December

17, 1996

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLIII No. 55

The House met at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

The members will have noted by now that there has been placed

on each member's desk a personalized copy of the Bible, and this is presented by

Gideons International, along with a letter which outlines the work that the

Gideons International have been doing throughout the world.

In that regard the Chair would like to welcome a delegation

to the Speaker's Gallery today, led by Mr. Laurie Chaulk, who is the field

representative from Atlantic Canada, and Hazel Chaulk, the national president of

the Ladies Auxiliary, and a number of representatives from the St. John's and

Mount Pearl chapters of Gideon International.

SOME HON. MEMBERS: Hear, hear!

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

MR. MATTHEWS: Thank you, Mr. Speaker.

I am delighted today to be joined in the Speaker's Gallery by

a number of friends and colleagues from the Gideon organization, an organization

with which I have had some association, and continue to, for the past twenty

years.

For those of you who may not be familiar, in the unlikelihood

that there is anybody who is not familiar with the organization known as Gideons

International, I might just refresh your memory and mind by saying that it is an

interdenominational group of business people and lay people who over the past

seventy odd years have worked together across denominational lines to provide

Scriptures to people in at least 172 countries of the world.

Mr. Speaker, the aim and objective of the organization is to

ensure that individuals, to the greatest extent possible, have access to the

Holy Scriptures for their personal use, and to that extent the Gideons have a

long and historic record of programming that sees that happen in Grade V classes

in all of our schools in the country where access is available, and that

includes most of the schools of this Province.

In addition to that, of course, you will be familiar with the

Gideon Bible as being something that is readily seen in hotel rooms, and in

prisons and hospitals and other areas.

I am delighted as being one of the Gideon brethren that is

here today to say on behalf of all members, I believe, of this Legislature,

thank you to them for their consideration, for their diligence in not only

ensuring that we have available to us in this Chamber and this House, as

legislators, a copy of the Holy Scriptures, but also in the broader endeavour in

which they work, and that is providing Scriptures generally around the world.

Thank you very much, Mr. Speaker, and thank you to the

Gideons.

SOME HON. MEMBERS: Hear, hear!

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

MR. H. HODDER: Thank you, Mr. Speaker.

I wish to join with my colleague, the Minister of Health, to

share his comments relative to the work of the Gideons not just in Newfoundland

and Labrador and throughout the country, indeed, throughout the world.

I wish to welcome to the Speaker's gallery some of the people

whom I've known for many years, particularly Laurie and Hazel Chaulk and Sid

Stacey. These are teacher colleagues of mine who have made it a point in their

lives to live exemplary Christian lives and to lead our young people in this

Province in their teaching profession in directions that follow the

Judaeo-Christian philosophy.

Mr. Speaker, I share with my colleague the Minister of Health

as well his compliments to the Gideons on their outreach ministry to those

people who are in hospitals, to people who are in prisons, and people who have

need for the consolation and wisdom that we find in the holy Scriptures. I want

to thank the Gideons for their presentation, reminding all of us of our heritage

and how we as people have a role to play in making sure that our society

reflects the values that are contained in the Scriptures and are to be there as

examples to all of us in our daily lives. Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The Chair would also like to welcome to the

gallery today thirty democracy class students from Booth Memorial High School in

the District of St. John's Centre. They are accompanied by their teachers Bill

Dowdon and Ian Sparkes.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The Chair would also like to welcome to the

gallery today Mayor Ray Pollet from the City of Corner Brook.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. SULLIVAN: Thank you, Mr. Speaker. My questions today

are for the Premier. The Premier indicated yesterday he was going to speak with

Prime Minister Chrtien regarding transfers to this Province. I ask the Premier

if he could tell us what specific areas of concern he addressed with the Prime

Minister.

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I thank the Leader of the

Opposition for his question. Basically all I've raised with the Prime Minister

is the question that arises as a result of what we anticipate will be an

increase in revenues to the Province once the Hibernia oil field comes on stream

in 1997, and once, in addition to the Hibernia oil field coming on stream, the

Terra Nova oil field comes on stream a few years subsequent to that event. In

addition to that, there will be additional revenues flowing to the Province as a

consequence of Voisey Bay coming on stream. All of these things of and by

themselves are good and they will bring a revenue stream to the Province, but

there is a consequence. The consequence is that as revenue flows into the

Province from royalties there will be a decline in revenues in our revenue

stream from equalization. All that we have indicated to the Federal Government

is that we would like to explore ways in which we could keep a larger share of

the revenue stream from resource development in the Province rather than seeing

an outflow as a consequence of a reduction in equalization. What the Prime

Minister has indicated on a number of occasions, I should say to the Leader of

the Opposition, is that the Federal Government is open to a discussion of the

issue.

There certainly is no agreement or discussion concluded at

this stage but it is something we are going to pursue to see if Newfoundland can

have a period of catch-up, if that is possible. I know this is something that

both Premier McKenna and Premier Savage are interested in as well. We have

collectively at one point discussed it with the Prime Minister so we will be

exploring this in the new year to see if there is some additional benefit to be

brought to the people and the Province of Newfoundland and Labrador.

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

supplementary.

MR. SULLIVAN: The Premier said he discussed basic

revenues, or lack thereof, because of increased prosperity in the Province. I

ask the Premier if he discussed the drastic cut this year of $87 million that we

receive in the Canada health and social transfer for health, education and

social services, a cut that was decided when he was our federal minister?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, no, I did not discuss that

with the Prime Minister.

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

supplementary.

MR. SULLIVAN: With reference to cuts in the upcoming

fiscal year, which I know are a concern certainly to our Province and our fiscal

situation, I ask the Premier if he discussed with the Prime Minister or any of

his federal colleagues, or members in his Cabinet, about the further $60 million

over and above the $87 million we are going to get under Canada Health and

Social Transfers this year?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, the Leader of the Opposition

knows that there is a formula put in place with respect to the fiscal transfer

to the Province. We know what the numbers are upfront. The formula is national

in scope. The Leader of the Opposition now is attempting to score political

points by getting up and asking specific questions about specific programs. It

is fairly transparent what he is trying to do. I tell the Leader of the

Opposition that what the Government of Newfoundland and Labrador is doing is

working in collaboration and in co-operation with the Federal Government to go

about the business of growing this economy.

One of the things I have discussed with the Prime Minister is

the delivery of a $100 million economic development program for the Province of

Newfoundland and Labrador that is unique to Newfoundland and Labrador. I

discussed that with the Prime Minister. I discussed with the Prime Minister the

ways in which the Federal Government and the Provincial Government can work

together through a joint environmental assessment, the first of its kind in

Canada, to facilitate the development of Voisey's Bay, the development of Terra

Nova, the development of a transshipment facility, and the development of the

largest and most technologically advanced smelter refinery complex in the world.

These and many other subjects I have discussed with the Prime

Minister because I believe, Mr. Speaker, there is much to be positive about in

the Province of Newfoundland and Labrador and I believe that we will make

progress when we focus on the size of our potential instead of always being

overwhelmed, as is the Leader of the Opposition, by the so-called size of our

problem.

SOME HON. MEMBERS: Hear, hear!

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

Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker.

The Premier stated yesterday that the Federal Government

could not scrap the GST because it needed the money to reduce its deficit. Now,

I say to the Premier, our Province is going to lose over $100 million by the

Minister of Finance's admission on this BS tax that you and two other Liberal

Premiers entered into in order to disguise the GST. Now, I say to the Premier,

you are not in Ottawa now. Are you more concerned with saving money for the

Federal Government or with looking after the affairs of this Province?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I am in St. John's,

Newfoundland. I know exactly where I am. I am proud to be in St. John's,

Newfoundland, proud to be in Newfoundland and Labrador and I am confident about

the future of this Province. Mr. Speaker, we are not going to lose a nickel. I

do not know what the Leader of the Opposition is talking about. Clearly, he

believes that if you leave $105 million in the pockets of the people, that is

money lost. I happen to think that is a gain for the taxpayers, and God bless

them!

SOME HON. MEMBERS: Hear, hear!

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

Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker.

If it were going into the pockets of the consumers in this

Province, I would not be worrying, I say to the Premier, but that is not where

it is going.

MR. SPEAKER: Order, please!

The hon. member is on a supplementary, I ask him to get to

his question.

MR. SULLIVAN: In Question Period I will tell the Premier

where it is going. Will you confirm, Premier, that our Province gave up $190

million in direct taxes to get the transshipment facility?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, the Leader of the Opposition

regularly stands up in the House, makes a statement which cannot absolutely be

substantiated, then he sits down and says: `I will talk about it later.' Mr.

Speaker, we have had the Leader of the Opposition stand here and talk about

secret meetings that occurred, supposedly, in the last election campaign. He

named Gerald Fallon, who has denied it. He named my brother - because he thought

there was some political mileage in that - who has denied it. It turned out to

be totally false. He has now stood up and said there is $105 million going to be

lost in the Province and, Mr. Speaker, that is absolutely untrue. There is no

money going to be lost in Newfoundland and Labrador. There will be less money

flowing to government coffers and more money staying in the pockets of the

people of Newfoundland and Labrador. Now, if the Leader of the Opposition is

going to stand and say that it is going to disappear, Mr. Speaker, as the Leader

of the Opposition, he at least has an obligation to give us some plausible

explanation as to where he thinks this money is going to disappear.

SOME HON. MEMBERS: Hear, hear!

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

Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker.

It is easy to know when the Premier is on the defensive -

easy to know. I spoke for one hour on harmonization in this House when you were

not here, and I said where it went. I will not take time in Question Period to

repeat it but I will immediately after Question Period, I say to the Premier. I

challenged you to a public debate on the issue and you refused. I will give you

that chance again, Premier.

MR. SPEAKER: Order, please!

I ask the hon. member to get to his question.

MR. SULLIVAN: I ask the Premier: Will he confirm that in

the transshipment facility, our Province gave up $190 million in direct taxes on

that deal?

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, the Leader of the Opposition

- and this I find amusing - keeps challenging us to public debates. I have to

tell him, this is the people's House, it is a public House and if he has an

answer to give, give it here and now with leave of members on this side of the

House.

The Leader of the Opposition's notion of public debate, Mr.

Speaker, of public policy discussion, is to make an accusation, then, having

made the accusation, run for the hills. There is no need to run for the hills.

We are here in the people's House and if he is going to say something, he should

substantiate it. And on his latest accusation about a $190 million transfer, or

giveaway, or money vaporising, Mr. Speaker, that statement is also false.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition, a supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

In a meeting with the deputy minister and the assistant

deputies, I was informed, with members of my staff, that we forfeited $190

million in revenues on taxation on the transshipment facility.

AN HON. MEMBER: Which deputy minister -

MR. SULLIVAN: Oh, I will tell you, I will tell you in due

course.

MR. SPEAKER: Order, please!

I ask the hon. member to get to his question.

MR. SULLIVAN: We all want to see prosperity but we also

ask the Premier: Will you come clean and lay the facts on the table and not be

hiding them, so we can all make a determination what is best for the people of

this Province?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, you know, the Leader of the

Opposition has been, on every occasion in this House, standing up in the face of

every single positive, constructive development that has gone on in the Province

of Newfoundland and Labrador and has searched diligently, Mr. Speaker, to find a

bit of crisis and a bit of bad news to drag onto the floor of the House.

Mr. Speaker, I am going to say something to the Leader of the

Opposition: I am so confident that his politics of bleakness, his politics of

defeat, his politics of misery, his politics of defeatism and pessimism, are so

unacceptable to the people of Newfoundland and Labrador, that I am going to

leave him to stew in his own juice. Because I believe in Newfoundland and

Labrador in 1996, and I believe in Newfoundland and Labrador in 1997. I believe

we are making progress. We are making progress because the fundamentals in terms

of our resource industry are right. We are making progress primarily, I say to

the Leader of the Opposition -

MR. SPEAKER: Order, please!

PREMIER TOBIN: - and I will conclude, Mr. Speaker; the

people of this Province believe in themselves and believe in their own

abilities, and believe in their own strengths, and I say to the leader: Not even

Scrooge, let alone the Leader of the Opposition, can steal this Christmas spirit

in Newfoundland and Labrador!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition, a supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

You wouldn't know but the Premier had a monopoly on the

interest of Newfoundlanders and Labradorians. Where were you when I worked in

this Province, employing up to 200 jobs and reinvesting in the future of this

Province? I believe strongly in the future of this Province, I say to the

Premier.

I want to see transshipment. I want to see the facts on the

table so we can see the merits, we can see the demerits, and we can render a

judgement on what is best and what is not, not take it from political connivery

by the Premier in documents that he will not table in this House.

MR. SPEAKER: Order, please!

I believe the hon. member just made a comment that is

certainly unparliamentary - political connivery - and I ask him to withdraw that

statement.

MR. SULLIVAN: Thank you, Mr. Speaker.

I withdraw the word `connivery' if it is used in -

MR. SPEAKER: Order, please!

That is all the hon. member -

MR. SULLIVAN: Yes, I withdraw it.

MR. SPEAKER: Okay, fine.

The hon. the Leader of the Opposition.

MR. SULLIVAN: I ask the Premier now: Will you lay on the

Table of this House, letters of intent and the specific details of the benefits

accrued from the transshipment facility so the public can see it and render a

decision? Will you do that, Premier?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I can only say to the Leader

of the Opposition, he should save some of his ammunition for the next election.

It is still four years away.

We had an announcement of a transshipment facility for

Newfoundland and Labrador. We had an analysis done by the Department of

Industry, Trade and Technology, showing half-a-billion dollars of net economic

benefit to the Province of Newfoundland and Labrador, and that information was

given to the Leader of the Opposition and given to anybody else who asked for

it, and the Leader of the Opposition said: Bah, humbug!.

Mr. Speaker, we had an attempt to try - and we are in the

middle of it - to try and renegotiate the Churchill Falls power contract. We had

a resolution put by a private member to the floor of the House to say that we

stand behind the attempt to renegotiate the contract, and the Leader of the

Opposition says: Bah, humbug!.

Mr. Speaker, we had an announcement by Inco that they are

going to spend a billion dollars in the Province of Newfoundland and Labrador.

The people of Argentia started a spontaneous parade -

MR. SPEAKER: Order, please!

PREMIER TOBIN: - celebrating the announcement, and the

Leader of the Opposition said -

SOME HON. MEMBERS: Bah, humbug!

PREMIER TOBIN: Bah, humbug!

MR. SPEAKER: Order, please!

PREMIER TOBIN: Mr. Speaker, I say to the Leader of the

Opposition: Bah, and humbug!

MR. SPEAKER: Order, please!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition, a supplementary.

MR. SULLIVAN: Mr. Speaker, when the Premier cannot answer

a question, he puts on a show for everybody. We all know how he acts, a little

show by the Premier.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: All I want Premier is an answer to a simple

little question -

MR. SPEAKER: Order, please!

MR. SULLIVAN: Will you let the people of this Province

see the details on the transshipment so we can draw a conclusion whether the

decision you made in secret is best for this Province? If it is, I will support

it, I say to the Premier. Will you do it?

MR. SPEAKER: Order, please!

The hon. the Minister of Industry, Trade and Technology.

MR. FUREY: Mr. Speaker, I should say to the House that we

made arrangements to provide a full and comprehensive presentation to the Leader

of the Opposition over a month and a half ago. It showed 300 construction jobs

at this terminal, 300 at peak; it showed forty full-time jobs in the aftermath.

What we talked about was 4 per cent RST exemption on Hibernia transshipped at

crude. It talked about fuel tax exemptions, and then it went on, in this

presentation, to talk about a positive net economic benefit to the Province over

the life of the Hibernia field of $500 million to the economy of the Province.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

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

MR. SULLIVAN: Thank you, Mr. Speaker. While the Minister

of Industry, Trade and Technology has such a great interest, I've requested from

your department on several occasions the letter of intent pertaining to

transshipment.

MR. SPEAKER: Order, please!

MR. SULLIVAN: In fact, I faxed to the minister today a

written request for that. I haven't received it. Will you see, I say to the

minister, that I will receive letters of intent and information pertaining to

it? I have been denied it for the past two to three months, Mr. Speaker. Will

you ensure that I now receive it?

MR. SPEAKER: The hon. the Minister of Industry, Trade and

Technology.

MR. FUREY: Mr. Speaker, the hon. Leader of the Opposition

is in dreamland. This was negotiated and made public three months ago. All of

the information was made public. It was made public at a press conference. There

were literally hundreds of people there. We didn't just stop there. We heard the

fuss the hon. member made in the public media trying to grandstand, so we

invited him to my department. We sat him down, we made a presentation, and when

the numbers got complicated we showed him pictures.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

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

MR. SULLIVAN: I say to the Minister of Industry, Trade

and Technology, the Premier said at a news conference he would provide it. I

called and asked for it. His ADM told me: We don't have it. He said: But we can

do an overhead presentation of the generalities. I want to see, minister -

you've been denying it for three months, your department. I ask to see the

specifics on this deal so we can draw conclusions in the best interest of the

people of this Province.

MR. SPEAKER: The hon. the Minister of Industry, Trade and

Technology.

MR. FUREY: Mr. Speaker, we have given every single

detail. We have explained the 4 per cent RST exemption on Hibernia-related

crude. We mapped out and traced for him the fuel tax exemptions which were

conceded by the Province. We showed the benefits on the construction side. We

showed the benefits of the 100 Newfoundlanders who will take jobs on the two

supertankers. What is the hon. member saying? That he wanted this to go to Nova

Scotia? We worked very hard for this for the Province of Newfoundland and

Labrador.

SOME HON. MEMBERS: Hear, hear!

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

Opposition.

MR. SULLIVAN: It is getting very interesting, Mr.

Speaker. In fact, on the overheads there are some of the pages they removed and

had to get permission from the Premier before they could send it to us, I would

say to you, on generalities.

Will the minister and the Premier admit that their department

is hiding the specifics of this deal, keeping it from the people of this

Province? I haven't rendered a judgement whether it is good or bad, but I think

I have a right, I will say to the Premier and the minister, to be able to see

the details so we can render an informed decision on what is best for the people

of this Province. Will you provide those specifics?

MR. SPEAKER: The hon. the Minister of Industry, Trade and

Technology.

MR. FUREY: Mr. Speaker, when the hon. member came over

for the presentation which lasted for a couple of hours I'm told by the

Assistant Deputy Minister Mr. Spracklin, who is a very good economist, that the

hon. Leader of the Opposition thanked him, thought it was a very comprehensive

presentation, thought all the questions were answered honourably and

straightforwardly, and all of the details and all of the numbers were given to

him. So I can only go by what these senior civil servants who were hired by the

former government that are still in our government gave. They gave full and

straight and comprehensive answers. I think the hon. member is just fishing. He

is on a great fishing expedition.

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

Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker.

I feel compelled to stand here in this House on inaccuracies

by this minister when the DM is not there now - in fact, he is not even there,

the one I met with - there is a new DM, I say to him, and I have thanked him for

the meeting which I requested and scheduled.

MR. SPEAKER: Order, please!

I ask the hon. member to get to his question.

MR. SULLIVAN: One more time, a final supplementary, Mr.

Speaker. I will just ask the minister: If you and the Premier have nothing to

hide, let us put it out in a public forum. Let us see the benefits and let us

see the areas where we made compromises and let us see if it is an overall good

deal. I want to see that and I will support it if it is. Will you provide to us

those figures so we can render that judgement, not an outline or sketch of

overheads that do not go into any specifics?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, all of the elements of the

arrangement that was reached on the transshipment facility were made public at

the time the facility was announced. The Leader of the Opposition knows that.

The 500 people who were there at the press conference know that and, Mr.

Speaker, the Leader of the Opposition, I have no idea what he is doing. I mean,

he is spending his time trying to tear down every bit of positive development in

the Province.

Mr. Speaker, I say to the Leader of the Opposition, and I ask

him to reflect upon what I am saying: there will come a time for us, three or

four years hence, to look at another election campaign. In the meantime, all of

us in this place - and the obligation is on me as well him - have an obligation

on occasion to put aside the partisanship a bit and to try and build

Newfoundland and Labrador. We cannot build up the Province if we try to tear

down our potential as a way of trying to score political points on each other. I

say to the Leader of the Opposition, we saw in the last election campaign an

announcement, Sir, by your party, that the transshipment facility after the

election was going to be announced for Nova Scotia. That was the major

declaration of the Conservative Party. The major reality is, it has been

announced for Newfoundland and Labrador and you should try to get used to it!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Kilbride.

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

Some fourteen months ago, a working group was put together to

work towards a better labour relations climate in the Province. Recently, they

tabled in the House a document containing forty-eight recommendations called,

`New Centuries, New Realities.' Now that the minister has had some time to look

at those recommendations and what is contained within the covers of the

document, can he tell the House when he sees government acting upon those

recommendations? And will it be a comprehensive action on the part of government

in terms of whether they will implement all of the recommendations contained in

this very comprehensive plan?

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

Labour.

MR. K. AYLWARD: Thank you, Mr. Speaker. I thank the

member for his question.

A presentation has been made to government of the documents,

that has been developed by the working group on labour relations. They have done

a very good job of putting together a report which the government is now

considering and over the next few weeks we will take our time to look at the

document carefully. We will examine the recommendations carefully. We are also

going to discuss further with the working group and also other groups who have

an interest both in labour and in management, on a go-forward basis to see where

we can move ahead, to make sure that we have a proper labour relations climate.

Mr. Speaker, we are going to need a good labour relations

climate in the Province for all of the new industry that the Premier is

attracting to the Province. We are going to work towards ensuring that we do

have a proper labour relations climate, Mr. Speaker, because of all of the

great, great work that is being done in this Province to attract business. And

as we create those new opportunities, we want to make sure that workers in the

Province are going to have a good labour relations climate. We are also going to

ensure that employers who come to the Province have a good labour relations

climate.

SOME HON. MEMBERS: Hear, hear!

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

Kilbride.

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

Let me say to the minister, that will work towards a better

labour relations climate, based upon our natural advantages, which seem to me,

are our resources and are not necessarily contained on the other side of the

House.

In the report, Mr. Speaker, the working group clearly says to

the minister that the recommendations contained here have been arrived at as a

result of compromise and trade-offs based upon both business and labour and that

implementing these recommendations on a piecemeal sort of approach, or only some

of the recommendations, would be harmful and would place in jeopardy - or would

provide balance to one group over another.

MR. SPEAKER: Order, please!

I ask the hon. member to get to his question.

MR. E. BYRNE: Will the minister make a commitment that

the recommendations contained within this report are very worthwhile, Mr.

Speaker, which outline a framework for a labour relations climate heading into

the next century? Will he make a commitment today that all of these

recommendations from one to forty-eight will be implemented? Can he inform the

House, please?

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

Labour.

MR. K. AYLWARD: Mr. Speaker, again, I thank the member

for his question. I want to say that the report was well put together. The

facilitator, Mr. Austin Thorne, did a great job of putting it together.

SOME HON. MEMBERS: Hear, hear!

MR. K. AYLWARD: We are going to look at the report in a

comprehensive fashion. I will not say we are going to accept it carte blanche.

We will look at the total report and we will examine all the recommendations. We

are going to also have further consultation with business, industry, and labour

to ensure that as we evaluate the options that we put in place a proper and very

much a positive labour relations climate for all the new business activity that

government is now creating.

Thank you, Mr. Speaker.

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

MR. FITZGERALD: Thank you, Mr. Speaker.

My question is to the Minister of Fisheries and Aquaculture.

Yesterday, I asked the Premier to confirm reports that Spanish and Portuguese

fishing activity has increased dramatically since 1995. In fact, it has

increased by 500 per cent in spite of the statement to the House by the Premier

a couple of weeks ago. The Premier stated that he could not confirm those

reports since he was not aware of any increased fishing activity. I now ask the

Minister of Fisheries and Aquaculture if he is aware of this serious situation,

and if so, what is he doing to correct it?

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

Aquaculture.

MR. EFFORD: Mr. Speaker, the hon. member opposite is

assuming there is a serious situation out there. What we know is that there are

more boats fishing this year than last year, but there are observers on all the

boats and that is a major improvement over past history. Assuming there is

something happening and finding out is another thing. The Minister of Fisheries

and Oceans of Canada has said very clearly that he is going to check into it and

monitor it on a day-to-day basis, and I have the confidence he will do that.

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

supplementary.

MR. FITZGERALD: Thank you, Mr. Speaker.

There are no assumptions, Mr. Speaker, we know the fishing

activity that is out there. It has been clearly reported. Minister, you must

have made time last night to speak with your cousins during the expensive

love-in down at Hotel Newfoundland. I ask the minister: When will Minister

Mifflin act to stop this raping of our turbot stocks, since the allowable quota

for this particular year has already been taken?

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

Aquaculture.

MR. EFFORD: Mr. Speaker, prior to 1985 when I decided to

run for politics, I wanted to know how many family members I had in the great

district of Port de Grave, and I found out I had 250, mostly cousins. I was not

in Port de Grave last night. I was at Hotel Newfoundland, so my cousins are in

Port de Grave, they were not at Hotel Newfoundland. Let the hon. member gets his

relationships correct.

Now, I would be honoured if the Prime Minister of Canada saw

fit in his busy

schedule to sit down and meet with the Minister of Fisheries and

Aquaculture for Newfoundland, and if he called me his cousin I would be very

honoured. Minister Mifflin and myself are in continuous dialogue on a regular

basis, on all activities in the fishing industry of Newfoundland and Labrador,

inside and outside the 200 mile limit.

I have never heard the hon. member stand up once in this

House and ask a question or do something about the 10 million seals that are out

there in the ocean eating fish. If a boat turns up in our direction that is the

issue. We are concerned about all activities, inside and outside the 200 mile

limit.

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

supplementary.

MR. FITZGERALD: Thank you, Mr. Speaker.

I agree with the minister that probably there were not too

many of his cousins down at Hotel Newfoundland, because they are probably like

my cousins, they could not afford to pay $500.

MR. SPEAKER: Order, please!

I ask the hon. member to get to his question.

MR. FITZGERALD: Minister, I call on you to admit to the

people of Newfoundland and Labrador right here today, that the turbot war was a

farce. It was an expensive spectacle put forward to showcase the federal

minister at that time, and the real reason that the Spaniards and Portuguese

temporarily vacated the Nose and Tail of the Grands Banks -

MR. SPEAKER: Order, please!

I think the hon. member has asked his question.

MR. FITZGERALD: I am asking the question, Mr. Speaker.

Mr. Speaker, will the minister admit that the Spanish and

Portuguese vacating the Nose and Tail of the Grand Banks was really for economic

reasons and not the intimidation created by the now Premier?

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

Aquaculture.

MR. EFFORD: First of all, let me tell the hon. member, my

cousins can afford to go to dinner. Now, make no mistake about that. Let me tell

the hon. member something else. Let me get on a serious point here. Prior to the

Spanish War, there were in excess of eighty vessels fishing 365 days a year on

the Grand Banks with no observers, with all the fishing activity that could take

place with undersized mesh and everything that they could possibly do wrong.

Today, there are less than thirty vessels fishing on the Grand Banks. We know

there are observers on each and every vessel. We know that there is a controlled

fishery, that there is co-operation between the EU and Canada, and we know that

there are major gains being made.

Is he also saying that we would like to revert to the way it

was, that we take all observers off the boats? Get your act together and let us

talk some sense in this House!

MR. SPEAKER: Order, please!

I ask the hon. the minister to take his seat.

SOME HON. MEMBERS: Hear, hear!

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

MR. OSBORNE: Thank you, Mr. Speaker.

My questions today are for the Minister of Justice.

The Justice minister was the head of a Cabinet committee

charged with an in-depth total review of the industry department. I ask the

Minister of Justice: Has this review been concluded, and when can we expect to

see it tabled?

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

MR. DECKER: Mr. Speaker, I am not sure what the hon.

member is talking about. Is he talking about the program review?

AN HON. MEMBER: (Inaudible).

MR. DECKER: The program review is an internal study which

is being carried out by ministers. It will be dealt with by Cabinet in due

course. Until then, it would not be proper to discuss the issue, before Cabinet

has had an opportunity to deal with it.

MR. SPEAKER: The time for Oral Questions has elapsed.

Orders of the Day

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

MR. TULK: Order No. 26, Bill No. 45. Motion No. 3, the

closure motion, Mr. Speaker.

MR. SPEAKER: The hon. Government House Leader is moving,

pursuant to Standing Order 50, is it, the motion on closure.

MR. TULK: Yes, closure on Bill No. 45.

MR. SPEAKER: All those in favour of the motion, `aye.'

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Against.

SOME HON. MEMBERS: Nay!

MR. SPEAKER: Carried.

We are now dealing with Order No. 26. We are on second

reading of the bill.

The hon. the Leader of the Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker.

The Premier was wondering what is going to happen to the $105

million, or the $150 million I advocate, in there, so I am going to explain to

him now basically what might happen there.

I asked the Minister of Finance and Treasury Board yesterday,

and I would like the minister to clarify this for me, if it is at all possible.

When we look at the GST revenue base we had in the Province last year, according

to the figures I received provincially and federally, it has ranged from $279

million to $283 million depending on what month you took. It varied. According

to that, there will be a shortfall of $240 million when you take the GST that

was collected last year and take that 7 per cent and convert it to an 8 per cent

equivalent to what our Province is going to get. When you look at that, there is

a $240 million shortfall.

The Minister of Finance and Treasury Board indicated that

there is an insurance tax. I think he said the insurance tax is going to bring

us in around...$35 million, he said, roughly - or $25 million was the figure he

used the first time. He came back after and made a correction. I think he said

$35 million the second time. The private sale of vehicles, I think he indicated,

is going to be $25 million, and then he indicated, by freezing the tax on

tobacco and liquor it is going to be another in the $25 million range, for a

total, he said, of about $75 million on those three specific areas.

Now, he said there is going to be another $15 million -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I will get to the Premier's question in a

minute, now. The Minister of Finance and Treasury Board could check this out in

the meantime. There were some other taxes of minor ones, and other taxes he

said, that would bring it up to $90 million. So when you subtract $90 million

from $240 million, you get $150 million. The minister has not provided

information that shows basically where the difference is. Unless the Minister of

Finance and Treasury Board can provide to me figures that show it is $105

million, I advocate it is $150 million. Based on the mathematics used in his

Budget, based on the answers to his questions in the House of Assembly, there is

going to be a $150 million shortfall. In year three, all our money is going to

be used up and we will be stuck with a $150-million hole in the Budget.

We all know what happened on the GST. We are all well aware

of the Finance minister coming out and admitting he was wrong, saying that they

promised to scrap it and abolish it, and he admitted that. Sheila Copps did a

poll that showed she could get re-elected in Hamilton East and then she admitted

it and went out and got re-elected, as everybody expected. There were no

surprises. Now the Prime Minister of Canada will not admit it. He will not admit

that he told us the GST would be abolished. The Prime Minister tries to skate

around the issue. The Premier of this Province also was one of those who was

going to scrap and abolish the GST.

Now, what he has done - and I am in the process of explaining

where the $105 million - he wanted so eagerly to know in Question Period. I am

getting to that very shortly, I am sure he will be eager to find out and now, he

decides to cover up to give the impression that the GST is eliminated when

actually it is hidden now by the only three Liberal governments out of ten in

this country and the federal government, it is hidden into a tax, with

tax-inclusive pricing, and in the tax-inclusive pricing, it is detrimental and

now I am getting to answer the Premier's question in Question Period, the reason

why it is not going into the pockets of consumers is because the tax-inclusive

pricing increases the base cost of the goods.

Anybody out there in business today will tell you, and in

accounting out in the fields, that when you add extra costs on to the base price

of the goods, whether it is transportation, repackaging, remarking, extra costs

of converting cash registers and ongoing costs, is going to be negative and is

not going to bite into the profits of businesses, it is going to be absorbed in

the cost of the goods and will be a profit margin on top of that. Here is the

example I used the last day: I said a hundred-dollar item today at 7 per cent

GST and 12 per cent RST, will cost $119.84. With a hundred-dollar item, after

tax-in pricing, other related costs, some retailers could be charging $104, it

might be $102, it might be 105 depending on the item and the cost of change over

in your business, when you put your 15 per cent on top of that basic cost, you

are back up to $120. So, what has happened?

What happened with GST and some experts will tell you, GST

was supposed to put money back into the pockets of consumers but it became an

inflationary tax. Inflationary, because the cost incurred in that tax did not go

into the pockets and the profits, did not filter out and go back to the consumer

to increase consumer spending but reduced consumer spending, and was absorbed

into the basic cost of the goods. I made that point yesterday on an Open Line

show.

I had a call from a person who told me he has over thirty

years in business. You are absolutely right, he said. I have been in that

business in retail and dealing with (inaudible), what you are saying is exactly

correct. He said the cost, I have seen it happen there, business does not pass

on increased costs of doing business, and let us look at an example: In Ontario,

they are shipping goods down, a lot of produce come into this Province from

Ontario and right across the country from non-harmonized areas. When you ship in

a pre-price, those major corporations on their products, what do they do? If it

comes into Newfoundland, you have to have your tax-in pricing. It is going on

the shelf, tax-in pricing. When you have tax-in pricing, not only the extra cost

of that labelling the wholesale, warehousing aspects here, you also have - just

look at a small business person.

A small business person, or large whatever the case may be,

you have to reprogram your cash registers, reticketing of these items and you

have increased costs. Here is what one company said: A Quebec based company,

called MMG Management Group, announced the closure of its stores in New

Brunswick and here is what they said: Like the metropolitan Greenberg red apple,

they indicated the new tax is going to cost $695,000 to implement, that is a

one-time cost and it is going to cost $563,000 annually to manage. I mean, who,

do you think pays out this $563,000? I mean, is it that the business is going to

absorb that? No.

It is always great to see a reduction in taxes for the

consumer, but I don't see the logic in reducing taxes to a consumer and adding

up the cost price which brings it back to where it was. That does not make

sense, and when that happens, the consumer does not gain, but our Province loses

over $100 million in revenue. One hundred million dollars in revenue, so I say

to the Minister of Finance and Treasury Board: Where is our Province going to

make up over $100 million in revenue that he said we are going to be short? Are

there going to be cutbacks in Education further? Are we going to cut back health

care further, or social services or are we going to increase other taxes to make

up for that shortfall of $100-and some million? He said the economy is going to

grow. Well, let us look at it two ways, let us look at both sides of that. If

the economy was going to grow, we would get those taxes anyway in extra

corporate, extra income tax, and other taxes. If it grows because of

harmonization there could be some residual benefits come back, but if it is

going to grow anyway we have forfeited future taxes to our Province. What

happens if it does not increase?

The Minister of Social Services just released a Strategic

Social Plan that said that between now and 2016 the economic prospects in this

Province will not be good - released by this government - and that there will be

less people working, paying more taxes. There will be more people to support

because of an aging population, and we will have a problem with being able to

deliver the social programs of the future. That is what the Minister of Social

Services said in that government document that was carefully put together, that

went out around this Province to people, in dealing with the future problems we

are going to have here in our Province.

I have a grave concern when we do not do responsible

planning. It looks great in the short term. There is too much of this short

term, to hell with the future, look after today, and don't worry about your

children of tomorrow, because we are in a rut in this Province because previous

governments - no matter what their political stripe - did not see the need to be

able to maintain their debt as a percentage of their GDP.

I said before, I do not think we should go out and start

trying to pay off a $5.8 billion direct debt. What I have been saying is

important is that we have to be able to, during a mandate of government,

maintain the debt levels, and as the economy grows, as the GDP increases -

inflation would drive up a GDP number - as it grows, and you keep the debt

similar, it comes more insignificant with each passing year. But we do not need

to incur more debt on top of what we have, to pass that on to future

generations.

We are at a unique time in our history. This past year or two

has been very positive on the budgets of provinces of Canada because we have had

some of the lowest borrowing rates we have ever had. Much of the saving in the

federal budget has been because of abnormally low interest rates. Now, while the

low interest rates did not stimulate economic growth in other areas, it did

drastically reduce the borrowing costs, and when we have to borrow at high

costs, and we have a lot of debt on our books, at 11 per cent and higher, and

when you can borrow on the market today in half of that, it is a considerable

saving. How many people want to see hundreds of millions of dollars going out of

the treasury of this Province to pay down on debt? It bothers me that that

number increases, and I feel we must look at the future of this Province in

delivering the programs we need to deliver, the social programs, our health and

education and social services, but we have to have a revenue on this side to be

able to sustain those programs.

We have made a decision on harmonization, or they are in the

process of making a decision, that is going to siphon $150 million - based on

figures I received from the minister's response and from federal and provincial

departments - out of this economy, badly needed, $150 million, that is not going

to do anything to stimulate growth because it is not going back into the pockets

of consumers to increase consumer spending.

If it would do that I could applaud that, but that is not

happening. I want to see a single harmonized tax in this entire country because

I think it is good, and I do not think tax-inclusive pricing is bad if all the

provinces of Canada buy into the deal, because then you have the level playing

field. You do not have certain areas incurring increased cost to the basic price

of goods because of that, and you have advantages that are going to filter back.

Now, when 6.6 per cent of this country buys into a harmonized

tax, and 93.4 per cent of the country does not, you have the big majority of the

country outside this harmonized tax area and there is inherent cost built into

the system. Everything you read will tell you, right through numerous people,

consumer groups out there, chambers of commerce, businesses, and it is not

only... Businesses are there to make money. You cannot put all your faith in

what they tell you, but when you have gone through it you know that when goods

get marked up - if the tax goes up on gasoline, for example, let's say five

cents a gallon, do they keep the same profit by retailers? Or if the price of

goods goes up by 5 per cent? No, you have to increase your profits in proportion

with the cost of the goods. Profits are generally a percent of that cost of

goods, percent of business, look at a profit line. So a 20 per cent profit on a

ten dollar item is a big difference from a 20 per cent profit on a one dollar

item. So as we increase cost of goods we proportionately increase our profit

margins on goods. That is why increasing the basic cost of a good, even if the

extra 4 per cent does not all go on the cost, there is some that is going to go

into the profit and that is not going to go into consumer pockets. That is going

to go into the price that the consumer is going to pay at the cash register.

The Government of Quebec, in 1993, looked at this tax

inclusive pricing. They did an analysis. They came back this year and did

another one and they came to the conclusion that it is not an option; a major

province, the second largest in this country. Here we don't do an analysis, we

don't look at it, the minister can't provide it. We don't look at the impact it

is going to have, what he did. Nobody can complain dropping the price of cars

from 12 per cent to 8 per cent. You can't complain about that. But the minister

saw it as an avenue, that in this Province we are going to lose a lot of

revenue, and because it was coming in April 1, decided it is better to act now

and give that break. Car dealers are going to benefit and it is fantastic to see

it happen but we were going to lose revenues anyway, and they were going to hold

off. So, why not get the revenues now and at least help the car industry in the

process?

Now, there are people out there too who were not too excited.

There are people who may want that new fridge, stove or furniture. In Labrador,

Northern Newfoundland - I mean a mode of transportation, the ski-doo, is a major

method of transportation in many parts of Labrador. It is their main method of

transportation. Even if vehicles that are used in Labrador, or areas of the

Province that do not have the same access to transportation, were afforded

similar things, it would be considered to be fair. In other words, we would be

accelerating the date on which we are bringing in harmonization, when we have

not even had a chance to debate it in the House. These decisions were made

before the bill was called here for second reading in the House.

There are numerous fundamental problems with this

harmonization. What is wrong with a bill when the price of a fur coat goes down

- you can go out and buy a mink coat or a fur coat cheaper after April 1 then

you could on March 31, but you go in and you pay an extra 8 per cent in taxes on

children's clothing or school supplies, or your light bill is going to go up.

The Minister of Social Services - I asked a question, made a

reference yesterday: What happened with the $51 supplement to add to people

during the wintertime, for people on social assistance to heat their homes? They

need that extra money in the winter because $50 extra spending in the winter is

not very much compared to summer spending. Are you now going to increase that

supplement out to those marginal income people, well below the poverty line? Are

you going to increase that? Are there extra costs we are going to be incurring

because of that? I mean, they are decisions the minister is going to have to

make in the future. Is it now that this increase is going to chew up some of

that cost? Is it going to chew it up in clothing, in heating, electricity.

Basic personal services are gone up. Less disposable income

for the social services people, which means even their standard is going to be

down. Other marginal people, the people out there today working for $200 a week

and less, who are just above the level for social assistance, are some of the

hardest hit people out there. They are just above that line where they can get

assistance. These people now with young kids - and many of them have young kids

- who have to spend a significant portion of their income, right now, on

clothing, on shelter, with heat and electricity and the basic necessities, are

now going to see an increase from 7 per cent to 15 per cent. There is something

radically wrong with a system that takes $100-odd million out of our economy and

benefits the rich at the expense of the poor. It is not a balanced system of

taxation in the Province and it is not moral, I say; it is not.

There have to be avenues when you have harmonization. First

of all, I oppose it on the grounds of tax inclusive pricing. There are ways to

deal with rectifying this. If you move tax inclusive pricing, if you look at a

distribution of the taxation levels, there are numerous ways that would

completely restructure this particular bill and certainly would make it

palatable to the federal government. What we have done here is we have bent over

to the federal government on an initiative that grew out of a desire to get rid

of the GST, that failed in every other province in Canada that has an NDP or a

PC or a Bloc leader in this country. Every single one said no. The only ones

that said yes are some of the poorest provinces in the country: Newfoundland,

Nova Scotia and New Brunswick. Why? Where are the benefits?

New Brunswick said: We will rebate to those people that I'm

just talking about now. We will give some money back to them. Nova Scotia, I

think. are talking about - what? - $8 million to send back, and they are saying

it isn't enough. They are talking about that now. The Premier said in answers to

questions during question period yesterday: We will look at things and we will

see how it will impact. You don't go through with a significant piece of

legislation and wander in the dark and feel your way. You do your analysis. You

look at how it impacts on people. How many millions more are on the bills of

low-income people below $10,000, or below $20,000, or $30,000?

MR. E. BYRNE: But that doesn't matter in the long run.

That isn't why the deal was signed. That doesn't matter to them. That has

nothing to do with why the deal was signed.

MR. SULLIVAN: That has relevance. It should be based on

basic economics and retaining revenues, that we have discretionary income to

spend for the people in our Province. We have forfeited over $100 million in

extra revenues, and we now do not have discretion over where it is spent in this

Province. That takes away a great degree of autonomy over taxation and to be

able to regulate levels in the future.

If it is a two-way street, you might live with the autonomy

part. But when the federal government can up its taxes under this agreement

twice - it can up it twice without consent of the provinces. It can unilaterally

increase it twice. But this Province, if it wants to increase it, must get a

majority. If it wants to decrease it, if it is as prosperous as the Premier is

telling us when he rants and raves about prosperity on the horizon, and we all

hope it is, if it is as prosperous, wouldn't we want to give a break to our

low-income people and the people on these necessities?

We have to get unanimous approval. New Brunswick has to say

yes, Nova Scotia has to say yes, and the federal government has to say yes. In

other words, Frank McKenna has to say yes for us to be able to give a break to

people here in our Province; or John Savage, or whoever is going to replace him,

whatever PC leader is going to replace him.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: They are refunding money back to these

people. That is what they are doing. They are saying: These people, the

low-income people who have to pay extra on clothing, who have extra heat and

light, will now have a rebate system like the federal does on GST, to go back in

the pockets of these people. We are the only province now that does not.

The Premier answered yesterday in question period, I would

say to the Member for Conception Bay East & Bell Island: We will look at things

next year and tell you how it is going. It is there in Hansard. You will see it

in yesterday's Hansard in his response to me. I mean, that isn't -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I'm saying it hasn't even gotten to the

legislature in New Brunswick and it has made a decision. The legislature went to

what is called a public hearing in a legislative process in Nova Scotia where

the public had an input. I have said here from day 1, this wasn't in the red

book. It wasn't an election campaign, it wasn't a part of the platform. It was

signed very shortly after. They knew it was coming down the pipe. They wouldn't

let the public discuss it.

I challenge the Premier to public debates on it. Anywhere,

any time, any place, at his convenience, morning, noon or night, any time in a

twenty-four hour period, I will be available, and I will discuss the merits and

demerits of this; and the Premier wouldn't do it. Because the Premier knows he

can't base it on fact, the Premier knows he can't stand on that. It is only a

smoke screen to buy time with a $348 million pay off to get us by the next

election, and then to hell with the future of Newfoundlanders and Labradorians.

That is a very poor attitude to have, political decisions in the Province here.

We have to make decisions that are based on a solid premise here for the

betterment of us all.

I said before, I hope to live here in this Province the rest

of my life; and my children. I'm genuinely interested in the future of every

Newfoundlander and Labradorian. The Premier talks as if he has a monopoly on the

future, on the interests of people in this Province. There are people here in

the Legislature who are very genuinely interested. People ran in politics so

they can get involved in a way that can help shape and improve the prospects of

people in the Province. How can we do it when the public can't have input?

We went around the Province on committees, I can tell you.

You would laugh at it, if you knew some of the things committees went around

this Province on. Here we have a major taxation scheme and he won't allow it? He

wouldn't allow it to go out in the public? He won't allow it to go to a

committee of the House?

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. SULLIVAN: By leave, Mr. Speaker.

SOME HON. MEMBERS: No leave!

MR. SPEAKER: The hon. member doesn't have leave.

MR. TULK: Take a minute, Loyola, to clue up, take a

minute.

MR. SULLIVAN: Sure, a minute won't -

MR. SPEAKER: Order, please!

MR. SULLIVAN: Okay, thank you, I will just take a minute.

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition, by leave.

MR. SULLIVAN: Thank you, Mr. Speaker.

I won't abuse the time. I will just finish what I'm saying.

There are some very valid points, I say to the Member of the House of Assembly,

on harmonization. It is not an area on which the Opposition is stalling. I have

asked simple things: Put it out; let us hear what the people have to say; let us

hear what experts out there have to say. Come on, let us deal with this on a

rational level, not on a political level, and let us see what is best for the

future of Newfoundlanders and Labradorians.

I will judge anything on its merit. I stood on education

legislation; numerous things we supported. We expedited processes there, and we

have not unduly delayed. I can say we have moved education rapidly through this

House, and other issues and other bills, up to twelve in a day. We are not going

to resist in areas where we feel there is no need, but when there is a genuine

concern that is going to affect Newfoundlanders and Labradorians... We cannot

turn the clock back on this deal when it is done and gone too far, because on

basic principle they will not do it.

I will leave you with one single question. Has this

government looked at what happens with other provinces, if this deal falls

apart? What happens with the $348 million? What contingencies has our Province

built in to deal with this when it falls flat overall in Canada and we do not

get this Blended Sales Tax, or this BS tax, right across the country?

Thank you, Mr. Speaker.

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

South.

MR. FRENCH: Thank you, Mr. Speaker.

I rise today to say again a few words on the tax

harmonization and especially, of course, the motion on closure on this

particular bill.

I think that this bill has a great deal of importance for the

people of this Province. Some of it, over the next hour or so, will probably be

repeated. I do not know how people on the other side of this House feel, but the

phone calls that I get clearly indicate that all is not well with this

particular piece of legislation, and most of the calls that I get - or all of

the calls I get, concerning this particular piece of legislation are certainly

not in favour of it but are, indeed, opposed to it.

I guess, over the last several weeks, or certainly since

December 13, there is quite a move on, certainly by the federal Liberal

Government, to backtrack, to cover up, to do whatever they can, to say that -

AN HON. MEMBER: Be nice, Bob.

MR. FRENCH: I have difficulty being nice on this; I

really do. I will be quite honest about that. When they made a promise to the

people of Canada to do away with this particular bill, I do not know how the

Minister of Health, or any other minister, can sit there and say it was a great

thing that they did and now we are not going to do away with it; we are going to

leave it into being.

AN HON. MEMBER: They should never have brought it in.

MR. FRENCH: I agree, it should never have been brought

in. As a matter of fact, if this member here had sat in the House of Commons

when it came up, he would be sitting by himself today because this member here

would have had his convictions and would have stood on his own two feet and

would have voted against this piece of legislation.

SOME HON. MEMBERS: Hear, hear!

MR. FRENCH: Let me tell you that today, I would have

stood on my own two feet.

AN HON. MEMBER: (Inaudible) support us (inaudible).

MR. FRENCH: No, Sir, I certainly did not on this

particular piece of legislation. I certainly did not support it.

AN HON. MEMBER: This man supported it.

MR. FRENCH: He probably did.

AN HON. MEMBER: `Lloyd' is a member of the 500 Club.

MR. FRENCH: Oh, I see. I was not aware of that. Oh, I

see; he was a member of the 500 Club.

As a matter of fact, during the campaign back in February

when I walked through Holyrood, I knocked on a gentleman's door and he told me

he could not support me because of Brian Mulroney.

AN HON. MEMBER: He would not?

MR. FRENCH: He would not.

MR. SULLIVAN: `Bob', he ran for us in 1989.

MR. FRENCH: Did he? He ran for us in 1989.

AN HON. MEMBER: Thank God, he did not get elected.

MR. FRENCH: Thank goodness, then, he did not make it.

AN HON. MEMBER: He is a member of both 500 Clubs.

MR. FRENCH: So he is a member of both 500 Clubs? He ran

for the nomination and still did not make it.

Mr. Speaker, I, as one member of this House, will not be

supporting this legislation. I think my colleagues on this side of the House

know me well enough, and I guess, respect my opinion, what I think about it. I,

for one, supposing I stand alone here later on tonight or tomorrow, will

certainly not be voting for this piece of legislation.

Now, it is great that the minister could bring in the news on

Friday to reduce the taxation on cars, and that is great for the motor vehicle

industry in this Province, and I have no problem with anyone who is capable of

buying a new car, to be able to save.

AN HON. MEMBER: (Inaudible).

MR. FRENCH: Well, they are suffering and will continue to

suffer. I would much sooner, if something had to come today or come last Friday,

I would much sooner have talked about children's clothing or talked about our

light bills. That is what I would much sooner have seen.

It is very interesting, and I made it a point to get some

things from the Nova Scotia Legislature as it relates to this particular piece

of business. It is called the BST tax and I have my own

interpretation of that,

of course, Mr. Speaker, which I certainly will not repeat here. A lot of

questions were asked in the House in Nova Scotia: Who is this deal really for?

Are the young people of Nova Scotia - and this is what went on in their

Legislature as it related to this piece of business. It is certainly not for the

young, it is certainly not for the old, and it is certainly not, as in this

Province, for the working poor of the Province. It goes on and on into great

detail and so on, which I will not bother to get into today, but those are just

some notes out of the Nova Scotia Legislature.

I would like to read here from the Globe and Mail of

December 13. It says: Of particular importance this week has been a clip played

on the CBC radio. This was an August 1993 call-in show on a Toronto radio

station, CFRB, in which Mr. Chrtien was asked about the GST: `So will you

abolish it?' `Yes, I will abolish it,' he replied. Of course, now, he and some

of his cohorts in Ottawa are saying this was taken out of context. Well, if you

are asked a direct question and you give a direct answer, how in the name of

goodness is it taken out of context? He was asked, and he answered, `Yes, I will

abolish it,' and then his cohorts say, `Well, it was taken out of context.'

Well, I would really like to know how we can interpret that as taking the Prime

Minister of this country out of context? Although I do understand that in the

last day or so, he certainly tried to cover his tracks, but I do not know if he

is doing it very successfully or not.

Privately, of course, the Liberal strategists agree that for

this GST there will be a heavy toll to pay, and if anybody thinks it is going to

go away before the next election, then they are sadly mistaken. The people are

not going to forget a promise to abolish this tax when this tax did not get

abolished. Now, in this Province, I guess, we sold out. We got short-term gain

for long-term pain, and this pain, Mr. Speaker, will be long-term. I find it

interesting that we do not even have the right, if we want to increase or

decrease. We do not even have the right to do that on our own. We do not have

that right.

The compensation package, as we see it today - and I will not

get into that, because I think our leader has done an eloquent job in talking

about the figures and what we will owe once this program runs out, what we are

going to be short on. It is very interesting to note that his figures came from

the Department of Finance and yet in this House he cannot get answers to his

questions. Tax harmonization in this Province, certainly back in February, was

not an election issue, but was signed in principle by the Premier soon after the

election, that (inaudible) a pending deal was hidden from the people.

MR. MATTHEWS: (Inaudible).

MR. FRENCH: Good.

MR. MATTHEWS: Thank you very much.

MR. FRENCH: You are welcome. I enjoyed yours, thank you.

Thank you, I say to the Minister of Health.

AN HON. MEMBER: (Inaudible).

MR. FRENCH: Oh, I will put that in especially for you.

AN HON. MEMBER: Sympathy cards (inaudible).

MR. FRENCH: Sympathy cards, yes.

MR. E. BYRNE: One week the Minister of Health says he has

nothing to do with hospital boards (inaudible) hospital board.

MR. FRENCH: Yes, and next day he does.

MR. E. BYRNE: (Inaudible), yesterday he had everything to

do with them.

MR. FRENCH: Yes, it depends on what suits him. It depends

what day of the week he is on.

Now, the three Liberal Premiers gave a pre-election gift to

Mr. Chrtien, who is nervous as people remind him of his broken promise to get

rid of the GST. I say to the Government House Leader, this will have an impact

and the people across this country will not forget Mr. Chrtien for not

abolishing this tax. This will not go away, it has not gone away and it will not

go away and I believe there is even some talk of maybe getting the federal

election - I saw that somewhere today in print - of actually getting the federal

election off the ground much sooner, before Canadians, we, in Newfoundland and

Labrador, Nova Scotia, New Brunswick have a chance to see exactly what this tax

is going to do to us and to the people of this Province. We will have an

opportunity to see how this unfolds and how it presents itself to the people of

this Province.

Now, when I look back, earlier this year, the calls I had,

Mr. Speaker, from people on social assistance who lost out on the sixty-one

dollars, who lost out on the drugs, who lost all of this and now, if they have

small children, Mr. Speaker, and a lot of them do, they are going to pay more

for children's clothing. If we are going to pay a light bill that goes up every

month - some of the calls I have had, and I am sure every member of this House

has had them, from people who are about to lose their electricity. And how we

have all worked - I say this to both sides of the House - how we have all worked

to try to help in having people's power reconnected. We have all talked to

Social Services, or most of us have, about what these people have to do to try

to pay off the debt.

I mean, an individual who called me would have actually had

to pay out almost as much, Mr. Speaker, or more than he was taking in. He

certainly would not have enough left for food or clothing or anything else. And

now, we are going to raise the cost of electricity in this Province to

consumers, Mr. Speaker. I think that that is totally, totally, totally wrong.

Again, Mr. Speaker, I have to question British Columbia,

Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Prince Edward Island, who

did not, would not sign on to this particular agreement. Certainly, all have

been asked but none of them have signed on. Why? It must be because the

agreement is no good for those particular provinces, and I say that it will turn

out to be no good for this Province either.

Mr. Speaker, the poor in this Province spend a greater

percentage of their income on essentials that will cease to be tax exempt.

Heating fuel, as I said, electricity, children's clothing, even funerals, Mr.

Speaker, haircuts, legal fees, books, the tax rate on basic necessities will

more than double because of this HST. Again, I say to you, Sir, that is totally

wrong.

Of course, between now and the next federal election, the

people in this country of ours will remember exactly what happened with this. It

just blows me away to see that you will pay less for a fur coat and more for

children's clothing. As a matter of fact, I believe one of the radio stations

quoted last night at the Liberal dinner: There was more mink at the Liberal

dinner last night than there was on a farm. There was more mink at the Liberal

dinner last night, that walked through the doors, than there would be on a farm.

MR. TULK: (Inaudible).

MR. FRENCH: I am just quoting now. I do not know if it is

true or false. I would say the Government House Leader would know more about

that than I do.

SOME HON. MEMBERS: Oh, oh!

MR. FRENCH: Go on!

AN HON. MEMBER: (Inaudible) `Beaton Tulks' (inaudible).

MR. FRENCH: Go on! I have some difficulty with that.

AN HON. MEMBER: Do not be so ridiculous! The reality is

that this tax will, in effect, increase children's (inaudible) to buy a fur

coat.

MR. TULK: (Inaudible).

MR. FRENCH: I doubt that somehow. I really doubt that, I

say to the Government House Leader.

Mr. Speaker, we are going to lose our autonomy to set tax

rates under this deal, as I said the other day. Ottawa can raise the taxes

unilaterally. Any province can veto a tax decrease. If our revenue needs

increase, what will we do to get the extra revenue? If our revenue needs

decrease, how will we give a sales tax break? We will not give a sales tax break

because we cannot do it without the permission of the rest of them. So how are

we going to do it? We cannot do it.

The Finance minister tells glowing stories about the economy

growing to make up for the loss of the revenue under the HST. But the

government's Social Advisory Committee document says that the next few years

will bring an economic downturn because of fewer workers, fewer paying taxes,

more seniors with needs, and smaller populations and declining transfers. Both

cannot be true. The Finance minister is painting a rosy picture, I say, just to

sell the tax harmonization bill to the people of this Province. It will not work

in this Province.

The government is breaking its promise to put education

reform savings back into education because the HST deal will leave it in a

revenue crisis. The government rushed into a bad deal without considering the

consequences and is desperately selling the deal, not because it is good for the

Province, but because they think it is good for the Liberal Party of Canada.

That is my assessment of this particular piece of legislation. There should be

more to this than just trying to build a very clear and clean road for the Prime

Minister of Canada who, like I said earlier, in the last three or four days has

done more backtracking - if we could run forward in the Olympics like he has

backtracked in the last three or four days, we probably would have won twenty

more medals.

The new tax means duplication in tax processing. The cost of

this - this new tax will cost this Province jobs. Again, when I spoke on this, I

think it was on Friday, I mentioned people in the government departments here

only when they came back to be none the wiser than when they left this building

to go. They have been told little or nothing, which to me is a disgrace to be

going forward, especially at this time of the year, not knowing once we come

back after Christmas: Are you going to get your notice, am I going to get my

notice?

I believe, Mr. Speaker, and believe most sincerely, that this

is wrong. I think the people of our Province and our employees deserve much

better than what we have been getting and what we have been given. We have seen

that when the Premier said nobody in Newfoundland need worry any more in 1996

about employment. No more lay offs. The next day when he went to Ottawa we

started getting ready to march 143 out of health care, and over the next year or

two years we are going to march another 100 out right along with them. That is a

shame. Now, under this here, we are going to drive more people away than we are

going to employ. That is wrong, I say.

AN HON. MEMBER: (Inaudible).

MR. FRENCH: Just let me say to the Minister of Health, if

we were in charge we would certainly look at ways to do it, and we certainly

would be doing it differently. We wouldn't have the Premier of our Province

coming out, standing up to the local press and to everybody else saying: We

aren't going to lay off anybody else! The next day, and even the minister

probably knew this, I don't know if he did or not, 143 - if he doesn't he

shouldn't be minister, I say to him.

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

The hon. member's time is up.

MR. FRENCH: By leave, Mr. Speaker?

SOME HON. MEMBERS: By leave!

MR. SPEAKER: Does the hon. member have leave?

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: The hon. member by leave.

MR. FRENCH: I just want to, in conclusion, Mr. Speaker,

on that particular point I was talking about, to say that we can't afford to

lose any more jobs. If the Minister of Health thinks I'm kidding I will tell him

another story, because he believes so much in health care in this Province. On

the fifth floor of the Health Sciences Centre one room in there has been cleaned

once in the last three days -

SOME HON. MEMBERS: No leave!

MR. FRENCH: - stuff wasted on the floors, Mr. Speaker,

not cleaned up -

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

MR. FRENCH: - and the Minister of Health can sit there

and (inaudible) your life, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. member's time leave has been withdrawn.

MR. FRENCH: He knows what I'm saying!

MR. SPEAKER: I ask the member to take his seat.

MR. FRENCH: He knows what I'm saying is true. Thank you.

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

MR. TULK: If he was going to stay on the bill, sure we

would give him leave to conclude.

Mr. Speaker, I move that this House not adjourn at 5:00 p.m.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

It has been moved and seconded that this House not adjourn at

5:00 p.m.

All in favour of the motion.

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Opposed.

SOME HON. MEMBERS: Nay!

MR. SPEAKER: Carried.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker. I'm pleased once

again to participate in this debate on the proposed HST legislation. Just a

couple of days ago we had an opportunity during second reading to explore some

of the arguments against the proposed legislation. It is clear that the

provinces in Atlantic Canada, which represent a region which entered into this

somewhat secret deal, this memorandum of agreement, or whatever it is called,

between this region of Canada and the federal government, that the opposition

parties in these three parties in these three provinces in this one region, and

indeed many of the citizens of each province, have voiced their objection to

this legislation which is now before this particular Legislature, has come

before another provincial legislature, and is due to be finalized in another in

the not-too-distant future.

There is significant debate I would suggest amongst

individuals and groups and associations, and indeed political parties,

opposition parties, which have great difficulty with the legislation which has

been entered into secretly between, I would suggest, a federal Liberal

government and three provincial Liberal governments. That sounds to me to be

somewhat suspicious and has to be assessed very carefully before the legislation

reaches its conclusion.

Mr. Speaker, I would like to review, in a discussion on tax

harmonization, the actual specifics as it relates to actual dollars and cents

and what this act will mean to the people of this Province. It is careful, Mr.

Speaker, that we review in detail the actual figures and with some projections

as to the shortfall that this Province will realize after year five. We have to

ask certain questions and I will begin with, how much is earned now in sales tax

revenues? When we look at the budget and we look at the estimates, Mr. Speaker,

we see that in 1995-96 the sales tax revenue from RST in this Province totalled

some $565 million. The federal sales tax or GST from Newfoundland, in the most

recent twelve month period, totals $283 million for a total sales tax revenue

from this Province, from the Province of Newfoundland and Labrador, in this

twelve month period, a grand total of $848 million. So that is the figure, Mr.

Speaker, that we begin with in our assessment of where we are today and it is

important that we carry this discussion along to see exactly where we will be in

year five. When we get to that figure it will be clear, I suggest to the members

opposite, it will be clear why the members on this side of the House have

serious objections to the provisions of this bill.

The question then has to be asked, how much will be earned

under the new sales tax, the new envisaged tax? We have to remember that the

current GST rate is 7 per cent. The new value added tax rate will be increased

to 15 per cent and everything now taxed with GST will be taxed with the new

value added tax. So the total revenue should increase by a factor of 15/7. So

let's take the figure that we have already suggested will be the federal sales

tax figure, which is $283 million. We multiply that, Mr. Speaker, by the 15 per

cent, which is the value added tax over the 7 per cent GST tax rate and we end

up with a result of $606 million. Now we have that figure, Mr. Speaker, we have

to do an analysis by asking ourselves the following question, how much will

Newfoundland get under the new tax act because this is our own provincial

legislation which is subsequent to this secretive agreement entered into between

How much will Newfoundland realize under this new tax? We

have a total value added tax revenue of $606 million, which is calculated, Mr.

Speaker, by the formula which I just referred to. We now subtract Ottawa's share

and when we do that we have a figure of $283 million which has to be subtracted

from the $606 million. So Newfoundland's share, Mr. Speaker, of the value added

tax revenue now totals $323 million and these are reliable figures obviously,

Mr. Speaker, that we have retrieved from our own internal documentation, public

documentation which is released by this Province and factors into these figures,

the figures revealed by the federal government as well.

How much will Newfoundland be short compared to what it gets

now? Again, the current RST revenues in Newfoundland total $565 million.

Newfoundland's share of the value added tax revenue, the figure which we just

addressed a moment ago, $323 million. So Newfoundland will be short - I would

suggest, Mr. Speaker, that Newfoundland will be short in sales tax revenue to

the tune of $242 million a year. When the calculations are complete that is the

bottom line. So the question has to be asked, is this a good deal for this

Province? Upon careful review, Mr. Speaker, is this arrangement, this secret

deal, this arrangement between Newfoundland and other provinces within this

the best interest of Newfoundlanders and Labradorians? The clear answer to that

question must be `no', and the people must stand up and be counted, and raise

objections to the proposed legislation.

What about the federal compensation? Federal compensation

starts in year one, and it decreases each year, so it sounds good right now. The

immediate benefit sounds very attractive, but it whittles itself away. We see a

diminishing effect as we continue from year one to two to three to four and

finally five, to the point that the benefit which this Province appears to

receive at this point is virtually eliminated completely upon the expiry of five

years. As I have indicated, it starts in year one, and this now decreases each

year over four years.

Mr. Speaker, it is now important, in my view, to do an

assessment of this five-year period. Let's try to project exactly what each year

means, and how this shortfall will directly impact upon this Province in terms

of the tax revenues of this Province. How much will we be short in years one and

two?

Mr. Speaker, we have Newfoundland being short $242 million,

and we now have to subtract the Newfoundland percentage of 5 per cent, which is

$12 million, so the difference Ottawa pays, which is 100 per cent of the

difference in years one and two, will be $230 million. So Newfoundland is short

$12 million in each of years one and two.

How much are we short in year three? Again, we have the

beginning figure of $242 million. Again we subtract the 5 per cent, again the

same amount of $12 million. The difference is $230 million, which we arrived at

earlier, and Ottawa pays 50 per cent of this difference, because in year three

it is now 50 per cent of this difference, and that would be deducting or

subtracting $115 million from the $230 million. Newfoundland will then be

requested to pay the additional 50 per cent, so again one-half of $230 million

equals $115 million. We add again the 5 per cent subtracted value, which is $12

million, so Newfoundland's shortfall using these figures is $127 million. So,

after year three we see a shortfall of $127 million.

Let's now move to year four. It is the same figure.

Newfoundland will be short $242 million. We subtract 5 per cent, which

Newfoundland pays, which is $12 million; the difference, $230 million. Ottawa

will now pay 25 per cent of the difference, not 50 per cent, and not 100 per

cent, which are the amounts that we started with in years one, two and three.

Ottawa now only pays 25 per cent of the difference, equalling $58 million.

Newfoundland pays the other 75 per cent, which equals $172 million, and again we

have to add the 5 per cent which we subtracted above, for another $12 million,

so Newfoundland's shortfall in year four is $184 million.

You can see that the shortfall increases. It is an escalating

shortfall. That is what this tax is all about. As time goes on, our shortfall

increases, the Federal Government contribution decreases, and the obligation on

the people of this Province reaches a point which is almost unmanageable; it is

almost out of control.

Mr. Speaker, there has to be careful review of what the

bottom line is with respect to this piece of legislation. Newfoundlanders are

not being given the truth. Newfoundlanders are not being given the facts. The

reality of this harmonization tax bill is that after a period of time

Newfoundlanders will be called upon, through this legislation, to dig deeper in

their pockets to get funds to compensate the Federal Government of this country

simply because this act allows it. I say, Mr. Speaker, that is not good enough.

The people of this Province deserve and demand better.

Let us have a look at year five, how much we are short in

year five and every year from then on. Newfoundland will be short again. We have

our commencement figure of $242 million. In year five and thereafter Ottawa pays

us nothing to compensate for our loss in revenue, absolutely nothing. There is

no contribution by the federal government after year five, and that is what is

frightful about this act, and that is why the people of this Province have to be

given the reality, have to be given the details, so that they can then truly

assess the impact of this legislation.

After year five Ottawa does not pay this Province one red

cent so let us review what Newfoundland is short. In year one we are short $12

million, in year two we are short $12 million, in year three, using those

figures and using those calculations, a deficit of $127 million, in year four a

deficit of $184 million, and in year five and each subsequent year, in year five

and each year thereafter a deficit of $242 million. That is the end result. That

is what this legislation means to the people of this Province, and that is why I

would argue that individuals who in the past supported this position, and I am

referring very specifically to Mr. Nunziata, basically challenged the Prime

Minister several days ago and issued rationale as to why he could no longer

support what was being done over GST.

As recently as last night, Mr. Speaker, we saw the Prime

Minister of this country attempting to give some form of an apology to the

people of this country, an apology, which I would suggest, is not being bought

by the people of this country. It is half-hearted, it is qualified, it is

conditional, and that is not an apology. An apology, Mr. Speaker, has to be

complete. It has to be unconditional, it has to be genuine, and these particular

qualities did not accompany the alleged apology or explanation as given by the

Prime Minister last night here in our city, and the people of this country will

not accept a conditional apology. The message was loud and clear with respect to

what the federal Liberal Party of this country stood for with respect to GST.

It was a faint effort, I would suggest, to the people of this

country, and the people, as I indicated earlier, simply will not buy it. There

have been questions raised, there have been challenges raised, and we see in

this Province, for example, a group in our own city, the St. John's Board of

Trade, who say that a hidden tax will make our prices appear to be far higher

than they would pay at home and this could, at first glance, discourage buying

and goods being sold on the open market. People simply will not know what it is

they are being taxed for. What is the true tax amount? What is real? What is

hidden? It is a feature of this tax regime which is not being accepted by the

many critics and many simply commentators, not necessarily critics, but

commentators of this tax regime.

The only way government will find it can hope to make up for

that shortfall, and let us keep in mind that after year five and each subsequent

year we have a shortfall of $242 million, so how does the federal government and

indeed this government, the provincial government, plan to cope with this

deficit and shortfall? There are several options which are available. Increase

other taxes which obviously would be income tax, property tax, or service

assessments that are offered by the government. They can ask the people of this

Province, when faced with this deficit, to dig in once again, to dig deeper to

find solutions to the tax revenue woes of the provincial government of the day.

It can create new taxes. It can be creative. Insurance, for example, they can

put taxes on insurance. They find new ways to ask the consumers of this Province

to deal with the deficit, to deal with the consequences of, to put it simply,

poor legislation. It can ask it to have the people of this Province again

experience more cuts, closing of hospital beds, reduced spending in health care,

reduced benefits in social services, reduced expenses in education, closure of

schools. All of these social programs, Mr. Speaker, will be further reduced. The

people of this Province will be asked once again to tighten where obviously it

is simply impossible to do so. That is how the government, Mr. Speaker, will

have to deal with the shortfall which is anticipated after year five.

It can generally, Mr. Speaker, generate more revenues through

economic growth but I would suggest that is a positive thing if it can generate

economic growth, Mr. Speaker, that is a positive thing as my colleague just

indicated, if it can be done and if the government has the wherewithal to find

the ways and to find the mechanisms, Mr. Speaker, to generate economic growth.

So the government is being forced, now it seems to me, Mr. Speaker, to try and

find ways to compensate for a deficit which it, in and of itself has caused.

These are projections, Mr. Speaker, these figures which I have used in this

assessment appear to be very reliable. They are figures which we collect from

provincial government documentation, from the federal government documentation

and we see in a

summary that the impact of this legislation after year five, is

such that ordinary Newfoundlanders and Labradorians will be called upon to, as I

have stated, dig deeper in their pockets to find ways, Mr. Speaker, to correct

the mistakes, to correct the concealment and to correct the truth of this

legislation.

So in conclusion, Mr. Speaker, it is essential that we look

very closely at this legislation. It is essential that there be a very careful

analysis made of the revenues, of the impact of these revenues vis--vis the

federal government and the provincial government. It is essential that we do a

careful analysis of the impact of this legislation after years one through to

year five and only then, will we be able to see, Mr. Speaker, only then will we

be able to see what the true impact of harmonized sales tax, this legislation

will be on the ordinary Newfoundlander and Labradorian.

Thank you, Mr. Speaker.

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

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

I am glad to rise today to make a few more comments on this

ludicrous bill that is before the House today. It is amazing, here we are, just

a few days before the Christmas break and this type of legislation is before the

House that we have to debate. I don't think it should even be here at this

point, Mr. Speaker. Where it should be is at public debate so that people can

get the pros and cons, and if the government is saying all these positive things

and they have nothing to worry about, well let us let people see it up front,

Mr. Speaker, so let us just talk about it specifically for a few minutes on the

positives and negatives.

Yes, there are positives. There is no doubt, Mr. Speaker,

that there are positives and one of the positives is that, as of now, you can go

out and buy a new car and, Mr. Speaker, if you have the intentions of buying a

new car and if you have the money to buy a new car, that is great, I am glad for

those people. I wish I was about to buy a new car now, there is a good savings

on cars and that is fine, I agree with that, Mr. Speaker. Now, let us look at,

maybe some of the negatives of it. How many people in this Province are ready to

go out to buy a new car next week or next month, or, are they really going to

buy a second-hand car or, are they going to buy a cheaper car or really, are

they going to buy a car at all? That is what we have to ask ourselves and if you

start to weigh out, and I ask all members in the House to take the pros and

cons, as we should do because there are positives to it, one positive is the

harmonizing of sales tax of any kind, I agree with harmonizing of the sales tax,

it makes it clearer we hope but, Mr. Speaker, the negatives outweigh the

positives, I say to the members of the House and if you really get down to it,

you find out where the negatives are and whom they affect.

Whom do they affect, Mr. Speaker? They affect the lower

income people in the Province and, Mr. Speaker, the middle income people in the

Province, more. Day after day, I hear it all over the Province, all over my

district and throughout the Province, about the middle income people. I will

come back to the lower income in a second. The middle income people, the people

who just scrape by, the people who pay their bills, the people who can send

their children to college, the people who can do all of the normal things, or

the average things, who have kids in college, who have a car, not a great car,

have a decent house, not a super rich house; it is the middle of the road person

that this also affects, because the truth is, the negatives that we talk about

are the necessities of life. They are not whether you are going to get a fur

coat, or if you are going to get a $25,000 car. They are about paying for your

light bill. They are about paying your electricity bill. They are about putting

gas in the car every second or third day if you have kids that you bring to

school, or because of the travel that you have to do. Those are two of the

negatives.

Mr. Speaker, let's just talk about this particular so-called

break that we gave the car dealers. I am glad for the car dealers, too, because

hopefully that will add jobs to the economy in some small way, and that is a

positive, but let's talk about who really saves in this.

The truth is that the more money you have, the richer you

are, the bigger and more expensive car you are going to buy, and therefore the

bigger break. On the other hand, the poorer you are, and the less you are going

to pay for your car, the less you are going to save. So this great, big benefit

for the car dealer has to be put in perspective of who is the richest down to

the poorest.

I think the example was already given of a $20,000 car - that

is average for a new car - 4 per cent which you would save on that would be

something like $800. So you are going to save $800 when you buy that car. But

when you go to a $30,000 car you are talking about a $1,200 saving. So the point

is that the richer you are, the more expensive car you buy, the better break you

get with this deal on the car tax. But the lower income you have, and the

cheaper the car you buy, the less advantage you have from this.

What this deal does with the cars is really show what this

whole bill is all about. For the richer people, the people who spend more money,

there is a bigger break, and for the people on lower income, the less break you

get. That is a fact. That is not made up. There is nothing fictitious about it.

It is plain and simple. The more -

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: I am being specific to the car dealership

situation. The more that you spend on a car, the more money you have, the bigger

break you get. The less money you have to buy a car, the lesser break you get.

Mr. Speaker, the people who are on lower incomes have no

intention of going out and buying a new car this year. If they are lucky they

will trade in their old one and get another secondhand one, or they will keep

the old bomb that they have and try to keep it on the road. That is the reality

for a lot of people in the Province, so this was no great news to them.

Also with this particular issue on the car dealership are the

people who raised a legitimate concern of other businesses, snowmobilers. If you

go somewhere in Labrador, pretty quickly they will tell you that a snowmobile to

them is as important, as essential, as a car, I say to the Member for Labrador,

and I am sure he agrees. If you go to the people in Nain, Goose Bay, Labrador

City... I lived in Labrador City. In Goose Bay there are at least two ski-doos

in every driveway, sometimes three, and they do not just use them for

recreational purposes. The Members for Labrador know this. For the people in

Labrador City and Goose Bay, especially up and down the Coast, the ski-doo

becomes a very essential part of their way of life. They use their ski-doo more

than a car, especially in the winter months. They jump on their ski-doo because

there are paths all through. I do not know what it is like in Goose Bay - maybe

the member can tell me - but in Labrador City there are all kinds of paths

through the houses and roadways, and everything else. They use their ski-doo to

go to the store. They use it to go to the stadium. They use it for all of those

things, not just for recreational use of going ice fishing or whatever. Mr.

Speaker, those people who talked about their situation with the ski-doos have a

legitimate beef with all of this. Why not them, if cars were considered

essential?

Of course, I also heard some comment from a furniture store

that thought the same thing. They said furniture was essential. Why not them?

Mr. Speaker, it seems what happened here, when it comes to

the car dealership, the truth is it was similar to the situation with the

smelter with Labrador. Just before they announced the smelter for Argentia, all

of a sudden the government started throwing all kinds of little goodies, a motor

registration office for Labrador City. Then they talked about $20,000 for a

heritage fund somewhere in Labrador. All of this was thrown out. The same thing

with this tax; we use the analogy. Just before the HST comes into being, the

government is going to throw out a couple of little goodies to calm people down.

That is what they are doing, throwing out a couple of little goodies to calm

people down, saying (inaudible) tax. Look what we can do for you. We can bring

down the price of a car for you.

Well, Mr. Speaker, it hasn't worked. It hasn't worked, it

isn't working, it isn't going to work. Because the simple blatant politics of

this is that there was a lie told about the GST during the last federal

election, admitted to that, and continuous every day. Now we get apologies from

the Prime Minister, finally.

It was a funny thing how he apologized. He apologized, but

then in the same breath he said how he didn't want to leave an impression. That

is how the Prime Minister rebutted on this. He didn't want to leave a full

apology, but he said; Okay, I will apologize anyway because it was an honest

mistake. That is what he said: I will apologize anyway because it is an honest

mistake. But at the same time he said: But I hope I didn't leave the impression

with people that we were going to scrap the GST.

You can twist it any way you want, but the recording from

this CFRB radio station back in August 1993 - and it is recorded, it is there

for anybody to listen to, and you can't change the words around. You can't

change the context of that. The question was directly to the Prime Minister: So,

Mr. Chrtien, will you abolish it? They were talking about the GST. The reply,

and this is the reply by the Prime Minister of the country: Yes, I will abolish

it.

How can you twist that or turn it so that you leave a wrong

impression like the Prime Minister said? It isn't the wrong impression. What it

is is an impression that got him elected in the last federal election. It was

plain and simple. You go around anywhere in this Province during the last

federal election, and what was the big plank of the red book? We are going to

scrap the GST. Sheila Copps admitted it. She called a by-election on it because

she knew she had made a mistake, she knew she didn't tell the truth about the

GST, and what happened? She called a by-election. What happens a little while

later? Paul Martin, the finance minister, apologizes for the Prime Minister. The

Prime Minister kept denying it, and lo and behold, he comes to Newfoundland just

last night and finally apologizes.

But as he was apologizing he took it right back. Because he

said: I apologize, but I still maintain that I did not leave that kind of

impression. It is so ridiculous. Then we have `Sheila Flops' who decides that

she is going to call a by-election, have the democratic fiasco of the century,

and move back. All of a sudden Sheila decides that she is going to prove to

Canadians that she can get elected again. Who is going to believe that Sheila

Copps didn't have her poll done and have her soldiers in order to win her

by-election?

That by-election proved absolutely nothing. Sheila Copps, she

decided to do her poll and then she was going to run. Nice safe seat. `Sheila

Flops,' the Deputy Prime Minister of the country, Proved it on a by-election,

she says. She didn't prove it to Canadians. All she did was prove it to her own

district who has a lot of support for her in her own district, and why wouldn't

she? The Deputy Prime Minister of Canada, government in power. Why would they go

against her? Because they would be threatened. They would lose their Deputy

Prime Minister, that is what they were afraid of. Then Paul Martin, out of

respect for the Prime Minister, stands up in front of national media and

apologizes for the Prime Minister. Then the Prime Minister ends up back in

Newfoundland just yesterday apologizing, but in the same breath saying: I didn't

mean to leave the wrong impression.

What kind of wrong impression was it? Then: Privately,

Liberal strategists agreed that they will have a heavy GST toll to pay, and

quote, from a Liberal strategist: If anybody thinks this is going away before

the next election they are sadly mistaken, said one. This is our Achilles' heel.

The only way to get any respect back from the people across

this country from the Prime Minister is to unequivocally announce that he did

mislead the people of this country during the election so they would become the

governing party of this country. That is exactly what it was. It was the main

plank throughout this Province, throughout every province in Canada, that the

GST would be scrapped, the bad GST, the Mulroney GST.

AN HON. MEMBER: What does scrap mean?

MR. SHELLEY: Scrap, abolish. Mr. Speaker, there is no

definition to it, I say to my colleague, because when he said abolish it I would

abolish it. The context of the sentence is there, twist it as you may.

The bottom line is that this is very political. It is, you

can't deny that.

MR. E. BYRNE: Paul, who is the Member for Signal Hill -

Quidi Vidi?

MR. SHELLEY: The Member for Signal Hill - Quidi Vidi, Mr.

Speaker, was here for about ten minutes after Question Period to see if there

was any - oh, that is right, I can't talk about it. I won't mention, Mr.

Speaker, that the Member for Signal Hill - Quidi Vidi is not here.

MR. H. HODDER: Talk about Jean Payne and the soup

kitchen.

MR. SHELLEY: I won't mention that, Mr. Speaker. I won't

mention the fact that he is not here and that he is probably still drinking soup

with the hon. Jean Payne, Mr. Speaker. She is not here either.

MR. H. HODDER: Jean Payne was inquiring of all hon.

members yesterday whether they had their soup or not.

MR. SHELLEY: I thought it only applied to ministers too.

The least he could have done was have a bowl of soup before he had the caribou

and the steelhead trout.

Mr. Speaker, this bill has raised its ugly head in this

country and we are about to head into a federal election. Simply put, Mr.

Speaker, the three Liberal premiers of Canada, in three Atlantic provinces are

the only ones that supported this, Mr. Speaker. They did it for a simple reason

and that is the Liberal Prime Minister of Canada and the GST coverup. The GST in

disguise, the BST. You name it, it is there.

MR. J. BYRNE: Blended.

MR. SHELLEY: Mr. Speaker, the Blended Sales Tax, the BST

but that is what it all came down to. It is three provinces - this whole issue

comes down to the politics of the GST coverup from the last federal election.

The second point is that the poorest people, the most vulnerable people in

today's society in this Province, the poorest and the middle income people will

be mostly negatively impacted by this. There is no doubt about that. You can see

it in the very example of buying a car that the disposable income of the lower

income people - and if you sit down with any low income or middle income person

in this Province today and just quickly, in about twenty minutes, go over their

budget with them and you ask them where they spend most of their disposal

income, from 70 per cent to 80 per cent of it is on essentials, if not more, Mr.

Speaker. That is a conservative amount. That 70 per cent to 80 per cent of their

disposal income for a monthly budget goes to necessities such as fuel,

electricity, children's clothes and so on, Mr. Speaker, the necessities, that is

what it is.

Mr. Speaker, I will tell you a little story about coming in

here on Monday. While I was driving to Deer Lake to fly into St. John's I was

listening to the Open Line and they were talking about the HST and right in the

middle of the Open Line Show, Fillatre's Funeral Home on the West Coast were

advertising for prearranged funerals because they said by April 1, when the HST

comes in, it is going to cost more to die. So it is best to get your prearranged

funerals done now before the tax comes in. Now, Mr. Speaker, can you imagine?

Funeral home companies are going around this Province advertising to get your

funeral arranged now so that it is cheaper because it is going to double. It is

going to more than double. It is going to go from 7 per cent to 15 per cent,

funeral taxes. There is no exaggeration, well I would consider looking into it.

MR. H. HODDER: The Liberals were all in a line-up.

MR. SHELLEY: It is pretty bad when a nineteen or twenty

year old is driving around and hears that you had better make prearrangement for

your funeral now because the taxes are going to go up on it. That is an awful

way to trick people into it, Mr. Speaker.

MR. H. HODDER: Clothes have gone up, the cost of living

has gone up and the cost of dying has gone up.

MR. SHELLEY: The cost of living, the cost of dying, Mr.

Speaker, so where do you go? The only way out of it is not to be born. So, Mr.

Speaker, those are the three main things that I would like to raise in this

debate. It is the whole idea of the GST and the coverup and the root of this

problem, which started with the last federal election. Now lo and behold our

Premier, the boy of the Prime Minister of Canada, his mentor has decided, along

with Mr. McKenna and Mr. Savage, that they are going to appease their Liberal

Prime Minister and make sure that they help him out. What Mr. Chrtien said is:

Boys, you got to help me out. Somebody has to harmonize the tax because we got

it in our red book. I can't go around saying I was going to scrap it but I did

say we were going to harmonize it in the red book. He is right to that extent.

In the red book he did say harmonization but he did, on many occasions, as was

quoted here, he did say he was going to abolish it. He was going to harmonize

it.

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: Oh, what about what a man says in public?

Mr. Chrtien was asked: So will you abolish it? Mr. Chrtien says -

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: Well, Mr. Speaker, I quote, `Mr. Chrtien:

so will you abolish it?' `Yes, I will abolish it.' Now how can you judge that?

Oh he did harmonize it but he also says -

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: That is right but like the lady, Mr.

Speaker, like Joanne Savoie, the Montreal waitress who turned to the Prime

Minister the other night at the Town Hall and pointed at him and said: Sir, I

voted for you and I voted for you because you said you would scrap the GST, and

he said: I did not say that, you should have read the red book. She said: Sir, I

did not need to read the red book because I believed you. That is what she said

to him, she said: Sir, I believed you that is why I voted for you, I did not

want to read the red book, I should not have to read the red book if I could

believe you, so she said: I did not.

So, Mr. Speaker, that is what I say to the Government House

Leader, that this lady, along with millions of people across this country, that

lady was an example of the rest of the country, Mr. Speaker, I heard it in my

own district, I heard it throughout when the now Premier was running as our MP

in my district, he was also saying the same thing: The GST will be gone when we

take over. Mr. Speaker, I suppose that is about true as my colleague for

Kilbride said, it is about as true as the Spanish will be gone, 500 per cent

increase, Mr. Speaker, Spanish, and the Spanish war is on, according to the

Minister of Fisheries and Aquaculture, the Spanish war is on, Mr. Speaker. I

thought it was over. Somebody should mention to the Minister of Fisheries and

Aquaculture that the Gulf war is over too. The Gulf war is over, somebody should

tell him about that, that is over, the Spanish war, the Gulf war.

But, Mr. Speaker, you talk about misleading people and the

whole extravagance of what happened with the Spanish war, about how the Spanish

were all forced into the harbour of St. John's, how they were arrested for

illegal nets, illegal everything, no licences, you name it, it was illegal,

guaranteed all proven but, were they put in prison, Mr. Speaker, were they

interrogated? No, Mr. Speaker, they were put up in accommodations and taken very

good care of and then what happened? We gave them back their frozen fish, made

sure it was not spoiled so we froze it for them. We borrowed their nets for

$40,000 or $50,000, brought that to New York City and held up a little turbot

and stored it all, we wouldn't want the prisoners' fish to spoil while they were

incarcerated, put them up in a nice hotel, took care of them, the best of grub -

I wonder if the Spanish fishermen were in the St. John's lock-up, Mr. Speaker?

When they were arrested, I wonder, did they go to the St. John's lock-up, I

wonder, Mr. Speaker? Then the great, big net down in New York and at the United

Nations, and the Premier holding up the Spanish turbot and we had all the

problems solved.

The Member for Bonavista South, made it clear today, he

described it to a `T', the farce, what is the end result -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. SHELLEY: By leave, Mr. Speaker?

AN HON. MEMBER: By leave.

MR. SHELLEY: Yes, a minute to clue up?

AN HON. MEMBER: Yes.

MR. SHELLEY: One minute to clue up, I appreciate that.

Thank you, Mr. Speaker, so I will get off that for a second

just to conclude on a couple of comments on the GST.

Three-pronged, I say to the Government House Leader, three

reasons why I will not support this bill, this tax. One, and most formidable is

that, it was a commitment, not even a promise, it is stronger than a promise, it

was a commitment by the federal government to abolish the GST and they never

followed through. Two, because it will negatively impact the poorest and the

most vulnerable people in this Province, Mr. Speaker, and three, although I

would like to believe, I do not believe when the Minister of Finance and

Treasury Board says we are going to have a boom in two years, that we will not

miss the $105 million once the three or four years run out, I do not believe

that is going to happen, Mr. Speaker. I would like to believe it, but we have to

start doing some things for the long-term in this Province, not short-term gain

for long-term pain. I will have a few more comments to make later on.

Thank you.

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

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

I rise to make a twenty-minute commentary on the HST, GST.

Only twenty minutes because government has introduced a closure motion on this

particular issue. Three members on this side of the House have not even had a

chance to debate the main motion. I have been in the House since 1993 and I have

seen closure introduced on a number of occasions but not before appropriate

debate.

Now, Mr. Speaker, at the core of this issue on HST, is

government's spin and the Premier's spin, the Minister of Finance and Treasury

Board's spin that what we are doing in essence is passing on $105 million

savings to the people of Newfoundland and Labrador. Now, that is what has been

said publicly, That is what the Minister of Finance and Treasury Board said.

In their initial press release the minister said: Well, I

mean, consultation is still open. In our next budgetary review process we can

still consult. The reality is, Mr. Speaker, the deal is done. Now, who is for

this deal? Who will save $105 million? Will it be the people who have three and

four kids in their family? Will they save $105 million? They will have to buy a

lot of new cars, they will have to buy a lot of new washers and dryers, they

will have to get a lot of new haircuts, in order to compensate for the cost of

increase in children's clothing.

It is a sad commentary on any government, and in particular

on all members, I think, when we pass legislation in this House which allows for

the sale of a fur coat to become less expensive, and on taxes on children's

clothing to become absolutely more expensive. Average people, people who make

$80,000 and less in this Province, will be the big losers if this tax regime

comes into play on April 1. Mark it down. Why will they become the big losers?

That is the question we have to ask, and that is the question I hope to answer

today.

Lower middle income Canadians and Newfoundlanders and

Labradorians will on average pay more for electricity, for home heating fuel,

for children's clothes, will pay more to buy goods and services. The reality in

terms of what this legislation will do to the average home owner and the average

taxpayer and the average ratepayer, who are all the same person, will have far

more detrimental affects on that end than it will in terms of the average cost

that will be paid to us.

What about new home owners or new home builders? The cost of

building a new home today compared to what it will be after April 1 will rise

dramatically as a result of HST. The other question, in terms of legal services.

What will be the cost of legal services as a result of HST? Will they go down?

No they won't. They will increase. The cost of real estate fees will increase,

These are legitimate, everyday costs that consumers and people in this Province

must buy.

The biggest arguments I've seen forthcoming have been on a

sort of fairy tale level, a level that says any time we reduce taxes to the

people of the Province, that we reduce taxes from a 19 per cent regime to a 15

per cent regime in this case, it will automatically produce positive results for

the people of this Province. I don't think so. While that is a laudable goal,

the details, as in much of what we do here, legislation that is passed in the

House, the details and regulations tell the story. While it is something that

every government should aim for in reducing taxes, at the same time the

reduction in taxes, whose back will bear the brunt of it?

The reality is that we don't have as many horses pulling the

economy along today as we used to. We have far fewer horses pulling along and

trying to support far more people. That is the reality of it. Socially, each and

every year since 1989 the amount of people who are on Social Services have

increased dramatically, and there is no expected decrease within the next five

to seven years. In government's own Strategic Social Plan, that is indicated.

Our labour force is shrinking tremendously, so our ability to generate more

revenue and more taxes at this point in time is also shrinking. While there are

exciting resource developments on the horizon, some on the immediate horizon,

some in the long term, we have no guarantee yet that as a result of increasing

revenue coming in from those resource developments the federal government on the

same hand will not reduce dollar for dollar off equalization transfer payments.

But yet, HST is going to be a good thing.

The real story, if you look at what the federal government

did in the HST zone, if it truly believed that HST would be good, then why

didn't it pass on