March 30,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLI No. 15

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Before recognizing the hon. Member for St. John's East, on

behalf of hon. members I would like to welcome to the galleries today fourteen

students, accompanied by two teachers and an administrator, from the Vanier

College, Canadian Studies Section, Montreal. Hon. members would like to give

them a warm welcome, I am sure.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker.

I wonder if all members of the House would be prepared to

join in an acknowledgement of the efforts of employers and employees in the

fishing industry yesterday in a very large - there were many thousands of

Newfoundlanders and Labradorians at a rally and demonstration to set off the

flotilla to demonstrate the concern of people in this Province about the

problems of overfishing, and to symbolically extend our jurisdiction over the

Nose and Tail of the Grand Banks.

I wonder if all hon. members would be prepared to join in

asking the Speaker to send a message to the captain of the Polar Storm, wishing

the flotilla 'Bon Voyage' and wishing the whole fleet well in their efforts to

call attention to this problem nationally and internationally.

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

MR. MATTHEWS: Thank you very much, Mr. Speaker.

We would certainly like to join with the Member for St.

John's East, and say that it was quite an undertaking yesterday to see so many

thousands of Newfoundlanders and Labradorians show up in support of the efforts

of the Fishermen's Union and the fishing industry as the flotilla left St.

John's, sailed through the Narrows, to go to the Grand Banks of Newfoundland to

draw national and world attention to the very serious crisis in our fishery, and

to the very serious issue of foreign overfishing.

Yes, Mr. Speaker, we would be more than glad to offer our

support to the suggestion made by the Member for St. John's East, and I think it

would only be fitting, if we were to send a message of unanimous support to

those involved in the flotilla, because they are drawing attention to this issue

for all of Newfoundland and Labrador. I think it would only be fitting that the

elected members of the Newfoundland Legislature go on record and have a message

relayed to them that indeed we are supportive.

SOME HON. MEMBERS: Hear, hear!

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

MR. CARTER: Mr. Speaker, naturally the government side

will support that kind of initiative taken by the House, proposed by the hon.

Member for St. John's East.

It is regrettable that we find it necessary to take that kind

of action. After forty odd years a Province of Canada, to think that now we have

to take that kind of action to protect our most important industry, but

nevertheless, the action is obviously necessary and we support it and wish them

well.

Statements by Ministers

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

Provincial Affairs.

MR. HOGAN: Thank you, Mr. Speaker.

It gives me much pleasure to announce today that government

has approved an amount of$59.9 million for the 1992-1993 Municipal Capital Works

Program.

This year's Capital Works Program is being advanced by

several months and the total expenditure of almost $60 million is sure to have a

positive impact on government's efforts to stimulate and accelerate economic

activity throughout the Province.

Our decision to announce the 1992-1993 Capital Works Program

at this time will ensure that earlier tendering can take place and that projects

for the 1992 construction year can start almost immediately.

This infusion of capital works funding will generate

considerable employment in the construction and trades industry.

It is expected to create 2,400 direct jobs in addition to a

considerable number of indirect or spin off jobs in the supply industry, small

stores, motels, in heavy equipment operations and garages.

Another meaningful factor is that this work is spread

throughout the whole of the Province as opposed to being confined to only one or

two areas.

It is a most significant expenditure in view of the difficult

economic conditions prevailing in our Province at this particular time.

These funds are being distributed fairly and equitably

throughout the Province.

Some $57.9 million will address the most pressing needs as

they relate to cost-shared municipal services such as water and sewer facilities

and street and road construction and paving.

Another $2 million has been set aside this year for the

construction of new regional waste disposal facilities and for emergency capital

works funding.

In the last three years, government approved substantial

expenditures under Capital Works including $50.3 million in 1989-1990; $63.9 in

1990-1991 and $53.1 million for 1991-1992. When added to this year's program

they represent expenditures well in excess of $200 million on Capital Works

since this administration assumed office.

The great need to provide municipal infrastructure throughout

the Province is evidenced by the fact that some $178 million in funding was

requested from government this year by cities, towns and communities throughout

Newfoundland and Labrador. In all there were 412 requests for water and sewer

and 254 requests for road construction and paving. To do all of this in any one

year is obviously beyond the fiscal capacity of the Province.

A total of 135 communities will share in Capital Works

Projects in 1992-1993. Some 147 water and sewer projects were approved for 112

towns at a cost of $41,470,000. Some 51 road projects were approved for 40

communities at a cost of $16,066,000.

We do have what is known as a Municipal Projects Board in

place in Municipal and Provincial Affairs with a rating mechanism to assess

requests from municipalities and it is designed to ensure that funds are

allocated strictly on the basis of need and taking into consideration

environmental and health problems.

Basically, the capital works rating mechanism reflects a

comprehensive and thorough review of the criteria used to establish priorities

for the distribution of funding for municipal infrastructure.

It is interesting to note that, at the present time, the

average cost of a water and sewer hook up per household in this Province is

$28,800 per unit.

This cost per service is one of the highest in all of Canada

and it clearly illustrates the need for us to continue to explore new and

innovative methods and technologies that can be adopted to the harsh terrain and

weather conditions here.

The objective of this initiative is to provide services in a

more economical manner thus allowing the installation of a greater number of

services for the dollars available.

All financing for Capital Works is through the Newfoundland

Municipal Finance Corporation (NMFC).

Road projects are financed on a 60/40 basis with the Province

paying 60 per cent and the community paying the remaining 40 per cent.

The contribution by a municipality for water and sewer is

based on the cost per household in a municipality or a percentage of fixed

revenue.

In spite of our considerable Capital Works spending over the

last number of years, we still have a long way to go before every community is

provided with water and sewer services. It is estimated that $2 billion is

required to complete water and sewer systems in Newfoundland and Labrador

including new systems and systems that are in the ground and in need of

replacement.

This is indeed a most significant announcement and I am sure

it will be well received by the many municipalities which are sharing in this

year's Capital Works Program.

As a result of this announcement, many residents will receive

either new or improved water and sewer and road services and, while such

services are taken for granted in many places, I can assure you that they are

extremely important for those who, up until now, have had to do without them.

Today's announcement not only means the creation of jobs, it

also means the provision of essential municipal services for a large segment of

out people and I am most happy to be associated with such a positive and

meaningful program.

Attached for the information of all members are the

expenditures approved for 1992-93 fiscal year listed by municipality in

alphabetical order. Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. WOODFORD: Thank you, Mr. Speaker. I would like, first

of all, to thank the minister for giving me a copy of his release prior to

coming into the House. I had approximately an hour to go over the statement so I

want to thank the minister for that. Having said that, Mr. Speaker, I agree with

the minister when he says it is positive news. It is, indeed, welcome news for

municipalities in the Province, and not only for municipalities, in particular,

but for construction companies and people who would be working, people who would

be looking for jobs, particularly this summer when we have such a high

unemployment rate of approximately 18.5 per cent.

Mr. Speaker, having said that, the $60 million that the

minister has allocated to municipal affairs this year is pretty well on par, $4

million or $5 million more than last year. I asked the minister a couple of

weeks ago, how many - my fear - how many of those projects can the

municipalities in the Province take advantage of? I asked him how much money was

left in last year's capital program but I don't think he came back with an

answer. I said there was approximately $20 million left in that program, albeit,

it may be committed, but are there some municipalities which cannot take

advantage of it. That is my worst fear, Mr. Speaker: Can municipalities take

advantage of the funds that are allocated here today? If every municipality

could take advantage of this we could have a program in place today, within six

or seven weeks, anyway, that would, as the minister has said, hire 2,400 or

2,500 people in this construction season; but I would venture to bet that

probably 60 to 70 per cent of this particular program will be taken advantage of

and that is it. The minister is aware of this, as well, that the lesser of 60

per cent of the first $750 of water and sewer debt charges per household, plus

100 per cent of the debt charges in excess of $750 per household and the current

water and sewer debt charge subsidy received under the existing system, a lot of

municipalities in the Province today cannot take advantage of that particular

clause in the new grant formula.

Mr. Speaker, the announcement should come earlier and I think

members opposite realize that as well as I do, that we should try to get it out

earlier so that we can take advantage of the construction season. Municipalities

now, especially municipalities where the plans are not done and the specs are

not in place, have to go back to their consulting engineers, get those in place,

and by the time it then goes back to the department for the minister to call the

tenders, at least three weeks minimum, possibly four, by the time it comes back

then and the tender is let, we are three parts into the construction season. So

I urge the minister, when tenders come in and are submitted, to take advantage

of that particular tender and let it go immediately. Don't let it sit on the

desk for an extra two weeks, when municipalities or construction companies can

take advantage of the construction season.

The minister referred, with regard to the rating formula, to

the priority basis they have in place under the new system. I would have to

peruse the statement in more detail, Mr. Speaker, to make an educated comment on

that particular part of the program. But it is good for municipalities based on

health, the need factor, and the bottom line, the finances, which will be

approximately 25 per cent. So that remains to be seen.

Having said that, I would say it is a positive statement to

get this particular capital program out so that municipalities in the Province

could take advantage of it and people can be provided with much needed jobs.

Oral Questions

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

MR. WINDSOR: Mr. Speaker, a question for the Minister of

Finance. The minister, in his Budget Speech presented on Thursday, predicted

that real growth in the Newfoundland economy will, in fact, decline by half a

per cent, that unemployment will rise by 2 per cent, and that, generally, this

Province is going to slip deeper into a recession during 1992-1993. Why, in view

of these factors, did the minister put nothing in his Budget to try to stimulate

the economy of this Province?

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

DR. KITCHEN: Mr. Speaker, if it talks like Gorbachev, and

it acts like Gorbachev, and it looks.... But the hon. member is espousing a

philosophy that everybody should work for the government. For seventy-three

years we have tried that experiment in the world and they finally threw it out.

It is not appropriate for governments to hire everybody in the population. Come

again.

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

MR. WINDSOR: Mr. Speaker, the minister didn't answer my

question directly, but his attitude shows clearly why there is nothing of value

in this Budget, let me tell you. Clearly, the government has chosen to do

nothing to stimulate economic growth, but it did a great deal to discourage

economic growth in the private sector, by increasing the payroll tax, by

broadening the base of the payroll tax to the resource sector, and by lowering

the threshold. Why did government choose to tax jobs when keeping jobs and

creating jobs should be the number one priority of this government?

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

DR. KITCHEN: Thank you, Mr. Speaker. If the hon. member

would look at the Budget he will find that there is something, over $400 million

there in activity for this year. So it is not entirely appropriate to say that

there is nothing there to stimulate the economy.

As far as the increase in taxes is concerned, taxes did

increase this year by $6 million in total, which works out to $10.42 cents per

person in the Province, which is not what you would call a tax grab.

The Budget, itself, was under great constraint. We have to be

very careful in this Province, in view of the bad economy, that we don't go

overboard as far as debt is concerned, and we did not. This is a strong Budget,

a good Budget, and a steady-as-she-goes Budget. We are on the right course, Mr.

Speaker, and I guarantee you that in a few years, things will turn around in

this Province because of the long-term action that this government has taken.

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

MR. WINDSOR: Mr. Speaker, the minister knows that the

payroll tax is a regressive tax. He imposed increased payroll tax to replace the

school tax which was a regressive tax. The rationale for getting rid of the

school tax was that it was regressive, so why would the minister choose to put a

more regressive tax in place to try to remove a school tax when, at the same

time, he has tremendously increased the burden on private enterprise in this

Province?

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

DR. KITCHEN: Mr. Speaker, I don't know where the hon.

member found that we are taxing businesses more than we did before. Actually,

businesses are $2 million better off under the present regime than they were

before Thursday.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Mount Pearl.

MR. WINDSOR: The minister likes to play with numbers and

say that businesses are $2 million better off. When you annualize it, you will

find that businesses are going to pay $15 million more next year, in total, than

they paid last year. If the minister thinks that businesses are paying less

money, how does the minister explain the fact that paper mills in this Province,

which are literally hanging on by their fingernails today and which were exempt,

did not pay any school tax, now will have to pay -

PREMIER WELLS: (Inaudible).

MR. WINDSOR: They did not pay school tax, I say to the

Premier. You had better go check your facts.

They now, Mr. Speaker, will pay a 1 per cent tax and, in the

case of Corner Brook, it will probably amount to $500,000 a year. Now, is that

not going to be the final straw to break the camel's back, as it relates to

Corner Brook?

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

DR. KITCHEN: Mr. Speaker, nobody is going to break the

camel's back. The people opposite almost broke the camel's back, in fact they

almost broke everybody's back with their tremendous attitude towards hiring

everybody, getting all their friends and buddies into the Public Service. That

is gone now. We are going to try to run a lean ship and we will do it that way.

I might point out to the hon. member that something like

10,000 businesses escaped the school tax and are not picked up on the payroll

tax. So that means, virtually every small business with three or four employees

has escaped the school tax that they were paying, the business tax that most of

them were paying - and now they don't have to pay the payroll tax. So, that must

be a good thing. Similarly, the overall effect on business is that the tax will

not apply evenly to everybody, some people will lose a bit and some will gain a

bit. Most of the companies to which he refers, the resource sector, were paying

more or less towards the school tax. Some were paying more and will gain. Some

were paying less and will lose somewhat; but, generally speaking, the effects of

our tax will not hurt any industry or any firm significantly.

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

MR. MATTHEWS: Thank you very much, Mr. Speaker.

I have a question for the Minister of Fisheries. As we all

know, the fishing industry is going through one of the worst crises, perhaps the

worst crisis, that it has ever undergone in our history. The Minister of

Finance, on Thursday, in his Budget Speech, talking about the fishery, said that

this government will continue to do everything within its means to ensure that

assistance is provided to those whose livelihoods are affected. I ask the

Minister of Fisheries - I have had a chance to peruse the Budget document since

Thursday, particularly the Departments of Fisheries and Employment and Labour

Relations - can he tell me where I can find some dollar allocations in this

Budget that will assist fishermen and fish plant workers who are severely

affected by this fisheries crisis? Could the minister tell me what the Minister

of Finance was referring to, and could he show me in the Budget where there are

dollars to take care of that problem?

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

MR. CARTER: Mr. Speaker, that question should more

appropriately be directed to my colleague, the Minister of Employment and Labour

Relations.

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

MR. MATTHEWS: Well, Mr. Speaker, can the Minister of

Labour tell me where, in this Budget document, this government has made any

provision whatsoever for financial allocations to assist fishermen and fish

plant workers who will now be severely affected because of the downturn in our

fishery?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

The question has been asked in the House several times

before, and has been answered in the House several times before. There are no

definitive numbers in this document. There was no intention for them to be in

this document. We have given an indication in this House on several occasions

that we are already involved in discussions with our federal counterparts. We do

not believe that we have the capacity to solve this problem by ourselves. We are

willing to participate in any shared initiative, both related to the fishery and

in areas not related to the fishery. We are already in discussions. We are

analyzing the scope and the extent of the expected problem that will develop

more fully as the year goes on, and we indicated to the public of Newfoundland

that just as we demonstrated as a government the capacity to deal with that kind

of a problem last year, while there are no specific numbers in this Budget

document that you could find on Thursday, and you might not find them today, and

you will not find them next week; but we have indicated that we do believe we

have the capacity, and we are involved in discussions with our federal

counterparts to make sure that as and when it is appropriate we will participate

in programs, both fisheries-related and non-fisheries related.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

The minister has confirmed that government has not made any

provision in this Budget for this program. It has cancelled the adjustment

program for fish plant workers, and the Emergency Response Program which were in

last year's Budget and amounted to about $10 million. My supplementary to the

minister is: Why didn't government keep that Budget allocation in place as core

funding for what is obviously going to be a much needed response program? We all

know the troubles in the fishery. We know there is going to be need for a

response program. Why didn't they keep that funding, or equivalent to that

funding, there as a core program for a response program?

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

Labour Relations.

MR. GRIMES: Mr. Speaker, the Budget lines and headings

that are required are there and maintained. The one that is missing is the

special short-term, one-time program to keep the three plants open from a year

and a half or two years ago. There is no need to keep that heading alive in the

Budget, because it is a program that was targeted at three particular plants. It

is finished. The older worker adjustment programs and so on that are in place on

an ongoing basis are still indicated in the Budget. They are headings that are

alive and can be actioned and functioned throughout the year, if and as

required.

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

MR. MATTHEWS: Thank you, Mr. Speaker. A supplementary for

the Minister of Fisheries.

The Minister of Finance also said on Thursday that government

is seeking long-term constructive solutions to the difficulties in the fishing

industry. I would like to ask the Minister of Fisheries: After all this time to

reflect and evaluate, what are those solutions, and when will the people of the

Province get to see what government's plans are for solutions in the fishing

industry?

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

MR. CARTER: Mr. Speaker, I suppose, the most appropriate

answer would be, the solution, of course, to the problem in the fishing industry

is to get more fish, and I am afraid we don't have that authority on this side

of the House, but certainly, Mr. Speaker, we do have initiatives that we are

planning, and these will be announced as time goes on, especially during the

detailed discussion of our Estimates, which will be taking place in the Chamber,

very shortly.

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

MS. VERGE: Thank you, Mr. Speaker.

Mr. Speaker, my questions are for the Premier. More than ten

days have gone by since I first raised in this House, serious questions about

apparent police mishandling of an investigation of a complaint made against the

Member for Naskaupi, at the material time, a member of the Premier's Cabinet.

This is the first Question Period the Premier has attended since then.

My first question for the Premier today is, will the Premier

now agree to have a judicial inquiry into the RNC response, or more accurately,

lack of response, to the complaint made nineteen months ago, that the Minister

of Environment and Lands sexually assaulted a woman?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we will allow the police to

complete the investigation. They know now that the matter has been raised in the

public; hopefully, if they have been doing anything inefficiently or

ineffectively or failed to do anything that they ought to have done, they will

correct it. We will not allow the hon. member opposite, or anybody else to

pressure such interference with an investigation that may in any manner,

interfere with the proper, and I emphasize the word 'proper', prosecution of any

charge that may arise out of it.

Now, Mr. Speaker, when the charges are laid and properly

dealt with, if there is a need, if there is a need -

AN HON. MEMBER: Cover up.

PREMIER WELLS: I don't know what the members are talking

about. If there is a need for an investigation, a full investigation will take

place, but, Mr. Speaker, we will not allow politically motivated pressures to

cause persecution instead of prosecution in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Humber East, on a

supplementary.

MS. VERGE: Thank you, Mr. Speaker. My questions are for

the Premier.

How does the Premier propose to address the fact that,

fourteen months after the woman made the complaint to the police, an RNC member

told her in the presence of the Leader of the NDP, that the Constabulary

accidentally shelved the file and nothing had been done on the investigation?

How does the Premier propose to deal with the fact that five

months after that startling admission, the police still haven't finished the

investigation?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Oh, oh!

PREMIER WELLS: Mr. Speaker, let me say again -

MR. SPEAKER: Order, please!

PREMIER WELLS: Mr. Speaker, let me say again, that we

will allow the police to conduct the investigation fully and completely and lay

whatever charges are to be laid without any interference whatsoever with the

police. We have no intention of interfering. Then, Mr. Speaker, when and if

charges are laid or the matter is properly dealt with, we will conduct such

investigation into the police procedures as are necessary to fully disclose any

shortcomings on the part of the police or any shortcomings on anybody else's

part, for that matter. We have no intention of allowing the police to develop

lackadaisical approaches or allowing any procedures to be operated in a manner

that does not fully and properly deal with complaints in a timely manner.

MR. SPEAKER: The hon. the Member for Humber East, on a

supplementary.

MS. VERGE: Thank you, Mr. Speaker.

The Premier did not hesitate to set up a judicial inquiry

into allegations that an executive assistant to the former Minister of Social

Services attempted to interfere in a public service job competition. Why is the

Premier trying to avoid having a judicial inquiry into a much more serious

allegation?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I am not trying to avoid an

inquiry.

AN HON. MEMBER: You are.

MR. SPEAKER: Order, please!

PREMIER WELLS: The hon. member knows - no, maybe I should

rephrase that. She ought to know, that a decision of the Supreme Court of Canada

has recently ruled that such an inquiry, Royal Commissions of this nature, into

matters that are alleged criminal matters can prevent the proper prosecution

and, in fact, are illegal, are ultra vires the Province. Now, the hon. Member

ought to know that, and if she does not know it, then I refer her to the

decision of the Supreme Court of Canada, and she should read it and see it.

Now, Mr. Speaker, we will ensure that there is such full

police investigation as is necessary to ensure that anybody who has breached the

criminal law is brought to account for that. That includes, Mr. Speaker, anybody

who has breached the criminal law by reason of failing, for any improper reason,

to perform their duties in carrying out such an investigation. Mr. Speaker,

whatever is right and proper we will do, but we will not rush into insane

approaches that prejudice the proper administration of justice because the hon.

members opposite want to make political points and persecute people, instead of

managing the system of justice so as to carry out prosecutions in a proper way.

I am surprised at hon. members, quite frankly, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. the Member for Humber East, on a supplementary.

MS. VERGE: Mr. Speaker, this is not a supplementary, it

is a new question. My new question is for the Premier also.

When I asked the Premier about his refusal to meet the

complainant when she came to his office, he said he did not remember. Yet a few

minutes later, just after Question Period, in Answers to Questions for which

Notice has been Given, the Premier read a note from his officials saying: The

lady came to his office and spoke to two of his assistants. He said: He

understood she wanted to speak to him about a private business dispute with the

Government and he told her he would not discuss such a claim with anyone. How

was it, I ask the Premier, that the Premier's staff knew instantly which woman I

was referring to? Is it the truth that both the Premier's staff and the Premier

knew about the woman's complaint to the police shortly after the complaint was

made nineteen months ago?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, it isn't true. Nor can

the hon. Member, with any degree of credibility, attempt to contort these

statements to make it true. The simple fact is, Mr. Speaker, I do not remember

what the hon. Member asked me last week. Now, that may come as an utter shock to

her, but I don't, because I have more important things to do than run around

memorizing what anybody said to me at any given point in time. I've got to run

the Government of this Province. She may not be aware of that, she may not

understand that.

Mr. Speaker, when the question was raised in the House

members of my staff said: Yes, Mr. Premier, a woman came to see you and here is

the matter that she raised. Now, I have virtually no recollection of the event

or the incident at the time, but there is something, a recollection of somebody

wanting to speak to me about a matter that was a claim against the Government, a

threatened action or an action actually commenced - I don't know which - against

the Government.

Mr. Speaker, I have no intention of dealing with anybody on

those matters without having their lawyer present, and I never will. I have

refused to do it every time anybody has ever raised it with me, and I will

continue to do it, Mr. Speaker, because it is the proper course of action.

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

MS. VERGE: Thank you, Mr. Speaker. A supplementary.

I say to the Premier, he knows very well what I asked him. He

was so upset at the time, he ranted and raved and got up on a point of

privilege.

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

The hon. Member is on a supplementary, and the supplementary

question ought to be asked. We are not in debate.

MS. VERGE: Thank you, Mr. Speaker.

Did Doug House repeat to the Premier what the woman told him

about her complaint to the police?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I don't ever remember talking to Doug

House about it. Maybe I did, but I don't ever remember talking to Doug House

about it, not to the best of my knowledge.

MR. SPEAKER: The hon. the Member for Harbour Main.

MR. DOYLE: Thank you, Mr. Speaker.

I have a question for the Minister of Finance. Several times

in the Budget Speech the Minister of Finance said job losses in the public

sector will be minimal. Now, will the Minister tell us what is meant by that

particular statement, and can he tell us directly how many jobs will be lost as

a result of his Budget?

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

DR. KITCHEN: Mr. Speaker, we used the word minimal

because that is what we meant. I do not know offhand, there may be some through

some re-organization here and there, but the attempt in the Budget, in the

strategy, was this time we would not make a conscious attempt to solve our

budgetary difficulties by laying off a large number of people in the public

service as we had to do last year. That would not be our strategy.

However, as we do make changes here and there in our

organizations and so on undoubtedly there will be a few people who may or may

not be laid off, but as far as I know there are very few involved in that.

MR. SPEAKER: The hon. the Member for Harbour Main.

MR. DOYLE: Thank you, Mr. Speaker. I draw the Minister's

attention to his salary details that showed direct permanent employment by

Government will be down next year by about 325. In addition 100 teachers -

SOME HON. MEMBERS: (Inaudible).

MR. DOYLE: Mr. Speaker, I will start again. The salary

details showed direct permanent employment will be down by 325. In addition 100

teachers are going to be laid off. Another 100 employees of the School Tax

Authorities are going to lose their jobs. As the Minister said in his Budget

Speech, as the result of the government boards being eliminated and agencies

being eliminated, there will be further cutbacks as well.

Now will the Minister confirm that as a direct result of his

Budget at least 600 jobs are going to be lost in the Public Sector?

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

DR. KITCHEN: Mr. Speaker, there will be, as far as we can

figure, a net gain in the number of jobs in the Public Sector this year as a

result of the opening of the long-term nursing care homes and the extensions in

Baie Verte, in Bonavista, in Gander, Corner Brook, Botwood, Agnus Pratt and so

on. So there will be a net gain in the health care sector.

Now as the Member mentioned we do have this procedure that as

there is declining enrolment in the school system, and as enrolments decline the

number of teachers required is fewer, but they too are protected by the 2 per

cent rule. As far as I know in most cases most superintendents can handle that

through their normal attrition because every year teachers retire, and it is

just a matter, if you are down a bit this year and you are protected by the 2

per cent rule, usually and as far as I know always - I cannot be sure about

always - but virtually every case - not only can attrition to people who are

retiring provide jobs for those for the jobs that are gone, not only that but

people are hiring teachers every year. So there are more retiring -

AN HON. MEMBER: Many more.

DR. KITCHEN: Many more so that there is actually a net -

new people are being hired into the educational system.

So I am sure that his estimate of 600 jobs is totally,

totally wrong. There will be a net gain in jobs this year, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Harbour Main on a

supplementary.

MR. DOYLE: Mr. Speaker, the only thing I can say to the

Minister of Finance is that I have both copies of his salary details, this year

and last year, and it shows a net decrease of 325. I do not know where he is

coming from.

MR. SPEAKER: Order, please!

I have to remind hon. members that we are getting

increasingly into a situation where hon. members are making comments on answers

and getting into debate. Hon. members know they are supposed to be on

supplementaries. I ask the hon. Member to get on with his supplementary, please.

MR. DOYLE: Well, Mr. Speaker, moving away from the

permanent jobs for a moment, maybe the Minister can give us a little bit of

information on the temporary and part-time jobs. Could he tell us how many

temporary and part-time jobs will be eliminated as the result of this Budget?

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

DR. KITCHEN: Mr. Speaker, the same answer.

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

MR. HARRIS: Thank you, Mr. Speaker. My question is to the

Minister of Finance and it concerns the plans announced in the Budget to

eliminate the School Tax Authorities. As the Minister knows, this will eliminate

86 full-time and approximately 20 temporary jobs for a total of more than 100

jobs. Can the Minister advise the House what plans he has or has made to make

sure that these people do not lose their employment? Are they going to be looked

after in other aspects of the public service?

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

DR. WARREN: Mr. Speaker, it is my understanding that the

figures of people employed by the School Tax Authority was approximately 80 to

85 full-time employees. I have been informed that since we made the

announcement, Mr. Speaker, a number of them have already acquired jobs

elsewhere. A number are retiring. There are others who at the end of June may

lose their jobs, but I assure the hon. Member that we are going to threat them

fairly. We want to treat all these people fairly. Severance arrangements are

being examined, and also provision will be made for some of these to seek

employment in other aspects of government, Mr. Speaker. We want to treat these

people fairly, but the number is nothing close to 100 or 120 or whatever the

hon. Member said.

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

John's East.

MR. HARRIS: Mr. Speaker, a supplementary to the Minister

of Finance concerning school tax. Can the Minister of Finance confirm that as a

result of the changes in the school tax, individuals sixty-five years and older

who were formerly exempt from the payment of school tax are now going to be

taxed by this Government at a rate of 4 per cent more - an increase of 4 per

cent on their personal income tax? The senior citizens who were formerly exempt

are now going to be taxed fully for the school tax. Can he confirm that and

advise why his Government decided to change this policy of exempting senior

citizens from this tax?

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

DR. KITCHEN: Mr. Speaker, I am sure that very few senior

citizens will be paying increased personal income taxes - assuming of course

that the senior citizens have very little income.

But is it fair - I'll put it this way - for someone who

happens to be sixty-four years of age, as opposed to someone who is sixty-five

with the same income, that because someone happens to pitch over the mark that

they are suddenly exempt from personal income tax? In my mind that does not seem

fair. If you have the income, regardless of age, it's my view that you should

pay your taxes.

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

AN HON. MEMBER: (Inaudible)!

MR. SPEAKER: Order, please!

AN HON. MEMBER: (Inaudible)!

MR. SPEAKER: Order, please!

The Chair has recognised the Member for Menihek.

MR. A. SNOW: Mr. Speaker, my question is to the Minister

responsible for Mines and Energy. New York State has recently decided not to

proceed with a $17 billion agreement with Hydro Quebec. I wonder if he could

tell us whether or not the cancellation of this agreement would have any

implication on the Lower Churchill development?

MR. SPEAKER: The hon. the Minister of Mines and Energy.

DR. GIBBONS: Mr. Speaker, it is my view that this should

not have any implications for anything we are doing with the Lower Churchill.

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

MR. A. SNOW: Mr. Speaker, Quebec says that it will

continue to proceed with the Great Whale project even if the New York contract

indeed does not go ahead. But is it really credible that Quebec will need both

the Great Whale and the Lower Churchill for its own use? If the Great Whale

proceeds then isn't it true that development of the Lower Churchill will depend

on sales to New York?

MR. SPEAKER: The hon. the Minister of Mines and Energy.

DR. GIBBONS: No, Mr. Speaker. The development of the

Lower Churchill has never depended on sales to New York. Relative to all this,

people should get in perspective that the contract that New York and Quebec are

talking about here, that particular contract, was only for 1,000 megawatts. The

total amount to be produced from the Great Whale and the Lower Churchill is more

like 6,000 megawatts. It is going to accommodate the growth in demand for

electricity in Quebec and in Newfoundland and Labrador for the long-term beyond

the year 2000.

One other point relative to the New York part of it. The New

York people themselves have said they will probably have to come to Quebec to

talk about power for beyond 2000. The present contract was going to start in

1995. They are saying: we do not need it now, but we will probably need your

power after the year 2000. There is only one group that is going to pay more for

that power. In my view it is the people from New York when they negotiate a new

contract for beyond 2000.

SOME HON. MEMBERS: (Inaudible)!

MR. SPEAKER: Order, please!

The hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, I have a question for the

Minister of Works, Services and Transportation. I would like to ask the

Minister, Mr. Speaker, if his Government or his Department has made any decision

in terms of laying off maintenance people, mechanics, with the Department of

Transportation.

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. GOVER: Mr. Speaker, as the Minister of Finance

indicated in the Budget Speech, layoffs will be minimal, if any.

MR. SPEAKER: Question Period has expired.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. GOVER: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The Chair has recognized the hon. Minister of Works, Services

and Transportation, and he is the one we would all like to hear now.

The hon. the Minister of Works, Services and Transportation.

MR. GOVER: Thank you, Mr. Speaker.

I would like to table the Public Tender Act Exceptions for

February 1992.

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

MR. DECKER: Mr. Speaker, under the provisions of the

Newfoundland Medical Care Insurance Act I wish to table the Report of the

Newfoundland Medical Care Commission for the year ended March 31, 1991.

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

MR. WINDSOR: Mr. Speaker, I would like to table the

Report of the Public Accounts Committee of the House of Assembly for the

financial year ending March 31, 1989. This is a report, of course, of the

previous committee and in so doing I would like to express thank on behalf of

the House to the former chairman, the hon. Member for St. Mary's - The Capes,

the hon. Member for Burin - St. George's, and the hon. Member for Bonavista

South, who have since taken leave of the committee. I table this on behalf of

that committee, Mr. Speaker.

Notices of Motion

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

MR. R. AYLWARD: Thank you, very much, Mr. Speaker.

I give notice of a private member's resolution:

WHEREAS persons sixty-five and over were exempt from paying

school tax, and

WHEREAS increases in the personal income tax rate were

announced in the 1992 Budget expressly as a means of replacing the school tax.

BE IT RESOLVED that persons sixty-five and over be exempt

from the increases in the personal income tax rate which were announced in the

1992 Budget.

Answers to Questions

For which Notice has been Given

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. GOVER: Mr. Speaker, I would like to answer a question

that was asked concerning an exception to the Public Tender Act regarding the

Lundrigan group of companies concerning space leased in Corner Brook and a

renewal of that particular lease. The item is found on Page 7 of the December

1991 exceptions.

Mr. Speaker, under

Section 45 of the Public Tender Act it is

perfectly permissable to renew a lease as opposed to calling for public tenders,

lease document. The only other requirement is that if a renewal is made, that

renewal will have to be reported as an exception to the Public Tender Act.

Obviously, Mr. Speaker, Government renews leases of this nature when it feels

that by renewal as opposed to tender it will acquire space at the lowest

possible price. In this particular case the space in question was a considerable

quantity of space, almost 20,000 square feet, and from September 1989 to June

1990 there were six tender calls, either by the Department of Works, Services

and Transportation or by Enterprise Newfoundland and Labrador, for space in the

Corner Brook area. These tender calls were for significantly lower amounts of

space than the 20,000 square feet required in this particular lease. In fact the

lowest amount of space was 2500 feet and most of them tended to come in around

5000, these previous six tender calls. In the previous six tender calls for this

smaller amount of space the lowest price received was 27 per cent greater than

the renewal lease price under the Lundrigan lease. Also, because the leased

space is 20,000 square feet, as the amount of leased space increases the number

of bidders decreases because obviously there are fewer landlords which have that

quantity of space. It was determined that if a tender was called in Corner Brook

it would be unlikely that there would be more bidders than the current landlord,

and in effect if we went to tender that could give him an opportunity, knowing

that, to increase his price above the $10.00 per square foot which was the

original lease term, so as a result of that, Mr. Speaker, the Government in an

effort to economize, achieve efficiency, and have top quality space for its

operations, decided to renew as opposed to tender. Mr. Speaker, I believe this

was the best decision to make.

Thank you, Mr. Speaker.

Orders of the Day

MR. BAKER: Motion 3, Mr. Speaker.

MR. SPEAKER: Motion 3. The hon. the Government House

Leader.

MR. BAKER: Thank you, Mr. Speaker.

This is a Motion with regards to the appointment of a new

Auditor General.

I would like to point out to this House that at the point we

assumed government one of our main objectives was to bring in a new Auditor

General's Act. That we did, and it was voted on and passed in this hon. House.

In the interim the Auditor General, who was Auditor General at that point three

years ago, became ill and subsequently retired.

To fill the void the Deputy Auditor General, Mr. Chris Hart,

has been filling in as Auditor General. I would like to say at this point in

time, Mr. Speaker, that we express our appreciation to Mr. Hart for the superb

job he has done in the interim until we could get around to going through the

proper process to appoint an Auditor General.

Mr. Speaker, the process was something like this: there was a

recruitment committee set up, and that recruitment committee had the mandate to

recommend to Cabinet an appropriate appointment to fill the position of Auditor

General.

The committee consisted of the following: Mr. Gilbert Pike

was Chairman of the Committee - he is Chairman of the Public Service Commission

- Mr. Robert Healey of Ernst and Young from the Private Sector, and Mr. Stanley,

Clerk of the Executive Council. This was a three person committee that was put

together to investigate and to come up with recommendations for people to fill

the position of Auditor General of this Provinces.

They subsequently went through a process where they

advertised nationally, they accepted applications, screened applications,

interviewed applicants and, Mr. Speaker, they recommended to Cabinet the

appointment of Ms. Elizabeth Marshall as Auditor General for the Province.

Ms. Marshall's background, Mr. Speaker, speaks for itself. In

her previous employment she has been an auditor with Thorne Riddell Company in

New Brunswick and Halifax. She was a senior auditor with the Department of the

Auditor General in Nova Scotia. She was manager of the Internal Audit Division,

Department of Finance here in this Province, Director of Internal Audit

Division, Department of Finance, Director of Government Accounting Division,

Department of Finance, eventually being appointed to Assistant Deputy Minister

in Transportation to Deputy Minister in Social Services, to finally Deputy

Minister in the Department of Works, Services and Transportation. So her

background has been in auditing and she is very familiar with the government

process.

The latter caused us a little bit of concern because our

piece of legislation creating the Auditor General's Act was done to ensure that

the Auditor General, the position of Auditor General, and that office of Auditor

General would be separate from government, would have more autonomy, more

independence and so on. We were concerned about only one aspect of Ms.

Marshall's appointment, and that was the fact that she was for some time within

the public service of the Province and working within a couple of departments.

So, Mr. Speaker, in the resolution we have taken care of that

eventuality. Now I would just like to very briefly read through the final 'BE IT

RESOLVED THAT.' " BE IT FURTHER RESOLVED that to ensure public confidence in the

independence of the Office of the Auditor General and to assure compliance with

the Rules of Professional Conduct of the Institute of Chartered Accountants of

Newfoundland requiring a member to hold himself or herself free of any

influence, interest or relationship which, in the view of an objective observer,

would impair the member's professional judgment or objectivity, the auditing or

examining of the records of a Department of Government, relating to a period

during which the Auditor General held an executive position in that Department,

shall be carried out by an independent firm of chartered accountants."

So, Mr. Speaker, this will allow a smooth transition from an

excellent public servant to the position of Auditor General, and allow the

transition so that when matters arise that relate to departments in which she

served for the period she served there, then an independent firm somewhere else

in the Province, or somewhere downtown or whatever, will then carry out that

function, so that the Auditor General is not responsible for commenting on the

departments in which she served, or what happened during the time she served in

government departments.

Mr. Speaker, the report of that independent auditor will be

presented to the House of Assembly as an addendum or in addition to the report

of the Auditor General. So it comes directly to the House of Assembly unchanged.

So that was done to take care of what we saw as perhaps being

a little problem in the process. We are very pleased, and I am very pleased

today, because we are very satisfied with the recommendation of that Committee.

We are very pleased today to move that Ms. Elizabeth Marshall be appointed

Auditor General for the Province of Newfoundland and Labrador.

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

MR. WINDSOR: Thank you, Mr. Speaker. I do not think any

of us can disagree with the choice of Ms. Elizabeth Marshall as the Auditor

General. Ms. Marshall, in my experience in working with her in the public

service, has exemplified herself I think in her conduct and her degree of

professionalism. I think she is an outstanding public servant, a loyal public

servant, who has dedicated herself. Let me say this in a very non-political way.

I say that in all sincerity. In a non-political way. She has provided tremendous

service to this Province. She is an extremely capable, well-educated and

experienced lady, and I have no doubt that she will indeed admirably well fill

this particular position. We certainly cannot find any reason to disagree with

her particular appointment. I think we would all certainly support that.

The only problem I have with the process is the length of

time it has taken government to deal with the issue. I think the government is

to be faulted for that. I realise that it takes some time to go through a proper

executive search and to screen the applicants, and the Committee no doubt did

their job. But I suspect that this government has had the recommendation for

some time. I think they have been sitting on this recommendation for some time.

If not, then I am at a loss to understand why the Committee would take so long

to bring a name forward.

I have to say that Mr. Chris Hart has served this Province

well, as the President of Treasury Board has said. In my limited experience with

him, since assuming the chair of the Public Accounts Committee, I have found him

extremely helpful, very professional, very interested in dealing with first of

all the whole Auditor General's Act, in being there when that was brought

through. That Act, by the way, was initiated by the former Auditor General in

conversations with myself when I was Minister of Finance. We initiated the

structuring of that particular Act. So that was

an act, as I said I guess when I

spoke to that Bill, that I fully supported and I think was long overdue. We

welcome the provisions that Act makes in giving the Auditor General autonomy in

fulfilling his or her obligations, and in reporting directly to the House of

Assembly instead of through government. I believe that is the way it should be.

The Auditor General's office of course, I guess, works very

much in conjunction with the Public Accounts Committee of this House of

Assembly. I believe the Public Accounts Committee can play a very important

role. Over the past fifteen years, I guess, we have seen the Public Accounts

Committee in this Province and in this House grow tremendously from when we

first formed the Public Accounts Committee back, I believe, in 1976 or 1977. I

was on that Committee as well, under the chair of the present Member of

Parliament for Burin, Burgeo, whatever the name of the federal riding is. That

was an interesting couple of years in trying to just decide exactly what the

Public Accounts Committee should do, how much authority it should have, and what

mandate it should have.

I believe we are at a stage in this Province where the Public

Accounts Committee can now grow even further, and I have discussed this with the

President of Treasury Board. In fact, there are many Commonwealth countries and

many provinces of Canada that are now looking at the possibility of putting in

place legislation so that the Public Accounts Committee has the same role and

autonomy as the Auditor General now enjoys. I have to say in saying that, that I

believe this House has treated the Public Accounts Committee over the past

number of years well. I think we have had the cooperation of the House. I think

we have had cooperation of members on both sides of the House of Assembly in

dealing as a Public Accounts Committee should be, which is a non-political

entity.

Now, that is very difficult when you take members from both

sides of the House of Assembly who are politicians and who represent parties.

But I believe members on that committee have acted in a responsible manner. I

want to say that, in the several meetings we have had since I assumed the chair

I have had nothing but the greatest of co-operation and support from members

from both sides of the House of Assembly who sit on that committee, and that is

as it should be. But I think there is a real question as to what teeth does the

committee really have, and if we get into an issue that is a highly political

issue, a highly sensitive issue, whether or not the committee would continue to

act in an impartial and non-political manner.

So I believe that we may well, and perhaps we should indeed,

begin to look at drafting legislation for Public Accounts Committees, and I

think it would be a worthwhile objective of the present committee if we could

put in place some sort of legislation. There is no legislation in Canada dealing

with Public Accounts Committees to date. I think a couple of provinces are

indeed looking at it, but there is no reason why we cannot begin to lead the way

in that particular area.

I say that simply because I believe that the Auditor

General's Office and the Public Accounts Committee have to work in parallel,

work very closely. The Public Accounts Committee is, to a large measure, the

Auditor General's voice here in the House of Assembly. We work closely with him

in scrutinizing activities in the Province, be they actions of government or of

Crown Corporations or whatever matters that may be referred to the Public

Accounts Committee or that the Public Accounts Committee may choose under its

present mandate to examine in some detail. I think it must have the right to

summon witnesses, to summon evidence, have access to evidence in a somewhat

quasi judicial manner, and have a right to report impartially to the House of

Assembly.

The Auditor General will be very important in that role, he

or she, in the power that the office now has under the legislation that the

present government brought to this House - and we welcomed and supported that

legislation when it came in. The Auditor General has a tremendous amount of

power and can be very helpful to the Public Accounts Committee. In working

together, I think there is a great role that can be played.

I do want to say that I think Mr. Chris Hart has done an

admirable job during the time that I have been there. I think he has served us

well and has proven that he certainly was extremely qualified, as well, to fill

the position as Auditor General. In view of the length of time he had been

acting Auditor General and in view of the manner in which he fulfilled those

obligations, I would certainly have predicted that Mr. Hart may have been given

that position. So, for his sake, I am disappointed, but that is to take nothing

away from Ms. Marshall, who herself is highly qualified. I guess we should be

pleased, as members of the House of Assembly, that we have two such highly

qualified individuals who were available, and no doubt there were probably

others who applied for that position. I have no knowledge of that, of course.

But certainly I think we should be pleased that there are two such individuals

who are so highly qualified, so highly respected in the professional

associations in which they are involved and who were prepared to offer

themselves for this particular position in this Province.

In saying that, again I welcome the appointment of Ms.

Marshall. She is a highly qualified individual and I know we, in the Public

Accounts Committee, look forward to working closely with her and with Mr. Hart

and the rest of the staff, Mr. Speaker. So, we support this resolution.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I didn't intend to speak in

this debate, because I think it is clear that it has widespread support, but a

couple of matters have been raised by the hon. Member for Mount Pearl that need

to be addressed. He expresses his support, and I appreciate that expression of

support for the recommendation. The Government is happy to endorse the

recommendation that came from the committee. That was the committee's

recommendation and we have brought it to the House unchanged.

The hon. member, however, felt the government was at fault,

that somehow we have been sitting on this report for some time. I just want to

assure him that such is not the case. I think the former Auditor General retired

some time in the summer of last year. By October -

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: No, he had been ill and on sick leave for

some considerable time, but his actual resignation, I believe, was some time

early last summer. I believe that was about the time.

In any event, we had the new legislation through in October,

but in anticipation of the new legislation, we put in place a search committee

in early October, and they did their advertising between October 23 and November

15, 1991. They made their recommendation to the Cabinet on February 12. So we

had the recommendation only on February 12. We got the recommendation, and on a

professional basis, and on the basis of the individual's competence, we had no

quarrel whatsoever with the recommendation, but Cabinet raised the concern and

referred the recommendation back to the committee.

The concern that we raised was that Mrs. Marshall had been a

senior executive in at least two departments of government in recent years, and

it is possible that the Auditor General would be auditing in that time. So we

referred it back to the committee with the request that they consider this

matter and advise us as to whether or not this would cause them any concern,

because it caused some concern for Cabinet, and asked them to advise the Cabinet

as to how we ought to deal with that. As a result of that, instead of the first

'be it resolved', which was all that was involved in the initial resolution, the

second 'be it further resolved' was added. Now I don't know when that came back

to Cabinet - just in the last week or two. Cabinet dealt with it right away, and

we moved right away. So there was no delay whatsoever.

I thought I should explain those matters, Mr. Speaker,

because it is not as though the Cabinet was, for some reason or other, sitting

on them.

Let me also express my pleasure and appreciation to Mr. Hart

for the job that he did in his acting capacity, and assure him that the decision

does not, in any manner, reflect any lack of confidence on the part of the

government in Mr. Hart. We simply accepted the recommendation of the committee,

and that is what we have brought before the House of Assembly.

With respect to Mrs. Marshall, I can only share the views of

the hon. the Member for Mount Pearl that, in my experience, she is a very

competent professional. She has served the public of the Province well, and I

would note one other thing, Mr. Speaker. I believe this is the first occasion

when this Province has had a woman Auditor General, and I am rather proud of

that fact. It may, in fact, be the first woman Auditor General in the country. I

don't know, off the top of my head, that there has been any other. So I am quite

pleased that that very senior and very significant governmental position is now

filled by a woman, and I wish both Mrs. Marshall and Mr. Hart well in the

future.

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

MR. HARRIS: Thank you, Mr. Speaker.

I only intend to speak briefly to this motion, in support of

it. I would like to say it is our belief that the process undertaken in

selecting and appointing the Auditor General appears to be an appropriate one,

that the consideration of the candidates was by a qualified committee, and I

have no quarrel with the result of their findings.

Ms. Marshall, of course, has served the public service of

this Province for many years, and I am satisfied that the government has taken

sufficient concern to ensure that the office of Auditor General would not be

open to the kinds of conflict of interest allegations that so often are made by

people without knowing what they are talking about in many cases; that by

undertaking the procedure that the government has included in the resolution

with respect to an independent audit of those departments in which Ms. Marshall

held an executive position, would be done by someone outside of the Department

of the Auditor General. I think, again, that is most appropriate.

As I indicated, Mr. Speaker, quite often allegations are made

about people, and flung around, and sometimes flung around this House, without

any consideration for the realities or understanding of what it all means. By

undertaking this procedure, the government, through the Auditor General's

office, is ensuring that the Auditor General would not be treated to such kinds

of comments by people and I think it is an appropriate method of doing so to

ensure that not only would things be done properly, but be seen to be done

properly by even the most cynical of observer. So, Mr. Speaker, I add these

comments in support of the motion by the Government House Leader.

MR. SPEAKER: Is the House ready for the question?

All those in favour, 'aye', those against, 'nay'.

I declare the motion carried.

MR. BAKER: Motion No. 1, Mr. Speaker.

MR. SPEAKER: Motion No. 1, that the House resolve itself

into a Committee of the Whole on Ways and Means to consider the raising of

Supply granted to Her Majesty. The Budget Speech.

The hon. the Member for Mount Pearl.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: The hon. the President of Treasury Board

wishes I only had twenty minutes, Mr. Speaker. The fact of the matter is, I have

unlimited time, as I should, so, we will no doubt have an opportunity to cover a

lot of ground before I take my seat. I would say to the President of Treasury

Board that for the next three or four days I would hope to make some preliminary

comments and then we shall get in full swing perhaps next week.

Mr. Speaker, I rise to speak to the motion and to debate in

the House the Budget presented by the hon. the Minister of Finance, on Thursday

past. This is his fourth Budget I guess, and the minister never ceases to amaze

me, Mr. Speaker.

When he read his first Budget, I thought it was the worst

Budget in the world and every year since, he has proven me wrong; they get

progressively worse. The minister, Mr. Speaker, though is consistent. This

government has certainly been consistent over the four years. The economy has

been declining every year for the past four years and the minister is telling us

now that next year will be no exception, we will see a decline in growth in the

gross provincial product of a half of a percentage point. That is not much to be

proud of.

In fairness, Canada is expected to grow only by 2 per cent.

Newfoundland had been expected to actually lead the way in Canada until recent

announcements in the fishing industry and Hibernia sort of took all the steam

out of that, so now, as the minister shows in his own Budget, and as he admits

in his Budget documents, we are faced again with suffering through recession for

the rest of this year, and into next year, at least.

Although we see in Canada some mild improvement, I can tell

the minister, if he believes there is any improvement in the recession in

Newfoundland, he had better go out and hit the streets and check and see what is

happening out there. It is interesting - I just spoke to a bank manager about an

hour or so ago, I had a meeting with him on an issue and he said: 'I have to

tell you that all I am doing is putting out fires, trying to save companies from

going into bankruptcy.' He said: 'Every individual who comes in here, every

business person who comes in, is looking for some help to get them over a

difficulty. Very few are coming here to look for help to expand or to start a

new business.' That is a sad commentary, Mr. Speaker, on the state of the

economy in Newfoundland and Labrador today.

But the minister identified that, the economic indicator

showed clearly that we are facing another very difficult year; they show that

unemployment is going to increase by another 2 per cent this year to 20.4 per

cent. Now, that should be enough to start the lights flashing and the bells

ringing, to tell the minister that he, as the chief steward of the economy of

this Province -

MR. MATTHEWS: (Inaudible).

MR. WINDSOR: - frightening as that sounds, but as the

chief steward -

AN HON. MEMBER: I will leave on that note.

MR. WINDSOR: - of the economy of this Province - Yes. I

don't blame my colleague, the Opposition House Leader, for leaving. In view of

the response I got to questions to the Minister of Finance today, in view of

that response, to think that the hon. minister is the chief steward of the

provincial economy is, indeed, frightening. It is, indeed, frightening.

Mr. Speaker, the minister failed totally to respond to his

own comments. He said we are going to have a negative growth in the economy, we

are going to have an increase in unemployment, and then he said, we are going to

do nothing about it - in fact, just the opposite, we are going to make it worse

for private enterprise in this Province. We are going to increase a very

negative tax, the payroll tax, which is a tax on employment. It is a tax on

employment without any regard to profitability of a company. And it is

interesting: I took time this morning - well, I was going to get into it later

but I might do it now - I took time this morning to call a number of businesses

around the Province, various types of businesses, to see what the impact was

going to be on them, and I found only one that was going to pay less and that,

basically, was a company involved in real estate. They have high property value

but very low payroll. This company basically was renting real estate, basically

a landlord, so that company would have very high property value, on each piece

of which they would be paying school tax, and now, of course, the payroll tax is

based on 1 per cent of the payroll, on their very minimal payroll.

AN HON. MEMBER: (Inaudible) $10,000 would have a payroll

less than $100,000. They all have it.

MR. WINDSOR: There are those. Anything smaller than a

bull's-eye shop, Mr. Speaker, will now be exempt from the school tax, I admit

that. I don't disagree with that. That is quite clear.

MR. BAKER: Now, these weren't random calls, from my point

of view.

MR. WINDSOR: I chose the ones I wanted to call to try to

hit the various sectors. I don't need to call the corner store, which would have

to be a very small corner store, by the way, to have a payroll under $100,000

today. Today $100,000 is not a very large payroll. If you have three or four

full-time employees, which any corner store probably would have - if you are

operating, particularly on a twenty-four hour basis, you can be sure to have

more than that. Any corner store with three or four employees will now be into a

situation where they would be over that $100,000 threshold. Admittedly, the

amount is small, depending on the amount over $100,000, but there may well be

10,000 businesses in this Province that are not paying any payroll tax but they

would have a very, very small amount of payroll. They would be very, very small

businesses, almost one or two person operations, certainly, no more than that.

The government says 10,000 and I have no basis on which to refute that, there

may well be that, but there are many, many more which will now pay the payroll

tax, or will pay more payroll tax.

Well, let us look at some of the examples that I got this

morning. These are actual examples and figures that people gave me in

confidence. I won't use any names but I use them simply as an example. One

company, Mr. Speaker, had a payroll last year and this year of $500,000, not a

huge company, but in Newfoundland terms, a fairly large company. Last year,

because of the property the company has, they paid $3,000 in payroll tax and

also $3,000 in school tax, for a total of $6000. This year, the company will pay

$8,000, an additional $2,000 to that small company. What does $2,000 mean, Mr.

Speaker? It will not bankrupt the company, it will certainly not bankrupt the

company, but that is one summer job that will not be there this summer. That

will be the impact; that is one student in this Province who will not find work

this summer. And this is exactly what these business people are saying to me:

The increase in the payroll tax in this particular case may not bankrupt us but

it takes away the flexibility to hire that student next summer or to do

something we might have wanted to do.

Another company, a much larger company, with 400 employees

and a $7 million payroll - that is a fairly large company by Newfoundland

standards - paid $100,000 in payroll tax and $20,000 in school tax. This year,

it is going to pay $138,000.

AN HON. MEMBER: (Inaudible) more.

MR. WINDSOR: Quite a bit more - $18,000 more.

Again, $18,000 is not going to bankrupt a company that has a

payroll of $7 million and, no doubt, a total cash flow of probably $12 million

or $15 million in total. Eighteen thousand dollars won't bankrupt. I would not

want to stand here and try to pretend that they would. But $18,000, again,

represents six or eight summer jobs, or maybe, a permanent job or a couple of

part-time jobs, some permanent part-time positions; that is a 15 per cent

increase in the amount of tax that particular company is going to pay.

Another small company with a $400,000 payroll paid $1,500

last year in payroll tax and $2,300 in school tax. It will pay $6,000 this year

for an additional tax of $2,200. That, again, is a fair number of dollars to

that small company.

Here is an interesting one, Mr. Speaker. I called a fish

plant, a fish company, one of the medium size fish companies, not the smallest

ones; not Fishery Products International - their payroll must be tremendous.

There is a fish plant that has, on the average, 350 employees, a fair size fish

plant, very important to the community. We all know that there is hardly a fish

plant in this Province today - if there are any - that is not having problems.

This company had a payroll of $2.8 million. On that they are now going to pay

$28,000 that they never paid before; $28,000 to a relatively small fish plant.

That is a fair chunk of money. That is 1 per cent.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: It certainly can make a big difference to

that company. Certainly $28,000 can make a lot of jobs in a rural community, if

that $28,000 were available to hire summer students, or even permanent people.

So that is the kind of impact that this payroll tax increase, Mr. Speaker, is

going to have.

Now, the government stands up and says: All we are doing is

eliminating the school tax. Everybody agrees that we should eliminate the school

tax. I think you will find very few people that wanted to say: Oh no, you should

keep the school tax - other than those involved in school boards. And the

arguments that we have heard many times from them have been very legitimate

arguments, of the autonomy that that represented to them in being able to gain

their own revenue and to having a contribution from the local area to the

schools in the local area. All of these are legitimate arguments.

But the government took the position that we can eliminate

the administrative cost of that. We could equalize it more by using a more

progressive sort of system, which is the personal income tax. Unfortunately, we

hit the same people again. Every time we hit personal income tax, we find those

who are paying the school tax, those who do not have all the exemptions that

others have. It is always that very small - and this is what is frightening when

you examine budget documents and really start to think about who is paying the

cost, today, of government, who is really feeling the bite on that.

It is not the very wealthy, it is not the big corporations.

They have the ability to live within the restrictions that are placed on them by

these taxes. But it is the person who is actively employed, the small business

person, or the individual who is bringing home a salary and supporting a family,

who are not getting all of the exemptions that are available to people of lower

income, all of the special assistance available to them, it is the working class

that are supporting them. Fifty per cent of the people of this Province in the

work force are being supported by Social Assistance or Unemployment Insurance.

That leaves a fairly small number of us, Mr. Speaker, who are out there working

in the Private Sector trying to generate activity in the economy of this

Province - a very small number of us. Every time we do this we are putting an

additional burden on these people.

Let's take a teacher in rural Newfoundland, looking at the

government's own numbers - who is making $40,000. I think that would be a

reasonable salary for a teacher with eight or ten years experience in rural

Newfoundland. That person is probably paying $85 or $100. I am using the

government's chart, and on this one it is based on $85. Probably paying $85

school tax last year. Based on $40,000 this year a person will pay $255. So an

additional

$170, exactly triple what that person paid last year -

exactly tripled.

The government would try to say that personal income tax

increases, payroll tax increases on private enterprise simply make up for the

money that we have lost from the School Tax Authority, the extra $30 million

that we have to give School Tax Authorities this year. When you annualize those,

when you annualize increases in personal income tax realizing that these taxes -

in the case of the payroll tax take effect on July 1, in the case of personal

income tax I believe it takes effect on April 1. When you annualize over the

full year next year you will find that government, in fact, raises $45 million

from these two tax increases.

So we have replaced a $30 million school tax with a $45

million tax.

DR. KITCHEN: You are wrong.

MR. WINDSOR: The Minister of Finance says I am wrong.

Well I say to the Minister of Finance that his officials have told me something

wrong because this is the information that was given to me by his officials in

the (inaudible) and it is also in the Budget document. So the minister better

have a look at it again because the increase in personal income tax is going to

bring the minister $20 million this year and $30 million next year. The payroll

tax is going to bring the minister $10 million this year and $15 million next

year. Now that adds up to $45 million next year, Mr. Speaker. What this amounts

to is a tax grab to the tune of $15 million under the guise of eliminating the

school tax.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Under the guise of eliminating the school

tax plus, of course, the $4.5 million the minister says we will save from the

administrative cost of the School Tax Authorities. That is another $4 million or

$5 million that I would hope is still going into education. The question is, Mr.

Speaker, what will happen to the $15 million next year? Payroll tax is a health

and education tax, or it is supposed to be. That is what the minister calls it.

We are finally starting to call it the payroll tax. Now even in the Budget

documents they are finally starting to agree that it is not a health and

education tax, it is a payroll tax and we might as well stop playing games with

the name of the thing. Where has been the increase since this tax came in?

Forty-two million dollars was collected last year. I think it actually surpassed

that above their expectations. They predicted $42 million less the cost that

government has to pay back to itself.

The payroll tax last year actually brought in $45 million. As

I recall, the minister estimated $42.5 million and actually brought in $45

million. He is going to bring in $66.8 million this year. That is an additional

$12 million this year in payroll tax. Personal income tax is up by $50 million

this year from last year. That is $62 million additional this year, and it will

be more next year because personal income tax goes up by another 1.5 per cent

next year and the payroll tax will apply for the full year instead of

three-quarters of the year. So, you are going to see quite a bit more. Where did

this $45 million go? There hasn't been an increase of $45 million in the

education budget and the health budget since the payroll tax was imposed. The

minister nods his head, but I say to the minister, the only increases you have

seen are the normal growth that every other department of government sees.

AN HON. MEMBER: There will be no cutbacks.

MR. WINDSOR: No cutbacks, no. But the government says, we

are going to put in a special tax for health and education. In effect what it

has done, Mr. Speaker, is they have put into effect a tax of $45 million that

was $45 million less that they had to spend otherwise.

AN HON. MEMBER: We would have had to cut.

MR. WINDSOR: You would have had to cut? Somewhere else,

perhaps. Yes, you would have had to cut in other areas.

AN HON. MEMBER: In health and education.

MR. WINDSOR: You wouldn't cut in health and education

because you couldn't, because you have cut health and education as much as you

could. In fact, you have cut.

AN HON. MEMBER: Look at the figures.

MR. WINDSOR: Yes, I will look at the figures. The

figures, from Memorial University this year, gives an increase of $1.2 million.

When you take $600,000 out of that for payroll tax -

AN HON. MEMBER: Four hundred.

MR. WINDSOR: A little more than that. The balance of it

will go on increased workmens' compensation because they voted themselves an 8

per cent increase when inflation is 1.8 per cent. So they unilaterally said, we

need 8 per cent additional. Every employer in this Province got a letter from

them saying, 'The Board has just decided we are going to have an 8 per cent

increase this year.' Unemployment insurance premiums, the employers'

contribution, have gone up. You will find that Memorial University has very

little of that $1.2 million left, certainly far less than the impact inflation

will have on them.

So, in real terms, Memorial University this year has less

money to spend than they had last year, and that is going to mean increased

tuition fees or a cutback in services.

MR. BAKER: About the same.

MR. WINDSOR: Now, the President of Treasury Board says

about the same. How can $1.2 million, which is less than 1 per cent of the

university budget, be the same as 1.8 per cent inflation.

MR. BAKER: The university budget is $40 million.

MR. WINDSOR: It is $40 million?

MR. BAKER: That is (inaudible).

MR. WINDSOR: Yes. When you take off what they have to pay

back for payroll tax and the other increases I just mentioned, workers'

compensation and UIC, you will find that the university has less money to spend

this year.

MR. FLIGHT: (Inaudible).

MR. WINDSOR: At least that. It depends on how excited I

get, if I decide to get into some other nice little issues, some little district

things.

Mr. Speaker, to bring in these tax increases - and we are

talking about a decline in growth when it is painfully obvious to anybody who is

looking at what is taking place in this Province that private enterprise is

struggling. Companies are going bankrupt every day and many more are just

tethering on the brink. Then this government brings in additional taxation.

I recall when this government came into office a couple of

years ago, Mr. Speaker. The Premier was waxing eloquently, saying that we are

not going to put all of our apples on the big mega projects. We have to get out

there and develop rural Newfoundland. We have to get small business moving, and

tourism. Private enterprise has to be the stimulant. And we read the budget

document and what do we see, the big items? The Hibernia Projects investment in

the Province will cause it to grow by 4.6 per cent, and the Lower Churchill

Development, 15,000 person years. There is the great hope, Mr. Speaker, now for

development. This government now is starting to say, 'Oh, oh! We haven't done a

very good job of creating employment in the private sector. We haven't utilized

the private sector. We haven't leveraged them at all.'

They are saying now that they will have a strategic, economic

plan for the Province. Mr. Speaker, they are only three years late. What has

taken them three years to develop? They are admitting, first of all, that they

have not had a plan for the last three years, and that is painfully obvious.

There has not been an economic plan in place. This government has been flying by

the seat of its pants, drifting in the wind. Now they are saying that later on -

hopefully fairly soon, I would suspect whenever the House closes, or next fall -

we will see a three year economic strategy plan. They have $3 million poked in

the Budget there for that. What that is going to be used for I do not know - on

top of the $46 million that is in for Enterprise Newfoundland and Labrador - and

there are a few more million hidden away somewhere for the Economic Recover

Commission, who seem to have gone into hiding. Then there is another bunch of

money there somewhere for the Economic Advisory Committee, or the Committee on -

I do not know what they call it - Advisory Committee on the Economy, or

something of that nature. We have more committees and commissions, and we still

do not have an economic plan, and even if they do get an economic plan, there is

no money in the Budget to do anything with it. You have $3 million for

implementation. I assume, and maybe the minister will tell me, I assume that $3

million is for administrative purposes of some sort.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: No? That is for investment in industry? Well

we will be dancing in the streets. We have $3 million to invest in industry. I

doubt, Mr. Speaker, if industry will see five cents of it. I doubt if they will

see five cents of that $3 million - for what good $3 million will do.

This plan will offer a solid framework for focusing

development, and will provide a basis for action aimed at economic growth and

diversification. Now which one of the reports produced over the last twenty

years was that one dusted off and taken out of, I wonder? What a novel idea -

the economic diversification. What have governments been trying to do for the

last twenty years? Precisely that.

There is nothing innovative, nothing imaginative, in the

minister's Budget that will change what we have been seeing for the last three

years. There is no new program - nothing to cause private enterprise to say,

Aha! Now that gives me an opportunity to do something. I have been planning to

do it. I have been trying to poke away a few dollars; trying to make sure that I

can get access to a few dollars to do something, and now this new plan of

government gives me what I need to get me started.

I do not see it. Retail sales in the Province was down 3 per

cent last year. That should tell the minister that, as we told him in last

year's Budget, he was overly optimistic. Due to the recession, yes. We all knew

there was a recession coming. The minister put his head in the sand and tried to

hide away from a recession. We all knew there was going to be a national

recession - an international recession, perhaps - certainly a North American

recession. The minister tried to hide away from that, and he predicted what I

believe were unrealistic and unreasonable growth rates in retail sales tax last

year. We tried to tell him that. We tried to tell him that he was not being

honest with himself in the projections that he brought forward last year, and

there is the proof. He was off by 3 per cent - off by 3 per cent.

Well he has learned his lesson a little bit and he is saying,

it is going to go down by another 1.5 per cent this year, because retail sales

is a very good indicator of the state of the economy. So we will be down by

another 1.5 per cent in retail sales this year. That has to tell you two things.

It has to tell you that the average person out there does not have the

disposable income. Why doesn't he or she have the disposable income? Again it

gets back to that middle-class wage earner, because the middle-class wage earner

is the one that is spending money. That is the one that you have to get moving.

The lower wage earner does not have it and will not have it. The lower wage

earner may be on fixed income, support programs of one sort or another, and that

person has the basic necessities of life and very little else in this Province.

In some cases they do not even have that.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: That's right. The minister and I agree for

once. I have had more calls from constituents with social assistance problems,

with unemployment problems, and with housing problems. I have not yet had a

chance to dig into the meat of this Budget as it relates to housing because you

only get one number here, of $50 million or $60 million for Housing Corporation.

I have not yet had a chance to analyze the impact of that. But when I do I hope

that I can find that there is something in there. The Housing Corporation and

the federal government will have to work together, because the Province cannot

afford to put in place all of the social housing that is necessary.

But the greatest, the most crying need that we have out there

today, is in social housing. Housing for single parents particularly. It was a

problem that we identified six or seven years ago, that single parents housing

was the most critical need. I have several constituents who are literally going

to be out on the street in the next few days. Quite literally, will be out on

the street. The Department of Social Services will have to put them up in a

hotel or something. Women with one and two children with absolutely no means of

finding a place to live. It is a sad testimony.

But these people are basically on fixed income. They do not

have a lot of disposable income. So you are not going to cause them to start

spending more. So it is the middle income earner and the small business person

who we have to move. What have we done? We have increased personal income tax

which hits that middle wage earner hardest, because they are in that tax level

where they are going to have to pay, with less flexibility. So we have taken 4

per cent more from them on personal income tax. That has decreased their

spending power. You are taking it from their disposable income. If they had any

in the first place. But you have reduced that disposable income.

So that will further -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Yes. They will save their school tax but it

will cost them more on personal income tax. Anybody over $30,000 will pay more

personal income tax than they paid in school tax. I am talking about people with

salaries from $30,000 to $60,000. These are the people who provide the greatest

amount of taxes to support the social programs. This is the area that you are

talking about. These are the people who normally have some disposable income

that is discretionary, that they can choose to spend or they can choose not to

spend.

So when you increase the burden on them by increasing

personal income tax then you decrease the amount of disposable income that they

have available. It is these people that we have to get out there. These are the

people who are poking a few dollars in the bank today. The banks will tell you

that their bank deposits are higher than any time in their history. Because

people are not spending. Because people are scared to spend. Because people do

not know what next year or next month will bring. Public servants in this

Province, because of the minister's Budget last year, when he announced: there

are going to be great cuts in public service. Maybe there were 400, 500, 600, or

700 people actually cut, but there were tens of thousand who sat there waiting:

will I be cut? And if so, I'd better hang on to that disposable income that I

would normally spend for items that I can - well, if I have to, I can do

without.

The discretionary income, it stopped. So, what happened? They

put the money in the bank. So they have a couple of dollars in the bank now.

They did not spend the money, so the minister's retail sales tax went down.

Because this money was not being spent. The only way to move the economy now is

to cause those people to take the money out of their bank accounts and start

home owners to use registered retirement savings plan, similar to the old

registered home ownership savings plan of a number of year ago. The two sort of

that now. That is a good initiative.

But it allows people to take some of that money and move it

now. That will help stimulate the economy. It gives people a little bit of a tax

break and it gives them an opportunity to do something now that otherwise they

probably could not quite do. I would submit, Mr. Speaker, that there is a lot of

private money sitting in bank accounts across this Province, or in old socks

somewhere up in the closet, that could be moved -

AN HON. MEMBER: None in my house.

MR. WINDSOR: There is none in my house either. I have

holes in my socks if I even tried to put a dollar in them. There is a lot of

money lying around, Mr. Speaker, that could be moved.

AN HON. MEMBER: You have it in your back garden because I

saw it.

MR. WINDSOR: The only thing in my back garden is what the

dog dropped there over the winter and there is plenty of that. I have a

weekend's work in the back garden.

Mr. Speaker, there is a lot of money there, private money

from that middle level wage earner, and private enterprise money. Business

people are finding it tough but there are a lot of very good proposals that

people would like to move forward with but they are afraid to do it because

business has been down. I can assure you that business is generally flat in this

Province, in every sector, that is what is amazing, pretty well in every sector

of this Province. You expect to see certain sectors hit, you expect that certain

sectors might survive nicely, but pretty well in every sector of the Province,

even the grocery business. I have spoken to people in the grocery business and

people are buying groceries but they are buying hamburger meat instead of the

roast. In the small stores in rural Newfoundland, that are grocery stores as

well as general stores, people are buying their groceries but they are not

buying hardware anymore, the same volume of groceries, shifting a little bit to

lower value groceries, the less expensive items, but they are not buying the

hardware anymore, and the other items that these little stores depend on really

for a good chunk of their profits.

AN HON. MEMBER: They will not have to pay the payroll

tax.

MR. WINDSOR: They may not because their payrolls are now

going down. I know of one store in rural Newfoundland which has laid off four

people. They had twelve and they have cut back to eight.

AN HON. MEMBER: They were paying more school tax.

MR. WINDSOR: I doubt that because in rural Newfoundland

the building would not be evaluated that highly. It is a fairly substantial

building for a rural community. It is a fair size supermarket for a rural

community.

AN HON. MEMBER: (Inaudible)

MR. WINDSOR: That is right. Well, what they have done is

cut back a lot of the people from full-time to part-time,

whereas they were able

to absorb them and keep twelve people working knowing that part of the time they

were doing things that could probably be left. They were making sure things were

neat, tidy, and clean, and the shelves were well stacked but now the place is

not going to be kept as well, the shelves will not always be stacked as well.

There may be a carton of beans thrown there instead of the cans stacked up

nicely, so a lot of that discretionary sort of thing is down and productivity

unfortunately has to go up. There is nothing wrong with that. That is an issue I

want to address as well, this productivity. There is always some good that comes

from everything and in this case the recession also has a little bit of good in

it, it is forcing us to be a little more productive and efficient, and that is

good because many of our businesses are weak in that regard. We tend to get

lazy, we tend to let things slide when times are good but when times are tough

we have to tighten up, so we find that people are cutting back on staff, they

are reducing their hours, doing all kinds of things to lower their costs, and

there is good and bad in that. It is good from the business point of view and it

is bad for the individual who is losing his job or losing part of his job.

But there is money out there that could be moved, it is out

there but what we have is a lack of confidence in the economy, and I had hoped

and I had said many times publicly, hoping that the minister would hear, that

what we needed in the Budget was something to stimulate some confidence in the

economy of this Province, something to cause people who wanted to start a new

venture or to expand an existing venture, to believe that the time is right to

do it, because it is a self-fulfilling prophecy, that when somebody starts to

move and starts to do something, everybody benefits and when everybody benefits

many other businesses start to improve as well and they start to spend more, and

so, it is very much the domino effect that one business starting to do something

can improve the business of others, but there is money out there.

Mr. Speaker, let us have a look at the minister's document.

The minister says we have made substantial progress towards our priorities

without imposing an undue burden on future generations, our fiscal plan is

working. Our fiscal plan is working, he says. Now, how can the minister make

such a statement as to say our fiscal plan is working when what we are seeing is

a decline in all economic factors. Gross domestic product is down by a half per

cent this year, again last year; personal income is down by 1.9 per cent last

year and is going to go down by one-third of a per cent this year; disposable

income is down by 2.4 per cent last year and will go down another per cent this

year; retail sales were down 3 per cent last year and are going down another 1.5

per cent; investment is going down from 6.2 per cent to 4.6 per cent;

unemployment is going up by 2 per cent to 20.4 per cent and the consumer price

index, the only bright spot believe it or not, the consumer price index is

expected to increase by only 1.8 per cent, not an unreasonable level, if that in

fact is the case.

But all of the factors are negative, yet the minister says:

our fiscal plan is working. We have reduced the size of the public service, the

minister says; reduced the size of the public service, well, interesting there,

Mr. Speaker. I think we see that in real terms, as my colleague said during

Question Period, we have in the Budget document, 6,794 public service positions

this year, that is 325 less than was in the Budget last year, so we are losing

another 325 positions; perhaps some of them by attrition, perhaps all of them by

attrition, but we are going to see 100 teachers laid off; 100 people with School

Tax Authorities laid off or redistributed, and of course the minister announced

all the boards and agencies that will be eliminated, there must be some

positions with those, and so we have seen from 1990, 456 positions lost last

year and a further 325 directly on government payroll this year, Mr. Speaker.

The minister says: there is a reliance on debt declines,

relative debt service-cost decline freeing up more funds to spend within the

Province on health, education, economic development and other priorities. Mr.

Speaker, how can the minister say that? The whole growth in the Budget is less

than 3 per cent, the minister is proud of that and I guess we can hardly fault

the minister for trying to keep the growth in the overall Budget down to 3 per

cent. It is a noble objective but, as I said over the weekend, at what cost?

Interest payments have played a large

part in the decline of

the cost of debt servicing, and in giving the minister an opportunity to come as

close as he did to staying on his Budget target. The minister was very proud of

the fact that he was only $6 million or $8 million in total above the projected

deficit figure for last year. A few months ago he was in a panic situation. He

figured he was going to end up with a $95 million deficit, but then, interest

rates fell, coming to the rescue for him.

Mr. Speaker, there is a graph on page 6 of the minister's

Budget document from which I think he could learn a good lesson. It is the

borrowing, and the ability to borrow. You have heard me speak many times in this

House of the Five-Year Plan that we brought in in 1985. If you look at the graph

on page 6, you will see that from 1985-1989, there was a steady and continued

downward slope, carried over into 1990. In 1991 we jumped up again. In 1992 we

came down a little bit, and we are hoping to go down a little bit next year. But

that shows what a sound, economic plan can do - and the minister comes forward

with his strategic economic plan. I hope that it will also take account of the

factors that impact on the cost of borrowing in the Province.

There is another reference here on page 6 to which I want to

refer: 'Before removing all the barriers to the free flow of goods, services and

labour that exist in this country, we must ensure that there is a level playing

field...' I address this to the Minister of Development, Mr. Speaker, who made

some comments over the weekend that I want to congratulate him for, as it

relates to free trade of inter-provincial barriers on beer. The minister was

quoted in the paper, and I agree with him, and I support him on it, and I hope

he sticks to his guns on it, because the minute you remove the barriers, then

you can forget brewing beer in this Province.

This says: 'Before removing all the barriers to the free flow

of goods, services and labour that exist in this country, we must ensure that

there is a level playing field with respect to taxation, services and

infrastructure, so that the goal of increased national efficiency is not

achieved at the cost of increased regional economic disparity.' I couldn't agree

more than I agree with that particular paragraph in the minister's Budget. That

is a real danger here, in our haste to try to find constitutional accord,

although critically important to this country; but in our haste to do that, that

we be very careful about removing - not inter-provincial barriers. I don't like

to call them inter-provincial barriers. They are perhaps regional incentives,

something put in place to assist companies on a regional basis.

Beer is a prime example. If we remove that difference in

price, then we will, indeed, lose it very quickly. I also want to caution this

government on the minister's concept of returnable bottles in this Province.

That can be even more devastating to bottlers, be it soft drinks or beer in this

Province, than the payroll tax. The payroll tax is peanuts compared to what that

can do in the marketplace, and to the competitive position in the marketplace,

because the market will go down.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: We have an environmental problem. I couldn't

agree more.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Yes. But I don't think the solution is in

causing the bottling industries in this Province to spend millions of dollars to

convert, and that is what they would have to do, spend millions of dollars to

change their bottling line, change their transportation system, change their

trucks.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Yes. That will not work. If you travel the

countryside, you will find that, when you get back into the wilderness. I would

sooner take an aluminium can that I can throw in the fire and it will burn than

a bottle that I am expected to lug back empty. Because I probably - I will. But

a majority of people will not. I usually come back from the wilderness with a

bag of bottles and cans that somebody else left there.

MR. FUREY: (Inaudible) will people take the cans out of

the wilderness if they have a value?

MR. WINDSOR: Yes. The value on an aluminium can is not

going to be very much.

MR. FUREY: (Inaudible) the value is x, whatever x is. If

we make x worthwhile, won't people bring it back?

MR. WINDSOR: Bring it back? I am not concerned. That is

my point. If the deposit on a bottle is high enough, people might bring it back,

I am not sure. We are talking about a very small portion here. We are talking

about the numbers of people who go into the wilderness. But still, it is an

important aspect of - the bigger problem is around city streets and on the sides

of the highways. There's your big environmental problem. But the wilderness area

is an issue that we will just talk about for a moment. There, if you are going

out on a snowmobile or an all-terrain vehicle or in a canoe - all of which I do

- you are not going to lug back half-a-dozen empty bottles. You will, but you

have to be dedicated to the wilderness if you are going to do that.

But an aluminium can you can throw in your campfire and there

will be no sign of it when you are finished, if you have a campfire burning at

all. Or you can squat it up and poke it in your knapsack. The value of the can

is negligible. You won't, for the ten or twenty cents, even, carry something

back. I don't think it is incentive enough. If you are not the sort of

individual who cares enough about the wilderness to bring it back, anyway, you

are not going to do it for the sake of twenty cents. The cost of your trip is

far more than that, and the twenty cents is peanuts.

But the cost of converting existing bottling lines would be

literally millions in this Province. I know of great debates, great discussions

that I held with them myself, back in the early 1980s, when they were bringing

in new equipment. We gave them assurance at that time - I think we put a

five-year limit on it, realizing we cannot bind forever governments. I think we

said: For five years, this government will not introduce any legislation that

will cause you to go to a returnable bottle - on that basis. They made

tremendous investments then.

The cost, now, would be tremendous and, in fact, would

literally put some of them out of business.

MS. COWAN: The tighter the environmental legislation, the

better it is (inaudible).

MR. WINDSOR: See, that is spoken with blinkers on. There

is an hon. member who has one objective in mind and has no concept of the needs

of industry, or the realities of what is taking place out there. She obviously

has not paid any attention to what I just said. Thank God, the Minister of

Development has a far more open mind.

But that is frightening, Mr. Speaker, that that particular

member, who was the Minister of Environment - thankfully is no longer.

MS. COWAN: (Inaudible).

MR. WINDSOR: Very few members in this House are more

concerned about the environment than I am. I work with it, I've worked with it

for many years. I think that there is a tremendous amount of work that needs to

be done in this Province to protect the environment. Bottles and cans are part

of it, but we have far worse environmental problems. I say to the Minister of

Forestry, have a look at what is coming out of the paper mill in Grand Falls. If

you want to see an environmental problem, a few cans and bottles along the

Exploits river bank are far less than the problem you have from what is spewing

out of the back of Grand Falls paper mill. Or go to Corner Brook.

MR. FLIGHT: (Inaudible).

MR. WINDSOR: Not the heck of a lot. They have spent some

money to improve it and I have not inspected it since that - I don't know if

that new settling tank is finished or not. They were spending $7 million this

year, I think - $11 million, to improve Grand Falls, but they still were not

going to tackle the whole problem. They were going to do part of it.

Corner Brook - the same way. I spoke to people in Corner

Brook who are divers, who used to go diving in the Bay of Islands, who used to

pick up lobsters off the bottom not far from the paper mill. Now, they say, if

you want to find a lobster you have to go outside Frenchman's Cove. There is

nothing left. The pollution in Bay of Islands is incredible. The pollution in

the Bay of Islands is far worse than in St. John's harbour, because St. John's

flushes itself once a day, the tidal action and the actions of the fresh waters

that are going into the harbour in St. John's.

AN HON. MEMBER: It doesn't look like it down there.

MR. WINDSOR: It doesn't look like it, no. Amazingly

though - I say this in all honesty and with some knowledge -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Pardon? The paper mill. But the Bay of

Islands is such a long reach - it is a twenty-two or twenty-three mile reach

-that it only flushes itself once every seven days, in spite of the huge amount

of water coming down the Humber River.

MS. COWAN: Where is it going when it flushes itself?

AN HON. MEMBER: Out into the ocean.

MR. WINDSOR: Into the ocean.

MS. COWAN: Into the ocean!

MR. WINDSOR: Outside the harbour.

MS. COWAN: (Inaudible) environment (inaudible).

MR. WINDSOR: Did the Minister of Development ever hear of

a notion called 'dispersal'? Which is one of - the former Minister of

Environment.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Did I? I apologize to the Minister of

Development - the former Minister of Environment. Did she ever hear of a notion

called 'dispersal'?

MS. COWAN: She is the Minister of Environment, now.

MR. WINDSOR: I thought she was changed

MR. MATTHEWS: She should be changed.

MR. WINDSOR: Oh, God! Dear Lord, help us! The Minister of

Environment - gone from bad to worse, Mr. Speaker.

MR. MATTHEWS: (Inaudible) dispersal?

MR. WINDSOR: Dispersal, yes, which is the modern method

of actually treating municipal sewage in a reasonable manner and is now being

accepted by environmental agencies all across North America, I say to the

minister, which is a method of getting an outfall far enough out, with a

dispersal system, so that it actually can be dispersed, to minimize the impact

on the environment. Yes, it is there, and far better to remove your suspended

solids from that effluent than to put it out there. But it is at least far more

acceptable to disperse it, to get it out into tidal and current action, so that

the localized impact is less. That is what I am talking about in the Bay of

Islands. But the Bay of Islands, unfortunately, doesn't have as good a natural

dispersal as does the City of St. John's.

MS. COWAN: (Inaudible).

MR. WINDSOR: What did she say?

MR. MATTHEWS: (Inaudible) act big, or something. She

doesn't know what she is talking about, boy. She wonders where the harbour went

when the tide came up and went out (inaudible).

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Sorry?

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: The Harbour is bad. I am not saying that the

Harbour is good, but it is not as bad as most of us would believe, when you do

actual tests - and many years ago, I, in fact, actually did tests. I was working

with an engineering company, doing a survey on that. At that time, people just

could not believe that it wasn't as bad as they said it was. Now, there are all

kinds of sediment on the bottom which has settled over the years. There is

nothing living in the Harbour - not for very long. But it does flush itself,

basically, once a day. That is not to say there isn't a problem, but it is more

an aesthetic problem than an environmental problem. The actual water quality is

not as bad as we might think. It is not as bad as it looks, by looking on the

surface. If you could take some of the gross suspended solids out of it, then

you would tremendously improve the overall impact from an aesthetic point of

view.

AN HON. MEMBER: In terms of danger, it is not there.

MR. WINDSOR: In terms of danger it is not there. As the

hon. gentleman knows, I am involved in that, or was. To give you another good

example, there is North West River in Labrador. The council there is concerned

that they don't have any treatment of their municipal sewage. Now, the little

town of North West River is never going to pollute Lake Melville, which is 150

miles long and forty miles wide. It is just not going to happen. They put their

sewage out into the North West River, right under the bridge, where, as hon.

ministers who have been there know, there is quite a tremendous flow of water.

It is a natural aeration process, a natural sewage treatment system. But it is

the gross solids. Because that is also their best fishing area. The fishermen's

nets are just below.

whereas the Department of Environment officials will go up

and test - you will test the water and you won't find any coliform count; you

won't find any trace of pollution if you do a physical test on the water, but

the fisherman has to pick his net once a week. Again, it is just the gross

solids. What I am saying is that it is not a danger, but it is not very nice

when you see what you're taking your fish out of. These are the sorts of things

we have to deal with. I am way off my subject now. I got drawn into it there.

AN HON. MEMBER: What is the Gander situation?

MR. WINDSOR: The Gander situation now is greatly

improved, not totally improved.

AN HON. MEMBER: We spoke on that before. (Inaudible).

MR. WINDSOR: No, no! I didn't bring it up at all. The

minister asked me about Gander and said, 'What is the Gander situation?' Gander

has gone to great expense to put in place a new system which is now treating,

essentially, all of the sewage from the town of Gander.

AN HON. MEMBER: (Inaudible) water quality?

MR. WINDSOR: The water quality is tremendous improved,

not as much as it should be because the town has not yet put in place the

chemical system that was designed to aid the separators that were put in place.

The separators are working well, and the chemistry can work but it needs to be

set up properly. I say this without - the efforts have not been made to put the

chemical system in place to improve the settlement. That is a fact. But the

system can and does work very, very well. The Town of Gander has spent a lot of

money on that.

The Town of Gander, by the way, has the only sewage treatment

system anywhere in the world using that technology. It was developed right here

in Newfoundland, the only one in the world.

AN HON. MEMBER: It should be used all over the Province.

MR. WINDSOR: It should be used all over the Province. If

we could only get the Town of Gander to complete the system, to put the chemical

system in there. Because the minister's environmental officials say, 'Yes, well,

this is a good experiment, but you haven't proven it yet.' Because it doesn't

work all year, it works during peak flows, because we are only trying to take

out the gross solids. The influent almost meets environmental standards when you

take the gross solids, but at a low peak, when the sewage is more concentrated,

you have to have the chemistry to aid in the settlement, and the chemical system

has not been put in place to cause that to meet standards all year. So the

department's officials are saying, 'Well, you haven't proven this one yet. So,

until this one is proven, we won't talk to you about it anymore.' So it is a

Catch-22 situation for the company that I was involved with, and this is a

non-paid political -

MR. BAKER: How does it work?

MR. WINDSOR: The President of Treasury Board knows the

system well.

I spoke a moment ago about the system for Grand Falls.

Abitibi paid, I think, $11 million or $12 million to put that system in Grand

Falls. I was trying to sell them this technology at the same time. I could have

done, I believe, the same job, if not better, for $3 million or $4 million.

In the case of Gander, the town's consultants, separate

consultants, had designed a conventional sewage treatment system with aeration

and lagoons which was estimated to cost $5.5 million.

AN HON. MEMBER: (Inaudible) 10 million gallons a day.

MR. WINDSOR: Fourteen million gallons a day at peak, yes.

It wouldn't work, and that type of system will not work because at a low flow,

it is underloaded, so it will not set up the septic action that is necessary,

and at high flows it is overloaded. So those types of systems will not handle a

broad range of flow. That is why the system that was put in place was effective,

in this particular case, because it can handle a broad range of flow, and it

cost 40 per cent of the estimated cost of the conventional system.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: We have done it. I have a model. Believe it

or not, I spent four days of my honeymoon in the bowels of the paper mill in

Corner Brook trying to prove to Kruger that we could take out 65 per cent of the

wood fibre. They are dumping eighteen tons of wood fibre a day into the harbour

in Corner Brook. I told them that I could take out 65 per cent without any

chemicals.

Mr. Speaker, this is well away from the Budget.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: The hon. minister is familiar with it. The

hon. minister officiated at the opening of the plant in Gander and was very kind

in his comments. In fact, when he was on the council, Deputy Mayor of Gander, I

believe, he was one of the chief persons who supported the concept and who had

the confidence in the technology to try it. The whole town council of Gander at

that time are to be congratulated, because it is new technology. As I said, we

took a piece of technology that was developed in Britain for storm sewage

treatment, for heavier solids, and we refined it and fine-tuned it to take out

the finer suspended solids that you get in municipal sewage. The Town of Gander

had the foresight and the courage to try it and I don't think they have been let

down. I think they are generally pleased with the system that was put in place.

Mr. Speaker, I feel very much that I am in conflict when I

talk about this sort of thing here, but I am doing so in response to questions.

MS. COWAN: I would like to ask a few questions.

MR. WINDSOR: Well, I would be pleased to give the

minister any information that she wants. If she is in Gander she could have a

look at it. I have photographs that I would be happy to sit down and show her,

and I have some videos that explain the technology. Her staff are very familiar

with it. Ken Dominie knows that system as well as I do.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Shortage of money for -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Yes.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: The Town of Gander can do it. It is there

and it should have been done. The thing just has not been completed. The money

was in place and the system was there. We had nothing to do with that chemical

system, and I am trying not to be unkind to other consultants, but other

consultants were responsible for that; there was a contractor who was

responsible for that; there were people who advised on the chemistry who were

responsible for it. Between them all, it has not been put in place properly to

work. We tried it for a little while about three or four months ago. It didn't

do much.

I say to the Minister of Environment and Lands that I would

be very pleased to give her any information. There is a broad range of uses for

this any time you have a suspended solid in a liquid that can be settled. I am

talking to mining industries about cleaning up their tailings operations. I am

talkin