PROVINCE OF NEWFOUNDLAND AND LABRADOR HOUSE OF ASSEMBLY Volume 1 Number 23 5th Session 34th. General Assembly VERBATIM REPORT TUESDAY, APRIL 20, 1971 SPEAKER: THE HONOURABLE GEORGE W. CLARKE

April 20, 1971, TApe 321, Page 1 -- apb The House met at 11;00 a.m. Mt. Speaker, in the Chair: HON. J.R.SMALLOOOD (Premier): Mr. Speaker, I wish to announce to the House the fact that the Government have appointed Mr. Gordon M.Stirling, Q.C. to be the Royal Commissioner of one to enquire into the statements made in this House by the hon. the member for St. John's East 1 in connection with the purchase of land at the present site of Holiday Inn in St. John's East. MJ.,CROSBIE: In connection with that announcement, is the Government · considerin~ widening the terms of the enquiry as requested?

Has he any explanation of what not, why it is being restricted to this one particular incident? The question cannot be answered I guess. MR. SPEAKER: Debate is not in the order before the Chair. PRESElfl'ING PETITIONS: PRESENTING REPORTS OF STANDING AND SELECT COMMITTEES: NOTICE OF MOTION: ANSWERS TO QUESTIONS: ORDERS OF THE DAY: MR. S}'ALLll>OD (J .R.) :_ Mr. Speaker, I have no lengthy remarks left to 111ake. I think I covered the matter fairly thoroughly yesterday.

There was one point that I said I would cover, and did not, and that is, to give an explanation of why it is that we give the National Sea Products Company, not fifteen but fourteen percent gift, fourteen percent of the cost of the draggers rather than fifteen. The House will remember that the Government of Canada for a number of years gave a ~rant of fifty percent of the cost of draggers built in Canada. This meant that anyone havin, a drag~er built r,ot half the cost of the dragger as a rift from the Government of Canada.

The Government of Canada subsequently reduced the subsidy from fifty to thrity-five percent. The Governments of Ouebec, Nova Scotia, ~ew Brunswick have been taking up the slack and ~ivin~ the companies concerned a fifteen percent ~rant. This is what they asked us to do. We did not a~ree to rive fifteen percent, but we did ar.ree to rive fourteen. I hope that one of my colleagues will be able 15C7

April 20, 1971, TApe 321, Page 2 -- apb to explain the technicalities of it, but I am not able to do it. It has something to do with taxation. It has something to do with a loss of tax revenue that the Newfoundland Government would get from Ottawa in respect of the E:orporation Income Tax that the company would pay to the Government of Canada, a share of which would automatically come back to the Treasury of this Province.

If we paid fifteen percent subsidy or gift to National Sea Products on the six draggers, it would have involved us in a loss of revenue coming to us from Ottawa as our share of the Federal Corporation Income Tax. By paying them fourteen percent, and giving the one percent direct to the yard and not to them,that situation would be remedied.

I do not know how this is, but I hope that one of my colleagues, especially one, a legal - a member of the law profession11ho was with me in the negotiations with National Sea Products when we were negotiating this whole contract,will be in the House later, and I am sure that in the debate he will be able to give the detailed explanation.

I do not think that any lawyer . member of the Government present in the Chamber was with me in the negotiations, and they perhaps,therefore, would not be-in quite the same position to give the exact explanation of the technicalities,which made it desirable for us to give them a subsidy of fourteen percent, rather than fifteen. The loss of revenue we v~uld recaot1.•-:-.­ in some form by giving them fourteen rather than I do not think I need to add very much to SUJllll&rize J!r. Speaker 1 !o aummarize; we ~ive National Sea Products no cash in respect of their taking over the plant here in the Harbour of St.

John's. We merely transferred to them the loan that we had already made to the company from whom they have baught the plant. Not that loan in full, the loan I think was two million and twenty-five thousand dollars. They, the people who received the loan, have paid the Government back somethin~ of the order of three hundred thousand or slightly 1110re than three hundred thousand dollars so that the outstandin~ balance of the loan is one million seven hundred thousand.

That loan, not new money, not new cash, that loan is transferred to the new company, and the new company,National Sea Products ,will pay off the one million seven hundred thousand 15 ,, -~ • ·., Q

April 20, 1971, Tape 321, Page 3 - apb dollars. In addition to that, the Government promises in the contract to use its beat endeavours with the City of St. John's to get the Govermnent of the City of St. John's .to extend some favourable consideration to the company, and to give them some tax concessions. I am happy to say , that this hu been done. I myself approached his Worship,the ~.ayor of St.

John's, and he in turn approached the members of the Council, and it was agreed to extend certain concessions to the company in the interest of getting the plant tO -?mploy two or three hundred persons, to create that many additional nev jobs in the seaport of St. John's. In respect of the plant itself,over here across the harbour, the Government are extending no new concessions, nothing that ve have not already extended to the old company that failed and closed the plant down. The concession we have given is in respect of the six draggers, the six new dragger& that are to be built at Marystown.

That is a case of two being built now and four being built now elsewhere,in,I think,Nova Scotia,to provide six dragger& to supply the plant. It cannot operate with fewer than six, and the Marystown shipyard is not presently in a position to build and deliver six in time to get the plant reopened next year. It has been agreed that two of them will be built at Marystown . and the remaining four in Nova Scotia and , in return for the four that are built in Nova Scotia.National Sea Products will build four other ships in Marystown,making. a total of six..

What use,_.;hey will make of the four additional ones that they will build at Marystown I do not know. They may use them in the plant here at St. John's or. they may use them elsewhere. They may use them in Nova Scotia, I do not know. I know only that six will be built in ~..arystown provided .of course the price is competitive, provided the quality of the ships is corr.petitive and provided the delivery dates are satisfactory.

As to that, I have conferred carefully with the management of the shipyard in ~arystown and I am assurred and ,throuph me .my collea~ues in the Cabinet are assurred that the buildin~ of the first two drap~ers at Marystown will restore,will re-establish the efficiency of the yard, so that

April 20, 1971, Tape 321, Page 4 -- apb they will be in a position to handle the other four that National Sea Products are to have built there. Not only that but,Sir, the building of these six draggers at Maeystown ought to have the result..it is natural to think that it will have the reault,of giving the work force in the shipyard at Marystown an experience and an efficiency that will put the yard in a far, far better poition to handle orders for other draggers.from the same company perhaps and from other companies operating in this Province.

The House will remember that the yard built two draggers for Atalantic Fish Company,for the new plant, and that when they had got those two new draggers built there were no o~her orders for draggers. There were orders only for repair and overhaul. Indeed, they have been kept reasonably busy repairing and overhauling ships under C.S.I. (Canadian Steamship Inspection) which requires such work to be dona, and a lot of which has been done in this shipyard.

Except for the building of the two original draggers and the repair work they have been doing ever since, the shipyard at Maeystown has not discharged 1vhat _it was built to discharge . The result is _ that substantial numbers of men, especially young men.who were taken on at the shipyard in the early stages . as apprentices, and who did acquire a certain amount of skill and efficiency,have scattered, gone away from Maeystown, sought employment in other parts of the Province and,indeed, some of them in other parts of Canada,outside the Province.

My understanding is, and I am given this assurance by the management at Maeystown, that many if not all of those persons who received that training at Marystown will be glad to come back, to go to work again in the shipyard. Certainly Sir, I cannot refrain from expressing the strong hope that the beginning of the shipyard, of the operation of the shipyard . which was a false start, a false beginning, due entirely to the fact that the fishing industry of Canada 1570

APril 20th., 1971 Tape no. 322 Page 1 Mr.

Smallwood. and of North America, in general, suffered a collapse that lasted a number of years and did so not long after the shipyard was constructed, that the hope now that with this new beginning, the building of six draggers, two of which are in hand, will conatitute a new start f6r ·.:tlle yard; that it will go on from success to success. certainly, Sir, it will be pretty futile for fishing companies to come to this Government and ask for financial help or any other kind of help to build draggers for use in this Ptovince, if their thought is to build them outside the Province.

Now it may well be and indeed I am quite sure that it will be the case that some Newfoundland fishing companies will come to us and will want financial help to build draggers and that these draggers aay not be built in Marystown but that reason will be a simple one but perhaps an adequate one; namely, that the yard itself will not or may not be in a practical position to accept the orders for delivery of the new draggers in time to meet the needs, the requirements of the fishing companies that want them.

Now as to that, I may say this.that the Govem•nt are presently negotiating and for some time passed have been negotiating with important ship building and ship operating interests of high calibre, of very high quality, with a view to their taking over the shipyard at Marystown and not only taking it over and managing it but instituting very substantial enlargement at the same time.

Certainly, Sir, if these negotiations succeed, I think we can assume that the management of the preaently existing shipyard at Marystowri will be put into very, very expert hands and I will be surprised if, under those new hands, the yard does not grow rapidly to the point where they would have a double shift and quickly a triple shift - . three shifts -- ~he yard working around the clock. Certainly, if that happens and it being the case that draggers,or even ships larger than draggers, can be built in the present

April 20th •• 1971 Tape no. 322 Page 2 Hr. Smallwood. ahipyard,without any enlargement of it 0 outside the great shed where you can build two or maybe more than two draggers simultaneously, indoors , under cover. When you remember that ,over and above that. it is quite feasible to build still other draggers outside that great building, out in the open ai~ So that with enough staff. trained and efficient staff. under efficient management. it is conceivable that four or five draggers could be under simultaneous construction. Thia is what we hope for. This is what we are pianning to accomplish.

I do not 0 because I cannot guarantee success in that respect, but my colleagues and I 0 with many, many meetings, with meetings on both aides of the Atlantic. with meetings in the United States and in ContinentialCanadaand in St. John's, in a number of meetings, reaching back for some substantial time, have negotiated and continued to negotiate for very substantial expansion of the ship building facilities at Marystown. It may be ttat we are within reach of coming to a final and successful conclusion in these negotiations. We had meetings yesterday. We had meetings in my home lut night., until midnight.

We had meetings in my office this moming 1until 10:SS A.M. We will have meetin~s between 1:00 P.M. and_ 3:00 P.M this afternoon. I will ask one or two of my collaguea to continue the negotiations throughout the aftemoon 0 because I have to be present in the House here. We will meet again at 6:00 P.M. and go on perhaps until midnight. I hope that before the day is over we may be appreciably nearer to seeing our way through to a successful conclusion. I do not say, see our way through to a successful conclusion. but see our way through to the point where we can forseee a successful conclusion to these negotiations.

If,by good luck or skill,that should prove to be the case, then Marystown and the people of the whole Burin Peninsula and indeed. Sir. people off the Burin Peninsula may have good reason, indeed. to feel pleasure over our efforts. We are making the effort. leaving u~ Qtone untumed . We have 1 ~~1o) ;) • I.,

April 20th., 1971 Tape no. l2Z Page l Kr. Smallwood. a certain degree of optimism that the thing is going to work. There will be points raised by hon. members, perhaps, on both sides of the Rouse and;wheu we go into Committee of the Whole, the Bill will be considered paragraph by paragraph, line by line and maybe word by word. But with that understanding,that other information may need to be brought out, I have pleasure in moving the second reading of the Bill. KR. A. MOORES: Mr. Speaker, there are a few observations that I would like to make on this Bill.

First of all, after reading it through and listening to the hon. the Premier introducing it, a fair observation for one to make is that the fish business is not what the investment industry would consider blue chip. In spite of all we hear today about the buoyancy of the fish markets, the prices paid for fish, the shortage of fish, the importante of fish in one's diet, we find that it -w• impossible for the Govemment and the owners of Ross Steers Plant to find a buyer that would put up any risk capital to purchase the complex. KR. SMALLWOOD: Only ten per cent. KR. MOORES: Only ten per cent.

Ten per cent of the cost of the plant itselfr the draggera. KR. SMALLWOOD: Putting up about $1 million to improve that. KR. ~llORES: The port of St. John's, located where it is, in close proximity to this great resource which lies off our coast~ it is very difficult to understand that risk capital, as 11,tch, was not forthcoming to get that complex moving. I am sure that it must be an eye~opener for all those wmare always saying that the fish business is i gold mine. This proves that it is not so, If the Government were not prepared to extend such generous terms, the ~~mplex would have stayed locked indefinitely.

April 20th., 1971 Tape no. 322 Page 4 Mr. Moores. In reading the Bill, it would appear that National Sea wrote their own ticket. It is an excellent deal for them. They cannot lose, in no way. By the same token - we all hope that it will be a success; that it will regenerate the water-front of St. John's, which has been lading in fishing activity ever since Job's closed its doors. It will be an avenue where an appreciable number of workers in St. John's will find a daily occupation. Of course, it will generate funds into the economy of the Province,which is a good thing.

Now having said that and given my support to the Bill, there are a few observations that I would like to make as well. It is common knowledge to all the people in the industry,and the Bill bears this point out, that the fish business in Newfoundland is not the place for risk capital. This is most unfortunate. Now this is what has caused our fish business to be so very slow in coming forward. Possibly this is the reason, which the Premier mentioned yesterday. I have to take exception to it. It is the fact about a lack of leadership.in the industry. That point is vell taken and I appreciate the remark.

But I think it is also fair to say that there are people knowledgeable in the fishing industry in Newfoundland today just as knowledgeable as they are in any part of Canada; just as knowledgeable as they are in any part of the United States or the United Kingdom or Europe. But we did lack the necessary funds and _~he wherewithal to be able to build the business faster and become a more viable industry and make a contribution to the economy. MR. SMALLWOOD: And they are not leading the industry. They are only leading their own individual business. MR. MOORES: Well yes, that is true.

That is so, But, of course. here again they have to try and survive. They have to pay their bills. They

April 20th., 1971 Tape no. 322 Page 5 Mr. Moores have to try and get their products established on the market. I was very much interested to hear the Premier's remark about terms which the Province of Nova Scotia gives in the construction of boats, where firms that are prepared to fish their boats out of Nova Scotia, that the coat of the boats would be guaranteed by the Province. That is quite a step forward and that could very well be the reason why National Sea is so far ahead today, the fact that trawlers were available to them, without having to resort to any of their cash resources in order to develpp it.

But Rattoo.al Sea, of course, is a great Canadian company, and they have done a terrific job in the fish business. There is no doubt about that. I am sure that we can look forward to a lot of activity here in Newfoundland, when they come in. By the same token, I am very glad that the Premier made the remark about our Newfoundland people who· are associated with our industry. We have in looking at our Province, in general, today, cur paper bills are controlled outside the Province. Our grocery stores are controlled outside the Province,to all intents and purposes.

I mean the cheap discount stores will do the job on the''momdand•pop~shops and the corner stores, before it is all finished 41 ,he departme11-tal stores, by the same token.~ the stage is set now to do a job in that particular field. Our unions are controlled outside the Province. Our mines are controlled outside the Province. You just have to name it. There is only one primary industry that has a certain amomt of control in the Province, and I hope it stays in the Province,and that is our fishing industry. Our fishing industry, of course, is our heritage. MR. SMALLWOOD: _MR.

K>ORES: Even that now is a minority. r appreciate that. I appreciate that, Mr. Speaker. But by the same token, it is important. It does make a big ' contribution to the economy of the Province. In fact it can make a much bigger contribution to the Province as well,from where I sit and what I have seen going on. 15:'5

April 20th., 1971 Tape no. 322 Page 6 Mr. Moores. Por instance just twelve miles off here today, supposed to be twelve miles off,and I hope they are twelve miles off. I hope they are 250 lliles off our coast, we have a flotilla of travlers,froa every nation in the world that has a ship afloat and is interested in catching fish to feaUts people, off our coast. They are 15':'G

April 20, 1971 Tape 323 NC - 1 MR. MOORES! tackling the job of catching fish, processing the finished product, and taking it back to feed their people. There is one important point we should remember here; with the exception of one or two Countries, possibly Norway and Denmark, the rest of the countries are catching fish off this Coast, catching fish to feed their people, food for their people. In Canada's place, Newfomidland in particular, Norway and Denmark, we are catching fish to sell in the World Market, to try and make a dollar, to try and make a dollar for the economy,to employ our people.

I think that that should be well noted. Now right here on the waterfront today, there is a Norwegian sealer that sails.I suppose, from • Norwa:, up to Trocso the lat. of February. There-.,ere twenty-two men on board that Ship. She has eleven thousand seals on board. Well that Ship, in December, January, and February, well let us take a twelve month period, in January and February, that Ship would be equipped to put sail for caplin or for herring in Norweg~an water.

She would change over her power blocks,still in evidence on board the Ship, taken on shore,and she was manned to come off the Labrador Coast to take seals and she got a good trip of seals. She will return, discharge her cargo, Only within a month from discharging her cargo, she will be back purae eeinin~·for mackerel and herring or she will be aalt fishing off her Coast again. She will continue that operation for three of four months. MR. SMALLWOOD: What kind of salt fish? Ml. )l)()RES: Salt cod fish. MR. SMALLWOOD: What kind of fishing? MR.

MOORES: Line fishing, the Norwegians do not operate any trawlers or dragger& off this Coast. It is all line fishing. Baited hook, set from a sheltered deck, the crew are not exposed to the elements anymore than our stern trawlers here. Of course it is all a sheltered deck and everyone is working within an enclosed area. It is very comfortable. 1577

April 20, 1971 Tape 323 NC - 2 HR. fil)ORES: But they are fishing for cod and there are possibly a couple of ships that do a little freezing of halibut and other species of fish that are fairly valuable. Now then, let us carry that on a little further, Norway's economy,,Norway's history and backgrolUld, is very much parallel to Newfoundland. I have said this many times. I think that NewfolUldland baa more in common with Norway tho with our Canadian partners, because of our industry, because of the probleu confronting it.

UnfortunatelJ,the language barrier is a great one but we have a lot to leam has from Norway as,been evidenced all during the winter. I had occasion to go to Norway in December, up in Tromso and I vu really amazed by what I sav. Tromso from Oslo is the same flying distance as from Montreal to St. John's - two and a half hours I believe it ia, maybe a little further,but it is inside the Artie Circle as everybody kn.ova.

On arriving there at eleven o'clock in the morning,in darkness,inside the Artie Circle,in the month of December,and driving out from the airport out to the hotel, seeing this big City. 40,000 people living in TrOlllSo. The standard of living of the people living in Tromso, the clothes which they wear, the buildings and the houses which they occupy.,. are just as good as you see in Montreal or Toronto, say nothing about St. John's.

There are five fish plants in Tromso, five fresh fish plants and the whole economics of Tromso, and all north of Hammerfeat, Hammerfest apparently ii one of the furthest points north wbere plants are constructed and operated, lt is all built around the fishing industry, ln flying over Norway, over that desolate Cowtry a lot of you have (lown over, looking down you begin to wonder why. Why all the interest?

How did all this come aboutT If you only have ·to stop to think, Norway had to, the Norwegian Government had to support the fishing industry or they had to pack it all up and tell the people to get out and move into the places in the south where it was comfortable to live, If they did that the Russians would, no doubt, 1578

April 20, 1971 Tape No. 323 NC - 3 HR. K>ORES: come in and occupy the Port. They are terrific ports, all the fierda in Norway are absolutely fantastic but,by the same token.we have fiords or harbours here in Newfoundland too. I am leading up to a point, Kr. Speaker, that we have a job on our hands to do here in Newfouuland and we have to, if it is necessary to copy the job that Norway has done and aalte a success thereo~ I think that this Bill that the Premier has just introduced now is starting to open up an opportunity for us to expresa our opinion• on a lot in connection with our fishing industry.

It ties in with our shipyard in Marystown too. We have got all our fishermen along our Coast here. We ware first of all trained, not too long ago.when we were roving boats out to our trawls, rowing boats to our traps, and we had a hook and line and then we had a cod trap and when starting talking gill net, six or seven years ago, we were talking about something which was absolutely foreign. But any­ way the fishermen took up their gill neta and they started at their gill nets.

Nov, in my opinion, a gill net in catching fish today is but one of the last manners in which we should catch fish and for two reasons: number (1) is that we aze saturating the fishing grounds with neta, we are killing a lot of the amall fish, we are not giving them a chance to grow and by the same token we are doing a real job on the quality of the fish which we are landing. That is one thing the Norwegians are very particular about and that is the quality of their fish. They tell me that a fishermen is not able to deliver fish to a plant,that has been in the gill net any longer than forty-eight hours.

It is against the Law. If he is caught doing it, he is fined. They concentrate chiefly on hook and line, coming up with good quality ~ish. The point I am leading up to is that - our Newfoundland fishermen, with all due respects. and they have done a wonderful job with what they had at their disposal, but were capable of doing a lot more. We hear a lot of talk about our debt, the debt of the Province, the Premier clarified all

April 20, 1971 Tape 323 RC - 4 MR. KlORES: Oat truth a few days ago, but we still have this debt. We have to service the debt and we can only service it by the resources we have at our disposal and the way we manage our resource • I have every reason in.the world to believe they are going to find oil. There has been eDough money spent out here already so we all know they are not on a bus ride. So we will have oil, but we have our fish and.by the same token~we are starting to get the resources in our bands to be able to service the debt which this Province bu entailed to build it up.

To build a strong base around it. Now then, we are going to have to take our fishermen and• first of all1 we should try and copy as much as possible what they are doing in Norway. With our Plant in Maeystown, capable of buf.lding ships, we are going to have to take our young Newfoundland men wh" are coming out of our Fisheries College, who are being trained, some of them go back into· trawlers and so on, but it is not enough of them. We are not getting full value into our economy of the human resource which our College is capable of turning out,so we have to look at that and look at it objectively.

We have a yard in Marystown that can build the ships. We have got the fish off our Coast which is out there, 1t is not as much of it,granted it is not as much,but it is still out there, .s-11fficient for twenty-five or thirty Nations to fish off here, so we are only a stone's throw from it,so we should be right in there pitching. Unfortunately, Canada is not a Maritime Nation, it is not a fishing Nation. We are going to have to show the way. Newfoundland is going to have to show the way to Ottawa as to what the fishing industry can contribute to the Nation.

One of the most valuable pieces of real estate that Canada own today extends from Cape Race north to Cape Chidley. With all due respects to the southwest coast, that is ,111 very fine too, there is a terrific job done up there with the fresh fish plant and the trawlers and all, but right off this Coast is where we get all this concentration of foreign ships, and this is where we got to get at it. 15CO

April 20, 1971 Tape 323 RC - 5 MR. K>ORES: We have the harbours, we have some of the finest harbours in Canada on the northeast coast and we have a short season~ that is so, we have a short season. But the season, possibly s0111e years, we run right through twelve months, no problem with ice. We have not had any ice problems on the northeast coast of Newfoundland, I mean south of Cape Bonavista, since 1967 or 1968. MR. SMALLWOOD: What was it like in this northern port of Non,ay where the hon. gentleman went. MR.

K>ORES: Well, the Gulf Stream washes ashore from Tromso and ports are open all the year around and that of course has made a terrific difference because fishermen can operate longer. But getting back to leading up to what I just mentioned, this may take a little time, this may take time, but there is one thing we should never owr- look and in my opinion we are starting to move a little fater right now when we are talking about legislation for our fishermen. ranted legislation is a good thing, we want it, but I do ·not think we should have it in 1971 and I do not think we should have it in 1972.

Ve should prepare it, start to prepare ourselves in 1971 and wait and make sure that the Government and the industry and the fisher.n are not going to find themselves built into a box which they are not going to get out of for three or four years time. We are just starting to move ahead and why start putting stumbling blocks in our wayl We are trying to break out from all thia feudalism and all that we have around down through the ages,but our fishing industry, especially our fresh fish,is just breaking through and twenty-five years, Mr. Speaker, in a primary product such as fish,is not . a great period of time.

As long as you are on the right track, six ·, months is too long if you are on the Wt'Ong track. This past winter, the Federal Government chartered a mid- water trawler from the Magdalea Island  and set it up on the northeast coast, set it up to fish in Trinity and Conception Bay to see if they could locate shoals of herring and shoals of caplin. Well the boat came up in 1531

April 20, 1971 'rape 323 NC - 6 MR. MOORES: February and there was some ice formed overnight in_Trinity Bay and the boat had to retreat,but one particular reason the Ship took back ten tons of caplin. MR. SMALLWOOD: In what month? MR. K>ORES: In the month of February. I was on board a ship and I saw the readings that the Captain had taken and if for ordinary laymen to look at a picture to show you what is on the bottom, off this coast, this is really enlightening. There is a solid wall of caplin, we use the word wall, all the way up the northeast coast of Newfoundland, right up the Labrador coast.

Getting back to Norway again, Norway last year, produced 350,0000 tons of meal. She increased her production by eleven per cent over 1969. Canada produced 112,000 tons of meal~ C&nada was down twelve per cent. MR. SMALLWOOD: What was that three hundred odd thousand tons of meal made from, what fish? HR. MOORES: I am leading up to that, primarily caplin. Norway's big whaler trawler purse seineTS last year took 1,200•,000 tons of caplin from the Bering Sea. Now Norway is becoming a little bit concerned over the resource of caplin in the Bering Sea. Caplin lllllkes an ideal meal.

Caplin competes with herring meal, that is the Norwegian product, and in 1970 they sent an expedition off the Labrador coast. •hat is co111111011 knowledge, you have read about it and so on, I read the scientist's report a few days ago. In that report he stated that the caplin resource off the Labrador coast, the northeast coast of Newfoundland, exceeds the resources of the Bering Sea now ,after the Norwegians taking 1,400,000 tons out last year, and I think this year they are going to do better. They say they are going to come -15'")? ·J,.-

April 20th, 1971 Tape 324 JM - 1 MR. MOORES: up with 2 million tons and when we think we have this resource up here on the Northeast Coast and we talk about bringing our young Newfound­ landers out of our trades college and we talk about Maeystown building ships. which Maeystown can do and will do, I hope she will do, she must do it. We have to build these ships here in Newfoundland and Newfoundlanders, we will train them and bring them on until they can build the ships.

We start to build a ship which can fish longline, can fish for caplin, can fish for herring and can go out on the banks here where these Norwegian and other ships from European countries are fishing,then we can start to get this resource ashore here and convert it into real money for the benefit of our people. Mr. Speaker, they tell me that according to reports there are 85,000 Newfoundlanders between the age of 35 and 55 locked in. They are too old to go to Trade School and they are too old to be taken on permanent jobs in any factory or anything. These are the people, Mr.

Speaker, that catch our fish, that fillet our fish, that like to live in Newfoundland, that want to make their home in Newfoundland and these are the people that we have to encourage and we have to make a special effort to see what we can do for them. I contend that we should - MR.. CROSBIE: Would the hon. member permit a question in connection with caplinT Ia there any caplin being caught in Newfoundland now to be processed into meal or is it not caught at all for that purpose? He mentioned what Norway was doing, do they take any caplin here? MR.

MOORES: Yes, well the only caplin known to us, of course, in Newfoundland are the caplin that come on our beaches and there is a certain amount of that taken, that is salt. MR. CROSBIE: Is it the same fish that Norway takes? MR. MOORES: Oh yes, it is exactly the same fish, they claim it is. In fact they claim ours is a better fish, our fish is a larger, especially on the 15C3

April 20th, 1971 Tape 324 MR. MOORES: Labrador Coast it is a larger fish. MR. CROSBIE~ But it is not being used at the m0111ent. MR. MOORES: It is not being used at the moment, no. JM - 2 MR. WINSOR: Would the hon. gentleman permit a question? Did not that report of the Norwegians indicate that they were abandoning their investigation of the caplin school in Labrador because the size'of caplin were too small to manufacture. MR. MOORES: At the moment they claim it is not .viable, not too economic to steam all the way to the North Labrador Coast and catch a load of caplin and take them back to Norway but they - MR.

WINSOR: Is there a difference in the size? MR. MOORES: That is right but installations on the Newfoundland Coast could be a viable operation. I think that if we are prepared to entertain that line of thought and reasoning and maximize on what we have to offer, the resources which we have out here and which we know about and which we are very 111Uch sure exists, I think that we should make representation to Mr.

Marchand's department and see if it is not possible for us to get some special funds invested into our industry to do a special job. rhe special job I am referring to is for the Northeast Coast of Newfoundland. The Southwest Coast of Newfoundland is pretty well taken care of, I mean we all hear about it today about the prosperity in Burin, in Grand Bank, ·•in Fortune, in Gaultois. you name it, that is wonderful, that is fine.

They are getting along grand and the best of luck to them.· ·· · But by the same token .as I mentioned earlier we have this great resource here off our Northeast Coast and this is the one we should go for and the amount of money involved in it, millions involved to get this thing set up properly, they are not unrealistic not by a long shot and they would start to generate earning power in a very, very short period of time. I want to interject that thou~ht at the moment and I want the serious consideration

April 20th, 1971 Tape 324 JM - 3 MR. MOORES: of the House to think about it and see if it is not possible for us to possibly, this may not be practical but if we could have some kind of int·roduce

an act something similar to what has been introduced here today .. to broaden our base for our fishing activity and see if we cannot have a special situation set up in order that we can maximize and develop this industry to its fullest. As I said before there are a few Newfoundlanders and I suppose, only they are dogs for punishment, for hard work ,they would take it easy and go someplace · else,but they stuck around .

I think that if we have our Newfoundland, young Newfoundlanders coming out of college and all,surely they are interested in staying around Newfoundland and working here, From what "l can hear,they are not too happy when they go to the mainland and try to settle in there, so let us encourage them. I think that we can do just as good a job here and build up our Province to a good sound economic base in respect of our fishing industry. I want to compliment the Government on the action they have taken against the Ross Steers plant,activated,and I wish the new enterprise the best of luck. Thank you very much. MR.

CROSBIE: Mr. Speaker, I think it was a very fine speech that the hon. member for Harbour Grace just made, in fact I would say it was his best one in the Rouse of Assembly so far. He obviously knows what he is talking about and it is very interesting his views on the fishing industry, C•f course, he is a man who spent his life at it and is now attempting to make a success. which I hope he will make, of the former Northeast Fisheries pl~nt at Harbour Grace. In connection with what the hon. gentleman has said, Mr.

Speaker, it .. often seemed to me ,as the Premier said earlier in this debate, that the fishing industry in Newfoundland is not organized properly. The Premier says that there has been a lack of leadership in the sense that there is no 15::!5

April 20th. 1971 Tape 324 JM - 4 MR. CROSBIE: one leading the industry and as the hon. member for Harbour Grace has said there are very excellent people in the fishing industry in Newfoundland but, of course, they are all competitors, ?here is nobody recognized as being a leader of the fishing industry in Newfoundland.

I do not see how it would be possible to expect that all these various firms,headed by great individualists, who are all competiting against one another in the fresh and frozen fish business down in and selling in the United States and elsewhere,are going to accept one of their number as being pre-eminent and a leader. It seems to me. Mr. Speaker, that in that kind of situation the lead has to be given by the Government and obviously this is what must have happened in Norway and Denmark and other jurisdictions where the fishing industry seems to be very successful and well organized.

The hon. member mentioned the possible L_egislation this year on collective bargaining in the fishing industry and the setting of the prices etc. which I think is very necessary. In those countries you have the fishermen organized,whether they are in more than one unit or not I do not know but anyway they are organized, you have the ship owners organized in an association, you have the plant operators organized in an association and~as I understand,the three at the beginning of every season or early in the season agree-as to what prices are going to be and what they can be.

Because they are all organized and they all have the same infomation and they all understand the problems of the industry you never hear of any great strikes in Norway or Denmark about what prices should be. They seem to arrive at an agreement on what it is possible to pay and in the event that they do not I assume there is some kind of arbitration or the Government has some influence. Well, it seems to me, Mr. Speaker, as the hon. gentleman said opposite, that this is the kind of system we have to have in Newfoundland.if we are . going to have the same kind of success in the fishing industry as they are 1586

April 20th, 1971 Tape 324 JM - 5 MR. CROSBIE: having in countries like Iceland and Norway in particular. That is why it is so important, Mr. Speaker, that whatever Legislation comes before the House this session,on the subject of setting fish prices and on the subject of collective bargaining for fishermen,is properly framed. ·We understand the Minister of Fisheries and other officals have been to Norway and certainly they have looked at that system.so we have to hope for the best. So I believe that . if there is a lack of leadership, Mr.

Speaker, it cannot be blamed entirely on the leaders of the fishing industry when the Government shares the responsibility too, which is not to say that the Government has not done a lot for our fishery, of course, it has assisted it in many directions. There is need, I believe, for overall leadership in the fishing industry and, I believe, that there is need for one marketing organization in the fresh fish industry.

I cannot see, for the life of me, the sense of our permitting all the various fresh and frozen fish companies of Newfoundland to compete against one another down in the United States, cutting the prices on one another and so on,to get a market. What is the sense to that? ! , mean this is Newfoundland, we do not want our own Newfound­ land fresh fish plants all down trying to outdo one another in the United States,with the tendency that we will have to lower prices. Why should there not be, as I have mentioned before in this Rouse, one marketing association of the fresh and frozen food industry in Newfoundland?

MR. SMALLWOOD: It would be no good unless you have it also in Nova Scotia. It might,in the beginning of getting it. MR. CROSBIE: Yes but at least we would be one united force. MR. SMALLWOOD: Nova Scotia will not even join in the salt cod fish marketing board. MR. CROSBIE: True, they have made that very difficult,but still it would be one united force for Newfoundland. MR. SPF.AKER(NOEL): Order please! I think that I should draw the attention 15C7

April 20th, 1971 Tape 324 JM - 6 MR. SPEAKER(NOEL): of the House to the fact that we seem to be forgetting the rule here a little bit. We are on now the second reading of a particular bill and speakers are getting quite far away from the principle of that bill. MR. CROSBIE: That maybe so but this bill has to do with the fresh frozen fish industry. The previous speakers have been allowed to dwell on more general questions about the fishery and I just wish to take a couple of minutes to dwell myself on it. I do not see how that can be objectionable. MR. SPEAKER(NOEL): It i~ objectionable if it is against the rules.

MR. CROSBIE: Well, if the ru.les are being bent for certain members why should they not b~ bent for others? It is a general debate so far why should not the general debate continue? MR. SPEAKER(NOEL): I do not know what has gone before but the speaker from Harbour Grace was talking about the need for the establishment of fish .plants in Newfoundland and that seemed to me to have some relevancy to the fish plant that is the subject of this particular Bill. Now the hon. member of St. John's West wants to go into the marketing of fish and I do not quite see what that has to do with the principle of this Bill.

Now I think we have been quite away from it but I just draw your attention to the fact that we are now on the second reading of a particular bill. MR. CROSBIE: Mr. Speaker, this Bill deals with the operation of another fish plant in ~ewfoundland, fresh frozen fish plant in St. John's Harbour. Now that fish plant ,if it is going to be successful 1will have to market its fish. All Newfoundland fish plants have to market their fish. They market them for the most

part in the United States of America. They are all down there competing against one another and I therefore suggest that the fact that a new fish plant is going to be operating soon indicates that it is very important for the fresh fish frozen plant operators of Newfoundland to start thin~ing ahout having one marketing authority to market all their fish. MR. SMALLWOOD: I am ashamed to admit it, I am humiliated but I agree with 1588

April 20th, 1971 Tape 324 JM - 7 MR. SMALLWOOD: the hon. gentleman. I mean there is something wrong with me, there must be. MR. CROSBIE: Mr. Speaker, I never feel there is something wrong with me when I agree with the Premier. MR. SMALLWOOD: When does that happen? MR. CROSBIE: This happens about one out of every five occasions but I keep quite about it generally. In any event, Mr. Speaker, - MR. MOORES: Would the hon. gentleman permit a question? MR. CROSBIE: Yes. MR. MOORES: Mr.

Speaker, on that particular point, possibly you could consider a one-desk marketing for cod blocks but I do not think we can consider one-desk marketing for ones, fives, and so on, possibly one desk marketing for blocks might be considered but I do not think we should have make a broad statement saying that we should/one-desk .marketing for all of our fish products. MR. SPEAKER(NOEL): Order please! I aa sftaid the ~peaker cannot agree with the members. The debate on marketing of fish generally has nothing whatever to do with this particular Bill. MR. CROSBIF.: All right, Mr.

Speaker, I agree that the hon. gentleman opposite.probably knows - MR. SMALLWOOD:~.Speaker, by my agreeing with him, he is all flustered. MR. CROSBIE: The hon. gentleman opposite knows more of the intricacies of this than I do and he is probably right when he says that you would have to vary that for different types of fish,but since this is bothering the hon. the Speaker I will move on to something else. Now, Mr. Speaker, this Bill generally I support. There is a fresh fish plant in St.

John's Harbour which unfortunately has not bP.en operating for the last some two or three years, two years in any event, Cbviously the Government had to take steps, whatever steps they could take,to get that operating. National Sea Products Limited,as far as I know, is a very 1589

April 20th, 1971 Tape 324 JM - 8 MR. CROSBIE: satisfactory company and has a good reputation and I am delighted to see them being brought into the picture and taking over the operation of this fish plant. There are several points,however, that need to be pointed out. One of the weaknesses of the Government, in my view, is that there is always a tend<ncy to make things look too good or to exaggerate what is being done when anything begins. That is the case in connection with this piece of Legislation.

When the original announcement was made, I think it was last fall, an impression was given,perhaps incorrectly,that these six trawlers would be built at Marystown but when Mr. Morrow of National Sea Foods was asked II about that he said; this is in November 27th,1970 issue of the Evening Telegram,''that National Sea Foods had given the Government an understanding that four other vessels will be built in the future but whether in Newfound­ land or the Mainland will depend upon existing economic conditions. Now that is quite a qualification, Mr. Speaker, and - MR.

SMALLWOOD: The qualification that counts is the one that is in the Bill not in the "Evening Telegram. '· MR. CROSBIE: I am coming to the Bill. Mr. Speaker. The qualification is in the Bill too, that is the point I am coming to. When the announcement was made Mr. Morrow said 15JO

.. Aoril 20, 1971, Tape 325, Page 1 -- apb MR. CROSBIE: That the building of these other four draggers would depend upon economic conditions, existing economic conditions. When we come to . the Bill, we see exactly - wording in exactly, really the same words, certainly the same meaning.

Clause (5) of the Bill is that Sea Products covenants and a,rees that ~'1.thin six months of the closing date, it will enter into contracts for the construction of these six trawlers. 'l'wo of such trawlers shall be constructed in Marystown,Nevfoundland,if National is satisfied that the price and quality of workmanship are competitive with other Canadian shipyards, and that such trawlers will be delivered within a reasonable time measured by the standards of the Canadian Ship Building Industry. Now that Mr. Speaker, is quite a broad qualification.

The price and quality of workmanship,at Marystown, has to be competitive with other Canadian shipyards, and trawlers have to be delivered within a reasonable time. MR. SMALLWOOD: What is wrong with that? • MR. CROSBIE: That qualification extends to the first two trawlers to be built there, and it also extends to the other four trawlers to be built. MR. SMALLWOOD: Right, to the six. MR. CROSBIE: To the whole six? - ·----- MR. SMALLWOOD: --- ---- - Right, as it should be. MR. CROSBIE: ------- Clause (9a) is to the same effect.

National Products agrees that as it requires new vessels to be constructed in the future, to serve any of its Canadian plants other than the one ·at St. John's, it shall have four such vessels constructed at Marystown. Then there is the same qualification. ?flt. CROSBIE: Price and quality of workmanship must be competitive with other Canadian shipyards, and delivery within a reasonable time. MR. ~.ALLPOOD: Right. MR.

CROSBIE: So the question one has to ask oneself is, whether the shipyard at }!arystown is competitive in price and quality of workmanship with other Canadian shipyards, and whether they can deliver trawlers within a reasonable time. That is r,oin~ to be the crux of the matter. 15:Ji

April 20, 1971 Tape 325 page 2. HR.~HALL~OCD; Right. MR.CROSBIE: So the onus is going to very heavily depend upon the shipyard at Marys town. MR.SMALLWOOD: As it should. MR.CROSBIE: To see if they can come through in this way. MR.SMALLWOOD: FAir enough. MR.CROSBIE:•: Now, Mr. Speaker, well it would be even better for us here in Newfoundland if those qualifications were not there. MR.SMALLWOOD: Oh sure, what kind of a fool would sign that kind of contract? MR.GROSBIE; Well it depends - MR.SMALLWOOD: Would we want a company that foolish. Would we want them here in Newfoundland?

That kind of a foolish clod of a company. MR.CROSBIE: It depends,Mr. Speaker, who has the most bargaining power? obviously the Government - has too much. MR.SMALLWOOD: MR.SPEAKER: MR.CROSBIE: This House has - this House Order please. The Government did not have too much bargaining power in order to get this plant to operate so it has had to aKtee to those conditions that can mean that it would be quite easy for National Sea Products to escape any obligations to have four trawlers built in the future at Marystown. MR.SMALLWOOD: Let them try it. MR.CROSBIE: Well they can easily do it.

Let us hope they do not try- MR.SMALLWOOD: They do not want to try they do not intend to try. MR.CROSBIE: WE hope they will not try - if they can get trawlers else­ where built within a period oftime that th~y need them and Maeystown is twice as long or one and a.half times as long.how are we going to be able to force them to build trawlers at Marystownl HR.SMALLWOOD: We should not try, we should not even think of it, if we cannot be competitive. 15!)2

April 20 , 1971 Jape 325_ page 3. MR.CROSBIE: So, Mr. Speaker, when he was speaking I did not interrupt the Hon. the Premier and since this is a serious topic I do not wnat to be interrupted myself, unless it is a question. is going to depend on the shipyard at Marystown. So, Mr. Speaker, a lot Now, the shipyard has only built two trawlers previously and I understand that the time period in which they were built was quite a long time period. It was stated in an address in reply to the Speech From the Throne in this House, several years a~o,that ten trawlers were going to be built there for Atlantic Sugar.

Only two were built there so they have not got much experience to go by. Therefore,it is going to be very interesting to know what arrangements are being made in connection with the shipyard 7 whether they are going to be able to carry out because.if the shipyard does not do a good job on these first two trawlers does not turn them out within whatever the time period is, a reasonable time, if it is price and quality not competitive with shipyards on the mainland,we will not get the other four trawlers. MR.S:¥ALLWOOD: Right. Right.

MR.CROSBIE~ So we cannot assume that all six are going to be built in Newfoundland and it is extremely important that a good job is done on these first two. MR,SMALLWOOD: Right. The hon. gentleman is so right today, I have not beard anything like this for two years. He is right in practically every­ thing he says - MR.CROSBIE: I am goin~ to lose all confidence in my - MR.SMALLWOOD: It is extraordinary, quite extraordinary. MR.CROSBIE: Under the agreement Mr.

Speaker, the Government is loaning $1, 700,000 to National Sea Products,that is the ~ewfoundland Ind11strial Development Corporation is.and it is going to be protected by a mortgage, first installment due and payable June 1, 1971, We have agreed to lend them, that is the Newfoundland Industrial Development Corporation,is going 15:;3

April. 20, 1971 Tape 325 page 4. to lend Natianal Sea Products forty per cent of the contract price of each trawler. The Federal Government is going to get them a subsidy of thirty-five per cent or a contribution ot grant. The Provincial Government is going to give them a further grant of fourteen per cent of the oost and one per cent to the shipyard, make it fifteen in all, the shipyard is not going to charge them that one per cent, that will reduce the price to them of one per cent.

MR.SMALLWOOD: The shipyard will get the full fifteen per cent - MR.CROSBIE: Right so that National Sea Products is assisted,by fiTteen per cant of the price by the Newfoundland Government and that is quite a generous deal. Now, Mr. Speaker, one weakness that I do not see covered here and that is in

Section 7, it says that within three years of the date,after National has entered into a contract with the shipyard for the construction of any one or more of the six trawlers and so on, they give Newfoundland notice and we start to pay. There is no clause here,Mr. Speaker, that the Government has any right to approve or disapprove these contracts. In other words the Government seems to have no say over the contratt price of these trawlers whether it is reasonable or unreasonable,, or whether it is a good price or a bad price. There is no

section of this agreement which gives us any say in what the trawlers will cost. We are going to have to give fifteen per cent of some contract price with no right to say whether or not we disagree with the contract price, ,or whether we think it is too high. That seems to be a weakness. It is also noticeable under clause 14 Mr. ,Speakei-, that National '.s obligation to go ahead with this agreement is subject to certain c~nditions precedent The Premitr has not said whether all of these conditions precedent are met or not.

The existing leases on the harbour here are transferred to :hem and then the mortg~ge for $1,700,000; that the Government of Canada authorized payment to the shipyards constructing the trawlers of a subsid:,r of thirty-five per cent 1 has the Government of

April 20, 1971 Tape 325 page 5. Canada done that? The Premier has not told us that yet. That we agree to the loan of forty per cent well that is being done. That we agree to the fifteen per cent subsidy,apparently that is done. They get an exemption for property and business taxes in the city of St. John's, that is apparently done. Now the Premier has not said whether this condition is met.

That on or prior to the closing date the Minister of Regional Economic Expansion of Canada has authorized the payment ta National,under the regional development incentive Act,of a maximum primary development incentive and the maximum secondary development incentive that may be paid with reference to National's acquisition and expansion of the plant and the fishmeal plant. If the Premier has the information,! think we should be told whether or not Mr.

Marchand has agreed to these payments and what they come to and what they are to be used fot, ~re they to be used just to expand the plant or can they be used to pay part of the purchase price of the plant -just what the position is and those grants from the DREE department. National also has to be granted an exemption from the SSA Tax,which is within our power,so I assume that is going to be done. There is also a weakness ,I do not know if anything will be done about it, Mr.

Speaker, ~n Clause 19, where National Sea Products agree to employ, to give prior opportunity of employment to persons ordinarily resident in the Province of Newfoundland ,when the same having appropriate skills are available ,and shall also give preference fn consumption ta use or use machinery equipment and materials manufactured or produced or distributed and serviced in the said province, subject to the same being competitively priced, and shall use its best endeavours to give effect ~~ that paragraph.

A best endeavours clause is a very difficult one to enforce. ',ho is to decide whether National Sea Products is using its best endeavours to buy equipment and machinery in Newfoundland or whether they are usin~ their best endeavours to hire residents of 15~5

April 10, 1971 Tape 325 page 6. Newfouadland to work in this enterprisel MR.SMALLWOOD: Even the employees in Halifax are practically all from Newfoundland.and the people they will employ here will be all from Newfoundland. MR.CROSBIE: What I am saying,i:lc. Speaker, is that the Government, no matter what Government it is,should try to develop some better formula that puts more of a legal obligation on people to whom we are entering into arrangements,better assurance that they will employ Newfoundlanders and better assurance that they will buy their equipment and materials here.

It is almost impossible, it will be almost impossible in a court case to show that a firm had not used its best effort to do these things. They will come in and say what effort they have made. Who is to decide whether they could have made better efforts or not1 So that is a weakness which I would like to see some better wording of in those kind of clauses. Now, this Bill,Mr. Speaker, really applies to one of the operation of the plant at St. John's. By the way the Premier has not said when it is expected that this fresh fish plant will operate - MR.SMALLWOOD: Next year. Cannot get the draggers - MR.CROSBIE: Mr.

Morrow made - Ml.SMALLWOOD: Unless they can find some draggers that they can divert in here, if they have to wait for the construction of the new draggers six of them, they will begin operating next year. They think that if they try to take inshore fish;the hon. gentleman will allow me - as a matter of fac~ Mr.Morrow telephoned me when I was in Louisiana. We had the discussion of it, he said that if we go in there now and open that plant now we will only be taking fish from presently existine plants.

What we want is to put six draggers in there and supply the plant from the ueep sea and n~t compete with any plants that already exists,which is very fair and very reasonable. MR.CROSBIE: Tbat is unfortunate that they cannot start until next year but 15J6

April 20 1 1971 Tape 325 page 7. that is certainly understandable and I think as ! :understand it,Mr. s,eaker 1 the Ross-Steers Group the plant was not successful because they did not have the kind of trawler, they were unable to get sufficient fish to process through the plant so that,of course,the trawlers are the whole answer:as to whether this plant is going to be successful or not, MR.SMALLWOOD: If the hon. gentleman will allow me to help him.

National Sea have their own ideas about the kind of draggers that are most suitable and most efficient and very,very,very modern and very efficient themselves in that respect and their design of draggers is really quite excellent, That is what they want for this plant. MR.CROSBIE: Mr. Speaker, the Premier meationed that the Government of Canada had reduced its subsidy on the building of ships in Canadian yards from fifty per cent to thirty-five per cent and one wonders why they did that.

Why should our Province now have to pick up this slack have to pony up the fifteen per cent of the cost of these trawlers,to enable the plan~ccin St. John's to be taken over,to provide trawlers,why should this province now have to pick up that fifteen per centt In other words, if the Government of Canada wants Canadian shipyards to operate it is a well-known fact that it is much more expensive to have a ship build in Canada than it is elsewhere in the World.

One wonders why they reduced the subsidy from fifty to thirty-five per cent because one of the results of it is to put a burden on provinces like Newfoundland that can least afford it,that have to make up the fifteen per cent to keep the shipyard that we have in Newfoundland operating, The only effect of this fifteen per cent reduction in the Canadian subsidy is that now four provinces of Canada have to pick up the reduction that the Canadian Governemnt made.

In other words National Sea Products or any of the other fish companies will not have their trawlers constructed in Canada unless they get the fifty per cent subsidy

April 20th. 1971 Tape 326 Pk - 1 MR. CFOSRTE: suhsidy. MR. S"1ALLWOOD: There is more to it than that, they are now subsidizinir,, until 1975. ships built in Canada for export,to the extent of fourteen percent. 'MF. CROSRIF.: Yes. the point is.,Hr. Speaker>that this seems to be very unfair. The Federal Government are suppose to have a ~olicy, well they have one to overcome revional disparity. But here another policy is vorkin~ in reverse.

They reduced their shipbuildinv subsidy from fif~ percent to thirty-five nercent and now the Province_ of Newfoundland, to keep our shipyard at l'arystown 11;oinp. or to help it e~and., has to pay the fifteen percent, So the only effect of what the Canadian Government have done is transfer the fifteen percent burden from the Government of Canada, which can afford it a lot !!!Ore than we can, to the Government of Newfoundland.

Perhaps the Government have made representation, but certainly the Government should pointthis out and ask the Government of Canada, if they will not put the suhsidy back to fifty percent, that they put it back to fifty percent for shipyards located in the disadvantap.ed areas of the • underdeveloped areas of Canada, namely: the Atlantic Provinces. Surely that would be the hon. the Minister for Community and Social Development, he should take that up with >.tr. }•archand. We are the ones who can least afford it; now having to replace the Canadian Government ll'Oney with our own, to the extent of fifteen percent.

The Premier 1'1ie:ht know what it comes to in dollars. I do not think it is in the ar.reements, hut it must be, six trawlers. ~~- S'1ALL'·'.OOD: These ships cost $1.25 million to l,il.ju udllion each. ~'R. CROSBIF.: So that would be about $200,000, something of that nature, perhaps $200 ,OO!'l that the r.overnment of )lewfoundland have to meet to have the shiy,s bui.lt hP.re :f_n Maeystown. But, we have a hil?~er burden than that, }1r. Sr,e::iker. ~nt. ~••ALVmnn: If thP hon. rentlelT'nn,ar-ain I know he loves me to interrunt hir-. 15J8

April 20th. 1971 Tape 326 PK - 2 MR. S}'ALLWOOD: We have had studies made of what cash will be generated into the Treasury of the Province by the operation of this plant across the harbour and the buildin~ of these six draggers. We will gain, we will have a net ~ain out of it. If we could have fifty plants such as the one over here, and fifty shipyards such as the one in Marystown and fifty deals such as the one that th-f_s Bill deals with, we would be on the nips hack. we would not call the queen our Aunt. We would be one of the reRlly pros"erous ~rovinces of Canada - forty-nine deals like this one.

MR, CP.n~r.IE: ~,r. Speaker, I wish the Premier would table some of those studies so we can. even this one there,so we can have a look at it and see h0"7 this is done. In o~her words the benefits will out-weigh the cost'l ~!R. S'-f.ALLWOOD: I will be willini to do it, but I would not want to table it because there is too much confidental information in it. But . I would be willinr. that the ~on. ~entleman or any hon. gentleman opposite,who wishes to see the study,to do so, on condition that it is kept confidental, because it has a lot of confidental information in it. ~'R.

CP.O~P,!F.: That would be acceptable, Hr. Speaker. ~!o,,• in that connection, the Premier sa:,d thiii study is bein~ done. Hell. what I am just poin~ to point out is, and I 8J!'I sure the Premier agrees that we are even better off, if we do not have to pay the fifteen percent. I mean1 the Govr.mment is that much in the pocket. That in this connection, in addition. to our subsidizin~ these particular trawlers the Goveml':'ent of !'.ewfoundland have to subsidize the shipyard at Marystown in :inv event. So, for exan,ple, Hr. Speaker, in 1968 the Government had to meet opcrlltinr losses at Harysto= of $1,010,000.

That is money the Government had to pav to meet the ope~ating losses of the shipyard in that year. Tn 19n9 the Government had to pay $576,000 to meet the operatin~ loss~s. and last year,1970,S405,000. 15~9

Arril 20th. 1971 Tape 326 PK - 3 l'R. CPOSBIF.: So what this means is that this year the shipyard gets, for exBll!ple, in 1968 it was quite busy, this year the shipyards gets the more money the Govemment have to pay towards operating losses, because the operating losses are increasing as more people are employed, the busier they are. MR. S'-fALLWOOD: No, no, that would not be true in the fifth year, in the tenth year, that would be true only in the first year when you are taking on a crowd of green homs, and you are getting very low productivity and yoar costs are high and your retums are low.

That is when you would have the big loss. That is when we did have it. MR. CROSBIE: But, unfortunately, unless there is a hard core, I suppose, left there, but the employment down there went from 300 odd down to - I think one peri•d there were.fifty odd people now it is back to 103, and when these trawlers are built it will come back again. wnfortunately, because of these two years, the hard core of experienced people are gone. Doubtless, there will be a considerable loss, operating losses that the Government will have to make up when these first two trawlers are done.

But, I :will mention just this point 1 to point out that our only expense. ,in connection with these trawlers will not be just the fifteen percent subsidy, there will also be the operating losses of the Maeystown shipyard. MR. SMALLWOOD: That is right. While there are losses. 1!R. CROSBIE: While there are, hopefully. MR. SMALLWOOD: Our firm intention is that the period of losses shall be greatly shortened by much improved manarement and a bigger turnover. MR. CROSBIE: Well, the Premier is going to have something new to announce on that, he hopes,during this session or during the year. 1-'F.

S'.MALJ,POOD: I did not say during the session. I hope I but I did not say that I hoped. 1600

April 20th. 1971 Tape 326 PK - 4 MR. CROSBIE: The Premier does not say that for sure 1 but he is hoping there will be something to announce, So I merely point out, Mr. Speak.er, in this connection,that we should are realize that thereAseveral costs involved to the taxpayers of Newfoundland, I doubt if the proper cost benefit study will show we come out better in the end after doing all this. Certainly no Government can have that shipyard at Maeystown lying idle.

No Government can have a fish plant in St, John's• a modem fish plant built just three or four years ago,lying idle, So, I mean,actually one has to support this legislation. But there are some problems in connection with it. MR. S!.(ALLWOOD: Will the hon. gentleman promise clilring the recess to consult a doctor. I will do the same. 1 am going to have a specialist look at me, when I find myself so much in agreement with the hon. gentleman there is something wrong with someone. MR. CROSBIE: I will not even mention. Mr. Speaker. that the shipyard cost more than it should have. I am not even going to mention that.

MR, SMALLWOOD: You know, I would even mention that, we built it too fast, and it cost too much. MR. CROSBIE: Right, so we agreed on that even, MR. SMALLW'OOD: You know there is something really- MR. CFOSBIE: I had a note here, false start due to collapse of fishing_ industry. I am not even going to mention that now. Negotiations re: Maeystown. I was even going to mention. Mr. Speaker, the ~ugs for Come-by-Chance, the Premier is in such an agreeable mood, I aa not even going to raise that question again, as to why they were not constructed at Maeystown. MR. m,fALLWOOD: You mean these tu,zs? MR.

CROSBIE: The tu~s. ~. SMALV·!OOD: Well, let me say, just so I will not put the hon. gentleman out of his pain. He could have had the tugs to build, but the tugs would be three shells ,the building of which would be rather triflinp;. Three shells containin~ en~ines that would be as big as this building almost 1601

April Vth. 1971 Tape 326 PK - 5 MR. SHALLWOOD: enormously powerful and extensive buildings. There would be nothing for Newfoundland in it. That is why. MR. CROSBIE: When the Premier replies also, Mr. Speaker, I wonder could he tell us what is the capacity of the shipyard? For example, if the shipyard is building these two trawlers, say they start soon now, how much other work can they do while these two trawlers are unde-rway? In other words how many ships can be built down there at one time? MR. SMALLWOOD: At least five draggers of that size. At least. MR. CROSBIE: All right. As I say, Mr.

Speaker, I support this legislation. Basically, I think, the Government have come out of the situation pretty well, have arrived at a pretty fair agreement. It is important that this plant in St. John's be used as soon as possible, that important shipyard at Mar,:stmm be kept going. I merely point out that while the Premier always takes the very optomistic outlook,that there are chances that all the trawlers may not be built there. I am sure the Government will do all it can to see that they are. There are those escape clauses, but all in all I am satisfied that it is a pretty good deal.

The Government are getting in a fish company in the Province that is already down in Burgeo partnership with Nat Lake; it is a Canadian Firm. It is a great pity; the Premier might say whether he is taken up with Ottawa, when he replies, this business of the fifteen percent. It is a great pity that Ottawa·puts this burden on us. I cannot lDlderstand why they did that. It is taking money from Newfotmdland that we cannot afford,to do something that th,Y were doing and should continue to do in the shipbuilding~industry.

The hon. the }finister of Community and Social Development ,when he signs that agreement with Mr. ''.archand,rnight put in a P.S. and get the subsidy back again for, (what is the term they use?) special areas of which Newfotmdland is one. AN FIO~r. ~PIBF.R: Designated areas. ~'R. CROSRIE: Desir,nated areas. Other than these remarks, I cannot speak 1602

April 'll'"th.1971 Tape 326 PK - 6 MR. CROSBIF.: on marketing. I will conclude by saying that I support the Bill. MR. H. R. V. F.ARI,F.: Mr. Speaker, I do not think that any of us on this side or anyone in the House for that matter can disag-ree with a principle of this Bill. Most certainly the evidence of the agreement which has been brought to this Hquse for the first time in this session should speak for itself.

Because, obviously, both sides of the House are extremely interested in endeavours of this sort and will go to their upmost and support the Government when it presents Bills of this nature to the House. Before I get on with the Bill itself, I should like to congratulate the hon. the member for Harbour Grace on an excellent address. There was a great deal of meat in it and very much to the point. I agree with the member for St. John's West, this was probably the best sp~ech he has ever made in this Assembly. I hope that it is noted and taken due note of on both sides of the House.

While referring to the hon.member and his remarks, pertinent to this Bill, there is a clause in it which does worry me to some extent, and · ·: ·· it is in connection with the exemptions from taxatimi.. I have always felt that encouragement to companies through tax exemption was not the right way to go about it. Tax exemptions are in themselves a very complexed way of subsidizing a company. I perfer 1 in deals of this natuze#that subsidizes be granted outright with limited terms rather than something which c·an extend over many, many years in s.s.A. tax exemption or something of that nature.

The City Council apparently has been asked to rermit itself. for ten years. I do not agree that that is the right type of subsidy for a company. Who can tell ,-,hat the conditions will be in ten years time? Who can tell what our s.s.A. tax situation will be in ten years time? I disa~ree with this principle of giving this type of subsidy to a company. I would mush perfer to see an outright grant of some nature that could be worked out to assist the~. The complications which I found during the period that I was Minister of Finance were terribly hard to deal with. Because when you get into the 16113

April 20th. 1971 Tape326 PK - 7 MR. EARLE: field of tax exemption and S.S.A. tax there is always the complication of exactly what is exempt. And there is the other complication that in trying to do something for one company, you may in tum be very unfair to a competitor.

The hon. gentleman from Harbour Grace,who spoke,he had a large fish business to conduct and try to make prosperous, and it is imperative, it is essential that any concessions that be given to this great concem, which after all is an intemational concem, with tremendous capital backing,ahould not in anyway preclude the same type of assistance and to the smne extent to our local operators.

I disagree with the remarks which were made on the other side of the House concerning the fact that a company of this nature.'llhich is in effeot a leader in the industry internationally,has necessarily any 1110re knowledge or experiences than some of our local opewators. And the fact that in the past a local operator could not be found who would find himself in the position of getting such great concession.~ .the Government or encourage them, if you like to put it that way, does not reflect to the extent that they were not and are still ezcellent operators in the fresh and frozen fish business in Newfoundland.

I am only making the point that,tmder this legislation, all of the concessions that are given to National Sea Products and in welcoming them to St. John's particularly, I should like to emphasis that any concession should also be extended to those in this Province who giv£'a .11ke amount of employment. I hope this will be taken due note of.

The point that struck me,that the assistance to this company is in a very large figure, but it is not something which we should hesitate at all, because this type of assistance to an industry that will employ many hundred of people is a very, very t.,orthy fom of assistance and, of course, as has been said indirectly.the revenues which will be gained by the Exchequer will retum,eventually, probably a great deal more than has been paid out. i~en you consider an industry of this type.which this Bill is asslstinp, to the extend of a couple of million dollars or so ,

April 20th. 1971 Tape 326 PK - 8 MR. EARLE: the subsidy pa:l.d to ER.CO at Long Barbour to the tune of $3 million a year for the employment of apprc,ximately 400 people does not atand up in compars:l.011. And no O'·

April 20th., 1971 Tape no. 327 Page 1 Mr. Earle Newfoundlander, in his right senses, should hesitate to support an industry of this size site, which is operating on our basic resources. It is using our basic resources for export and to bring new money into Canada. So, I favour very much the encouragement of an industry of this type. I do disagree with the hon. member for Barbour Grace that the industry_ on the south coast, the fishing industry on the south coast, is fully developea. I do not think he used these exact vorda, but they are better off probably than other sections of the country.

This is true on the foot of the Burin Peninsula, but there are long stretches of that coast, with all-weather ports, which are ideal sites for large fishing enterprises. 1 do not think that other sections of Newfoundland, with the restrictions of weather and ice and so on that they have, can really stand up against many of these sections of the south coast which should and must be further developed. One thing I have noted, Mr. Speaker, in examing this Bill, the clauses might look at the Department of Fisheries, generally.

The first thing that one notes, when examing the estimates of the Department of Fisheries, the comparatively meager amount which ia their total budget for the year. Now the total budget for the Department of Fisheries in the year, 1969-1970 or 1970-1971 was approximately $3 million. I think the succeaa of companies such as National Sea Products, in coming in Newfoundland and others that have come here and failed, would largely rest on the amount of support that they can get from Government.

It does not appear to me that a govemment that takes an interest in the fishing industry to the extent of a budget, almost one of the smallest of any department in Government, ia showing sufficient interest in the encouragement and promotion of the fisheries. The excuses used, and I refered to this the other day, that the_ Federal Government, of course, have a large hand in our fishery operation. This is an excuse and it is only an exc~se. 16 ' I,. LO

April 20th., 1971 Tape no. 327 Page 2 Mr. Earle We cannot live on excused. Thia business is our business. Newfoundland fish business is our business and the life of our Province depends OD it. • 4 '•• This Government 111W1t of neceaaity use every effort, every- thing at its disposal,to encourage and help the fisheries, not as has often been the case in the past, that the fisheries had been .'mainly used as election bait. There were great promises and so on of what will be done and then you turn to the actual effect of what has been done and the meager amounts that have been spent.

You find that this is largely hot air and propaganda which does not materialize. Now here we are encouraging,into this Province, international concerns who will need and should receive all the support, in many• many different fields of their endeavour,whie~ _this Govermile!J,t can gi;ri!' i:bem:--' I think, for instance, if you look over the Department of Fisheries' estimates, there is nathing at all in these or the promotion of our own products; advertising or promotion of any sort. We are prepared to let someone else do that.

Surely, an organization such as National road Products will advertise its own products and its own name brands. But what will this do for Newfoundland? It will give employment here and jobs we hope, if they are succe sful. But will it make Nafoundland, as auch, better known throughout the world? I think this is the job of the Department of Fisheries, hand in hand with such organizations} such as National Sea Foods, to help promote Newfoundland products.

I would like to see, in the Department of Fisheries, much heavier votes for the encouragement of the fisheries and in all its aspects, particularly, in the sales efforts of promoting and selling the Nafoundland products ,- But by far the most important and essential function which this Government can participate in is the protection of our resources. Our protection has largely been left as a Federal matter. But the Continental Shelf and the waters off our khores are most certainly our 1607

April 20th., 1971 Tape no. 327 Page 3 Kr. Earle. bueiness. Whether we are wise enough to prohibit and atop the pollution of these waters, it will remain to be seen. I certainly welcome the eff>rts which are being made or which are now being made through the resh ater and cesh, ir • uthority - clean water and clean air authority, to keep a careful eye indeed on any future pollution or things which may pollute our fishing grounds.

I think that is a splendid organization o~ a department, . if you would like to call it, and I hope that they are given the necessary money and sufficient backing by the Government to do a good job. But here again on the protection of our resources, the fact that so many countries benefit from what we have and yet we are very often inclined to pass the control over these other efforts in our waters . to the Federal Goverriment without, in wy opinion, being noisey enough and being adamant enough about what is happening on our shores.

My hon. friend,the member for Burin,mentioned yesterday, fishing efforts by foreign draggers right in Fortune Bay. I have had many communications from my district on this same thing. If we allow countries or fishing vessels from other countries, foreign countries,to just come here and do as they please, it will be of scant use to encourage companies such as National Sea Foods to come in here and fish, :because they would fimthat after a few years, there is nothing for them to catch.

Now this is the ultimate objective that we have to watch; that, we, in encouraging these people to come in here and spend their money and invest their money in Newfoundland, that we help them to the greatest possible degree in the promotion and sale of their products and in the promotion and sale of Newfoundland, 1n so doing, ~t the same time, we also help them to maintain andf"eserve the natural~ resources which they will need to carry on business in the future. Now there is no point, I say, in our just taking a back seat and 16118

April 20th., 1971 Tape no. 327 Page 4 Mr. Earle. aayingjaS a Province, that thia is a Federal responsibility. It ia the responsibility of everybody in this Bouse. It ia the responsibility of the Government and. we, in future.must make a great deal of noise indeed, to see that our own resources are protected for the use of companies, such as, the National Sea Products and our own local firms. MR. HICKMAN: Mr. Speaker, if I may make a few comments in connection with this Bill. I think I agree with hon. members that this type of support is most definitely a step in the right direction.

At the same time, I think, before we start making firm projections as to what the job opportunities will be at Marystown, as a result of this, that we have to look very carefully at this Bill. We have to bear in mind that there is no firm, irrevocable conmitment on the part of National Sea to build the other four trawlers in Harystovn. The hon. the Premier has indicated today that negotiations are going on for the purpose of finding new management for the Marystovn Shipyard - a new company to take over and manage the shipyard and hopefully to expand it.

We know on the Burin Peninsula - we have seen feasibility studies going on down there during the past two or three months. I do not know who was carrying out these studies, but I would hope that Govemment have leamed by experience that it would be a very serious mistake to have anyone conduct a feasibility study to decide whether a shipyard can be expanded, if the company doing the study is in the position to profit by its report being accepted.

The point I am making is this: That if the feasibility study is being done by a construction company (We had that same sort of situation arise with respect to the building of the Marystown fish plant. We had it in Come-by-Chance with Jacob's Engineering) these reports are not 1609

April 20th., 1971 Tape no. 327 ' Page 5 Mr. Hickman necessarily factual. They certaiuly are not unbiased. The Maeystown Shipyard as it stands today, with the -proper support personnel, can build twelve draggers a year. But it is going to be quite some time before it reaches that. In this House last year, I suggested that Canadian Vickers, which was and is a great ship building company, had turned its back on Maeystown and had withdrawn its drafting and design support which is fundamental to any shipyard, if it is going to compete in today's markets.

This brought on great denial that afternoon by the hon. the Premier and some official from the company who happened to be here. But, I, did not speak,at that time, without some knowledge of what I was saying. I had been in Marystown only a few days before, and it was obvious from talking to anyone down there that they were not getting the support that they felt they were entitled to from Canadian Vickers in Quebec. But obviously, what i' said,. 11111ft have been true. If it were not true, then why switch horses in midstream?

Why the need to go and try and find someone else to carry out the work at Maeystown and to expand the plant? Now, Mr. Speaker, we had a very excellent speech this moming fro the hon. the member for Harbour Grace. I think he projected to a great extent some of the possibilities of ship building and the fishing industry in Newfoundland. Make no mistake, Mr. Speaker, the time is running out on us. We are not in the same league at all with some of the European fish producing companies that are now fishing off our shores. I have before me an

article from "World Fishing" of last year. Some hon. members may be familiar with it. It is a first-class publication. It carries a very detailed

article on a Russian boat, the •Bostov.'' That boat is 43,400 tons. It has a crew of 594 persons. It is going to carry with it a flotilla of smaller ships, the size of some of our smaller draggers. It is going to carry them on the deck. They are now fishing out here. They lower them off the deck, and they put them to sea on the Grand Banks, and they bring in · the product, and they process it on board. Now this is the kind of competition we are up against. 16:0

April 20th., 1971 Tape no. 327 Page 6 Mr. Bickman. It is pretty severe competition. Whilst Norway and Iceland may primarily be our only competitors in the American market, let ae draw this House's attention to the fact that what caused the slump in the frozen fish market a few years ago, in the United States, was not the compe~ition from Iceland and Norway, it was when the restrictions against Iron Curtain countries were lifted and this openid up the American market to Polish fish.

It was the Poles who crucified the Newfoundland fishermen, not the Norweigans and not the Icelanders, because they were crucified by the Poles as well. So we are into a pretty competitive industry, Mr. Speaker. We are into an industry where design of the dragger - look, it has almost reached the stage now of a motor car. Every year, out comes a new model of a motor car, primarily designed to attract customers but with some new features built in. The design of the fishing trawler on the Grand Banks, today, is changing almost yearly.

Two or three years ago, there were four fine trawlers built, in the "Prince" class for Bonavista Cold Storage. They were supposed to be:the latest in design and so they were in 1967. I think right now they are probably the four finest boats on the Grand Bank fishing out of Newfoundland ports. But these boats today, Mr. Speaker, if they were built today, the design 111ould have to be substantially changed juat to compete with our friends from the European countries who are out on the Granct Banks.

This boat, this 1 Bostov:, you know, when you read it, you marvel at the engineering capabilities and you marvel at the scientific capabilities of the Russians. But those of ua who live and represent fish producing areas of this Province, can only read this with a great deal of apprehension. This or apart from the ship accommodating 594 persons,in .suites with all modem air conditioning and a library and a rest room and recreatian room, swimming pool, dance floor, rest zones. It has two hospital wards. It has two isolatbn war4s. 1611

Ta-pe no. 327 Page 7 It has a barber shop. It has a tailor shop. It has a boot and an~ repair shop. It has something else. But these are for crew comfort Now, Mr. SJaker, when you get that type of crew comfort on European boats -we always use to say in Grand Bank that when you aav a new reno•ation on the Lunenberg Banker, when they covered in their pilot house, covered in their wheel by way of a pilot house in 1938, we always used to say in Grand Bank that two or three years later we will be doing the same thing. As the night followed day whatever the Dutchmen ·· did in !

Lunenberg • you would see it on our boat• two or three years later in the way of crew comfort and improvement in fishing 16!2

April 20, 1971 Tape 328 RC - 1 MR. HICKMAN: capabilities but this is going further now, we must follow and we are following the design of boats coming out of European countries, because an awful lot of our boats. an awful lot of the fishing trawlers that are operating out of the Newfoundland port, pretty well the whole group, fleet 7 out of Fortune and a lot of Fishery Products fle~t were built in Holland and if they go over and they avail of the new true comfort you are going to see demands that the Marystown Shipyard meet these requirements.

And this is why, not only do you need, I do not know if you need new management there or not, but the indications seem to be from the Government that this is in mind, but whatever it is, it has to be sufficiently strong that it has at its disposal all the drafting support and design support that is going to be required to make Marystown competitive, not just with Pictou, where they are still building side trawlers. MR EARLE: Inaudible. MR. RICKMAN: Well maybe that is another crew comfort that we will see great demand for.

Let me tell you this; I can produce a crew who will demand that kind of comfort, make no mistake about tha~, Mr. Speaker. But again they have another thing on board that is called a dinner type computer and this progressively accuaulates and analiaes data as it becomes available to make catch rate forecast. Now remember this type of boat, Mr.

Speaker, can be fishing (1ft t~@ Grand Eanks today and if they decide to go to tropical waters, if their computers indicate that that is the place to go to get the sort of species of fish they want, .they will go, and she is equipped for fishing bl the North Atlantic, she is equipped for fishing in tropical waters. Mr.

Speaker, again while we are on,to see what these people are doing to our fishing operations out of this Province and what they are doing to our fishing grounds out here, tbe other day>in another debate, I mentioned the fact that the Hamilton Banks off the Labrador coast were being excessively dragged by the Russians, I read afterwards 1613

April 20, 1971 Tape 328 NC - 2 MR. HICKMAN: that someone suggested that this was because I was envious that our NewfolDldland boats were not going up to drag Hamilton Banka. That was not the point I was making at all. The simple fact is that the Ruaaians are dragging the Hamilton Banks. as the hon. Minister of Fisheries is aware, during the spawning season and they are destroying.the fish, destroying the spawning gromids and substantially, I believe, reducing the fish that is coming in to be caught by NewfolDldland fishermen on the Labrador coast. I suggest, Mr.

Speaker, that most of the studies that are DOV going on, and most of the attempts that have been made to try and find reason for the decline in the Labrador fishery, come to one conclusion, that this is directly related to the over fishing of the Hamilton Banq,not by Newfoundland or Canadian fi3henien but by foreign fiahing dra•gers. But on that point, yesterday, there is a skipper in my constituency who said to• that one of the acarcest fish on the Grand Banks right now is cod. A few years ago, it was haddock, and a couple of years ago we started issuing warnings about cod, it is coming to pass.

Cod is in pretty strong demand right now and the skippers are asked to go looking for cod. This man, after spending a week looking for cod, has now had to go back and look for yellow tail flounders,starting this morning. Now this does not say that cod has disappeared from the Grand Banks, because let me tell you Mr.

Speaker, that cod is not nearly as plentiful on the Grand Banks today as it was a few years ago and if we are going to maintain our present production, if we are going to give the type of employment that labour intensive industry gives in our fish plants,and I can not agree with the hon. member for Fortune Bay that the Burin Peninsula is satisfactorily developed as a fish • producing area of this Province right now, it is not. You can ao to the four fish plants on that Peninsula and they can total up without any difficulty at all, the absoln~e necessity for an additional twenty draggers right now.

Not to give more jobs, but to maintain the jobs that 16!4

April 20, 1971 Tape 328 RC - 3 MR. RICKMAN: they have as of today. Because e,rery veek these draggera are coming in with lea.a and less catches, aaaller catches. That means leas employment in the fish plant and they an desperately trying to keep ahead of this demand and their obligation to their people working in the plants and on the draggera. MR. SPEAKER: I will now call it one o'clock and I leave the chair until three o'clock. 1615

PROVINCE OF NEWFOUNDLAND AND LABRADOR HOUSE OF ASSEMBLY Volume 1 Number 24 5th Session 34th. General Assembly VERBATIM REPORT TUESDAY, APRIL 20, 1971 SPEAKER: THE HONOURABLE GEORGE W. CLARKE

April 20th. 1971 Tape 329 Pk - 1 The Rouse resumed at 3:00 P.M. Mr. Speaker in the Chair. ~.SPF.AKER: Order! There is an amount of papers and books and assorted printed matter on the floors right now. I did not want to tell the staff to take it down ~o the incinerator,until I advise members accordingly. But this evening all books and papers on the floor,together with anythin, which the hon. members wish to discard 1would they please leave it on the floor~ h\ything that is left on the floor at closing this evening will be removed and carried to the incinerator. HON. J. R. ~MALLWOOD: (PREMIER): Mr.

Speaker, would the House be agreeable, before we resume the daily business, that I now give answers to two or three questions/ I do not know how I missed them this morning, I am not sure that Your Honour called"Answers~did he? I did not hear it, I must have been occupied, worried. MR. SPEAKER: With permission of the House we can revert to Answers to Questions. I hear no objection. The hon. member may continue. ~- SMALLWOOD: I expect I was worrying about the hon. member - Question No. 146. on the Order Paper of Mar the member for St. John's West.

The answ iSth., in the name of the hon. o the first part, if that is now before hon. members, is that this waa-aOBwered previously No. 388, so I am told. Question 1-'R. CROSBIE: Ouestion No. 388 is not answered. You may have the answer, but it is not given yet. ~- Sf-l'ALLWOOD: It has not been tabled? MR. CROSBIE: ~o. MR. SMALLWOOD: Well, when they say previously answered, what they may mean; they haye answered it to me and I have not passed it on to the House, if I have not I shall do so.

Then the second part, a, b, c, d, e, f, g, h, with re,ard to a, b, c and e, these are previously answered in the answer to 388. But, if I have not ,iven the answer to 388, I shall do so. First class. I tr~velled first class. I am half ashamed, but nevertheless I 1615

April 20th. 1971 Tape 329 PK - 2 MR. SMAJ,LPOOD: fe61 that the Premier of the Province ought to travel first class, othe-rwise he mi~ht give a bad impression of thta ~rovince, that maybe what the Opposition are saying is right 1 that the Province is broke and we cannot afford it for the Premier to travel first class. I do travel first class. So I do travel firat class. And the (

h) is Air Canada. Now I have to supplement that, and say that I had travelled otherwise than in Air Canada. I have travelled in nineteen other aircrafts. Aircraft owned by nineteen other people.

The Government of the United States of America, the Government of Canada, the Government of Quebec, the Government of Newfoundland, the planes of these four Governments, planes then also of the Iron Ore Company of Canada, of BRINr.o, of Canadian Javelin, of the Shaheen Enterprises, of Lundrigan's, of The International Grenfell Association, of Holll.nger Consolidated Gold Mines, of Boylen Engineering, ALCAN, that is Aluminmn Company of Canada; Irving Clil, Bowater's Newfoundland, Monsanto Chemicals of the United States, Home Oil, this is the Bobby Brown Company; Price Newfoundland, the paper mill people in Grand Falls, and Katey Industries and the one I just said, what was that?

I just mentioned one, it is not on this list, which brought it to nineteen in number and a number of others that I cannot reme~ber, But I have to add, Mr. Speaker,that no charge was even made to the Government for my fare on any of these flights, that is to say having had free flights I did not charge the Government for any one of those fli~hts. I did not get a free flight and then charge the Government for that flight. It was free to me, it was free to the Government. And that list which is interesting I have extra copies of.

Question No. 388 on the Order Paper of April 1 .,in the name of the same hon- ~entleman. And the following trips were at Govemlllent expense, June 17, to Ottawa,and August 7 , 1970,to London, Oslo, back to London and then to Montreal and to Toronto and back home. That was the first trip I made over to Oslo. In fact, I made only the one. That was Au~ust 7, last year. And on Sertember 10 • to Ottawa. September 21, to Montreal 1G:!.7

April 20th. 1971 Tape 329 PK - 3 MR. S'MALLHOOD: and on to London. Then, Noven,ber 24, to Toyko and back and on the way back I stopped off at various places, but that did not cost anything extra. All these trips involved Government business and the amounts are set opposite. And the cost of these trips were met by the Government. question No. 409 - MR. CROSBIE: That is going to be table , is it not? MR. SMALLWOOD: I am talbling that, Question No. 409 asked by, oh! the incurious hon. member for St. John's East, the bedfellow of the hon. gentleman, new party colleague, his buddy,buddy, east and west.

Not true is it that never the twain shall meet; The twain have met. East and west are now in bed together. St John's East and St John's West have both gone Tory. I am sure the hon. ~entleman feels comfortable, but I am not sure, when the other hon. gentleman rolls over on him, how comfortable he is. We are not sure of that This is Question No.409, on the Order Paper of April 13, and in the name of the hon. member for St. John's East and the ansver to the first part of it is "yes." And the reason is purely econ0111ics. And the answer to the second

part is ''nil" none, ''nara''dollar "na:r::a"cent. The answer to the third

part is "no." The answer to the fourth

part is ''no." No tenders were called because the Government did not do it, the tenderers make their own alterations to suit their own requirements. If they call for tenders, we would not know anything about that. It ia none of my business. Part five, it is not in the public interest. This is a question that asks the gross rental return from the additional office space. It is not in the public interest to quote figures. But the rental for space for commerical purposes will bring a higher return than residental occupancy.

The space they rent in that building for commerical purposes will brinr. the Government a higher rent, than they would r-et if they rented it for resJdental occupancy. The answer to the 1613

April 20th. 1971 Tape 329 PK - 4 ~'R. S~•ALLWOOD: sixth is the same as to the first, it would bring a higher rental income for the Government than residental occupancy, but it is not consider proper to quote the rentals charged. MR. CROSBIE: A supplementary question, Mr. Speaker, can the Premier tell us who these tenants are that are taking the second floo~ for c0t1111erical space? MR. ~ALLWOOD: I have no more idea than the man in the moon, but I can get the information. I do not know who is in these, there are only two people I know in that whole building.

There are shops I notice on the ground floor, restaurants, delicatessen, and I know there is a travel agency, I go there frequently to have a meal with my personal friend, Mr. Vardy, and as I go there and get out of the car and walk in I notice different shops The .. delicatessen is on the ground floor. I know that the computer people have a large part of . the building, and I know that Mr. Vardy has a flat on the top floor, which is where I usually go when the House meets here in the night, I usually go down there and have a bowl of soup.

Now I know I could go down to the Chinese Restaurant and have a bowl of soup, but besides having a bowl of soup with !fr. Vardy at night, between afternoon and night sessions, besides a bowl of soup I can lie down and have a nap of fifteen minutes and get in ~resh condition to meet, to cope with the Opposition when I come back here at night. That is why I am so fresh, a bowl of soup and though, and though being a fifteen minute sleep , is better than any Chinese Restaurant that I know. Although, I do like Chinese Food. I would not want to be misunderstood on that, I am very fond of Chinese Food.

If there is anything else the House wants to know about Elizabeth Towers, just put it on the Order Paper and I will be happy to answer it. MR. CROSBIE: Is it Elizabethan in its appointments? "'R. S''AT,V.rnon: It is Elizabethan, lte has a lovely. flat. And I enjoy going there and it is larr,e and most people do not know , and I hope the Fouse will keep it a secret,where I r,0 1 be~ause they do not phone me, they do not 16:!.:)

April 20th. 1971 Tape 329 PK - 5 !om. ~MJ.LLWOOD: where I am, and I can escape the phone , for a while, which is a relaxation and it puts me in excellent condition to cope with this ferocious opposition, every night. MR. CROSBIE: You will never spy stangers there. 'HR. SMALLWOOD: Never are there any strangers. Home on the ~ange,where never is spoke a discouraging word. Never. ROH. W.R. CALLAHAN: (MINISTER OF MINES1 AGRICULTURE AND RESOURCES): Mr. Speaker, Question No.

Zl on the Order Paper of March 25, and this is to keep the record straight really, the question is in the name of the hon. member for Gander, I feel that the disposal of the assets of the former DOSCO mines, I think, has been answered COD!pletely in the statement -I tabled a couple of days ago, attached to which was a financial statement. Question No. 193,in the name of the hon. the member for Gander on the Order Paper of March 26 1 did the minister inspect in Halifax an off~sbore oil-drilling rig·, to be used off the shores of Newfoundland?

Yes, accompanied by the Chief Inspector of ~ines and the Mechanical Electrical Inspector in that division.

(2) Was this inspection for the purpose of investigating the safeguards aiainst pollution? Yes, primarly.

(3) What precautions have been taken by the owners of this oil-drilling rig as safeguards ~~ainst pollution? All possibe precautions, s~ my officials report.,Mr. Speaker,and indeed what :Is judged, or having equipped the rig with what is jud~ed to be the latest technology available in the world today.

(4) Will C,ovemment inspectors be undertaking periodic inspections during the drilling operation? Yes, Mr. Speaker, if the weather allow them ever to get out on the Banks. And I wish to table, Sir, the answers to Ouestion No. 26,in the name of the hon. the member for Gander.on the Order Paper of March 25 and also ans•.rer· to (!uestion No. 28, in the name of the same hon. member on the Order Paper of March 25 . Thank you! Hl]N. ERIC DA:JE: (MINTSTF.'R OF ~T!-TTCIPAL AFFARIS Mm HOUSING): Mr. Speaker. I have the answer to Ouestion No. 390 asked by the hon. the member for 162D

April 20th. 1971 Tape 329 PK - 6 ~- DAPF.: Bonavista North on the Order Paper of April ]. The question is what lawyers or law fims within the Province of Newfoundland have been en~ar,ed to carry out legal work for the Newfoundland and Labrador Housing Corporation showing the amount paid during each period and such lawyer.or law firm engaged? The answer to the question, the firm of Sterling, Ryan, Goodridge, Caule, Gushue and Goodridge,paid $809.50 conveyance fees and $40.00 for searching fees. The firm of Halley, Bickman and Runt, Steele and Carter $600.00 preparation of draft agreements, and a further $1,113.75.

General servicing in property purchase and conveyance and fees. There is another amount for Halley,.Hickman, Runt, Steele and Carter 1G21

April 20th., 1971 Tape no. 330 Page 1 mrw Hr. Dawe $3,225.75. General service and conveyance fees in the oroperty purchase on the Blackhead Urban Renewal ScheJK- There is an amount, of Cashin and Pyke, $460.73 for the same services on the Blackhead Road. The answer to the second part of the question: Since Ap~il 1, 1969, what lawyers or law firms practised in the Province of Newfoundland, outside the Government services, have been engaged to carry out legal work for the Department of Municipal Affairs and outline the nature and legal work involved? The answer to the question is: Mr.

Leo Barry of Thoma, Fowler, Rowe and Barry, $5,474.50. This is solicited work in connection with the Blackhead Urban Renewal scheme and this is for work since September, 1968 and this is shared by half with C.M.H.C. and with the Province itself. This is the amounts that we have engaged through legal fees. For the information of members, I table the answer as well. HR.. SPEAKER: If there are no further answers to questions, the hon. member for Burin has the floor? MR •. CROSBIE: Mr. Speaker, before we move on, you mentioned that anything that was on the floor waa going to be removed.

Your Honour will recall that we do not have an office but under the desks here there .is not just stuff thrown on the floor but piled up here. Could you direct the cleaners that if it is underneath the desk to leave it there? We have nowhere else to put this material. MR. SMALLWOOD~ If I may comment on that, Mr. Speaker, I intended to mention it.

The hon. the Mintster without Portfolio, that is to say the hon. member for Labrador South, has been pressing the Government to ~e allowed to relinguish the office he occupies in the floor, 1 think, above. 1 told him I thought this was an exemplary decision on his part, but that it was no•use his telling me, except as a member of the Internal Economy Commission. I told him that the next time there

April 20th., 1971 'Iap• uo. 330 Page 2 Mr. Smallwood. waa a meeting of the Internal Economy Collllllission, t would pass on to them his very generous offer of depriving himself, as one of the Queen's ministers, of an office in this building, that t would pass his offer on. And that if the Internal Economy Colllllission we-re gracious enough to accept his gracious offer, the office would become vacant •• MR. 00.LARA'!f: During the house? MR. SMALLWOOD: While the Bouse is in session only and that he would make that sacrifice.

Now if the Internal Economy Commission rise to this noble occasion, which I da-resay they might. I know Bis Ronou-r, the Speak.er, is the Chairman of the Intemal Economy Commission. The Minister of Finance, my colleague, my honoured colleague is a member of it. He is the soul of geneTOsity. The Attorney General ia fa1110us in this Bouse fo-r the apirit of co-operation, which he exemplifies always • And who would deny that I am absolutely a maid of the milk of human kindness. So when the Intemal Economy Comissin meet next, I will be most surprised if -they do not decide to accept.

We do not have to meet until next year. We might call an extraordinary meeting, however, and t would be most surprised if this gracious offer were not graciously accepted. In which case what is left of the Liberal Reform Party could go up there by himself and have a handsome office all to hiuelf, vhe-re he can dream of the days when he was once one of the Queen's ministers and mourn the past and yearn for the future. MR. CROSBIE: Mr.

Speaker, if the Internal Economy Committee meets, and I gather that their usual meetings a-re telephonic In other words the Deputy Chairman usually has a telephonic meeting and everyone agrees. We would be only too pleased to accept the offer. The only question is whether the room will be large enough to hold twenty or thirty after the next election. 1623

April 20th., 1971 Tape no. 330 Page 3 MR. SMALLWOOD: Twenty or thirty ghosts. MR. CBRTIS: Perhaps, Mr. Speaker, the Order here might stand until tomorrow so that members can have an opportunity just to see - 1 notice that there are quite a number of things under the late Mr. Keough'a desk. Somebody shauld go through it before it is scrapped. MR. SPEAKER: We defer the . removal for another day. MR. HICKMAN: Mr. Speaker, when we adjourned for lunch, I was coanenting on the demand for new design insofar as the trawler fishery is concerned that shipyards must meet now,if they are to be competitive. In that respect I drew to the attention of the Bouse an

article in ''World Fishing" on the "Bostov•'which is the 43,400 ton mother ship, which the Russians recently put in the North Atlantic. There is some information, Mr. Speaker, that may be of interest to hon. membars concerning these trawlers that they carry on deck. They are dories that she carries on deck when she is fishing. These boats, as 1 said before, are large as some of our aide trawlers that we have operating out of Newfoundland ports. They are capable of steaming at ten knots. They are capable of dragging at four knots.

They have a type of fishing gear and trawl that must commend itself and would have to,to our deep-sea fishing fleet and inshore fleet, if they are going to survive. The fishing gear on these catchers enable them to fish with a bottom trawl, with a variable depth trawl, with a detachable cod end and with twin variable depth trawls at thirty-two mecets in length. They are also equippped to do purse aeigning, and they use electric fish attraction. You could imagine, Mr. Speaker, the problems that must have been encountered in trying to design a boat of this kind.

One of the real problems was what do you do out in North Atlantic in a gail of wind, when you want 16~1

April 20th., 1971 Tqe no. 330 Page 4 Mr. Hickman to take on board or hoist on board a dragger the size of the "Blue Foam" when she is under speed; Because these catchers weigh up to seventy tons. But they overcame the difficulties, and they can now take these boats on board with wave force up to six. That is a pretty hea'V7 gail of wind that you are operating in, when you are trying to take on board one of tftesa draggers. Now, Mr.

Speaker, the hon. the member for Barbour Grace, this morning. referred to,and in this any hon. member who is at all interested in the fishery of this Province must concur,that the Government of Canada has not really experimented in the fishery at all. Their experimentation at St.

Andrews and the station in Halifax owe its - they have good facilities and good equipment there, but they are so far, far behind other countries, when it comes to experimenting that one is inclined to agree with what the hon. member for Barbour Grace said and that is that there is very little understanding and very little sympathy in Ottawa as far as the fishery is concerned. Canadians do not regard themselves as a fishing nation. We are pretty well at the end of the line when it comes to research dollars and new innovations tinsofar as fishing is concerned.

There is no. doubt at all that if we are poing to take advantage of the many species of fish that we find in our bays - I believe, Mr. Speaker, that as the massacre of the great banks, the Grand Banks, the Green Bank, Quearo and Mizzen and St. Pierre and other banks off our coast, as that continues, we are going to find more and more Canadian fishermen turning to the bays as a source of supply. Particularly, if we can ever find sufficient courage in Ottawa to enforce the headland to headland rule without equivocation. I used to hear a lot of talk a few years ago that Canada could not afford gun boat diplomacy.

But, Mr. Speaker. there is going to have to be something more than this tireless, endless chatter that has been going on for the last fifteen years, concerning the Canadian waters and 16'.:'.3

April 20th., 1971 Hr. Hickman. Tape no. 330 Page S Canadian fishing resources. But sometime ve will keep the out of the bays. There is no question about that. Sometime Placentia Bay, Bay St. George, Fortune Bay will be free of foreign trawlers and• when that happens, I am convinced that the e great baya of Newfoundland will become a aource of aupply of fish for our people. Mr. Speaker, in that respect, there is one thing and again ·; I believe, the member for B~rbour Grace referred to it.that our fiaherlN!l do not have - that they lack, that they require,and that is a suitable inahore trawler.

There ia where the Karystown Shipyard can do a yeoman service. Again ve have to look to Europe - the lead once again ia coming from Europe in thia. I refer this Bouse to a very intereating

article that appears in the July, 1970 issue of the magazine, "World Fishing." It is headed -(I am not bilingual despite the yoeman service of the hon.Minister of Education, when he taught me in Grand Bank) I think it is the ''Travel Air 16." What it saya is this: "A French boat•-yard in Dinard, in the north of Brittany, had begun producing a new breed of inshore trawlers which are expected to have wide appeal both in France and overseas. One reason for this ill the stout construction and_ general specification and the other is a very competitive price." I will not go through the whole article.

It ia fifty-two feet in length - the firat one that has been built. It has proven itself as most suitable for local inshore fishery. It is designed to carry a crew of four men and a skipper. The appointments on board the boat are pretty good. There is room to store a great deal of fish. There is provision for icing the fish or for freezing the fish. Now, Mr. Speaker, that is the kind of inshore trawlers that we are going to need to fish in the bays of Newfoundland.

If we are · going to harvest what is out in these bays, if once we could find out what is there, it is not going to be done, if a man has to spend two or three hours steaming out and two or three hours steaming back on the same day. 16:.3

April 20th., 1971 Tape no. 330 Page 6 Mr. Hickman As the hon. the member for Placentia West knows, our crowd on the south coast are not happy if they can see land. They do not like fiabing in the sipt of land. They want to get out into deep water, and they want to get as far away from the rocks as they can. This is the type of boat that I helieve should c9i.end itself to Newfoundland inshore - It is not quite inshore. It is half way between inshore and deep sea fishing. I believe that - offshore if you want to call it, offshore as opposed to deep se~ fishing. I believe, Mr.

Speaker, that that is the kind of innovation that we should expect from any great Canadian shipyard. It ia not an answer to siaply say that we have curtailed all production because the bottom fell out of the market, and the demand. for trawlers disappeared. Because good yards,with strong drafting and design support, should follow the lead of the European yards and continue to experiaent, to innovate so that when economic conditions improve, the draggers and the inshore trawlers of new design are ready for delivery.

I believe that the Maryatown Shipyard 1even as it e:d.ats today with some innovation and with the courage to take on our European

April 20th, 1971 Tape 331 JM - 1 MR. HICKM/u~: competitors insofar as ship building is concerned,can become an outstanding Canadian yard. The Bill that is before this House has been dealt with by other hon. members. The principle behind it obviously is sound. I do not know if we can take much pride out of the fact that we are following behind Quebec or Nova Scotia or New Brunswick, they are all fishing rovinces and all these ·rovinces land a great deal more fish than many of us realize but they are not traditionally fishing rovinces in the same sense as is the Province of Newfoundland.

The fifteen per-cent grants that are made available or subsidy or bounty by Nova Scotia, Quebec and New Brunswick are pretty well standard now. At least this Bill.for this one particular group or one particular company~indicates that we will now be headin~ in that direction. What I did, ,not realize until the hon. the Premier spoke yesterday was that the balance of the purchase price which can be made·~vailable by way of loan in Nova Scotia is available to Nova Scotian firms for ships to fish out of Nova Scotia regardless of where they are built.

I was under the mistaken impression, I presume, that the Nova Scotians,where they have two shipyards of their own that whilst they would make that fifteen per­ cent bounty available to any boat to fish out of Nova Scotian waters,were not prepared to advance the additional fifty per-cent unless it was restricted to the shipyards in Pictou or in Halifax.

But whatever it is, the end certainly justifies the means and the fleet of Nova Scotia, both the fleet fishing out of Halifax and Lunenburg and the large, large fleet in Mulgrave and Cape Breton seems to have been expanding at a much more rapid pace than our fleet has been here. The Ross Steers plan~when it becomes operative,and after the million dollars that was referred to and apparently is to come from the Regional Economic Expansion Department, should be a good plant, It certainly is strategically located. But it points up, Mr.

Speaker, that in any of this type of Legislation and in any type of Government programme where there is 1 ,."' ') C ,., J

April 20th. 1971 Tape 331 JM - 2 very heavy Government involvement in the attraction of an industry to this Province,as there was particularily in the case of the Rosa group.that Government must have at its disposal men who are competent in their field to see that that money is being well spent. I think it is clear b~yond any doubt that the Ross group put one over on the Government of Newfoundland and put one over on Steers. They built this plant with good machinery but it was said here this morning that the layout leaves a ' great deal to be desired.

The draggers that they sent out here were an absolute disgrace. They were old draggers. side draggers, they were not even good side draggers and the fact was that they could not get Newfoundlanders to crew them and why should they when they had better draggers operating on the South Coast of Newfoundland. The hon. member for Placentia West is fully aware of what I am saying and he knows that this is true. MR. CANNING: The hardest looking ships that ever sailed. MR. HICKMAN: You are quite right, the hardest looking ships that ever sailed into St. John's were these Ross boats.

But there is where you need some control because that was set up with our money or on our credit and there la more to it than just simply setting up an industry and saying, "We have security. If the industry fails we can look to Ross or we can look to Bird's · Eye or we can look to anyone in the world to pay us back our money," Because, Mr. Speaker, when a new industry is created there is going with that new industry certain ancillary services, people change their lives to make provisions for themselves and their families to work in that industry. This happened in Marystown.

They come in, the future seems to be assured, they buy homes, they build homes, their family ~ets settled in'and suddenly the rug disappears. The same does not apply with the same effect in St. John's with reference to Ross Steers because St. John's is not dependent on that one industry to the same extent.

April 20th, 1971 Tape 331 JM - 3 MR. HICKMAN: But I do suspect that National Fish are ~oing to have to do a lot of recruiting in order to p