transportation needs, the real needs, of the area of St. John's. Thank you,

Mr. Speaker.

MR. SPEAKER: The hon. the Member for Mount Scio - Bell

Island.

MR. WALSH: Thank you, Mr. Speaker. I rise in support of

the petitioners and the petition presented by the Member for St. John's North.

The vast majority of the 200 residents that he referred to are in my District

and unlike the Member for St. John's East I would like to address their concerns

and their needs as opposed to dealing with issues that were not part or parcel

to the petition.

The residents of Pippy Park have endured hardships beyond

that of anyone else in the St. John's metropolitan area. Over the last number of

years they have found themselves literally in a squeeze whereby if they wish to

do any repairs to their homes they have to go through so much more than anyone

else. As their families grow and expand and they want to do the same thing to

their homes they find that they are not allowed to do it except for a very small

portion. There are some two-storey homes in the area that, in order to build a

porch onto their homes, a lot of them have been refused and can't do that. In

particular the Groves Road area have within the City of St. John's endured the

fact that they can't get water and sewer because this idea of living within the

Park has been hanging over their heads for so long.

I think what the people of the area have suffered from for

the last good many years is the fact that successive governments, and indeed the

Pippy Park Commission itself, has put them in such a squeeze that the intent is

to try to, if not force them to move from the Park, to ensure that the value of

their properties will continue to go down. For me that is an unfair practice

because it is - instead of giving them fair market value for their homes it is

allowing their properties to deteriorate, so that in turn they will be trapped.

I'm pleased with the fact that the residents have had some

meetings with the Minister of Works, Services and Transportation. Although all

of the issues that they had to cover with the minister were not totally cleared

to their satisfaction I know that progress has been made. Back in 1989, 1990, I

recommended strongly at that time that a representative of the residents be

allowed to sit on the Pippy Park Commission, and I'm glad to see that at this

point in time one of them will. I know that the residents would like to see four

members on the Commission but a good beginning is to have someone at that table

who can represent their needs.

For me it is a pleasure to represent and support the petition

as presented by the Member for St. John's North, and I wish the residents well

in their endeavours to accomplish for themselves the right to live as other

people do within the city limits of the City of St. John's. Thank you, Mr.

Speaker.

MR. SPEAKER: The hon. the Member for Green Bay.

MR. HEWLETT: Thank you, Mr. Speaker. I rise to present a

petition signed by some sixty-eight residents of Green Bay, most or if not all

of them from the town of South Brook.

The document goes as follows. The petition to the House of

Assembly:

We, the undersigned, are concerned about the legal status of

young people between the ages of sixteen and eighteen years. Such persons are

neither children nor adults in our social welfare system. We ask the House of

Assembly to direct the Minister of Social Services to address this matter.

Mr. Speaker, this matter first came to my attention several

weeks ago when I had a call from a concerned parent. I've heard of this

particular matter over the last number of years but this is the first time it

has come to me directly as an elected MHA. A woman called me in a situation

where her daughter, who was a single mother in her own right, her daughter had

reached the age of sixteen years with an infant child and had decided to move

out of her parents' home, indeed decided to set up house with her boyfriend,

with whom I'm given to understand there was an abusive relationship. So the

girl's mother, the grandmother of the infant concerned, was upset that her

daughter and her daughter's child would end up in a household relationship that,

to say the least, would not be healthy for her daughter or her grandchild, Mr.

Speaker.

When the lady checked with the Department of Social Services

as to the legalities involved here, she was told that the department did have

some obligations to care for the daughter and the daughter's child in terms of

food, lodging and clothing, etc., but the department had no control over the

fact that her daughter and the child would be moving out, and into a household

relationship with a young male who is alleged to have abused her daughter. This

was very upsetting, and I told the woman at the time that if she wished me to

bring it before the Assembly, a petition was one particular way it could be

handled. I told her that a few names would suffice to have me bring this matter

before the Assembly and before the minister concerned. She obviously took the

matter to heart, some sixty-eight names of friends and neighbours were gathered

for this petition and I have it here today.

Mr. Speaker, a sixteen-year-old, in terms of our society, is

not old enough to vote, is not old enough to serve in the armed forces, is not

old enough to consume alcohol, these days I don't believe is old enough to

purchase cigarettes and tobacco products. So, by many of the standards of our

society, a sixteen-year-old is not an adult. Yet, at the same time, when it

comes to leaving home, when it comes to setting up a household with children and

a husband or common-law husband, such a person appears to be free to go without

any constraints as regards the social welfare system and, more particularly, the

Child Welfare Act.

Mr. Speaker, this can be extremely upsetting to parents who

see their own children and their children's children launch off into the

unknown, at a very tender age, without any appropriate safeguards. I call upon

the government to look at this matter. I know it's been put to them on a number

of occasions in the past and I ask them again to look into this matter to see if

something can be done to establish more control and safeguards for individuals

in the sixteen- to eighteen-year-old category. Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker. I'm pleased to

rise today in support of the petition presented so ably by my hon. friend, the

Member for Green Bay.

Mr. Speaker, the member is 100 per cent right when he talks

about the sixteen- to nineteen-year-olds in this Province today having no

opportunity and almost being a forgotten group, when we look at the unemployment

rate in this Province for our youth, which is in excess of 35 per cent, even

nationwide, in excess of 17 per cent. Over 1.8 million youth are unemployed in

this nation today. Mr. Speaker, the Department of Social Services does supply an

allowance, as small as it might be - I think it is something like eighty-nine

dollars a month for some of those people who are eighteen- and

nineteen-year-olds to expect to survive on. Mr. Speaker, we continue to say that

those sixteen- eighteen-, nineteen-year-olds should be living with the family,

should be part of the family unit. It isn't always possible, Mr. Speaker, that

those sixteen-year-olds and nineteen-year-olds can continue to live with their

families.

I have one case, Mr. Speaker, that comes to mind, in my

district, that happened just a couple of weeks ago, where a family moved back to

their home town, to a two-bedroom house, Mr. Speaker, with a son nineteen years

old and a daughter eleven. The nineteen-year-old son went to the Department of

Social Services looking for help and was told that he had to live with his

mother and father and that meant moving the eleven-year-old daughter into the

same bedroom with the parents. Mr. Speaker, that's hardly good enough in the

20th Century that we live in today - the daughter, age eleven and the son,

nineteen. This is a common cry that's out there, but it seems that we're

forgetting those people and there's not enough attention being paid to try to

get them involved in meaningful employment. It continues to come up. We talk

about the Department of Social Services putting forward a plan to have those

young people take

part in a training program, and instead of putting our dollars

towards going out and just cleaning houses and cutting brush to compensate

wages, to give them some kinds of skills so they might find their own way in

life and become part of a meaningful job, but up until now that has not

happened. Those younger people are out there crying for help.

Another situation that exists, and is continuing, not only in

my district but in other districts, is, where those people are remaining at

home, unable to find a job, and the parents who are already on social services,

or making just above the poverty level, that would not entitle them to social

assistance, are today without power in their homes. Newfoundland Light and Power

went out and cut the power, and I can name you at least two families right now

in my particular district, who because of the size of the family, are without

power, and the homes continue to exist and children live there with the power

completely cut off, no way to cook food and no way to heat their homes.

So I certainly support the hon. member's petition, and I call

upon government to bring forward a plan of action so that those young people

might be included, and be made capable of going out and taking

part in

meaningful employment, and to find their own way in life.

Thank you.

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I move the Orders of the Day

now be read.

Motion carried.

Orders of the Day

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I don't know how late members

will decide they wish to sit tonight, but in an effort to accommodate those who

may wish to sit a little later, I move that the House not adjourn at 5:00 p.m.

Motion carried.

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, could we go into Committee,

please, to deal with Motions 2 through 5, or as many of them as we may get

through. We will start with Motion 2; my friend, the Minister of Finance, is

with us.

On motion, that the House resolve itself into Committee of

the Whole on Supply to consider Motions 2 through 5, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN (L. Snow): Order, please!

Bill 9, the hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman.

This is a very simple piece of business here today. It

relates to a decision announced in the Budget back in March, and it involves a

change from a gasoline tax exemption at the point of sale to a system of tax

rebates. This applies to the marked gas and so on, that we have all become

familiar with over the years.

We felt this is a necessary move at this point in time, and

the mechanism for the tax rebates is well known in other areas, so we thought we

would apply it in this area to make sure, first of all, that the level of abuse

is not there that we have heard is there in the system. I think that is the main

reason for doing this.

Mr. Chairman, the three sections of this particular bill make

that change in the Gasoline Tax Act to allow for rebates rather than the price

reduction at the point of sale.

MR. CHAIRMAN: The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Chairman. First of all, I say

to the minister, he very conveniently neglected

Part I, which increases the

gasoline tax as announced in his Budget. I don't understand why the minister

wouldn't have even mentioned that. Was he hoping we wouldn't see that, or the

people of the Province wouldn't know that this has been - and, of course, that

took effect on April 1, 1994 anyway, so people have been paying it. I am

surprised because he could have said that it also decreases the sale on diesel

fuel,

section 2. They are now both .165 cents per litre, I guess it is.

MR. BAKER: I was preoccupied.

MR. WINDSOR: Preoccupied, the minister says, and

neglected to advise about his tax increase that he wants approved; I say to the

minister, he is going to have to work a little bit harder than that to get taxes

approved around here; but we will forgive him, Mr. Chairman. I congratulate the

minister on finally reaching an agreement with the teachers; I can sympathize

with him, I know what it's like, I have been through it. It is not a fun time

and the minister deserves a word of congratulation for the role that I know he

played, and I know his staff do a tremendous amount of work, the collective

bargaining team of Treasury Board and, in this case, the Department of Education

as well, I'm sure, but Treasury Board's staff do a tremendous job when these

kinds of situations arise and there are some very, very capable people who

deserve a word of praise as well, Mr. Chairman, and who are all too often

forgotten. But I just want to mention that the minister has been working hard

over the weekend and he will enjoy next weekend, I'm sure.

Mr. Chairman, to get back to this particular bill, The

Gasoline Tax Act, the minister has already announced his tax increase and now I

say to the minister, you know you can say, we are decreasing the price on diesel

fuel, and that's good. Businesses and corporations in the Province will welcome

that; those who are shipping goods, those who are bringing in goods that are

coming in by truck, hopefully there should be some impact. I suspect there is

probably not; I suspect it is the trucking companies that have benefitted from

that, I doubt very much that that has translated itself into any kind of a

reduction in transportation costs, and then, in turn, translated into reduction

in the price of goods and services in the Province.

Nevertheless, it is positive; on the other hand, the increase

in gasoline tax is very negative from a consumer point of view, for all of us,

we are all paying more for gasoline, but it impacts most importantly on tourism

in the Province, which the minister and the government and their great Strategic

Economic Plan put forward as being one of the potentials for growth. Tourism has

been one of the areas where they say they can create more jobs. An increase in

tax on gasoline is very negative to the tourism industry and probably impacts on

that industry more than any other in very, very subtle ways.

It also, Mr. Chairman, impacts on small businesses because

small businesses are generally driving vehicles that are gasoline-powered. The

small delivery vans, station-wagons, automobiles, that sort of thing - so I am

talking about small businesses, there are very few big businesses in

Newfoundland, and when I talk small business, it is in terms of Newfoundland

small business, being very, very small almost minute in the national sense of

business. So these companies that are operating are very shoestring operations,

very generally, in this Province today with a very, very small profit margin,

and are feeling the impact of that increase in gasoline.

If you have only one delivery van, you are probably burning

fifty dollars worth of gasoline a day just on one delivery van, driving around

St. John's, and an increase such as this could be fairly substantial to that

very small company where that cost delivery is quite significant; but, of

course, the minister is not going to change his mind on that, it was announced

in the Budget, it is in effect, we are paying it now, so this is effectively

retroactive legislation once again.

Now, Mr. Chairman, to get to the area to which the minister

referred, which is changing the system of marked gasoline to one of tax rebates

on gasoline. There are two sides to the argument, I say to the minister; there

are those who will oppose it clearly and there are those who will agree with it

and will welcome it. Those who oppose it will be those who have been benefitting

from it, primarily fishermen and farmers. The Minister of Fisheries should be

interested in this particular one and all members who have rural constituencies

with fishermen, if there are any fishermen left in Newfoundland and Labrador

today, but if we ever get fishermen back again, groundfish, obviously there are

all kinds of other species as the minister quite properly points out on a

regular basis, so there is still a very significant fishery in Newfoundland, but

far, far below the levels that we have enjoyed in past years.

But the fishing industry and the farming industry, primarily,

were the benefactors of that tax break. They didn't pay the gasoline tax, and

they still won't pay it. What this does for the minister, from his point of

view, is ensure that only bona fide fishermen and farmers actually benefit from

that. That is fair and just. I find it difficult -

MR. W. MATTHEWS: Keep her going, `Neil'.

MR. WINDSOR: A few hours?

I find it difficult to argue, Mr. Chairman, against that.

MR. W. MATTHEWS: (Inaudible) want to do that.

MR. WINDSOR: Well, they know that I'm good for quite a

long period of time. I have a record of speaking - I don't check my speeches

with my watch, I use a calendar.

AN HON. MEMBER: Don't feel bad. It has nothing to do with

you.

MR. WINDSOR: No?

AN HON. MEMBER: It has to do with good news.

MR. WINDSOR: My colleagues have other business outside

and that is fine.

To get back where I was. Those who benefit from it will find

it as a detrimental thing to them. Because it will involve more paperwork for

them. They will have to go and apply to get their rebate, they will have to

document that they used the gasoline and that they bought it for a bona fide

purpose. I have to say to the minister, I don't have a problem with ensuring

that only those who are bona fide farmers and fishermen actually get the benefit

of the rebate as it is now, or the tax break as it was previously. There are far

too many situations in this Province where marked gasoline is going into

automobiles, into snowmobiles, into all-terrain vehicles, into just about

everything that runs on gasoline. Gasoline generators, you name it.

We have inspectors, quite a number of them, or at least we

did, who regularly went around the Province checking. Because the marked

gasoline, in case the minister doesn't know it, is simply vegetable oil added to

the gasoline. If you are using marked gasoline in your vehicle or in any engine,

your carburettor becomes coloured bright red or bright blue, depending on which

dye the government is using. It is not hard to tell if marked gasoline has been

used in a particular engine.

That has been a nuisance. You have to go around and collect -

and I say to the minister, I don't know how many inspectors we have had on

staff, I don't know how active they've been in trying to determine where

gasoline is being used.

AN HON. MEMBER: Usually they get complaints.

MR. WINDSOR: Usually they get a complaint from somebody

who said: John Smith next door never buys a gallon of gas at full price. He is a

fisherman, he has a thirty-five horsepower boat - as I used an example in caucus

this morning, I think. I said he has a thirty-five horsepower boat and he is

buying as much marked gasoline as Day and Ross would need for all their

transport trucks if they were gasoline, not diesel.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: All across the Province. We all know that is

the case. I say again, Mr. Chairman, as I've said in this House many times

before, people don't object to paying taxes as long as everybody is paying taxes

fairly. When somebody, as my friend here points out, sees their neighbour next

door evading taxes by using marked gasoline in their automobile or in their snow

machine, when the gasoline is destined or designated for a fishing vessel, then

they are not happy with that. That is why tax inspectors would be called. It is

very rare that it happens, unfortunately.

So fine, the minister will get at that, and I don't have a

problem with that. But for those bona fide fishermen and farmers, now they will

have a large administrative burden for them. To keep a record of all their

gasoline purchases, to somehow verify - I mean, the minister hasn't given us the

regulations, so it is very difficult really to address the situation. All we

know is that there will be some regulations of some sort to deal with it. I

would have been happier had the minister said: Here is the legislation and here

are the regulations that Cabinet have approved to go with it, so that we could

really see the impact on the fisherman and farmer, because we really don't know

what administrative burden he or she will have to bear in dealing with this

proposed change.

Now, I mentioned there were inspectors. How many inspectors

will be lost? If we had inspectors before checking to see who was using marked

gasoline, I'm not sure - I don't recall whether they were designated only to

inspect that, whether they inspect many other things, or whether this was only a

small portion of it. Maybe the minister could tell us when he speaks again

whether or not he anticipates any losses in the number of inspectors.

On the other side of the scale, how many administrative

clerks and accountants will be required to process all of these claims? What

will be the cost of administering the tax rebate system that is coming in place?

I know it is incremental to the work that is already being done but it is

additional work and it will require additional effort and additional staff and

costs associated with it.

Maybe the minister would tell us what, if anything, it will

cost. How many jobs will be lost by way of inspectors being laid off? How many

additional jobs will be created by way of administrative clerks and accountants

being hired? What, if any, additional revenue does the minister expect to

receive? Does the department have any estimate of what government is losing,

what the public treasury is losing at the moment, by marked gasoline that is not

being used for the correct purpose? And will we get at all of that? I suspect,

if the minister does have an estimate, it is probably one-tenth of what he is

actually losing, so what we are losing is probably ten times as great.

If this measure accomplishes that, then it is a good measure,

I say to the minister. It is a legitimate way to get taxes from those who should

be paying taxes, and to plug up a loophole that has been abused in this Province

for far too many years. I say to the Minister of Fisheries that there are so

many programs today for the fishing industry, and we all know how important the

fishing industry is to us, to this Province, particularly to the economy of

rural Newfoundland and Labrador, but there are many other industries in this

Province as well, many other people are trying to survive, and we are now

starting to see - I can say it because I have maybe one or two fishermen in the

district I represent - we are now starting to see other segments of society

objecting to all of these many benefits that fishermen and farmers perhaps may

get.

They perhaps can't see, as we may, as legislators and

governments may, in the full knowledge of all the difficulties those industries

are faced with, the requirement for those types of subsidies and assistance in

order to keep those industries going. But when you see something blatant like

this, I say to the minister that perhaps he needs to go one step further.

Perhaps if we knew how much marine paint is being put on barns and sheds at $50

or $60 a gallon, good top quality marine paint; another item, lumber, that is

extensively bought for the fishing industry, that is being used to build all

kinds of things.

MR. DUMARESQUE: I don't think anything like that is

happening.

MR. WINDSOR: The Member for Eagle River says that with

tongue in cheek, and with a large smile on his face, because he knows what I am

saying is true. I am nodding acquiescence here. We know it is true, but it is

not right. It is not right, I say to the minister, and I'm not one who is

advocating looking over somebody's shoulder all the time, but when we know there

is widespread abuse of these kinds of incentives and benefits that are put in

place to help a specific resource-based industry, then I say to the minister, it

is his responsibility, government's responsibility, to ensure that those

benefits go only to those bona fide farmers and fishermen who need that kind of

assistance that ensures that those industries are able to survive in a fiercely

competitive economy today.

I say to the minister that although I see some disadvantages

here to the bona fide - unfortunately, the bona fide fisherman and farmer, under

this legislation, will have to pay those costs in order to get at those who are

not bona fide, who are receiving this improperly at the moment, and so that the

government collects the taxes they are entitled to, that the taxpayers of the

Province are entitled to have collected.

So, I don't have a major problem with the bill, but I point

out those weaknesses and ask the minister for that information, as to what he

sees the impacts are? I wish we could see the regulations so that we could

access just what impact that will have on individuals who have to deal under

those regulations.

Thank you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Speaker.

I just want to comment on a couple of things. First of all,

the Member for Mount Pearl is right, I neglected to even mention the tax

decrease that was in this bill. It is rather nice to see a decrease in the cost

of diesel fuel, which obviously will have a positive impact on business. I also

neglected to mention the tax increase, so in here there is actually a tax

increase, a tax decrease, and a tax change which will result in some increase.

The hon. member is absolutely right, that for budgetary

purposes we have predicted a very small rise in terms of maybe a couple of

hundred thousand dollars, that sort of thing, a very small rise, simply because

it is difficult to estimate, at this point in time, the extent of the problem.

We do know that in spite of the closedown of the groundfish industry and cutting

off the recreational cod fishery, groundfish fishery and so on, that there

didn't seem to be a tremendous impact on the use of marked gas - slight, but not

very much.

We suspect that there was a fair amount of abuse out there. I

suspect he is right. I think we will probably realize more in revenues, much

more than we have estimated, except that we wanted to be very conservative in

our estimates. You can't go estimating these things with high numbers, and then

if you don't reach it you are in trouble at the end of the year and so on, so we

estimated a very small amount. I suspect that there will be some extra savings

there for us, some extra revenue for us -

MR. WINDSOR: I would love to have tickets on it.

MR. BAKER: - yes - in terms of the Gasoline Tax Act. But

it is something that is difficult to get a handle on. I was amazed at the grasp

that the Member for Mount Pearl had of all of the other ways of tax avoidance

and the suggestions he made. It really surprised me, because he mentioned things

that I would never think of. The marine paint, that is one that really surprised

me. That stuff is really expensive and I didn't realize the situation with

regard to that. It is interesting.

MR. WINDSOR: It brings (inaudible) your debt, you know.

It is about the only thing that (inaudible) the annual debt.

MR. BAKER: Yes, yes. Works better than anything. I was

going to hint at the fact that probably the Member for Mount Pearl has had a lot

more experience at that kind of thing than I have. I don't know if that's true

or not.

MR. WINDSOR: Never bought a gallon (inaudible).

MR. BAKER: But, obviously, the indication was there that

he was very knowledgeable about this process, very aware of the kinds of things

that could happen. I suppose I could give him the benefit of the doubt and say

that it is because of his time in finance and he got to understand it, and not

conclude the other obvious conclusion that he was much more aware in terms of

his everyday life. I would assume that it is because of his past contacts with

the Department of Finance.

I agree with the hon. member in terms of the increase in the

normal gasoline tax. That does put perhaps an extra burden on particularly a

type of small business that does a lot of delivery and so on. I'm thinking in

terms of the fast-food places that do home delivery, stores that do delivery,

and so on. It is an extra cost and that is unfortunate. There is a reduced cost

to some of the larger operations that use diesel, and I'm talking about the

woods industry and so on that use diesel fuel. There is a decrease in cost here.

I would say to the hon. member that the large amount of money here - and make no

mistake about it, this is a revenue measure on government's part - the

equalizing of the two numbers does not have a zero revenue effect on the

Province. We gain more money. We gain an extra $2 million or $3 million out of

this, at least.

MR. WINDSOR: No, but your weakness on this one is that

you are picking up on the gasoline tax, which is a local consumer,

whereas 75

per cent of the decrease in fuel tax benefits out-of-Province transportation.

MR. BAKER: And an awful lot of in-Province, too, the

transportation that is within the Province. But you are right, some of it is

out-of-Province.

I was going to say to the hon. member, to continue on, that

most of the effect of this is not on business, it is on individuals like you and

me. That is by far the largest amount of money on an overall basis. The people -

personal cars, and that is by far the biggest impact in terms of the revenue.

Mr. Chairman, it is unfortunate that from time to time we have to do those

revenue measures, and I will openly admit this was a revenue measure. It was not

simply an equalizing, it was a revenue measure for government.

I would also like to point out, in terms of the effect on

small business, at the same time, we did lower the corporate tax, small business

tax, and we have lowered some taxes that have a net positive effect on small

businesses in the Province.

MR. WINDSOR: (Inaudible).

MR. BAKER: Well, I don't know. Right now we are the

lowest in Canada and I don't think we've ever been at that stage and point in

time where we were the lowest in Canada. I think that is the significant thing.

Again, it is unfortunate that these revenue measures have to

be taken and this is a revenue measure. We try to do these things in a way that

least impacts the overall population. We are not always successful. We like to

think that we are perhaps doing it in the best way, the way that's most

acceptable to people in the Province and ways which they can, in essence I

suppose, control their expenditures to suit their circumstances rather than on

something that is not controllable and gasoline use in this Province or anywhere

for that matter, is a controllable expense. Anybody who really would find it

difficult to have a cent a litre increase or a cent-and-a-half litre increase

could cut down on consumption and therefore not have the actual affect on their

pocketbooks.

Mr. Speaker, I think that deals with the two or three points

raised by the gentleman opposite. I thank him for his comments on the collective

bargaining. He understands the difficult time that we've been through in the

last couple of weeks and he understands the attitudes that were there. I would

say to him in that regard that situation is not finished. We have a tentative

agreement with teachers but we still have NAPE/CUPE which has not been brought

to a successful conclusion yet. We still have the nurses, we still have the

allied health professionals and we still have the police brotherhood. So we

still have some ways to go before I can sit down and breath a sigh of relief and

say that I can now sort of in that area at least, relax for awhile. There's

still a long ways to go.

MR. CHAIRMAN: The hon. the Member for Humber Valley.

MR. WOODFORD: I would like to take a few minutes, Mr.

Chairman, to make a few comments as it pertains to Bill 9, this particular piece

of legislation. I too, Mr. Chairman, would like to echo the comments of my

colleague from Mount Pearl in congratulating the President of Treasury Board in

coming to some agreement, tentative agreement with NLTA. Hopefully the

agreement, Mr. Chairman, will be ratified over the next couple of days and the

students in this Province and the teachers can get back to the classrooms and

get on with it. Students are only a couple of weeks away from writing their

exams and they need every minute they can get in the classroom today with their

teachers, Mr. Chairman, to try to - like I said yesterday - to try to salvage

the school year.

Having said that, Mr. Chairman, as it pertains to Bill 9 -

one of the problems that government always had and one of the problems the

inspectors always had in working as inspectors as it pertains to gasoline and

diesel, what they call dyed or marked gasoline and marked diesel is that they

didn't - the irony in it is that after four or five months, after Budget time,

inspectors didn't have the money to put in their own government vehicles to go

around the Province to do the inspections. I talked to them time and time again

over the past number of years and they could not do what they're supposed to do.

They had a job to go around and inspect down the coast and all around, wherever

- say for instance they were stationed in Corner Brook, go all over the West

Coast and Northern Peninsula to do their inspection as it comes to dyed gas and

marked fuel but they couldn't do it simply because they didn't have the money in

their budgets to put in their own government vehicles to go do the inspections.

Now, Mr. Chairman, this mainly, I would say, would affect

farmers especially as it pertains to rebates, farmers and fishermen in the

Province - fisherpersons I should say. The diesel part of it, most farming

operations in the Province use diesel in their tractors and so on. Very little

gas is used by farmers except in big machines like the truck, on road vehicles

and that's not allowed anyway.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Yes, that's good. Yes hopefully, as the

minister said, hopefully there will be some good news coming forward in the next

few days possibly as it pertains to farmers in the Province. Industry, I might

add, that could grow. It has the potential to grow and has grown over the last

number of years. It has a lot of other potential to grow further, Mr. Chairman,

but the diesel part of it will not have a big effect on the farmers in the

Province as it pertains to the actual pricing.

Gas; mainly fishermen and fisherpersons in the Province

they're the people who use gas because engines - all those motors are mostly,

whether they are inboard or outboard, are all gasoline driven and there's not

too many, only the bigger outfits use - the inshore, mostly, is gasoline.

Offshore, the bigger boats, use diesel in their inboards.

Mr. Chairman, where it will hurt is the actual rebates. Now

when a farmer or a fisherman goes to pick up a drum of fuel, or a drum of gas,

they go to, for instance, Imperial or Irving Oil stations, Ultramar, or

whichever. They pick it up and then they exempt at the place of purchase.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: I yield to the minister.

MR. CHAIRMAN: The hon. the Minister of Industry, Trade

and Technology.

MR. FUREY: I thank the hon. member for yielding. I just

want to welcome to the gallery, if I could, to your gallery, the former Minister

of Intergovernmental Affairs, Mr. Ron Dawe, and some investors from Austria,

Wolfgang Breuss and his wife, Sabina, who are here looking at the lamination

plant for the Great Northern Peninsula.

SOME HON. MEMBERS: Hear, hear!

MR. CHAIRMAN: The hon. the Member for Humber Valley.

MR. WOODFORD: I would like to take this opportunity now,

seeing I am on the type of bill I am on, I can go on in welcoming the former

minister and colleague to the Speaker's gallery, and his wife, and the other

visitors as well. I am sure that over the next few weeks we may hear more about

the lamination plant on the Northern Peninsula. That is probably timely now,

too, with what is happening with regard to Kruger in Corner Brook, and so on.

Anyway, getting back to the actual bill, Bill 9, the problems

that I see with this particular piece of legislation is that it is more

bureaucracy for small business. There is more record keeping, there is more time

involved in office work, and so on. Before, it was done at the point of sale.

Now all receipts, every bill, every receipt, everything, when it comes to the

purchase of diesel and gasoline, will have to be kept and then a proper

adjustment made, and request made at the end of the year, to have those rebates

refunded to the individuals.

There will be an increase in taxes, but the increase mostly,

I would say, is going to be in the gasoline sector. The other thing brought up

by my colleague from Mount Pearl, I think, is something that is going to have to

be addressed. It has been in the past year or so, but not enough, and that is

that most of the truckers coming into the Province usually fuel up in Sydney,

and come in here with all tanks loaded, thereby cutting down on the amount of

fuel that is actually purchased in the Province. This is not good for the

Province. The Province must be losing an awful lot of revenues with the truckers

coming into the Province fuelling up on the other side of the Gulf, coming in

and waiting, just having enough to get on the boat in Port aux Basques to go

across to the other side and then fuel up again, because the tax regime is lower

in Nova Scotia than it is in this Province.

There is no question, the government is losing a lot - not

only the government. We have small businesses all along the Trans-Canada, when

they get off the boat in Port aux Basques, that are losing out with regard to

the fuelling up of those big trucks - and big dollars.

I know of the Irving Big Stop in Deer Lake, for instance.

There is nothing at all to have 150, 160 or 170 trucks a day pull into the

Irving Big Stop in Deer Lake, and it is no trouble to tell. That is the

barometer. That is where you can take a reading on what is going on with regard

to the fuel purchased by the truckers. They come there. What they used to do

once before, before the price went up, they used to fuel up there, but now there

is no trouble to see the difference. The drop in the sales and so on is

dramatic.

I would say that the President of Treasury Board said there

would probably be a $1 million to $2 million, I believe, increase in taxes as it

pertains to this particular piece of legislation. I think it will be more, based

on this, and it would be more still if the opportunity was given and something

was done with regard to the truckers coming across the Gulf and fuelling up on

the other side. I think it would be more revenues for government, and it is an

area, as far as I am concerned, that they should look at. If they did, they

would bring more revenues into the Province, and would be creating and helping

the small business sector in the Province.

Mr. Chairman, there is not much else can be said about this.

Like I said, the big thing here is that the business people, the small business

person, has to make a request for a rebate at the end of the year, and that is

one of the things that they have to be cognizant of, and make sure they have

good record keeping. If they haven't they are in trouble. Because a lot of those

farms, fishermen, and so on, and some fairly big operations that consume a

considerable amount of fuel and gas every year. With those few comments I thank

you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Minister of Health.

DR. KITCHEN: Thank you, Mr. Chairman. My remarks are few

on this particular bill. It is indeed regretted in a way that we have to

increase taxes. We look forward to the day when these measures will no longer be

necessary, but they are necessary, and I commend the minister on bringing in

such a fair tax increase.

I look forward to the day when the health system will not

take as much out of the provincial budget as it presently does. As we move more

and more into the area of prevention - I see in the paper today a very alarming

statistic, where the World Health Organization is warning that 10 million people

a year over the next thirty years will die because of smoking cigarettes. Ten

million people a year over the next thirty years; 300 million people in this

world will die because they smoke cigarettes.

I'm encouraged today by an event which took place, because

today is `World No Tobacco Day.' A number of restaurants in this city,

particularly the McDonald chain, has decided that today, `World No Tobacco Day,'

there will be no smoking in all McDonald's restaurants. I want to commend the

McDonald chain for this good effort they have made in observing `World No

Tobacco Day.' Because these fast-food organizations, which deal to a large

extent with children, are in a very good place to bring about this change in

society which we need. It is the children that - if we can keep children from

smoking by the time they are seventeen or eighteen, that means, the research

indicates, that they will not smoke from there on in. Very few people pick up

smoking once they get into their 'twenties. This measure by these organizations

to promote non-smoking has very much to be commended.

I also would like to remind hon. members that June 17 will be

a red letter day in this Province because on that day nobody under nineteen will

be able to buy tobacco legally, nor to be given tobacco legally. Also on that

time we will begin our measures, increase our measures, to make public places

and places of work smoke free. With these few comments, Mr. Chairman, I will

conclude my remarks on this gasoline tax act.

But let me say one more thing. One good thing about this

particular tax, as far as consumers are concerned, is that it, to some extent,

is tax avoidable. If you don't burn the gasoline, if you walk instead of drive,

you can avoid this tax. Thank you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Chairman. I just have a few

brief comments here. I guess the thrust of what government is doing here is to

bring it down to the same level there, the taxation for diesel and gasoline.

There seems to be a reason behind it, and maybe it could be a very justifiable

reason too, is that they haven't been able to expend the dollars in doing the

inspections, and monitoring this has become expensive, so they decided to apply

for a rebate for the tax now rather than having it there when it is purchased.

Because it is a very difficult job in making cases to monitoring with I guess

government resources drying up and applying less people to do that. They've

decided to - let's do it the easy way out. Let's have the same taxation on both

diesel and gasoline and also go through the process of having these complete and

submit for a rebate.

It may very well I'm quite sure cut down on abuses. On the

consumption I know of gasoline it would certainly eliminate that. It would also

probably expedite certain areas there and eliminate the need for any further

inspections and system, which could be positive.

I guess on the other hand, submitting for rebates by these

people would make it a little more cumbersome and would require a little more

accounting procedures, probably both by the user now, by the farmer or the

fisherperson, and probably a little more accounting needed on the government

side now too, to process and deal with these rebates. It might be a little more

labour intensive in terms of the accounting aspect of it, and where government

has not been applying any or very little manpower in inspection areas, there

might not be in the long haul a savings but it certainly would be a less

cumbersome and a probably more acceptable route to go, so with that, I conclude

my comments on Bill 9.

Thank you, Mr. Chairman.

Resolution

That it is expedient to bring in a measure to amend The

Gasoline Tax Act.

Motion, that the Committee report having passed the

resolution and a bill consequent thereto, carried.

MR. ROBERTS: Your Honour, could we go on please to do,

Motion No. 3, Bill 13, The Loan And Guarantee Act, 1957. My friend, the Minister

of Health will speak for the government.

MR. CHAIRMAN: The hon. the Minister of Health.

DR. KITCHEN: Mr. Chairman, this, "An Act To Amend The

Loan Guarantee Act, 1957", has just four simple points to make in it. What we

are basically doing under Item 1, is to extend the Labrador Stores by putting in

a loan guarantee of $2.5 million dollars, which is due to expire February 28,

1995, and in Clause 2, what we are proposing to do is to increase the amount of

money of the guarantee to Newfoundland Ocean Enterprises Limited, the company

that operates Marystown Shipyard from $23 million to $26.5 million; and then

Clause 3, we are decreasing the amount of the loan guarantee to Smith Seafoods

Limited from $175,000 to $125,000, as that company's balance sheet improves; and

we are also putting in the "Date of Issue" and the "Expiry Date" to Newfoundland

and Labrador Computer Services Limited.

Thank you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Member for Mount Pearl.

MR. WINDSOR: Just a few words on this bill, Mr. Chairman,

the loan guarantee is of course straightforward, it is after the fact. The

question though, and I would say the Minister of Industry, Trade and Technology,

was here a moment ago and I am sorry he seems to have stepped out but -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: The Minister of Industry, Trade and

Technology.

MR. ROBERTS: I could send word and ask him to come back

(inaudible) -

MR. WINDSOR: He was just there.

MR. ROBERTS: (Inaudible) Newfoundland and Labrador stores

item if you have a question.

MR. WINDSOR: Yes, I am just curious about the Labrador

stores if we are going to be putting in a $2.5 million loan guarantee to

guaranteeing a loan to a Crown corporation. It is a little -

AN HON. MEMBER: Well, (inaudible).

MR. WINDSOR: By all means, if the minister (inaudible).

MR. CHAIRMAN: The hon. the Minister of Justice.

MR. ROBERTS: Well, Mr. Chairman, the point is well-taken.

What has happened is, these stores which were hitherto run as a division of,

latterly the Industry, Trade and Technology department, have now been spun out

on their own as a Crown corporation, and we are trying to get a divestiture

process underway with somewhat mixed results as my friend from Mount Pearl would

understand. These are not exactly the most profitable Crown corporations which

we have in the Province.

MR. WINDSOR: (Inaudible).

MR. ROBERTS: I take his point that perhaps they have not

been the best run, he will agree that's not a criticism of the people who have

been running them, it is a criticism really of the system. It is difficult to

run a commercial operation in Labrador in accordance with the system that has to

grow up in government, that's one of the reasons why we have spun them out into

a Crown Corporation, which answers through ENL and Harold Marshall in Labrador

is sort of the point man, he is the vice-president for Labrador, and on top of

that, many of the people who worked in the old division are still there, Ben

Ludlow and those people in Happy Valley-Goose Bay.

Now this company needed a line of credit to enable it to

stock it`s shelves and what not and this is the $2.5 million. I don't know why

it is $2.5 as opposed to $2.6 or $2.4 or whatever, it's an ongoing, revolving

line of credit to enable the corporation to get its stock in and get it`s

supplies up and carry on its business; it is no more than that but it is unusual

for us to guarantee a Crown corporation, however this one, I think the hon.

gentleman would acknowledge is not likely to get a loan at the bank without the

Minister of Finance going on the back of the note, so that is what we have done.

MR. WINDSOR: I thank the minister for that. Let me say to

the minister, though, that the Public Accounts Committee took the time last year

to visit Goose Bay, and had all of the managers and the administrative staff

from Goose Bay appear before the committee at a very, very worthwhile day's

hearings, I might say. I have to say to the minister, the conclusion we came to

is that your managerial staff are very, very weak. They do not even understand

the very basics of retailing and of accounting, and cost accounting.

MR. ROBERTS: That is what we are working on now.

(Inaudible).

MR. WINDSOR: Well, I say to the minister, this too: The

minister needs to look - we had a discussion last night about the Public Tender

Act. I am a great advocate of the Public Tender Act, but I am also an advocate

of the fact that the Public Tender Act can be utilized the way it should be and

not broken. There are many cases where goods and services were broken in there,

and that you probably look in these books that I referred to last night and it

would be an emergency basis - emergency only because nobody did the proper

planning to ensure that the goods were brought in before the ice came down. So

now, instead of being able to get them in by ship, they had to be flown in or

something, and the cost is extremely high.

Fresh fruits and vegetables, these sorts of things, by all

means you are going to have to fly those in all winter if the people of Labrador

are going to enjoy those commodities. I don't have an argument with that, but

when we are flying in cans of tin milk in the middle of the wintertime, that

tell`s me that somebody - unless somebody has gone one step further and

considered the cost of shipping versus the cost of maintaining that inventory on

the shelf. I doubt very much if that will work out that way, so I say to the

minister that kind of very simple, basic management appears to be lacking very,

very badly.

Cost accounting, inventory control, is negligible. I think we

recommended, as a committee, in fact, a computerized system be put in place, at

some cost, but at least a computer then does the work, and as long as we can

teach somebody to pass a tin of beans in front of the computer, the computer

will tell you that somebody owes this amount of money, and that this tin of

beans was sold and that we need another one ordered. That kind of very basic

retail management needs to be put in place up there to deal with that.

There are many other areas that were extremely weak with that

operation. Again, unfortunately, I say to the minister, all the Public Accounts

Committee can do is report that this is what we found. We have no teeth, and I

will get back to the minister again now very shortly when the House closes and

perhaps we can get together and discuss potential legislation for the Public

Accounts Committee so that we can deal with those issues, with those things,

directly, on behalf of the House of Assembly.

The second one, the Marystown Shipyard, is a $3.5 million

increase in the guarantee. I assume that is for the work that is proceeding on

the Cow Head, and if so it is very worthwhile and I don't have a problem with

that. One of the problems I had with the Marystown Shipyard is the problem that

we have always had, that it is undercapitalized. In fact, when I first took the

portfolio in 1980, I think the first paper that I brought to Cabinet was an

injection of funds, I think, of $8 million in the Marystown Shipyard, by way of

a grant, put it in there.

MR. ROBERTS: It has never really been capitalized, has

it?

MR. WINDSOR: It was never properly capitalized, no. When

I first went in the portfolio - it was not my doing - the officials had a paper

in the system; they brought it to me and I said yes, it is logical. How the heck

can you operate a company on 85 per cent or 90 per cent debt? It couldn't

possibly operate, so we had a choice of either injecting some equity into it,

capital by way of equity, or paying the interest every year, which we were bound

to do. It made all kinds of sense, and we had a few good years when we built

supply vessels on spec. We didn't have markets for them. We built them on spec,

and we had to pay - we guaranteed the interest after a twelve month period. The

shipyard -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Thirty-three and thirty-four, and I think

thirty-five as well, the last one I think we did. Now before thirty-five was

finished, it was picked up by the Coast Guard. We sold all of them, as it turned

out. It was a risk, but it was something we had to do at that point in time in

order to keep the shipyard operating, in order to ensure that the expertise that

was available at Marystown, and on the Burin Peninsula generally, stayed there

at a time when the Hibernia development was pending. So it was a good

investment, I believe, and I think we got our monies back out of it many times

over. It is the sort of thing that you have to do; you have to gamble.

I don't want to get into the Hydro debate here now, but when

we talk about Crown corporations, and the ones that we should sell, the

Marystown Shipyard is one of them. You shouldn't be injecting that kind of money

into Marystown Shipyard except for the reasons that I just gave. Except for

those reasons, you do that in difficult times to maintain that industry, to

maintain the expertise, get it put on a solid footing hopefully and then turn

them over to private enterprise.

I'm pleased to hear from Port aux Basques a major

announcement last week, $316 million in steel construction work. Three or four

years work out there for 300 or 400 people I would think, in that. You know

that's a tremendous initiative that was started back as part of the offshore

development fund, as was the Cow Head and which now - has nothing to do with the

offshore but because the facility is there designed to construct these kinds of

major steel structures, that the ability was there now to bid and with the help

I'm sure of some ERDA funding or whatever else an agreement was but in place.

$316 million coming into this Province from outside, that's new money. Now a

large chunk of that will be machinery and equipment that will go outside but

maybe there's $100 million that will be left in this Province. More than that?

I'd be surprised if it's more than that.

AN HON. MEMBER: (Inaudible) $130 in labour.

MR. WINDSOR: $130 in labour? Well that's an excellent

project for an area such as the Port aux Basques area which depended largely on

the fishing industry. Other than the railway, which has died over the years,

they've had an economic downturn over the last ten or fifteen years. They need

that kind of injection and it's a great sort of thing. That's the kind of use

for which loan guarantees are for and I guess that's really what I wanted to

say.

I know back in '89 the Premier said when we get in we'll get

rid of all these loan guarantees that don't make any sense. He soon changed his

tune when he found that you cannot operate without providing this kind of

assistance to business and industry in certain circumstances and indeed you lose

a couple of them. A few will fail and the Province will have to make good on its

guarantee but in many cases they do not fail and it doesn't cost the Province

anything. It's a contingent liability and let me compare that contingent

liability to the Hydro contingent liability which is totally self sufficient and

guaranteed by the revenues generated by Hydro. There's a big difference. Here

there is no guarantee that the Labrador stores will work. In fact, most likely

they won't. There's no guarantee that Marystown Shipyard will work. It could

some day go broke and we might have to pay out the $26.5 million now that went

into the Marystown Shipyard.

Now the next one is Smith's Seafoods. There are numerous,

there's hundreds of fish companies in this Province that have loan guarantees

from the Province and they couldn't survive without them, Mr. Chairman. They

couldn't survive without them because the banks have put a noose around the

necks of fish companies all around this Province, have pulled in on their lines

of credits and will now no longer give fish companies any borrowing without a

government guarantee. Once again I take the opportunity to say, without taking a

great deal of time, it's time that the government dealt with the banks. If we

are going to take the responsibilities as taxpayers, if we are going to take the

risk by guaranteeing the borrowing of the fish companies then the banks should

be taking a smaller percentage of interest as a result of it.

I hope we get a very significant guarantee fee for the

incredible risk that we take in guaranteeing loans to fish plants around this

Province but I'm concerned about Smiths Seafoods in that it's decreased from

$175,000 to $125,000. Now I don't know if that's because they're in the good

position, fortunate position of being able to pay back $50,000 or whether the

government is just saying we're decreasing your loan. This plant is in Mr.

Chairman's district, I assume is it? The plant is in Mr. Chairman's district.

Mr. Chairman is nodding that yes it's because they're able to pay back $50,000.

MR. ROBERTS: (Inaudible).

MR. WINDSOR: Well you do it either as the bank does. If

you have a line of credit from the bank of $100,000 and all of a sudden you make

some good sales and you deposit $25,000. They may well take that $25,000 and

apply it against your line of credit and say we've now reduced your line of

credit.

MR. ROBERTS: That's not what happened here because all

that does is deprive the company of cash flow.

MR. WINDSOR: Okay. I was asking that question, is that

what's happening? The minister has said no and I accept that and that's good.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Yes. If they don't need that money any more,

if they've had that $50,000 to pay - the bank don't need that guarantee then

that's excellent. I don't have a problem with it and again it emphasizes the

importance of what these loans are meant to be. What they do and what they can

do for the private sector.

Now the final one is Newfoundland and Labrador Computer

Services. I assume this totally relates to the privatization of Newfoundland and

Labrador Computer Services, it simply puts in there a date of issue and an

expiry date, since the financing for Computer Services, being a wholly-owned

corporation of the Province, now is probably an open-ended guarantee, simply

almost like a line of credit, an ongoing line of credit. That in order to

privatize you need these dates in there. I assume that is the explanation, or

maybe the minister can enlarge on that. Thank you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Member for Menihek.

MR. A. SNOW: Thank you very much, Mr. Chairman. I'm

pleased to have the opportunity to speak on Bill No. 13 just for a few minutes.

I'm sorry I missed the introduction of the bill. I understand that the

Government House Leader spoke. I'm not sure if he clarified everything

concerning the so-called Labrador stores, but anyway I would just like to have a

few things clarified. Maybe he could answer them.

In reference to clause 4, which is - I will start off

probably right there. I am to assume that this particular clause in this bill is

to facilitate the privatization.

MR. ROBERTS: Your colleague just said that (inaudible).

MR. A. SNOW: I'm assuming that is what this is in there

for, is to facilitate the privatization of NLCS, Newfoundland and Labrador

Computer Services. Which, Mr. Chairman, there has been a lot of discussion over

the last several months in this Province concerning the privatization issue

itself. I guess most commonly the one that has been discussed has been the Hydro

issue. I'm sure that we don't want to get into that particular discussion today

while we are discussing this Bill No. 13, but just to set the record straight as

an individual, as a member of the House of Assembly, I can see where I as an

individual, as a member of the House, and as an individual, and a member of this

party, can see that while I have some concerns about certain aspects of the

privatization of NLCS I am generally in favour of it, and I would support the

privatization of NLCS.

Because I believe in the principle basically of

privatization. Albeit I don't think we have to wholesale the whole Province as

some members have suggested on the other side. They are willing to sell anything

that can be operated by the private sector. I think that is silly. Having said

that, I can see where the privatization of NLCS can be of benefit to the

industry, to the employees, and to the people of this Province. If this bill

will facilitate that privatization I can support that aspect of the bill.

That leads into another part of this bill which would be the

so-called Labrador stores guarantee of some $2.5 million, which is a substantial

amount of money. I'm led to understand that this $2.5 million loan guarantee

really is to help these Labrador stores, to give them more of a cash flow.

MR. ROBERTS: To give them a cash flow.

MR. A. SNOW: To give them a cash flow.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: But the nature of the business that they

operate, and where they operate, and the size of the community that they have to

serve, or deliver a service to, is one of the reasons this is there.

In the one concerning Labrador stores, I'm assuming that the

government is still continuing along with the principle that they would like to

someday see these turned over to somebody other than the government to operate

and -

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: No, thank you.

MR. ROBERTS: If only someone would come along and buy

them.

MR. A. SNOW: No, thank you. I would suggest to the

government that they would encourage as much as possible cooperatives in this

area. I think that it is a very good principle. I believe that there is an

education process necessary in order for this to be acceptable to the people who

utilize this service. I believe that before we foist upon them, so to speak, it

is necessary to have an education process explaining the merits and the

advantages and the pitfalls.

We all know that there are success stories out there with

cooperatives. We all recognize that there is a tremendous amount of service

associated with the delivery or the operation of the Labrador stores. I don't

think there is a member in this House who doesn't recognize the necessity of

somebody operating - and I guess right now it is the government - operating the

Labrador stores to provide this service. Most of the communities down on the

Labrador Coast would not have a large enough base, if you will, to operate the

type of service that is necessary for individuals who reside in the area to have

the opportunity of being able to purchase the things that you and I take for

granted as a service, where we just have to run over to a convenience store,

which would not be available if it weren't for the operation of the Labrador

stores by government. Now, it may be available, but it would be at an exorbitant

cost, whether that be toothpaste, fuel oil, or ordinary everyday groceries, Mr.

Chairman.

It is necessary then for government to be there. There is a

public policy function for this particular organization, and they are performing

a very good public policy purpose. That is why government should continue to

operate those stores and not just cast them aside to anybody who wants to

operate them, and ultimately this service would not be available to the

residents of the Labrador Coast, in the five towns in which they operate.

These people deserve the right to have these services that

all people in other parts of the Province take so much for granted, the ordinary

purchase of common household goods and groceries, which we here in St. John's

take so much for granted, in Labrador City, in Happy Valley - Goose Bay, or

wherever. In most cases, you can just pop out and run down to the grocery store,

or whatever, and buy the commodities, but they wouldn't be available at a

reasonable cost if these stores weren't open and weren't being operated.

If the aim of this administration is to sometime have these

stores either operated by the community or by the private sector, I believe the

one avenue that has to be explored is co-operative stores, the co-operative

agencies method, and the success of that is going to have to be done through

education. I would expect somebody on the other side will rise and answer my

question as to whether or not they have proceeded with an education process to

explain co-operatives, to invite - the Newfoundland Co-operative Society, I

believe it is, to invite them down to go into those communities and use our

school system, use our community councils, the combined councils of Labrador, to

explain and develop an acceptance of co-operatives, and encourage co-operatives

to operate. We should also be considering that there may be opportunities, if

some inducement were supplied, where the private sector would be able to operate

a couple of those stores, or some other agency would be able to do it.

Mr. Chairman, Clause 4 of this bill talks about the date of

issue and the expiry date to a loan guarantee given to Newfoundland and Labrador

Computer Services Limited. Am I to assume from this, that in this particular

privatization, there would not be any loan guarantees to NLCS? This is Bill 13.

MR. ROBERTS: Mr. Chairman, I am not involved in the

privatization of NLCS because I have declared a conflict situation. My friend,

the Member for St. Barbe can do that. But if you go back, the Committee will

note that the amendment actually amends the

schedule of the act as it was

enacted by the 1993 Guarantee Act. And if you look up the 1993 act, which I

happen to have before me, there was a guarantee approved for NLCS of $1.544

million. There was no start date and no finish date given for it. Now, that was

not unusual, given that at that stage, NLCS was a wholly-owned Crown

corporation, so there was no particular significance to the fact there was no

start date and no end date.

But, with the prospect of privatization of NLCS, the issue

suddenly became a different one. So, all that clause 4 of the bill will do, if

it is adopted by the Committee, is provide a start date, December 21, 1993, and

that is four days after the act was assented to back in December 1993, and puts

in an end date, an expiry date, November 3, 1997, which is roughly four years. I

assume it was a four year loan. That is all it does. It is not an increase in

the guarantee. It just grows out of privatization. It is a loose end, I gather,

to be tidied up. I hope that addresses the hon. gentleman's concerns.

MR. A. SNOW: (Inaudible) what I'm saying is after

privatization -

MR. CHAIRMAN: Order, please!

I need to recognize the hon. the Member for Menihek. Hansard

has a problem when hon. members speak without being identified and we are

causing havoc with the Hansard. I suggest in future that hon. members rise and

wait to be recognized.

The hon. the Member for Menihek.

MR. A. SNOW: Sometimes you just get carried away with

back and forth which is probably a better way to have it. Maybe if we removed

some of the restrictions there might be a better flow in the House altogether.

Anyway, it is $1.594 million?

MR. CHAIRMAN: In response to that -

AN HON. MEMBER: It is $l.544 million.

MR. A. SNOW: It's $1.544 million; and it is to facilitate

the privatization of NLCS, this $1.544 million. It is a loan guarantee and you

are putting in - it is not new monies added. It is a loan guarantee that the

government has there today. When the privatization of NLCS is completed, will

this loan guarantee be removed at the end of the guarantee or when NLCS is

privatized?

MR. CHAIRMAN: The hon. the Minister of Justice.

MR. ROBERTS: Mr Chairman, I'm not sure I can answer that.

What I would say to my hon. friend is there is a bill to come before the House

which we, I hope, will deal with later this week or next week that specifically

deals with the NLCS privatization proposal. I will undertake - my friend, the

Minister of Finance, is not in the House; he is the minister responsible for

dealing with it - I will undertake and we will get him the answer to his

question at that time. I just don't know the answer and I confess in preparing

to deal with this bill this afternoon, I didn't anticipate that question. I did

anticipate the question of is it new money and why are you putting the dates in.

I will get him the answer.

My guess - and it is no more than a guess - is that when we

sell NLCS, all of the contingent liabilities go with it, but one can take off

contingent liabilities a number of ways, as my hon. friend knows. I realize I

haven't answered his question fully. I will undertake we will have the answer by

the time the NLCS bill comes into the House for debate.

MR. CHAIRMAN: The hon. the Member for Menihek.

MR. A. SNOW: In the same vein, I asked several questions

earlier with regard to the Labrador stores, and I don't know if the introduction

of the bill - or if you made note of the questions that I did ask concerning the

Labrador stores.

MR. ROBERTS: My friend, the Minister of Industry, Trade

and Technology was going -

MR. A. SNOW: `ITT' has gone. Anyway, the questions that I

did ask were related to privatization again. I agree with the principle of

privatization. I also recognize the function of Crown corporations performing a

public policy purpose or a function for the people of this Province, or in

particular zones of this Province, and in point of case, this being the Labrador

Coast, the five communities that these stores service, and the importance of

these stores being able to continue to operate in a good fashion, if you will,

so that people can make use of the services that ordinary communities within

this Province have and take for granted.

Being able to go and buy a tube of toothpaste at a reasonable

cost in a store that is reasonably well furnished and that type of thing is

something we all take for granted in other communities, but probably that

wouldn't be available if it weren't for this Crown corporation.

Having said that, I also recognize that the government has

looked for bids for other groups of people to operate, and I am wondering if

they have decided, if they have attempted, to use a co-operative method, the

co-op method of operating these stores, and encouraging the communities to take

over the stores themselves. It is one of the methods that they should look at.

It is just not necessarily privatization, but to allow the communities,

themselves to take it over through a co-operative, and if they have looked at

it, what indeed you have done as a government to encourage this type of

operation of this particular service that the government now provides to people

in these five communities in Labrador, because I think that quite often a lot of

the people in this House don't recognize the dilemma that these communities find

themselves in, and it is completely different from what we normally see in this

Province. These are very isolated communities that don't see the type of service

such as roads that we take for granted. They use a coastal boat in the summer

and, of course, they have airport service year-round, but that is very, very

expensive, and again that is one of the problems with operation of these stores.

So I am wondering if the minister could answer those particular questions.

MR. CHAIRMAN: The hon. the Minister of Industry, Trade

and Technology.

MR. FUREY: Mr. Chairman, there is a very short answer to

this. The divestiture program that was put in place was looked after by Deloitte

& Touche, which is a local accounting company, or at least a local branch. There

were te