March 27,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLI No.

The House met at 2:00 p.m.

MR. SPEAKER: Order, please!

Oral Questions

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

MS. VERGE: Thank you, Mr. Speaker.

I direct my question to the President of Treasury Board in

the absence of the Premier. Last September the Government began a program of

massive cuts to health and education, and in the Budget on March 7 announced

unprecedented and devastating closures of hospitals and reductions of education

programs. Last evening many of us were surprised to see the Minister of

Development on television saying that now the Wells Administration is going to

turn its sights to Crown Corporations such as the Economic Recovery Commission

and Enterprise Newfoundland and Labrador and cut Crown fat there. How can the

President of Treasury Board justify the Government cutting vital health and

education programs and services while allowing the Economic Recovery Commission

and Enterprise Newfoundland and Labrador to get fat? Does this not indicate a

reversal of priorities?

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

MR. BAKER: I thank the hon. Member for the question.

Obviously we have an obligation to the people of the Province to ensure that not

only direct Government services, but also indirect Government services and the

Crown Corporations are operated in a manner as efficiently and effectively as

possible. That is precisely what we are doing, Mr. Speaker. We are going to make

sure that the whole of Government, including the Crown Corporations, are

operating in as efficient a manner as possible.

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

MS. VERGE: Mr. Speaker, I would like the Minister to

explain why the Government began cutting and gutting health and education before

even looking at possibilities of inefficiencies in Crown Corporations. Why have

they allowed Doug House, under the Premier's direction, to build an empire while

they cut education and health?

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

MR. BAKER: Mr. Speaker, in answering a question like that

I would have to first of all go back to the original premises mentioned by the

hon. Member. First of all we did not start to gut anything. We did not start to

destroy anything. We are spending the money the people gave us in the best way

possible, to ensure that we provide the best services possible to the people of

this Province in the best possible manner. That is precisely what we are doing,

and I will repeat to the hon. Member, we are also ensuring that the agencies

close to Government, the Crown corporations, are also operating in a manner that

is as efficient as possible and in a manner that will save the taxpayers of this

Province as much money as possible. I believe we owe it to the people of the

Province.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Mr. Speaker, my question is to the Minister of

Education. One of the most severe cuts in the 1991 Budget was the reduction of

$1.5 million in operating grants for community colleges and institutes - now, I

said a reduction of $1.5 million -can the Minister tell the House what effect a

Budget cut will have on staffing and programs in the community colleges and

institutes?

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

DR. WARREN: Mr. Speaker, the budgets for colleges and

institutes were frozen this year and that has created a number of problems for

these institutions, as it has created problems for other Government Departments

and other agencies. We discussed with the Boards of Governors certain guidelines

that they would follow in making their reductions - they are in the process of

doing that - some of them have announced their decisions and I have been briefed

on some of them.

I do not know the precise number of layoffs but I can assure

the hon. Member that before programs were cut in any of the colleges they looked

at the headquarter staff, they looked at the management of the colleges, they

looked at administrative staffing, they looked at duplication in programs, they

looked at low enrollment programs where courses were not filled; they looked at

all these things before they cut programs, Mr. Speaker, to minimize the impact

on students; very shortly I will have a full report on what all the colleges

have done.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker. I ask the Minister:

have the colleges already been told about next year's programs, that is

1992/1993 I am talking about now, on the assumption their operating budget will

be frozen at 1991/1992 levels, which, I add again is $1.5 million less than they

had last year.

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

DR. WARREN: No, Mr. Speaker, they have not been told to

budget for 1992/1993, however, I would suggest to them that they be very

cautious about any planned expenditures for that year, this is a difficult year,

we are dealing with the Budget year this year, but we have not told them they

will not have any additional funding for the next fiscal year, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Mr. Speaker, the Minister should be very, very

careful in answering the question. I did not ask that 'he' tell them, I asked

were 'they' told? I ask the Minister then: has the Minister or his officials

discussed with college officials the closure of several community college

campuses this year and next year? Will he confirm that colleges selected for

closure are located at Bonavista, Bell Island, Port aux Basques, St. Anthony,

Lewisporte, Baie Verte and Springdale?

SOME HON. MEMBERS: (Inaudible).

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

DR. WARREN: Mr. Speaker, I must tell the House that

during the past year we looked at every possible option. Because of the

underutilization of some campuses they have very few full-time students - they

have a large part-time population, but very few full-time students. I can

provide the numbers involved for the hon. Member. I think there are six campuses

with a total number of 420 full-time students this year, and they cost $5

million. So in the process of looking at all the options we did examine the

possibility of closing campuses. But, Mr. Speaker, I am delighted to tell this

House that not one campus in the post-secondary system will be closed this year.

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

MR. WINDSOR: Thank you, Mr. Speaker. The question is, Mr.

Minister, which ones are closing next year? He did not answer that question.

Mr. Speaker, yesterday I asked the President of Treasury

Board some questions. Specifically I asked him to advise the House what the

current budgetary projections were for 1992-93 and he responded that if

Government had not acted to curb its $200 million deficit -I have already

explained to the House in an earlier debate that that is a fictitious figure,

from the imaginations of the Government opposite, and has no bearing on fact.

But they predicted that they would have a $200 million deficit if they had not

taken some action this year, and that it would reach $400 million next year and

$600 million the following year if action was not taken this year.

Mr. Speaker, the House knows that the major deficit reduction

measures taken this year was freezing public sector wages and eliminating about

3,500 public sector jobs. Now the Minister of Finance confirmed on Monday that

unless action is taken very quickly he will not realize all the savings, and we

are now seeing, in fact, that it probably will take five months to institute the

kinds of savings they had projected, and they probably will not meet their

target of $100 million.

Mr. Speaker, thank you for your tolerance. My question to the

Minister of Finance: will the Minister confirm that the projected savings from

these measures was $100 million and based on the estimate given by the President

of Treasury Board yesterday, that means, therefore, that we are now still facing

a $300 million deficit for next year?

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

DR. KITCHEN: No, Mr. Speaker.

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

MR. WINDSOR: The Minister of Finance is a wealth of

knowledge, Mr. Speaker.

Mr. Speaker, if the answer is no, if the Minister is saying

no we are not looking at a $300 million deficit, what further measures is the

Minister proposing for next year in order to escape from being faced with a $300

million deficit?

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

DR. KITCHEN: At this point, Mr. Speaker, none.

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

MR. WINDSOR: Let me be a little more direct, Mr. Speaker.

Is the Government now considering freezing 1992-1993 expenditures at 1991-1992

levels? And have Government Departments and agencies, in fact, already been

warned to expect such a freeze?

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

DR. KITCHEN: Thank you, Mr. Speaker. The answer is no.

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

MR. WINDSOR: Mr. Speaker, by way of a

preamble, a very

brief

preamble, I say to the Minister of Finance that he is not bound to answer

questions, but he will answer to the people if he does not answer to the House.

Mr. Speaker, does Government plan, therefore, to extend the

wage rollback proposed by Bill 16 to the 1992-1993 fiscal year in order to

reduce this deficit? Or will Government seek to reopen collective agreements to

negotiate elimination of wage increases for 1992-1993? Will he bring in more

legislation next year, or will he try to renegotiate rollbacks?

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

DR. KITCHEN: Mr. Speaker, the answer is no, no, no, no -

four questions.

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

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

MR. WINDSOR: We got more information from you when you

were out of town.

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

President of Treasury Board. In 1989, when this Government took over,

Newfoundland Information Services was under the Minister of Works, Services, and

Transportation and it spent about $168,000, about the same as it spent in 1988.

Mr. Speaker, in 1990 the agency was moved to Executive Council, under the

Premier's control, and its budget doubled to $335,500. But it actually spent

triple that, $513,000. Mr. Speaker, why did the agency spend so much money in

1990? Specifically, why did the salaries increase from $101,500 in 1989 to

$314,900 in 1990? And why did transportation and communications increase from

$1,800 in 1989 to $79,800 in 1990?

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

MR. BAKER: Thank you, Mr. Speaker, I thank the hon.

Member for his question. The answer is obvious. During the years previous to our

coming to office, NIS was used by Members opposite as their own private

publicity agency. And they had on staff in the various Departments - I do not

know - thirty, forty or fifty press secretaries who were being paid salaries to

go around and promote their political interests and so on, at a cost of millions

of dollars.

We have consolidated all functions. NIS is now truly an

information service that gives out Government, not political, information, and

we have attached to NIS information officers, I believe they are called, who

provide information and keep up to date on specific Government programmes - not

political programmes, Government programmes - and provide information to the

Province concerning Government programmes.

Mr. Speaker, we have saved millions of dollars by this move

and we have provided a better service for the people of the Province.

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

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

No wonder our Budget is so out of whack, Mr. Speaker. I think

there were twelve or thirteen press secretaries, not fifty or sixty as the hon.

Member said.

Mr. Speaker, why will the agencies' budget increase in 1991,

a year of massive cutbacks in critical Government services and, in particular,

why will salaries increase by 24 per cent over 1990, and why will transportation

and communications increase by 11 per cent over 1990 to $86,500?

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

MR. BAKER: Mr. Speaker, he is not correct with the

numbers he gives. As a matter of fact, in some departments we found as many as

five, six and seven people whose responsibility it was to look out for the

Ministers, essentially. So, Mr. Speaker, the numbers he gives are not correct.

It may not have been forty, I may have been exaggerating, it might have been

twenty-five or thirty, but certainly it was not as few as ten or twelve. As a

matter of fact, I would undertake to research the fact and table in this House

at the earliest opportunity exactly how many and where they were, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: If you want truth you will get truth.

Now, Mr. Speaker, as to the question: it has taken us some

time to reorganize this multimillion dollar effort the Members opposite had in

place. And the reflection this year is simply the annualization of the cost for

last year. There are no new costs, no increases or anything, the annualization,

as we set up this new system to provide the people of the Province with

Government, not political information.

SOME HON. MEMBERS: Hear, hear!

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

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

Mr. Speaker, if the Newfoundland Information Service got

along with approximately $170,000 when this Government came to office, why can

it not get along with that amount now? Mr. Speaker, is it not true that the

$400,000 increase to Newfoundland Information Services over the past two years

would be enough money to keep the hospital services in Placentia?

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

MR. BAKER: Mr. Speaker, I know the hon. Member had his

questions all prepared ahead of time so the answers I gave to his first two

questions did not matter, he still had to read out what he had prepared

previously. Mr. Speaker, the answer has been adequately explained.

MR. SPEAKER: The hon. the Member for Kilbride on a final

supplementary.

MR. R. AYLWARD: Mr. Speaker, I have questions filled out

for the next two months, if the hon. Member is interested, questions and

information, some of which is from his staff. Is the Government more concerned

about it's public relations image than it is about the health care of this

Province? And, is it not its priority to hire on the spin doctors and lay off

our medical doctors.

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

MR. BAKER: Thank you, Mr. Speaker. Obviously another good

line that somebody slaved all last night on and he had to get up and use it,

regardless of whether it meant anything. In this Province we are spending close

to $900 million on the health care system. We have increased expenditures

tremendously every year and for the past two years, and this year, even in an

era of restraint, we are still increasing the expenditures over 3 per cent, I

believe, in the hospital sector. Mr. Speaker, we are increasing expenditures in

health and we are providing, within the limits of the funding we have, the best

possible health care system we can provide. Mr. Speaker, I would remind Members

of this hon. House that the Minister of Health has explained a number of times,

that if somehow we don't plan well in the health care sector we may very well

lose the system we have ten years down the road, because of the reduction in

monies coming from the Federal Government that is earmarked for health care. Mr.

Speaker, this is a well thought out plan that will result in a better health

care system, and a more efficient health care system in this Province.

MR. SPEAKER: The hon. the Member for Grand Bank.

MR. MATTHEWS: Thank you, Mr. Speaker.

I have a question for the Minister of Municipal and

Provincial Affairs. It is more of a district question, which I am sure applies

to many Members of the Legislature and municipalities around the Province. I

have two communities in the district, namely Garnish and Point May, that have

partially installed water and sewer systems. In Garnish $2.2 million has already

been spent and in Point May $1.1 million. Now, the new municipal grants system

impacts negatively on both of these communities. I am wondering what plans the

Minister has for those communities so that they will be able to finish those

much needed water and sewer systems?

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

Provincial Affairs.

MR. GULLAGE: Mr. Speaker, without knowing the details on

those two communities off the top of my head, because I obviously do not have

the information on water and sewer applications in front of me, each community

has applied, as the House knows, for water and sewer phases as well as roads

work for this upcoming calendar year. We are now in the process of examining

those phases as they have been recommended in priority order by the regional

offices. I have said in the House already that this year we have added a

component to the selection process, and to the criteria, to address fiscal

capacity. Now, I assume the Member is making the point that these two

communities are in such a problem financially that they would have difficulty

affording water and sewer, and if that is the case, that could very well be

reflected in the application process and in the decision making process, and

ultimately would be in their favour in terms of their ranking. I cannot tell you

specifically on those two communities right now because we are in the process of

examining in detail, and those two communities will be examined as all others

will be.

MR. SPEAKER: The hon. the Member for Grand Bank on a

supplementary.

MR. MATTHEWS: Since both communities are willing to incur

additional tax increases, but because of the population size and their tax base,

even with huge tax increases the amount of additional revenue would be minimal

to put towards paying off the water and sewer debt. They do have very high

environmental and health problems, there is no doubt about that, and the worst

areas of the communities would be the last to get the system because of where

the water supply was located. Really what I am asking the Minister is, will he

guarantee that, with those factors taken into account - they are willing to

increase taxes and there are very high health and environmental considerations

here with septic tank systems and wells that they get their drinking water from

- can he guarantee that those systems in communities such as this will be

completed?

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

Provincial Affairs.

MR. GULLAGE: Mr. Speaker, obviously I can't guarantee

that those systems will be completed. In the selection criteria though, work

that is already in process does get slightly more favourable consideration than

work that has not commenced. So that would be in their favour.

But I will say, getting back to the fiscal capacity question

once again, that the property, business, industrial and poll taxes and all the

revenues gathered by a community is just one component of deciding whether or

not they have reached the limit of their fiscal capacity. The other important

component is the amount of water and sewer debt that they have existing on the

books of the financing corporation right now. If they have reached the limit of

the capacity that they can sustain in that community, given the revenue that you

speak of that is available to them, then that will be an important factor in

their favour as well, the fact that they have already a large amount of water

and sewer and roads debt on the books.

So obviously if that is the case, that will work in their

favour and would probably see the Province paying a greater proportion of the

water and sewer debt as would otherwise be the case if they had very little

water and sewer debt on their books and had room in their revenues to raise

taxes.

MR. SPEAKER: The hon. the Member for Grand Bank.

MR. MATTHEWS: Thank you, Mr. Speaker. A final

supplementary to the Minister, I am just wondering: since both those communities

and many others in the Province like them began these systems under a different

arrangement of something like 80-20, where they only had to pay, I think it was

20 per cent of fixed revenues, will the Minister give special consideration to

those communities who took on those projects and this programme on a different

set of financial guidelines and debt repayment? Will he give special

consideration to communities who have partially installed systems, who began the

systems under a different financial arrangement?

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

Provincial Affairs.

MR. GULLAGE: A good question, Mr. Speaker, and I think it

relates back to the answer I gave to the previous question, in that, he is quite

right, twenty per cent of fixed revenues was the maximum amount expected under

the previous programme. So when a community reached that amount in contribution

towards their debt that was all that was expected of them.

Now to address that, in this current year we have asked

communities to pay an additional amount towards the existing debt, not a large

amount, but we have asked more of the communities than was expected in the past.

We have eliminated the 20 per cent of fixed revenues requirement to make it

fairer, because that was not fair. We saw communities getting water and sewer

systems literally for nothing, and others paying more than their fair share. So

I think we have a much fairer system.

But to answer your question more specifically: as I said, the

amount of debt that is on the books and the capacity that the community has to

pay that debt, then the next consideration will be applications for new debt and

whether or not a community can afford to take that on and pay it from their own

resources. The split then between the Province contributing and the municipality

paying will be decided, whether that be 80-20 or 90-10 or 70-30 or 60-40 or

whatever. But clearly, communities with a large amount of debt on the books and

at the limit of their fiscal capacity in terms of raising revenue will be given

special consideration in the capital works.

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

MR. HEWLETT: Thank you, Mr. Speaker.

Mr. Speaker, this morning I went back through my bills and

dug out my electrical bill for April of 1989, when this Government came to

power, and compared it with my last bill, February past, recently. The Minister

of Finance, when he was last in opposition, indicated he would like to see a

freeze on power rates. My calculations this morning indicate there was a 25 per

cent raise in electrical rates since he became Minister of Finance. What does he

think of those numbers?

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

DR. KITCHEN: Mr. Speaker, we have to be very careful

about the price of electricity. One of the questions we are examining is

broadening the base of the retail sales tax so that we can lower the rate. One

of the items we would have to consider if we did that would be whether we were

to tax electricity bills, and it is one of the reasons why we have decided not

as yet to broaden the base.

MR. HEWLETT: A supplementary Mr. Speaker?

MR. SPEAKER: The hon. the Member for Green Bay, on a

supplementary.

MR. HEWLETT: A different question, I should say. Now that

the price of gasoline is on the way down, will the Minister agree to revert to

an ad valorem tax system ?

AN HON. MEMBER: (Inaudible).

MR. HEWLETT: Now that the price of gasoline is on the way

down, will the Minister revert to an ad valorem tax system to give consumers a

break?

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

DR. KITCHEN: No, Mr. Speaker. The fact that the price of

gasoline is going down means that the consumers are getting a break.

AN HON. MEMBER: Not from you, they are not. Not from you.

You give yourself a break but not (inaudible).

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

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

Minister of Energy. The Minister of Energy will know from the March 22

statistics released by the Newfoundland Statistics Agency that the consumer

price index energy component has increased for Newfoundland from February of

last year to February of this year by 21 per cent, while the Canadian increase

month over month from last year increased by 10.9 per cent. Can the Minister of

Energy tell the House why it is the increase in the cost of energy in

Newfoundland is double that of the Canadian average?

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

DR. GIBBONS: Thank you, Mr. Speaker. Last year, Mr.

Speaker, there were a number of things that happened in the electrical area.

Number one, we continued the phase-out of the PDD subsidy,

and also there were, as a result of that, some rate hearings. There was an

increase - and I do not remember the exact number - for Hydro that was about 4

per cent; there was a change to the rate stabilization fund last year because of

variations in the price of fuel that was been burned at Holyrood and other

factors. That, I think, is also in the area of 4 per cent; Last February,

Newfoundland Light and Power received an increase, again in the area of about 4

per cent, and on January 1 the GST, 7 per cent, applied to electricity and all

these things together over the last year is what totalled up that number.

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

supplementary.

MR. HARRIS: A supplementary, Mr. Speaker. The GST, of

course, is not just a Newfoundland issu. In view of the substantial increase for

Newfoundland in the past year, can the Minister of Finance now confirm that the

Government will not tack another 10 or 12 per cent retail sales tax on to this

very high energy cost that Newfoundlanders now pay?

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

DR. KITCHEN: Thank you, Mr. Speaker. As we announced in

the Budget document, the Department of Finance and Government generally is

studying the whole question of base broadening on the retail sales tax. What we

are studying is whether we can in effect lower this terrible rate of 12 percent

down, and the only way we can do that and without getting extra money is to

broaden the base. We are not interested in gaining extra money by this exercise.

What we are interested in doing is making the tax system fairer - fairer - so

that things which are not taxed at the moment - now, you see, people are

diverted from things they want to buy to things they may not quite want to buy

because there is no tax on them. So we are studying the whole question of

whether we can in effect lower the rate by broadening the base.

We are looking at the question of the school tax as well in

that context. But one of the problems, as I indicated to the Member for Green

Bay, has to do with the largest item, the largest commodity item that is not

presently taxed and that is home heat and electricity. And it is clearly a

difficult question. It is difficult to tax that on the backs of people who are

already paying high rates. So we have not decided not to do it, and we probably

will not, but we certainly have to bring in some sort of a tax credit. We are

asking for public input from people to get their views on these matters, because

there are people who would very much like us to lower the rate of the retail

sales tax.

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

MR. HARRIS: A final supplementary, Mr. Speaker. Is the

Minister seriously suggesting that people are heating their homes because there

is no tax on gasoline and foregoing other purchases? Why will he not confirm now

to the House and tell the people of Newfoundland that they do not have to worry,

that their home heating fuel and electricity to heat their houses is not going

to be taxed by this Government? Tell them now.

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

DR. KITCHEN: Mr. Speaker, if we listened to the hon.

Member we would have no taxes and we would be spending many more dollars than we

are on everything. This Pollyanna, pie-in-the-sky attitude of that particular

party is getting them into great trouble all over the country. When the Province

of Ontario this coming year will probably have to bring in a Budget with a $10

billion or $15 billion deficit, we have to take no lessons in economics from

these people across the floor.

MR. SPEAKER: Question Period has expired.

MR. BAKER: A point of order, Mr. Speaker.

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

MR. BAKER: I wonder if we could, for one item, revert to

Statements by Ministers. There is a statement which should be made today, yet

was not quite ready when Statements by Ministers was called by Your Honour. I

wonder if we could, by agreement, revert back?

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

MS. VERGE: Mr. Speaker, yes, we agree. The Minister of

Justice consulted me earlier and showed me a proposed statement that he would

not be able to make until later this afternoon, and we in the official

Opposition would be glad to give leave for him to make the statement later this

afternoon.

MR. SPEAKER: Is the statement now?

AN HON. MEMBER: Yes.

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

MR. DICKS: Thank you, Mr. Speaker. I want to thank my

hon. colleague from Humber East for her agreeing to do this. There was a

difficulty with making it earlier, and we just had to finalize the statement.

Mr. Speaker, the statement reads as follows:

I am rising to inform the House that following discussions

with Chief Edward J. Coady of the Royal Newfoundland Constabulary, the

Department of Justice has requested the Ontario Provincial Police to assume

responsibility for the investigation of the incident at the Brittany Inn which

occurred on March 17th, 1991.

Significant public concern has been expressed about the

propriety of a police force being called upon to investigate itself. While this

cannot be done in each and every case because of the urgency of immediately

proceeding to obtain evidence, in this case it is appropriate to do so. The

public has a right to the assurance that justice will not only be done but will

be seen to be done. Because of the high degree of public anxiety in the matter,

we have felt it necessary to take this unusual step. It is a measure which is

sometimes utilized in other jurisdictions in similar circumstance.

I wish to emphasize that the Department has every confidence

in the ability and integrity of the Royal Newfoundland Constabulary to

investigate its own members. However, because of the unusual nature of this

incident, it is in the best interests of both the force and the public that an

independent review be made of the file and that any public concerns be allayed.

Thank you, Mr. Speaker.

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

MR. WINDSOR: Mr. Speaker, first of all I thank the

Minister for giving me an advance copy of his statement, and for also, over the

past several days, keeping me informed on a confidential basis of procedures in

this particular case; it is a very sensitive case and a very important case.

Mr. Speaker, I welcome this announcement that the Minister

has taken some action. As he has said quite properly, not only does the public

have the right to know that the matter has been thoroughly investigated, but it

should also appear to be a very clear, open and clean investigation. Without

casting any aspersions on the Royal Newfoundland Constabulary, I think it is

appropriate, indeed, that some other agency - in this case, the Minister has

chosen the Ontario Provincial Police. I would say only that it is unfortunate

the Ombudsman is not still here. The Ombudsman could well have been called in in

this particular case to do this investigation.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: The Ombudsman had the legal and legislative

authority to do this, and on the request of the Minister could have been called

in. I do not know what the cost of bringing in the Ontario Police will be. We

saved only $200,000 by eliminating the total Ombudsman's office, Mr. Speaker, so

we obviously have not saved any tremendous amount. I also want to say that this

obviously is an investigation only into the actions of the police officers

involved in this case. There still remains the question of the incident itself

and the death of the gentleman. I would assume that this will in no way slow the

Minister down from appointing a full judicial enquiry to seek information, to

look at the whole aspect of what took place that night at the Brittany Inn, and

I would hope that the Minister would move forward with that with haste.

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

Extern, on a point of order?

As the Member for St. John's East, Mr. Speaker, I would ask

leave of the House to respond to the Minister's statement on this matter.

SOME HON. MEMBERS: Agreed! Agreed!

MR. SPEAKER: Agreed.

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

MR. HARRIS: I understand I have leave, Mr. Speaker. I

would like to thank the Minister of Justice for providing me with a copy of his

Statement before the House, and I want to say this about the Statement and the

actions of the Minister of Justice, and, indeed, the Government on this matter.

I want to congratulate the Minister of Justice for his prompt action in taking

this measure. It does, I think, respond genuinely to the concerns of the public.

The activities of the Royal Newfoundland Constabulary, indeed the police forces

of this Province, ought to be seen by the public to have confidence in the

actions of the police force. And this action can only re-enforce that confidence

by the public. As I say, I congratulate the Government for acting promptly. It

is in full keeping with their stated intentions of creating a Police Commission

to provide a permanent and ongoing method of investigating matters that are

brought to the attention of the police by members of the public, or, indeed, by

Government itself when police action is involved, and I congratulate them for

it. I hope, as well, they will move equally promptly to resolve the difficulties

in terms of alternatives they are considering, and establish the Police

Commission in the near future.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Before proceeding to other business, on

behalf of hon. Members I would like to welcome to the House of Assembly today

nineteen Level III students from Point Leamington School, Point Leamington,

accompanied by their two teachers, Miss Martin and Miss Andrews, and their bus

driver Mr. Burton.

SOME HON. MEMBERS: Hear, hear!

Presenting Reports by

Standing and Special Committees

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

Labour Relations.

MS. COWAN: Thank you, Mr. Speaker. I have today, as

required by the legislation, the Report of the Labour Relations Board for the

period of January 1, 1990 to December 31, 1990. I would like to have that

tabled.

Petitions

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

MS. VERGE: Thank you, Mr. Speaker. I wish to present a

petition of representatives of municipalities in the Humber Valley region, in

four electoral Districts: Bay of Islands, Humber West, Humber East, and Humber

Valley. These mayors and councillors signed the petition at a meeting of the

Great Humber Joint Council on Saturday passed. The prayer of the petition is as

follows: `The petition of the undersigned, the friends of Mun Extension, states

that

whereas Mun Extension has provided and continues to provide an essential

service to the people of Newfoundland and Labrador; and

whereas no other agency

is capable of providing that service, Mun Extension should be re-instated.

Your petitioners respectfully request that the hon. House

take such action as may be necessary to ensure that Memorial University

re-instates its Extension Service, and that it be funded and equipped to provide

these services it has traditionally provided.'

Mr. Speaker, one of the Deer Lake councillors, Daryl Kelly,

circulated this petition at the Great Humber Joint Council meeting. Councillor

Kelly spoke to the group about the valuable contribution the Memorial Extension

field worker at Deer Lake has made to the development of the Deer Lake and

Humber Valley region. The Mun Extension field worker based in Deer Lake over the

years has helped in the development of the Humber Valley Development

Association. That Development Association is based in Deer Lake but encompasses

the District I represent, Humber East, which takes in lower Humber Valley, and

one project I know from my own personal involvement the field worker has been

quite helpful with, is the Strawberry Festival, one of the main projects of the

Humber Valley Development Association.

The field worker has also worked cooperatively with the

Pasadena Venture Centre on their Entrepreneurial Spirit Programme. The programme

has included the television broadcast, the satellite broadcast that has covered

most of North America on one occasion, and on the second occasion has linked

with the UK. These community leaders in the Humber Valley region are reflecting

the views of the people who live in the communities in that part of the

Province. These people valued the contribution of Memorial Extension and they

can't see how that role is going to be duplicated in any other agency. We have

in the region the Grenfell College campus of Memorial University, and their

three Extension employees worked and offered a variety of courses to people in

the region. They also, of course, will be going, along with everyone else at MUN

Extension, and that is to be regretted as well.

But the councillors on Saturday were focusing on the loss of

the field worker stationed at Deer Lake. One of their main concerns, and I am

sure this is shared with other municipal leaders in the Province, is the

economy. They want the economy to expand, they want businesses to flourish and

they are fostering the creation of jobs, and the MUN Extension field worker was

involved in those kinds of business development activities.

Now at the same time as this agency of economic development

in small communities has been terminated, we see Doug House's empire

mushrooming. We see huge swanky expensive offices of Enterprise Newfoundland and

Labrador opened in Corner Brook. The offices opened this winter and I happened

to meet Gary Anstey, the friend of the Minister of Development, on a flight

after the official opening, he explained that he had flown over from St. John's

to preside at that official opening. So people in our area are realizing the

economic recession and are seeing the need for governments - plural - to

restrain spending, but they believe, as I believe, that this Wells'

administration has its priorities reversed and is cutting essential services,

services that are needed to boost our economy, while at the same time -

MR. SPEAKER: Order, please!

The hon. Member's time is up.

MS. VERGE: - they are wasting money.

SOME HON. MEMBERS: By leave!

SOME HON. MEMBERS: No leave!

MS. VERGE: Thank you, Mr. Speaker.

MR. SPEAKER: Orders of the Day.

AN HON. MEMBER: Oh my God, what an embarrassment. Nobody

supported her petition.

MR. SPEAKER: Order, please!

MR. HARRIS: Point of order, Mr. Speaker.

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

point of order.

MR. HARRIS: Mr. Speaker, I had intended to speak to that

motion but I saw an hon. Member standing at a microphone, at a table -

SOME HON. MEMBERS: (Inaudible).

MR. HARRIS: - and I was waiting for Your Honour to

acknowledge him -

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

MR. HARRIS: -and give him a chance to speak, and Your

Honour did not do so, and the Orders of the Day were called. It was certainly my

intention to speak but I understand that when petitions are made someone from

that side of the House can speak and then someone from this side of the House.

But I saw an hon. Member standing at a place in the Chamber.

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

MR. BAKER: To that point of order, Mr. Speaker. Your

Honour advised the hon. Member who was doing the petition that the time was up

and the hon. Member sat in her place, and then Your Honour waited for quite some

time to see if any other hon. Member wanted to speak -

SOME HON. MEMBERS: (Inaudible).

MR. BAKER: -and waited for quite some time, and there was

no indication that any hon. Member wanted to speak, so Your Honour called Orders

of the Day, and I see nothing wrong with that, Mr. Speaker.

SOME HON. MEMBERS: (Inaudible).

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

The Chair did see the person standing, obviously, but the

person was not in his place, and this again points to the importance of decorum

in the House, with people walking around and wandering around, which I have

indicated to people several times, but the Member was not in a position to speak

and I waited and looked on both sides and I called Orders of the Day.

The only way we can go back to Petitions now is if we agree

to revert to Petitions and give the hon. Member permission, but the Chair called

for Orders of the Day, and rightly so.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Humber East.

MS. VERGE: We in the official Opposition saw the Member

for St. George's stand and were expecting him to speak to the petition before

somebody else on this side took a turn, but obviously there has been a genuine

misunderstanding and we would give our consent to revert to Petitions to allow

the Member for St. John's East or the Member for St. George's, or anyone else to

speak to the petition.

The hon. the Government House Leader.

MR. BAKER: Mr. Speaker, we have no objections to the hon.

Member speaking to the petition so we would not object to reverting, but I would

simply like to make the point, Mr Speaker, that the whole process was done

properly and if the Member wanted to speak the Member had every opportunity to

stand up and speak, and did not. I think that is a lesson to be learned for the

future, Mr. Speaker.

MR. SPEAKER: Reverting to petitions.

Before recognizing the hon. Member the Chair would also make

the point that I made in the past, when there is an intermission between

proceedings Members should not walk aimlessly around the House, because we can

see the kind of problems that it creates. Again, as I said the Member was not in

his place to speak.

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

MR. HARRIS: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The Member for St. John's East has the floor.

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

MR. HARRIS: Thank you. Mr. Speaker.

I wish to rise in support of the petition so ably presented

by the Member for Humber East. It is an issue which I think we will be hearing

more of in this House. It is an issue which is of grave concern to very many

communities across this Province who need the services that have been provided

by MUN Extension, services which this Government seems to feel are no longer

relevant to the people of Newfoundland. Mr. Speaker, nothing could be further

from the truth when we have the kind of concern and despair in many cases

existing in our rural communities about their future, and about what they are

going to be able to do about it. I suspect, Mr. Speaker, that part of the

concern, and part of the lack of concern by this Government about Extension, has

to do with the fact that one of the things that MUN Extension did was to help to

give the people a voice. It helped to give the people a voice in their

communities to work together to bring about social change, and that working

together has often brought embarrassment to the Government - not only this

Government but the previous Government. I say that when the group on this side

of the House, or when this party was in office, they too were embarrassed by the

kinds of things that sometimes came out of the work that MUN Extension did, but

they kept them there, perhaps reluctantly, because perhaps Extension Service was

a bit of a thorn in the side of Government because people did have a voice that

was assisted by the field work of Extension, by the field workers being present

and helping community groups to work together, helping community groups to

organize, determine their own agenda, make their own decisions, and come to

Government, sometimes with a low voice and sometimes with a plan, but sometimes

with a little bit of anger, and sometimes with a bit of unruliness. I know the

former Premier, Mr. Smallwood, one time castigated MUN Extension in this House

for their actions against Government. I understand that is the kind of thing

that Governments do because they do not like people at the gates, they do not

like people out in the lobby. On many occasions the Premier will not go out and

speak to them because he is afraid of the reaction he will get. This is the kind

of thing we need in a healthy democracy, Mr. Speaker, and I am a little

concerned that Government has taken upon itself some level of arrogance which

does not permit, and does not allow them to permit this kind of activity to

occur and to encourage democratic development and democratic opposition out in

the rural communities of Newfoundland. I am quite concerned, along with the

individuals who signed the petition, that this Government do something to

reverse that, and do something to assist Memorial University in keeping

Extension Service, and change their policy and give them additional extra money

to make that possible.

Thank you, Mr. Speaker.

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

DR. WARREN: Mr. Speaker, as I have indicated on several

occasions in this House the University is given a global budget. The Board of

Regents and the President determine how that money is to be expended. In this

case they have had to make some cuts, as many other institutions have had, and

we respect their right to do that, Mr. Speaker.

One thing I want to say to the hon. Member for St. John's

East: this Government is committed to rural Newfoundland. We are doing hundreds

of things for rural Newfoundland. And one of these days I am going to get up and

list the number of things we have done in education to promote rural

Newfoundland and to promote education in rural Newfoundland, Mr. Speaker. I will

do that one of these days.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

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

I have a petition from a number of students at the Port aux

Basques Community College requesting the Provincial Government to reconsider

proposals to impose any financial constraints on the operating budget at the

post-secondary institutions of Newfoundland and Labrador.

Earlier today, Mr. Speaker, I raised some questions with the

Minister in relation to his plan for the community colleges and institutes, and

let me say that, at best, he was very shaky in his response. In fact, the

Minister made it quite clear, in over-emphasizing the fact that none of them

will close this year, left everyone with the impression that plans were being

made to close some of the institutions next year.

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

MR. SPEAKER: On a point of order, the hon. the Member for

Treasury Board.

MR. BAKER: Mr. Speaker, I am beginning to wonder if this

is a petition or if it is a response to answers to questions during Question

Period. I wonder if the Member could table a copy so we could examine it and

see, if in fact, that is mentioned in the prayer of the petition. And if it is

not, I would suggest the hon. Member stick to the prayer of the petition as our

Standing Orders dictate.

MR. HEARN: To the point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: The petition was introduced, the prayer of the

petition was read, and a Member has five minutes, I understand, to comment on

the prayer of the petition - that is exactly what I am doing. This has direct

relation to the prayer of the petition, the future of the institute, that is

exactly what the students are talking about.

MR. SPEAKER: To the point of order. The Chair will

address again the point that it did yesterday, that Members are going to have to

make up their minds in this House as to whether or not we are going to stick to

the rules in our Standing Orders with respect to petitions. I have come to the

firm conclusion that if we lend any flexibility at all the House is just letting

itself in for trouble. I am prepared to stick by the rules, in which case I will

make sure that the petitions are in the form that petitions are suppose to be in

and, of course, Members are to ensure that as well, because Members are supposed

to follow the rules, and no Member is to present a petition that is not in

compliance with the House rules.

The hon. the Member for St. Mary's - The Capes.

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

I will certainly be glad to show Your Honour the copy of the

petition, which is a petition to the House of Assembly, the Province of

Newfoundland and Labrador.

To go on with my comments: the Minister in responding to

questions today left in doubt what is going to happen to the various

institutions, including the one I am presenting the petition on behalf off, and

that is Port aux Basques.

The Minister said today that no colleges will close. While he

was saying that in Springdale today, which was one of the names that I

mentioned, we had seventeen people laid off, a small community college,

seventeen people laid off. I understand the business education courses have been

eliminated. There is some talk that the automotive course might be moved to

another campus. This is the start of the major plan that Government has in place

to eliminate a number of the colleges.

A little over a year ago the Department of Education, through

the Minister, introduced a White Paper for Post-Secondary Reorganization. When

it was introduced, we said at the time that it was a scam so that the Government

could implement its own plan and now we see that what we had said is coming

true.

Mr. Speaker, this year the Government cut $1.5 million from

the operating grants, the community college and institutes - cut. It is not a

freeze. The Minister talks about a freeze to the post-secondary institutions.

The Minister cut $1.5 million from the operating budget. When you add on 5.7

inflation rate, one has an idea of how many fewer dollars the various institutes

and colleges have to operate this year, institutes and colleges faced with an

additional burden each year with the increase in numbers of our students who are

coming through, what up until this year or up until last year, was a progressive

primary, elementary and secondary education system.

We are gradually narrowing the gap between us and the rest of

the country. We are gradually getting closer in the number of students we have

participating at the post-secondary level with the rest of the country, but now

all of a sudden because of cutbacks we are going to find out that a number of

our students are not going to be able to attend such institutions, and we see

exactly what the students who signed the petition are asking the Government not

to do - to cut back on programs in the various institutes - because if we can

eliminate enough programs then the registrations at these colleges would be so

small, as the Minister started to point out today, they will be able to say,

'why do we need the institute? It is not worth our while to have it here anyway.

There are only so many in attendance. Let's close it up. Let's consolidate.'

That is the operable term, the operable phraseology of this Government, let's

consolidate. It is to the detriment of education in rural Newfoundland because

all these small community colleges and institutes that are named are in rural

Newfoundland. So the death knell has been sounded for rural Newfoundland by

Government and by taking out MUN Extension, which would be in the forefront in

fighting for some of those causes. Government is well on its way to perhaps

attaining a victory, but a victory which will mean a sad price will be paid in

the future by the young people of this Province.

So, Mr. Speaker, if I could have my petition back I will

present it. Thank you, Mr. Speaker.

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

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

like to speak to this petition so ably presented by my colleague, the Member for

St. Mary's - The Capes. I did have a look at the names on that petition, as my

colleague showed it to me for a couple of minutes, and I see that there was only

one MHA who signed it and that was the Member for St. Mary's - The Capes. Now I

would expect in this House that if I was representing the district from where a

petition was presented then I certainly would be one of the ones who would be

supporting the students in my district, Mr. Speaker, and I would try my utmost

to have my signature attached to that petition to show my support. If that was

not possible, because the petition did not get around or the petitioners did not

ask me, then the minimum thing I would do, the very least I would do is get on

my feet in this House and stand up for my constituents and the education system

in my district.

I would hope, Mr. Speaker, that after I sit down the Member,

whoever represents the area that houses this community college, the Member for

LaPoile, Mr. Speaker, who sits in this House on the Government side, who stood

up last week and said that he would not support his hospital administration when

they protested the cutbacks in health, the Member who said he would stand with

the Government in cutting back the health system will not stand with the

Government now, I am sure, in cutting back on the, and possibly closing, the

community college in LaPoile or in Port aux Basques in particular. I am sure

that Member will stand up and tell this House and the Government the advantages

of having the training in the LaPoile area, in the Port aux Basques area as it

proved out only a couple of years ago when they were training people to become

welders for potential work in the offshore.

That community college down there showed leadership in trying

to get people - and I believe they even sent some people over to Norway at the

time to get expert training to deal with Hibernia. Now, Mr. Speaker, that was

two or three years ago and I do not think this Government was in power at that

time, there was a Government in power at that time, who this crowd says did

nothing for the area, but, Mr. Speaker, we stood up for the people in LaPoile

and we provided them the opportunity to get to Norway to get some training so

they could get work on the Hibernia development when it came.

Now, what is this Government deciding to do now, Mr. Speaker:

Forget the people in LaPoile, shut down the Trade School in LaPoile, there are

lots of workers from all across Canada who can do this work anyway, why would we

bother to train Newfoundlanders to do this type of work when there are thousands

of people throughout Canada who can do the work; there are thousands of people

in Norway just biting at the bit trying to get over here to take the jobs away

from Newfoundlanders who will not be trained to do the work, because this

Government and this Minister of Education, have begun this year, to close down

our training systems.

I know why they are doing it, Mr. Speaker, they say there is

lots of fairness and balance, do you know why they are doing it? Because John

Diefenbaker built them in the first place and they are a Tory project and they

hate everything that was ever associated with Tories, so they are going to close

down the Trade Schools now for the very reason - because they were built by Tory

money and Federal money.

Mr. Speaker, as a representative in this House, I am sure he

is over there contemplating now what he is going to say when he stands up to

support the students from his district and to protect the trade school. I mean

there are jobs created by the Trade Schools, besides the training for new jobs,

there are jobs created in the community of Port aux Basques, which I would say

has suffered over the last several years by a lot of job losses and they are

desperately trying to be innovative and try to come up with creating new jobs.

What this Government is doing is taking jobs out of the health system, Mr.

Speaker; they are going to take jobs out of the community college system down

there now and completely demoralize the people of the Port aux Basques area and

LaPoile, unless the Member gets up on his feet and changes the Government's

mind; do not close down his community college, Mr. Speaker.

When he stands up and gives you all the good reasons why you

should be supporting that community college in the Port aux Basques area, I am

sure you will listen to him, I am sure -

MR. SPEAKER: Order, please! The hon. Member's time is up.

MR. R. AYLWARD: - The Minister of Education is certainly

much more reasonable than the Minister of Health -

MR. SPEAKER: Order, please! The hon. Member's time is up.

The President of Treasury Board.

MR. BAKER: Thank you, Mr. Speaker. This Province has been

faced with a financial crisis. This Province has been faced with a financial

crisis like never before; our options were very limited by the fact that for the

past seventeen years so much money had been borrowed that we are at the limit of

our borrowing. That imposed tremendous restraints on us, Mr. Speaker, tremendous

restrictions in the way we responded to the financial problem brought upon by a

downturn of the economy, a freezing of transfer payments and, Mr. Speaker, it

was more than we could normally cope with, so we had to take certain measures.

We went through an exhaustive consultation process to get

opinions and we received input from some sources and not from others. Mr.

Speaker, we then took action, and it is Government's responsibility to take

action. That action, Mr. Speaker, culminated and resulted in the Budget

presented by the hon. the Minister of Finance, very recently. Since that time we

have seen the Opposition in the House play their petty political games with this

very serious crisis facing the Province, their petty political games, and Mr.

Speaker, those of us who have been sitting here listening to it, understand

these petty little games.

Many times I have said to the Opposition: where would you

have gotten $215 million, and they have come up with some suggestions and they

would have done those things I guess, had they been in Government, but the

suggestions they came up with amounted to about $15 or $20 million and my only

conclusion is, they would go out and borrow the other $200 million and the

resulting catastrophe for the Province would have turfed them out of office

immediately had they still been here.

That is their solution. They do not talk about solutions. All

they do is play petty political games with individuals. Petty little games - in

the press and in the House.

Mr. Speaker, there are no solutions over there. There are

small minds. They are acting like a bunch of vultures ready to pounce. That is

exactly what they are acting like.

SOME HON. MEMBERS: (Inaudible).

MR. BAKER: No overview of the problem, no solution to the

problem, and their solution is simply to play petty political games. Well, Mr.

Speaker, I hope they enjoy themselves, because they are going to be over there

for a long time playing their petty political games.

Orders of the Day

MR. BAKER: Mr. Speaker, as a result of exhaustive

consultations with the acting Opposition House Leader yesterday, very productive

consultations that I am sure probably would not have happened had the situation

been different, there was agreement that today we would go to Interim Supply.

And I would thank the Members opposite, especially the Member for Humber East,

and call Motion Number 3.

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

MR. SIMMS: I can hardly let that go by without responding

in some way, shape or form, Mr. Speaker, reluctant as I am. But I would suggest

to the Government House Leader that the discussion that was held yesterday, the

arrangement and the agreement that were reached yesterday, had nothing at all to

do with the Government House Leader's cooperation, I can assure you.

On motion, that the House resolve itself into Committee of

the Whole on Supply, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN: Order, please!

The hon. the Member for Grand Bank.

MR. MATTHEWS: Thank you very much, Mr. Chairman. I want

to say that I am pleased once again today to rise in debate on this Interim

Supply Bill, Bill 12, Granting of Supply to Her Majesty certain sums for

different particular things in the Province.

As one peruses the bill one can see that most of the things

here are certainly worthy expenditures. I am just wondering perhaps if the

Minister of Finance or the President of Treasury Board could really explain to

the House in detail really what all the requests are for. There is practically

$1 billion, some $993 million, and I see that the Act is deemed to come into

force on April 1, and that is in a few days time.

I guess what I am reading into the Bill is that the

Government needs this bill passed before April 1.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Well, I just want to know what the

President of Treasury Board and the Minister of Finance's reason is for putting

April 1 -

AN HON. MEMBER: (Inaudible.)

MR. MATTHEWS: He's not in a very good mood!

He is not in a good mood. I mean I can understand it, I

suppose he is feeling sorry for the Premier who is down with a bad case of

laryngitis. I can understand that. The Premier had to stay home, could not get a

hospital bed, because of Government cuts. Perhaps that is why, because now they

are finally realizing that what they have done to the health care system in this

Province is impacting, first of all, upon one of their own. It just struck me

rather peculiar because I noticed in the office today that most people were

paid. I think today was payday at the office so there will not be another pay

period until a couple of weeks time, and while just perusing the bill I saw they

seemed to want the bill to come in effect on April 1. That is why I wanted the

Minister of Finance and the President of Treasury Board to impress upon the

House, I guess, the real urgency of having this passed by April l, because I do

not fully understand it. If wages have been paid and social assistance cheques

have been sent out then what is the real urgency of trying to get this thing

passed in a few days time? That is my question to the President of Treasury

Board and to the Minister of Finance. I am sure one of them will get up this

afternoon and tell me why there is such a sense of urgency to this particular

bill.

AN HON. MEMBER: We are overdrawn.

MR. MATTHEWS: Well, maybe he can tell me if we are

overdrawn but having said that I doubt very much if the cheques would be issued,

or if they would be allowed to be signed, or sent, without the money in the bank

to cover the cheques. I expect the President of Treasury Board to deal with that

later when he rises in his place.

Now, Mr. Chairman, there have been a number of interesting

debates and points of view expressed in the Legislature over the last number of

days in this wide- ranging debate on Interim Supply, and I want to follow-up on

an item of financial concern of mine which I brought to the attention of the

Minister of Municipal and Provincial Affairs today in Question Period, and that

is the change in the municipal grants structure. I am sure Members on both sides

of this Legislature have communities in their districts in the same predicament

as the two communities, Garnish and Point May, that I made reference to today.

In both cases their systems are about half way installed, about half completed,

but the sad thing about it is that the areas of both towns that needed the

system most were furthest away from the water supply that was identified to

provide the water and consequently the sewer system to the town. In both towns

the septic tank system has polluted the ground and in some cases has polluted

wells. In one town in particular the ground is sloped away and you get it

running down and there is a problem with drinking water from those wells. These

will be the areas of those two towns who will be the last to get assistance.

What really worries me now as their MHA and what worries their councils is with

the change in the grant structure there is a real worry and concern that those

systems will not be completed. There has been an official from the Minister's

Department, the Eastern Director, who I must say I found to be very

co-operative. He is doing a good job and the councils are pleased. As a matter

of fact they have seen him a number of times over the last few months and he is

working long hours doing a lot of consultation, but the real question remains

unanswered. He has reviewed the present tax structure of those two communities,

he has looked at the cost of what it will take to complete those systems, and

looked at the possibility of both communities raising their taxes. In the case

of Garnish they have a reasonable tax right now. As a matter of fact their poll

tax, before this year, was the second highest in the Province. Their property

tax rate is comparable, or certainly in average of that in the Province. In

Point May their tax rates are a little less because of the type of community it

is. In the community of Point May a lot of people on the tax roll do not make

enough money a year to pay the taxes. Most of them are inshore fishermen. I

think there are three teachers in the community that teach in Lamaline.

AN HON. MEMBER: They can afford it.

MR. MATTHEWS: You are right, they can afford it. A number

of the people work in the fish plant in Fortune and if they make $15,000,

$16,000 or $17,000 a year, that is maximum, so if you increase the taxes - the

gentleman for Pleasantville said the teachers can afford it - so if you tax that

great number of three teachers and hit them with twenty mils on their property

tax, you are probably going to get an additional $20 where found. That is the

dilemma you are in. And it is not that the councils are not receptive to

increasing taxes. The Member for Pleasantville has raised a good point, because

those with the best properties, those with the highest value properties will end

up basically paying all the tax, and there are so few of them that the bottom

line to the council, even if they imposed large tax increases, in property tax

and poll tax -

MR. NOEL: It would still be less than St. John's.

MR. MATTHEWS: God in heaven, still be less than St.

John's?

MR. NOEL: That is correct.

MR. MATTHEWS: See! You know, you are echoing the problem

of you Government. You are echoing the problem of your Government, with the

Premier and most of his Cabinet. They do not understand rural Newfoundland. You

do not understand Point May or Lamaline or Garnish. And I don't expect you to.

How could I expect you to?

MR. MURPHY: Bill, when you have an $80,000 mortgage in

St. John's, it is difficult to understand somebody in Point May.

MR. MATTHEWS: Yes. Well, I would suggest that you could

buy four or five Houses in Point May, perhaps six, for $80,000.

MR. NOEL: Yes, but the average school teacher -

MR. MATTHEWS: And the only way -

MR. CHAIRMAN: Order, please! Order, please!

MR. MATTHEWS: The only way people make ends meet in Point

May is if they are lucky enough to get a Federal project, or get on the special

fisheries response program and get enough stamps so they draw UI to get them

through the winter. And if they are lucky -

MR. NOEL: It is the same in every district.

MR. MATTHEWS: If they are lucky - I don't know if there

are too many who get on special fisheries response programs down in

Pleasantville. I am not so sure about that.

MR. NOEL: (Inaudible).

MR. MATTHEWS: And I am not so sure that it is needed down

there. That is the problem.

MR. NOEL: You don't understand.

MR. CHAIRMAN: Order, please!

MR. MATTHEWS: Oh I do understand, very well.

MR. NOEL: (Inaudible) in Pleasantville.

MR. MATTHEWS: I do understand, very well. What I am

trying to do is get this Government to understand rural Newfoundland and the

problems, and the problems councillors are having out in rural Newfoundland

because of the changes to the grant structure the Minister has brought in.

Now those people in Garnish and Point May had their systems

started, as I said today in Question Period, under a different financial

arrangement - 20 per cent max of fixed revenues. They had to pay the

Newfoundland and Labrador Municipal Financing Corporation. They could manage to

make ends meet paying 20 per cent of fixed revenues for their system, but there

is no way they can come up with the taxes to be able to continue with the system

under the new structure. That is the problem. From what I have seen and listened

to with the official from Municipal Affairs who has been down with the councils

on a couple of occasions, and I have been there with them as I always do -

MR. CHAIRMAN: Order, please! Order, please!

The hon. Member's time is up.

MR. MATTHEWS: - we are basically talking about a 60/40

arrangement instead of an 80/20.

MR. CHAIRMAN: Order, please!

MR. MATTHEWS: Is my time up?

MR. CHAIRMAN: Yes, the hon. Member's time is up.

The hon. the Member for Pleasantville.

MR. NOEL: Mr. Chairman, the Member for Grand Bank talks

about the difficulty that taxpayers in some of our rural municipalities will

have to pay for the services they receive. Well, then, who does he expect to pay

for them? I would like him to answer that. What has happened in this Province is

the previous administration put services in all sorts of areas of the Province

which cannot afford them. They put an albatross around the necks of many of the

towns and communities in this Province and they are expecting other people to

pay for them. Now that cannot continue. People have to realize that they have to

pay in proportion to the services received.

AN HON. MEMBER: (Inaudible) St. John's, right?

MR. NOEL: Pardon me?

SOME HON. MEMBERS: Exactly. Exactly.

MR. NOEL: This problem is particularly applicable to St.

John's and to my district, and this is why this Government is pursuing the

amalgamation efforts. We have to equalize services and equalize payment for

services. That is all that is fair. That is what has to be done if our economy

is to remain viable. St. John's, for instance, has a residential tax rate of 11

mils, Mount Pearl has a rate of 8.7 mils, and Wedgewood Park has a rate of 6.5

mils. In other words, if you take a teacher living in my district who has a

$100,000 home, he is paying $1100 a year in municipal taxes. Another teacher,

living over in Wedgewood Park, is paying $650 a year in municipal taxes.

MR. MURPHY: The same home valued less.

MR. NOEL: That is a difference of some $450 a year,

$5,000 over a ten year period. Now Wedgewood Park is a settlement that you

people allowed to remain an independent community, and I and some other people

are trying to make the argument for bringing it into St. John's.

And the same thing with Mount Pearl. Mount Pearl has, as I

said, a residential mil rate of 8.7 compared to St. John's' 11, and Mount Pearl

derives just as many regional benefits from this whole area as residents of St.

John's. I see Mount Pearl's Mayor Hodder, I think, presented a brief to the

Minister yesterday, according to the news media, trying to fight efforts to

ensure that Mount Pearl residents make a fair contribution to the cost of

running this region. They are not doing that now. Their commercial property tax

is 8.7 mils compared to 16.5 mils in St. John's. Now that is almost twice as

much in St. John's. That is why you are going to get more commercial development

out in Mount Pearl than in St. John's. This Pearlgate Plaza they are talking

about, which is estimated to be worth about $75 million when completed, would

save about a half million dollars a year in property tax as a result of being

located in Mount Pearl rather than St. John's, as the mil rates now stand.

Now what Mount Pearl has to understand is that - how can they

expect to be allowed to continue to have this favourable position which,

according to their own figures, has enabled Mount Pearl residents to pay $2

million less in taxes in the present year than they would pay if they were taxed

at the same rate as St. John's residents.

MR. GOVER: Go on!

MR. NOEL: Two million dollars less. Now they say they pay

their own way. They pay for the services they provide in Mount Pearl. They do

not pay for the services they use in St. John's, which city taxpayers have to

pay for.

MR. GOVER: Exactly. Good point.

MR. NOEL: You take a person working at Confederation

Building who is living out in Mount Pearl. He pays for his services in Mount

Pearl, but he does not pay for the services to Confederation Building. But a

person working in the same office with him is paying for his domestic services

in St. John's, but he is also paying his share of the cost of servicing

Confederation Building. And this applies to hospitals and schools and all kinds

of public buildings in this city. The Federal Government makes a reasonable

contribution for its property in the city, but the Provincial Government does

not make a reasonable contribution to St. John's tax revenues for its

properties, it is the St. John's residents who have to pay for that.

Now I notice that Mount's Pearl Mayor Hodder is quoted in the

paper today. This is a case they have been making for some time, that Mount

Pearl has a much more efficient operation than St. John's and they have all

kinds of mumbo-jumbo figures that they use to make that case. One he uses in the

paper today. He says that St. John's has four times the population of Mount

Pearl but has eight times the staff. Now what he does not mention is that St.

John's has six times the budget of Mount Pearl, and we have that because we have

to provide services that Mount Pearl does not provide for its own community, and

we have to provide services that are more expensive.

They have put out comparison costs between the two

communities. They compare crosswalk markings - how much crosswalk markings are

in Mount Pearl compared to St. John's. Now their figures are unfair, because the

two cities do their accounting in different ways. St. John's includes an

estimate of the capital cost of the amount of work being done in its figures,

whereas Mount Pearl apparently does not do that. Mount Pearl does not allow for

the extra cost of services in St. John's. They have a lot of wide and flat

streets out there which are not very expensive to plow in wintertime, for

instance, which are not as expensive to salt.

These are the kinds of costs St. John's have which Mount

Pearl does not have.

AN HON. MEMBER: Half of Mount Pearl is provided with city

drinking water (inaudible).

MR. NOEL: What do you mean, people already pay for the

streets?

AN HON. MEMBER: (Inaudible).

MR. NOEL: Do you think people in St. John's do not pay

for their services and the cost of their building lots?

AN HON. MEMBER: (Inaudible).

MR. NOEL: Their cost of services? Well, maybe. But,

anyway, there are reasons. The reasons that their cost of services are lower are

not because they are more efficient, it is because you are comparing, as the St.

John's councillors say, apples and oranges. Now Mount Peal has been very

fortunate in having Donovans Industrial Park within its boundaries.

MR. GOVER: Yes. And how did it get that?

MR. NOEL: But Donovans Industrial Park is there because

it provides a service to the whole region, not just to Mount Pearl. So the whole

region has to benefit from it. Mayor Hodder is fearmongering in saying that if

Mount Pearl is combined with St. John's and Conception Bay South and all this,

and some other communities, it is going to cost the city of St. John's an extra

$58 million, I think is the figure that he uses. An extra $58 million, he is

trying to say, is the cost of amalgamation.

Now that figure relates to services that are going to have to

be provided out in Conception Bay South in large part, other communities as well

if they are all amalgamated, but largely in Conception Bay South. Now everybody

who is familiar with municipal infrastructure around here knows that if services

in Conception Bay South are to be brought up to standard, a lot of money is

going to have to be spent over the next few years. So it is reasonable to expect

a whole region to make a contribution to it, because the people of Conception

Bay South cannot do it themselves. And if we do not have an enlarged

municipality to help share the cost -

MR. CHAIRMAN: Order, please! Order, please!

The hon. Member's time is up.

MR. NOEL: Thank you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Member for Grand Bank.

MR. MATTHEWS: Thank you very much, Mr. Chairman. I want

to get back on the same topic I was on before in reaction, to some degree, to

what the Member for Pleasantville has said.

Now you can talk about regional services and amalgamation all

you want, and that is basically what the Member has talked about. I have two

communities that are basically in the middle of nowhere, miles away from any

other community, which have health and environmental concerns, which have needs

for a water and sewer system. They have put off the request for water and sewer

for years, until the problem had become so bad they had no choice but come to

the Department of Municipal Affairs, with back-up support from the Department of

Health and others, telling just how serious the situation was and still is.

We were fortunate enough to get a start on both systems under

a completely different debt repayment system than the towns are now stuck with,

and that is the problem. They have half the systems in the ground under the

80-20 system, if you want to refer to it as that, and basically what they are

faced with now is more like a 60-40 problem. It is more like 40 per cent now

that is going to be requested and required from the communities to pay for the

water and sewer system. And there is no way they can increase their taxes by 100

per cent in those small communities, and there is no way they will come up with

enough additional tax revenue to be able to meet the debt repayment

requirements. Now that is the problem.

And I want to say to the Member for Pleasantville, who jumped

into the debate, that there is no doubt that they must have all forgotten their

campaign promises. I mean, doesn't the Member remember the Premier's press

conference somewhere in the Province during the election when he talked about

the water and sewer corporation? Does he remember what the reason was for the

proposed water and sewer corporation? It was to bring services to those

communities which could not get them otherwise, which could not afford them.

That is what the water and sewer corporation was supposed to do. And how quickly

the Member has forgotten that, and Members opposite. How quickly!

`This corporation would take over and continue to operate all

existing water and sewer facilities and over a period of years build and expand

new ones to areas not now serviced.' That is from the Liberal campaign policy

manual of 1989. How quickly he has forgotten that.

And it goes on to say: `Only in this way can people in all

parts of the Province expect to have available to them reliable drinking water

and sewage disposal services free of health hazards. We can do no less to

provide our people with good water and healthy sewage disposal than we will do

for medical services, education and electricity.' Now that is from the policy

manual. Now you have completely forgotten about that.

MR. NOEL: But they did not say (inaudible).

MR. MATTHEWS: But they said they would put it in areas

which do not have it and could not afford it. What you have done is just the

opposite of what you promised, again in the election of 1989. You have doubled

the cost on communities to get water and sewerage. You have doubled the cost.

That is what you have done. You have gone from an 80/20 arrangement to what is

now basically 60/40.

MR. NOEL: Those who can pay will have to.

MR. MATTHEWS: That is no problem. I am not talking about

people who can pay here today, I am talking about people who, because of the

change by the Department and the Minister, can no longer afford to continue with

their water and sewer system.

MR. HEWLETT: They cannot finish it.

MR. MATTHEWS: Half in the ground, half functional, both

need outfalls. They both need outfalls to make them functional; the worst areas

of two towns from a health point of view, where the sewage concentration is

greatest because of the way people built their homes, a real health hazard in

both towns which will be the part of town which will be the last to get the

water and sewerage system, and the problem is, what does the Minister have to

tell them? That is the question.

An official from the Department has been down on a couple of

occasions, has gone through their tax system and has gone through their debt.

But the official, quite naturally, cannot give them an answer. That is why I

asked the question of the Minister today, and that is why I am pursuing it in

debate, because I want more hon. Members, or most Members opposite, to

understand the problem. And I am sure there are Members on that side - I know

there are some here on our side - who have the same problem with some of their

communities.

Now what are you going to do about this? That is the

question. The need is there and it is a legitimate need. You are going to have

people's health affected if it is not completed, and you have yet to find a way

to complete it and some way for the town to be able to pay for it. Under the old

system they could do that; 20 per cent of fixed revenues they could manage. And

that was the agreement that was signed between those municipalities and the

Department to begin the systems which are now half completed. In the middle of

the game the rules changed. And we all know what happens in the middle of a game

when the referee changes the rules; there are some very serious problems. And

some games in which I have been involved actually turned into riots - literally

turned into riots.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: I am talking about sport, of course, I am

not talking about water and sewerage and municipal affairs.

AN HON. MEMBER: In your younger days.

MR. MATTHEWS: In my younger days - my younger days. But

the comparison is the same. The rules have been changed in midstream and it is

causing difficulties. And I want an answer from the Minister of Municipal and

Provincial Affairs and I want it fairly soon. And the municipalities out and

about this Province want it fairly soon, because this has been ongoing now for a

fair bit of time and Members Opposite know that. We are soon to the stage now

where ordinarily you would have announcements on water and sewerage capital

works, on additional phases. Last year, I believe, they were announced in the

fall, which was good for early tendering. This year, no one in this Province

knows how much money is going to be expended on water and sewerage in this

Province this year.

AN HON. MEMBER: In the Liberal districts?

MR. MATTHEWS: In any district, I suppose. Now perhaps the

Minister brought up a good point. Perhaps there is something happening I do not

know about. But I doubt that. Knowing the Minister the way I know him and the

way he throws his little quips across the Legislature, I would say he is just

doing it hoping to get under someone's skin. He knows he cannot get under mine,

because I know him too well. But the thing is we should know. And, Mr. Minister,

all I am saying to you is that those municipalities need to know. Those two

communities have not yet finalized their budgets. There are some municipalities

which have had their budgets sent back five times.

MR. EFFORD: When you fellows had a budget it was no

trouble to read it: Tories only.

MR. MATTHEWS: Ah, the Minister of Social Services is

obsessed. He is obsessed. I would ask him to restrain himself. Because what I am

talking about is serious stuff, it is not to be joked about.

SOME HON. MEMBERS: Oh, oh!

MR. CHAIRMAN: Order, please!

MR. MATTHEWS: It is not to be joked about. Health is not

to be joked about. And that is what we are talking here, health. Health

is not a joke. I am concerned about the people in those communities who put off

requesting a water and sewer system until they absolutely had to; they did not

want to have the burden of putting in water and sewer. If they could have gotten

away forever on their septic tank system and their well system, they were happy.

But you know what happens with septic systems. When they are properly installed

it is bad enough after a number of years, but when improperly installed there

are further complications and that is what we have; we have septic tanks

polluting wells, and it has to be addressed.

It cannot go on much longer. And I say to the Minister, I

would request that he seriously look at communities such as the two I have

talked about in my district, Garnish and Point May, and that he make a decision.

Personally, I do not know what in the name of God is going to happen to the

people in the areas of those towns where the systems have not yet reached. I do

not know what is going to happen if there is not some kind of financial

arrangement, debt repayment

schedule set up that they can live with. Because

there is no way with the types of communities they are, particularly the Point

May situation, where if the people earn $7,000 or $8,000 a year they are lucky;

if you can get two people in a household who get $6,000 or $7,000 each, that is

how most of them get through the winter, I say to the Member for Pleasantville.

That is the truth of it. I know people who work in the fish plants in Fortune

and Grand Bank. If they make $18,000 a year they consider it to be a good year.

And they have property tax.

MR. MURPHY: You're talking UI, too.

MR. MATTHEWS: I am talking the works. We do not get

twelve months' work any more, I say to the Member for St. John's South. One time

we did. We do not any more. This year we are getting twenty weeks, and we got

twenty last year. But before that we were lucky to get six! So put it all

together, and if they top $15,000 they are doing well.

Now they have in Grand Bank 8 mils, and the poll tax, I

think, is $140. Sometimes you think, well, it is not much tax. I would think it

was a lot of tax if I were making $15,000 a year. And the only way a lot of them

get through is they somehow get some income for their spouse. And most ways they

get it, and as much as we do not like it and as much as we are desirous of

having long-term employment, most ways they get through the year is by getting a

job on the Federal programme, or the Community Development programme or

whatever. That is how they make it.

That is rural Newfoundland and you cannot change that, I say

to the Member for Pleasantville. You can not change that. They chose to live

where they live. And they want to live where they are because as things are now

in the Province and the country, it is of no advantage for them to even attempt

to go anywhere else. Because things are just as bad. The most they get if they

go somewhere else is welfare. And they do not want to go anywhere else. So they

have chosen to live where they are, and all they are asking for now is water and

sewer because of the health hazards in their community. That is all they are

asking.

MR. CHAIRMAN: Order, please! Order, please!

The hon. Member's time is up.

The hon. the Minister of Municipal and Provincial Affairs.

MR. GULLAGE: Mr. Chairman, I would like to make some

comments on the Member's points about Garnish and Point May. He points out,

quite correctly of course, where both communities are in very difficult

circumstances. Both of them on the coast, needless to say, as are all the

communities in the Province. With the exception of maybe twelve or fifteen, the

vast majority are on the coastline. Garnish, and Point May as well, are pretty

well isolated from the other communities. Very little worry about being

amalgamation candidates, I would think, because they are pretty well on their

own. And they are very much alike in the sense that they have no commercial base

to speak of. I think, if I recall correctly, Point May has six commercial

properties and Garnish has probably three or four.

MR. MATTHEWS: No, it is reversed, Garnish six, Point May

(inaudible).

MR. GULLAGE: Okay. So it is pretty well a residential tax

base. Garnish's revenue per household is $200, and Point May is $100. The big

question is of course whether that is -

MR. MATTHEWS: Point May has not been assessed for

property tax.

MR. GULLAGE: I realize that. And the Member makes a valid

point, in that we have existing debt on the books and still have a fair amount

of services to put in the ground in both communities.

In Garnish, as a matter of fact, we are looking at about a

third of the service in place and two-thirds to go, and not too different in

Point May. The problem is, of course, the cost to pay the debt is $1,700 in

Garnish and $1,958 in Point May per household.

Now I think the main point the Member was making is why would

we bring in a new grants program? And the other part of that, because it is

separate from the grants program, is the contribution to the debt? The fact of

the matter is, we have $411 million in debt on the books and, as I explained

last night in the House, or the night before, are faced with a proposition and a

possibility that we probably would not get any more water and sewer programs, or

certainly a drastically reduced program if we continued on building up the debt

in the corporation. As the Minister responsible, I felt I had to propose at

least some reasonable repayment on the debt by the municipalities. Because

clearly 20 per cent of fixed revenues was a ridiculous equation to have in

place. And it just was not working. Because as we know, with communities with

very little capacity for revenue, and I suppose these are all in the category -

Garnish, for example, $165,000 in revenue. That is their total revenue. Very

little capacity. Using the 20 per cent figure, they are very quickly at the

maximum they are expected to contribute, and beyond that the expense is on the

remainder of the Province.

So under the change in the formula we are now asking

communities to pay up to $300 a household, and that is the cap. If they are

above that, of course, they have to pay whatever is above it. And certainly all

of the urban communities in the Province are at $300 or above, and they are

paying more than that now. I think the Member for Pleasantville was making that

point. But we are saying to the rural communities in the main which were not

paying anywhere near $300, we would expect that you would pay up to $300 per

household on a graduated basis on the water and sewer debt that is existing on

the books.

Then we have to look at what happens in the future, and this

is where the Member is concerned. If we have a community, and I am assuming that

Garnish and Point May are considered in such a situation, if that is his point,

which has reached the maximum revenues they can bring in from their taxpayers,

and that may be true in the case of Garnish, but I am not so sure it is true in

the case of Point May - actually, Point May is $300 a household in tax, and

Garnish is $200. That still is not a large amount of tax per household. It is

nowhere near the Provincial average of $1,000. Believe it or not, the average

revenue per household in this Province, including commercial, industrial, poll

tax, property tax, is $1,000. Believe it or not, excluding the three cities.

AN HON. MEMBER: (Inaudible) urban.

MR. GULLAGE: No, I am talking about averages now. If you

get into rural Newfoundland, the average is something like $600. So we are not

even at half the rural average with those two figures. I am not suggesting that

the Member does not have a point, if in fact the economy of the area is such

that the incomes of the people are a factor. And certainly if there is no

business tax base and the only revenue available is a property tax, it could

very well be that the household income which is simply a factor is down because

the only opportunity for revenue is the individuals in the town. If that is the

case, well we may have a circumstance that would be looked at when we are

addressing the approvals for capital works.

But, Mr. Chairman, I have to say that in all fairness to all

other rural communities in the Province they all have to be looked at in a

similar fashion, that they have to pay their fair share of water and sewer debt.

And that is all we are asking. And I talking about existing debt now. Because

that is already in place. And remember that the Province is still only picking

up an extra $1.8 million against a $411 million problem. That is all that is

being contributed towards that problem in the current fiscal year. So we did not

gain a lot by asking the communities to pay a little more, not a lot at all. It

is a help, and it helps us keep a program in place. Because, obviously, the more

dollars going towards the financing corporation from the municipalities eases

the burden on the provincial contribution. Consequently, I can go in to

Government and ask for a program for this year, a program that will hopefully

address some of the problems in the Member's district. Where those communities

of Garnish and Point May will rank I obviously cannot tell at this stage, but I

can say that for the first time we are able to look at the fiscal capacity of a

community and determine whether or not it has reached its capacity as far as

revenue is concerned, and I am talking about revenues from all sources, divided

by the households.

And we can compare that now very easily, because all that

work is done. We can compare one community to another, we can compare it to

averages, we can do what we want, because we have the work done. Almost a year

and a half of work on every community in the Province has given us a tremendous

amount of information. But we have added to what was always in place. The Member

has made the point about a serious health and environmental problem being in

place. That is not unique, of course, but it is a problem. We have added health

and environment as being important factors, and we have added fiscal capacity.

There are some other factors, too, that are of lesser importance: is the

community growing, or is it diminishing in population and that sort of thing.

But the main factors are health and environment factors, and fiscal capacity. We

never really had a good strong handle on fiscal capacity because we were never

really seriously addressing the existing debt and how that impacted on a

community. We have addressed that now and we know exactly how each community is

faced off against the debt that is in place for that community. We know the

effect on that community per household, and we are able to make a decision as to

whether a community can take on more debt per household than is in place right

now, and make more payments on that debt, and then make a decision based on all

those factors put together of whether or not the Province should pay the greater

proportion of the debt that is going to be put in place in a given year.

We are going to find, Mr. Chairman, that there will be

communities where the Province, if it is going to proceed with a new water and

sewer phase or an additional phase, whichever way, there will be situations

where the Province will simply have to say, if we are going to do this, if we

are going to proceed and put this system in place, put this debt on the books,

the Province will have to pay for it. We will have situations like that, and we

will have some other situations where the Province will pay 90 per cent, or 80

per cent. Or on the other extreme, we will have situations where a community has

such good fiscal capacity, it has an industrial base, a residential base, it has

everything going for it, no health problems, no environment problems, and we may

very well say you should pay for it yourselves, or we will only pay 10, 20, or

30 per cent. We will have the two extremes, there is no question about it.

I think for the first time, Mr. Chairman, and this is

important, we will have an excellent view of each community and we will know

where we are coming from when we are making decisions as to the priorities of

the Province and where we should be spending the limited amount of dollars we

have. We have a $2.5 billion problem of new water and sewer that has to be put

in place, not to mention replacement, which is another $2.5 billion - a $5

billion problem. Mr. Chairman, when you talk about a water and sewer

corporation, we have examined it from every which way to Sunday and the cost to

the average household in the Province would be such that it would be unthinkable

to even try it. Because the expectation would be that everyone would want it at

once, as with any utility if you like, if you want to put it in that context,

and the cost per household would be exorbitant. And you would have to take

everybody into it anyway -

MR. CHAIRMAN: Order, please!

The hon. Member's time has expired.

MR. GULLAGE: - you would have to buy out all the existing

facilities, and it would be very difficult to manage, Mr. Chairman.

MR. CHAIRMAN: The hon. the Member for Grand Bank.

MR. MATTHEWS: Thank you again. Mr. Chairman. I find the

Minister's response very interesting and there is some credence in some of the

points that the Minister has made. There is no doubt that there have been

communities which had capacity or could have had greater fiscal capacity over

the past years that have not reached it.

But the Minister is touching on a very fine point here when

he talks about fiscal capacity. Because in essence what this Minister and this

Government are doing is they want to set the taxation rate for communities in

this Province. Now that at present is the decision of the elected councils,

there are community councils, town councils or city councils. That is a decision

under the Act of those duly elected local governments. Now what I see in what is

evolving over the last number of months in essence is that the Government really

wants to set a minimum tax rate for the people of the Province. That is

basically what we are seeing here. And I say to the Minister there are a number

of councils and councillors now that are ticked off about that, and if he pushes

it a bit too hard then he is probably going to lose a number of councils in this

Province, and that would be an undesirable thing. I would not want to see that.

Now, what I want to say to the Minister to expand the

argument a bit further and to talk about my own local situation, which I guess

pertains to any number of communities in the Province, is that we have partial

systems installed. Half, or greater than half of the residents in the community,

do not have any services whatsoever. There are no services to the worst areas of

the towns. And yet these people are going to be expected to pay the tax rates

that are set by the councils - without services. So this is another predicament

that the councils and the councillors find themselves in. Because they are

asking people to pay taxes for services that they are not receiving, and in

small communities that is a problem. It is big enough in larger but in smaller

communities it makes life far more miserable for the poor councillors. So that

is another problem we have.

In the case of Point May, which has requested a property

assessment for property tax, they have not yet been assessed. And with the

backlog in the Province God knows when they will be assessed. So, how is this

all going to come about, because they are now stuck with a poll tax situation?

Garnish is different. They have property tax and poll tax. Their poll tax last

year, by the way, was the second highest in the Province. Their mil rate I think

was 5. So if they push that up to 7 or 8, if they doubled their mil rate in

Garnish, put it to 10 mils, from 5 to 10, the amount of revenue that will accrue

to that council is so minimal. And I do not know, I say to the Minister, how

they are ever going to get the figure you are looking for per household of $300

or $400.

I mean, it is virtually impossible for a community like Point

May to do it, certainly, I do not know how they will ever do it, because I

believe the figure is - and I stand corrected on this - I think there is

something like 290 taxpayers, I believe, in Point May, and there are about 110

of them each year who are not sure whether they are going to make enough money

to have to pay the tax to the council. There is a limit, I believe. The Minister

probably knows the figure. There is a limit that if you make less than a certain

amount you do not have to pay, is that correct? The council in Point May has

told me that there is - I think it is over 100 people who are on the tax roll of

the town that some years it is dubious whether or not they will have to pay

taxes.

The other problem you have is the value of the property. The

average property value in Point May is very, very low. So if the council was

charging 10 mils in Point May on a $20,000 home, they get $200. And a 10 mil

property tax rate in a town like Point May is very very high, when you look at

the economy of that town and the people. Most of them do not work, only

seasonal, and their earnings in the inshore fishery and otherwise are very low

as I have already said. So if the council said tomorrow that you have to pay 10

mils property tax, on a $20,000 home it is $200.

So that is the predicament that these councils find

themselves in. And it is not only these two towns, but there are any number out

and about the Province. So it is a real problem. And my big concern, and I think

everyone realizes it now, is that with those extra burdens, particularly on the

councillors, I mean those elected people who go through very difficult times,

particularly in small communities, there is no doubt that small community

politics is worse to live with than any.

That is the problems that they are under, and they are under

great stress, and here they are now with those systems half completed and with

the areas that need it most, they are not sure if they are going to be able to

afford to finish them. Like I said they are willing to increase taxes

reasonably. But from what I have seen, I say to the Minister, sitting down with

one of his officials, who is a very competent individual. He has been very

accessible, has been down and about in my area any way in the Province, in the

eastern region, more I would say than anybody else over the years I have been in

politics, doing the best he can with the situation. My big worry from what I

have seen is that having said all of that and with all of his visits and all of

his scrutiny there will not be some provision for those towns to be able to get

a decent water and sewer system which is so badly needed.

So having said that, Mr. Chairman, I conclude my remarks,

particularly on this point which I thought very, very important to raise here

today because of the concern for those two communities and the people in them,

and for me as their MHA, and I know that there are other Members on both sides

of this Legislature that have similar concerns and maybe we will hear some more

expressed as the day goes on.

So thank you.

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

DR. WARREN: Mr. Chairman, I have been anxious in the last

few days to make a few general comments about education. It is interesting

discussing very particular issues and special issues, but I felt, Mr. Chairman,

in this very important debate, that I should make some general observations

about education in this Province and perhaps in the country.

Over the past two or three decades, Mr. Chairman, there have

been two or three major issues in education in Newfoundland and Labrador. If I

were to identify two of the major ones, they are issues of quality in education

and equality. I would like to speak for a few minutes on each of these, and then

add a third one, this question of accountability and efficiency ,and relate that

to the estimates and to what we are doing here in this House in this important

debate.

SOME HON. MEMBERS: Oh, oh!

DR. WARREN: Years ago, I would suggest in the 1970s,

equality took precedence over quality, and perhaps in the early part of the

1980s we focused more on equality of opportunity than on quality in education.

Now I would suggest today we have reversed the emphasis on these two, and the

emphasis in this country and perhaps in North American and in this Province is

on excellence and quality. It is not enough to educate everybody, we are saying

you must provide high standards in education. You must provide the right kind of

education. So I would suggest that excellence and quality are the kinds of

concepts which are going to permeate education in the 1990s.

SOME HON. MEMBERS: Oh, oh!

DR. WARREN: Our graduates must compete with the world.

They must be able to compete nationally and internationally. They must be

qualified. They must be able to take their place in the country. I think we have

to, Mr. Chairman, look at the quality of education, school by school. Maybe we

should have, in addition to a report card on students, maybe we need a report

card on schools to see how schools themselves are providing high standards for

areas. We need to do that. I mentioned science. Certainly, in science we need

some changes. There has been an improvement in the participation rates. Mr.

Chairman, there has been an improvement in participation rates in science. More

and more people are taking science courses but we must do much more in this

area, and I am pleased to say that the Government is considering initiatives in

the area of physics, mathematics and other sciences that we will implement over

the next year or so. We have to focus on science and technology. We have to

focus on rewarding excellence by scholarships. Now I don't want to repeat what

this Government has already done with respect to scholarships, but it is very

important. We did more in two years than the other Government did in seventeen

years in the area of scholarships.

SOME HON. MEMBERS: Hear, hear!

DR. WARREN: And that is only the beginning. That is only

the beginning.

Mr. Chairman, we have to focus on not only providing

education for everybody, but for providing the right kind of education and

providing quality education for everybody at all levels in the system. Now let

me say a few words about equality, and I start from the premise - if the Member

from Torngat does not want to listen I am sure the Member for Humber East is

interested in what I am going to say about equality, because she and I, and I

want to pay tribute to her, she and I share some of the same philosophical views

on equality. I am going to say something nice about the Member for Grand Falls

later - if I can find something - maybe even the Member for Ferryland

eventually. But I believe, Mr. Chairman, and this Government believes that all

children in Newfoundland and Labrador, regardless of where they live, regardless

of their ability, regardless of the income of their family, that all children

have the right to quality education, an education that meets their needs.

Now I could go on for some time saying that there are still

gaps between quality of education in large schools and small schools, and we

have to rectify that. Perhaps because the large schools happen to be in urban

areas, there are some gaps there between urban and rural, but we are rectifying

that and we have to work on it, and I think we have discovered some ways and

means of improving that.

Gender equity: We have to provide for males and females, we

have to provide equal opportunity to sciences, to technology. We have to ensure

that more females go on to study at the post-secondary level in the area of

science and technology. That is what I talk about when I talk about equality. We

have to make sure also, Mr. Chairman, that more women get into administrative

positions in education. As a Minister I am committed to that. I don't know how

we can do it in tough times, but we are going to find a way. We are going to try

and find a way to ensure that more women who are qualified and competent in

administration get an opportunity to give leadership in education. We have not

done enough of that in the past. I am very concerned about it and I want to find

ways of doing it.

Mr. Chairman, we have to provide for not just the

disadvantaged - we are doing a lot for disadvantaged students - we have to

provide for the gifted. When I talk about equality of opportunity I am talking

about helping the gifted and the creative students. We sometimes have left them

on their own. We have left them on their own because we know they can survive.

We have left them on their own and the good ones have survived - Furey is

pointing to himself - I mean they survived, the gifted students, but we have to

do more to develop education for all our students.

Christians and non-christians: I know this is a sensitive

issue in this Province. We don't have a lot of non-christians or non-religious,

but as a Minister and as this Government we have to ensure that all of our

people, irrespective of their religious background, have the right to quality

education guaranteed by law, not as a matter of just giving them an advantage,

Mr. Chairman. In the new Schools Act we are going to provide some protection,

maybe not all they want, but more than was there in the past for those who do

not adhere to some of the recognized denominations.

Mr. Chairman, native students: This Government is committed

to improving the educational program for native students. We are looking at the

curriculum. I have met the Sheshatshit. I have been to Sheshatshit, I met the

people, and for the first time we are going to face up to the questions that are

raised in communities on the coast of Labrador - equality of educational

opportunity for single parents and for others, Mr. Chairman. So this whole

question of equality is not easy but as a Government we have done a number of

things, and I am pleased to see that some of my friends are nodding across the

House, we have done a number of things and we are going to do more to guarantee

- we are going to change the grant system, for example, over the next year, to

provide more funds for areas of the Province that have high costs and high

needs. We are going to develop a ten year capital construction program for the

Province to ensure that people, irrespective of where they live, have access to

quality facilities and the latest in technology, the latest in science, and the

latest in instructional materials. These are things which we plan to do, Mr.

Chairman. It is not going to be cheap but we intend to do it. We are going to

keep after the Federal Government to change the student aid program, and perhaps

they will, because they know we have done our share to improve student aid. We

are trying to decentralize post-secondary education. We have first year programs

in the Province. We have an excellent one in Labrador. My hon. colleague for

Labrador West knows that it has been a tremendous success - putting the first

year back into Labrador West.

AN HON. MEMBER: Putting it back?

DR. WARREN: Yes, it was taken out and we, as a

Government, put it back. I think if you were to go to Labrador West and ask the

people, you will find they are very pleased, as my hon. friend knows, with what

we have done. It is going to be costly but we want to ensure greater equality of

educational opportunities.

Mr. Chairman, I have a few more minutes, but I should get a

warning, because I want to talk about efficiency and accountability. I want to

talk about that.

We spend a lot of money on education. The educational system

is underfunded, and we have to find more. Let me assure you, Mr. Chairman, that

we have to convince the public we are getting the best value possible for the

monies we are spending. We have to make sure because we have other public

services which are very important. We have health and social services. The

number of senior citizens is increasing dramatically, and the number of

elementary and secondary students is going down, so the competition for the

dollar is increasing, and therefore we are going to be asked, as educators, all

of us, Departments of Education, Ministers, education teachers, we are going to

be asked to justify the money we are spending to ensure that we are getting good

quality for education, because we are not going to get those additional funds

unless we do. We must do that if we are going to compete successfully with

health, social services, and other areas, environment, and so on. Accountability

is going to be a big thing in the future and I want to say here now that this

Government is going to promote interdenominational sharing. We are going to

promote this. We believe that the traditional organization of education in this

Province must be changed. Mr. Chairman, some twenty years ago we made some

changes in the organization and administration of education at the elementary

and secondary level. I think Government believes that now is the time for

another series of changes. We have put in place a Royal Commission and I have

every indication that they are going to provide models for us to change the

organization of education in this Province. I know this is a sensitive issue. I

know the denominational system is a very sensitive issue. The question, however,

this Government is putting to the people of the Province is not - and I want to

stress - the question is not should we keep the denominational system or abolish

it, the question we are putting to the people of the Province is: how can we

change the system to better meet the needs of the present and the future? How

can we get better returns for our dollar? How can we share? I don't think we can

continue to provide quality services in every part of this Province using the

traditional organization of education. Mr. Chairman, I think the people realize

this. The support for sharing has increased. I think the churches realize that

we have to find new approaches -

MR. CHAIRMAN: Order, please!

The hon. Member's time has elapsed.

AN HON. MEMBER: By leave.

DR. WARREN: I am just about there. I will have another

comment later if you want to.

By leave?

MR. CHAIRMAN: The hon. Minister has leave of the House

for one minute, if he wants to continue.

DR. WARREN: No, I want a little longer than that, Mr.

Chairman. Thank you.

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

MR. WOODFORD: Thank you, Mr. Chairman. Now, Mr. Chairman,

whilst I do not want to change the subject, or look like I am changing the

subject education, I think it is vitally important and very important and I

share a lot of the concerns Members on this side have as well as concerns the

Minister has, I cannot, Mr. Chairman, go without making some reference - not

some reference, but a very strong reference - to some of the comments made by

the Member for Pleasantville this evening concerning municipalities in this

Province. Now if nobody else, Mr. Chairman, whether in the Province or in this

House is going to stand up on behalf of municipalities in the Province, this one

Member is. I think, with all due respect to the Member for Pleasantville this

evening, that he is handing a lot of municipalities in this Province today a

great deal of disrespect. You do not insult the smaller municipalities in this

Province. When I say small, I do not mean the Cormacks of the world, I am

talking about the Stephenvilles of the world, or the Deer Lakes of the world,

too, (inaudible) the comments made by the Member this evening.

And the other thing that baffles me, Mr. Chairman, is this.

How can Members opposite, and I know three or four of them personally who served

on the Federation of Municipalities and served on councils for years, sit in

their seats and agree with the comments of the Member for Pleasnatville this

evening? And not only members who served on councils. I know of Members opposite

who never served on a council in their lives but, as far as I am concerned, do

not agree with the comments made by the Member for Pleasantville this evening.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Well, maybe you should listen more

attentively to what he was saying, especially the Member for Carbonear, because

I sat with him on a committee for a couple of years and I know exactly what his

beliefs are when it comes to municipalities in this Province. They are certainly

not the beliefs of the Member for Pleasantville, that is for certain.

Now either the Member for Pleasantville is out of touch with

rural Newfoundland or else - and the other thing that got me, Mr. Chairman, was

to see the Member for Bonavista South at pretty well every word the Member said,

sort of tapping his desk and agreeing with him. How in the name of God can

anybody from a rural part of this Province agree with what he said? I just do

not understand it.

MR. R. AYLWARD: He must have moved into St. John's.

MR. WOODFORD: The Member for St. Barbe knows exactly what

I am talking about, I can guarantee you, with the municipalities down his way.

The Northern Peninsula is one of the areas hardest hit in this Province when it

comes to unemployment, because of the fishery, especially in the last couple of

years. And you go down and ask any of those councils, even after instituting a

poll tax and a property tax, how hard it is to collect those taxes. They just

cannot do it. They cannot collect the taxes. Whether it is five or twenty-five

mils, they cannot collect it - you cannot take blood from a turnip.

And when