June 3,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 10

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

On behalf of all hon. members, I would like to welcome to the

House of Assembly thirty-seven students from Fatima Academy in St. Bride's,

Grades VII, VIII and IX, together with their teachers, Diane Williams, Michelle

Ridgley and Gordon Pike.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. WINDSOR: Thank you, Mr. Speaker.

I have some questions for the hon. the Minister of Finance.

Yesterday, the minister, in response to some questioning from myself, indicated

that it was the government's objective to balance current account deficit in the

short term and, subsequent to his meetings with other ministers in Ottawa, that

in the medium term, he is proposing to eliminate borrowing for capital account

expenditures. Mr. Speaker, over the last two or three months we have seen the

difficulty government is having, to even reduce the current account deficit. I

am wondering how the minister is proposing to save the amount of money it would

require to also balance, in the medium term, the capital account deficit? We now

know that the present Budget estimates, as they stand at the moment, contain a

$121 million deficit, until the minister finds the magic $70 million; we also

see in the Budget that the minister is borrowing $172 million this year to do

some capital works - that is a total of $293 million. How does the minister

propose to find that, over the next couple of years, to eliminate all of that

borrowing?

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

MR. BAKER: Mr. Speaker, the point that I made was an

obvious point I believe, that if we are to get ourselves out of the mess of the

tremendous burden of debt that we have, we must plan to, first of all, stop

borrowing to pay our light bill, which we hope to do very quickly, and secondly,

to aim towards stopping the borrowing of money to do capital works in the

Province, in other words, to become self-sustaining. That is our objective in

the medium term and, Mr. Speaker, we stick to it.

The opportunity is here because, in the last three years,

despite the devastation that this Province has seen in terms of revenues from

the Federal Government and decreases in own source revenues, we have managed to

hold our own and to control our deficits. We have managed, this year, to reduce

the overall borrowing over last year - we have managed to do that in the worst

of times. As times improve, as conditions improve, Mr. Speaker, it is only

reasonable to assume that we can aim at, one day, paying our own way.

SOME HON. MEMBERS: Hear, hear!

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

MR. WINDSOR: Mr. Speaker, we certainly agree, the

minister should not be borrowing to pay the light bill but we are not used to

buying houses out of change that we have in our pockets. We normally do borrow

to make those kinds of long-term capital expenditures and it is an admirable

objective to reduce that amount of borrowing; whether or not it is realistic is

what I am trying to get from the minister here. Does he honestly believe he can

do that? There are only three ways, Mr. Speaker, to do that. One is to raise

taxes, one is to reduce expenditures of government and the third is not to spend

money on capital at all. Now, how does the minister propose to do that? The only

way he can save money - he has already said, we have taxed to death, we can't

tax any more. If we are going to have any capital expenditures, the only way we

can do that is by reducing expenditures and that means reducing wages and

benefits to the public service. Will the minister tell us what impact does he

see this having on wages and benefits to the public service and how long does he

propose that the people of the public service will have to live with these

conditions?

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

MR. BAKER: Thank you, Mr. Speaker.

The member's analysis is a little bit incorrect because there

is another alternative, and that alternative is increased revenues through

economic activity, Mr. Speaker. Obviously, if the problems that have existed for

the last number of years continue to exist, then it is not realistic to achieve

that target, but, Mr. Speaker, we believe that we have turned the corner. We

believe that there are better days ahead; we believe that increased economic

activity will mean that we will one day be able to pay our way.

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

MR. WINDSOR: Mr. Speaker, I can certainly agree with the

statement by the minister; it is a great Tory policy he is putting forward.

Unfortunately, this government is more bankrupt of ideas on how to stimulate the

economy even than we are financially, so we don't see any dependency on

increased economic activity.

Mr. Speaker, $282 million, the government is spending this

year, down from $335 million last year. The minister is still having to borrow

$172 million in order to build schools, roads, water and sewer systems, to

repair those facilities, to build hospitals, to do other capital works. How does

the minister, Mr. Speaker, think that he can - is he planning to continue

cutting capital expenditures? We are down from $335 million to $282 million this

year, $50 million less going into the economy. Does he continue to plan cutting

capital expenditures year by year? How much does he propose to cut year by year?

And how many jobs will be lost in this Province as a result of these cuts?

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

MR. BAKER: No, Mr. Speaker, we do not plan to cut capital

expenditure year by year by year. There are certain things that absolutely must

be done to maintain the infrastructure we have and to improve the services to

our people. So there are things that must be done, in this Province, on capital

expenditures. I don't know what the lower limit is, but we have probably come

pretty close to that lower limit right now, so I can tell the hon. member that

our plans do not include continually cutting capital expenditure.

MR. SPEAKER: Order, please!

I am having a little trouble hearing the hon. the minister.

The hon. the Member for Mount Pearl, on a final

supplementary, I presume.

MR. WINDSOR: Thank you, Mr. Speaker - one final

supplementary.

The minister's statements yesterday and today are doing

nothing to put any confidence into the economy, particularly in the construction

industry and the other areas of the private sector. He is not going to do

anything to move the economy this year in spite of his claim that economic

recovery is the way to try to balance the Budget.

Mr. Speaker, could the minister tell us: How does he propose

to do this? What is he proposing to do to try to stimulate the economy? Does he

propose to have any capital expenditures whatsoever over the next couple of

years?

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

MR. BAKER: Mr. Speaker, perhaps the best thing we can do

to ensure that we recover is to be very careful now that we don't overburden

ourselves with debt that would have to be repaid in future years and that

accumulates interest that we have to pay year by year, by year out of our

current account. One of the most productive things we can do is to limit the

amount of debt that we build. That is one thing we can do to make sure that we

recover, as recovery comes in North America, as a whole. Because we, Mr.

Speaker, in this Province, do not control our own destinies. That may be a

revelation to the hon. member, but it is a fact. It is almost an axiom, that we

do not control our own destinies in terms of economic development. We are

subject to what happens in North America and to what happens in the rest of

Canada, and, Mr. Speaker, I can see a recovery coming. I think everybody agrees

that the recovery is coming.

No, Mr. Speaker, we do not plan to cut and keep cutting

capital expenditure. We intend to do what we have to do to maintain the services

but, as the recovery comes, more money will come. So, Mr. Speaker, what we have

to do is make sure, as revenues increase, that we don't go hog-wild - the way

the government did seven, eight, or ten years ago as revenues were increasing -

go hog-wild, spend all of the increased revenues and go borrow even more to

spend. We have to control that.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, two days ago, at the end of

Question Period, I was asking the Minister of Education about the dramatic

decline in percentage of sixteen and seventeen-year olds attending school. For

example, the participation rate for sixteen-year olds dropped from 97 per cent

in 1991 to 91 per cent in 1992. A decline of 6 percentage points. There was a

similar decline in the participation rate for seventeen-year olds. Has the

department done a study to find out why sixteen- and seventeen-year olds are

dropping out of school? Is there a study under way? Has the minister established

a protocol to find out why there is such a dramatic increase in the number of

dropouts this school year?

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

MR. DECKER: Mr. Speaker, there's no doubt that first

looking at this statistic is somewhat frightening. However, after the matter was

raised by my friend for Waterford - Kenmount I did go back to the people who did

the research, and we found at least an explanation as to what happened.

In actual fact, there are 9,814 sixteen-year olds in the

school in 1992-1993. Now, if we were to use our population based on the 1986

Census there would be 10,810 students in the classroom. However, in actual fact,

when the 1991 Census came out we discovered that the number of sixteen- and

seventeen-year olds had dropped. So the statistic is wrong. It was based on a

projected census. Census Canada do that. At the time that this book went to

print they were using the estimated, the projected population, but the projected

population was wrong, Mr. Speaker. There are actually over 300 less students

than we thought, therefore the picture looks a little brighter.

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

Extern.

MR. J. BYRNE: Thank you, Mr. Speaker. Just over a year

ago government transferred the responsibility of the St,. John's Fire Department

to the City of St. John's. Because of that transfer there was a massive increase

to the towns involved in it which were using that service. These towns have seen

their costs increase as much as 900 per cent. Representatives of the towns

involved met with the Premier and the former minister. Following that meeting

the minister told the City of St., John's in writing that the formula that was

being used was unfair and they should come up with another formula. Does the

present minister agree with the position taken by the Premier and the former

minister?

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: Mr. Speaker, I'm not really in a position to be

able to answer. Whether I agree with the Premier or not, you've certainly put me

in a spot to say yes, I have to agree with the Premier.

I will honestly say to the member that when I have a chance

to review that particular question I will do that and quite honestly come back

and give the proper answer - not necessarily the one that you are looking for,

but when I get a chance to review it I will come back and give you an answer on

it.

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

Extern.

MR. J. BYRNE: Mr. Speaker, the city is still charging

communities on the basis of a formula which the Premier and the former minister

agreed was not fair. If and when the present minister comes to the same

conclusion, what action will he take to ensure the charges for fire fighting

services are assessed at a fair rate?

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

Provincial Affairs.

MR. REID: Mr. Speaker, I would think that the hon.

member, in the answer to his first question, would give me the opportunity to

look at the whole thing and study the whole issue. Then I would be glad to come

back in the House and give him an answer, but I cannot answer his question today

because I was not briefed on the question, I have not made up my mind one way or

the other on it, and until I do that I ask the hon. member to give me the

opportunity to do some work into that - to do some investigation into that

particular area - and I will gladly come back to the House and answer his

questions.

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

MS. VERGE: Mr. Speaker, I have a question for the

Minister of Health about services for cancer patients in Western Newfoundland.

People in Western Newfoundland were very upset when, for seven months, from last

September until the end of April, cancer radiation specialists stopped visiting

the cancer clinic in Corner Brook and cancer patients from Western Newfoundland

either had to go to St. John's for services they had been able to get in Corner

Brook for twenty-one years, or go without.

Can the minister assure the House that in the foreseeable

future radiation specialists will visit the Corner Brook clinic frequently and

regularly?

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

DR. KITCHEN: Mr. Speaker, the visits by the cancer

specialists to Corner Brook have recommenced and it looks like we will no longer

be as short as we were. There is, in Canada, a shortage of cancer specialists,

but at the moment it looks like things will be alright - but as far as giving a

guarantee, that is impossible to give, but it looks like that situation has been

resolved.

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

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

Minister of Health.

Even with radiation specialists visiting Corner Brook again,

radiation therapy and other services for cancer patients are available in this

Province only in St. John's and patients and their relatives have to come to St.

John's and stay in St. John's for lengthy periods at considerable expense.

Will the government give more financial assistance to cancer

patients than is now provided, and cover all reasonable travel, accommodations

and meal expenses?

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

DR. KITCHEN: Mr. Speaker, we have in place in the

Province a program to assist people who can't get treatment in their own

communities and who have to go elsewhere. The formula per year is the government

pays half over the first $500. So that if a person has $600 worth of expenses,

we take off the $500 and fund fifty dollars. But if the expense is quite heavy

we take off the $500 and fund half of what's left.

I've asked officials in the department to look at that

formula to see - as a matter of fact, I have even received a print out of the

number of people who have very excessive travel claims. There are several. I

don't know what the financial hardship of these individuals might be because I

don't know their circumstances. We are looking at the question as to whether

that formula should be revised to make it easier for people to travel away from

their communities to get needed medical treatments. Not only for cancer

treatment, Mr. Speaker, but for other types of treatment as well.

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

Humber East.

MS. VERGE: Mr. Speaker, a question for the Premier. In

Nova Scotia, Sydney is about to get a cancer radiation unit, in addition to the

facilities in Halifax. In New Brunswick there's a new cancer clinic with full

services in Moncton as well as the established clinic in St. John, and there's a

cancer radiation unit in Charlottetown, PEI. The government of this Province is

now embarking on funding a new, $13 million cancer clinic in St. John's with no

plan to put new facilities anywhere else. Will the government respond to the

pleas of thousands of people in Western Newfoundland by immediately studying the

feasibility of decentralizing services in this Province, in a fair and balanced

way, and putting a radiation unit in Corner Brook?

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

DR. KITCHEN: Thank you, Mr. Speaker. It is true that some

of the other provinces have more than one radiation centre. I've asked officials

to look at precisely what type of radiation is going on and whether they're open

or whether they're partly open, or what type of cases are treated there. But in

the foreseeable future in this Province, given our population, it looks like

there will be one centre for radiation treatment and that will be in St. John's.

If we were to have another in Corner Brook, that wouldn't do very much for the

people in the Grand Falls area or the Northern Peninsula or Labrador. So the

question is how many should we have.

The basic question at the moment is that our best bet to

handle the situation is to leave it where it is now, in St. John's, and have the

best possible radiation centre we can get. Also, there's a problem of recruiting

people to work in these centres. It's not easy to get, as I say, cancer

treatment people. If we spread them around it'd be even more difficult than it

is now to get appropriate treatment. So even though we'll be looking at the

situation - I assured the member of that in the estimates meeting the other

night, because she asked the same question here as she asked the other night.

She got an answer the other night. But I guess she wants to make it a little

more public. Because the press wasn't there the other night. The reason is -

SOME HON. MEMBERS: (Inaudible).

DR. KITCHEN: We are looking at the situation. We want to

provide the best possible care to people who are suffering from this dreaded

disease.

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

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

the Minister of Social Services. Last Friday the Leader of the Opposition asked

the Minister of Social Services about cuts in support of senior citizens and

persons with physical and developmental disabilities who are cared for at home,

either their own home or foster homes. The minister then said the cuts were

being reviewed with a view to offering our people, in all areas, the best

possible services.

The district offices of social assistance have been told, and

I quote from the department's memorandum: to review each case to determine the

absolute minimum number of hours of care that needs to be provided without

jeopardizing the safety of the disabled persons.

Mr. Speaker, I would ask the minister: Is that all the people

who cannot care for themselves are entitled to in this Province - just the

absolute minimum care without jeopardizing their safety?

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

MR. LUSH: I tell the hon. member that we are doing our

best to try and cope with the financial situation in which the Province finds

itself. I can tell the hon. member that I, nor anybody on this side of the

House, would like to cut back in social services to an extent where it is going

to be harmful or where it is going to cause any of our people hardship, and we

are trying, in the most desperate manner we can, to prevent just that from

happening. Our staff, and everybody in social services, is working to their

utmost ability to ensure that our people are given the best care and the best

attention possible - the disabled, the seniors, and all the people to whom he

referred in the question.

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

MR. FITZGERALD: Mr. Speaker, the minimum level of service

is what the persons who are now in the care of social services will get. They

are the lucky ones. The department memorandum to district offices also says:

Applications for new or reopened cases are not to be approved except in cases of

extreme emergency. I ask the minister: What, in his opinion, is an extreme

emergency?

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

MR. LUSH: I again say to the hon. Member for Bonavista

South that it is very easy to get up and to ask these questions in a very

sincere manner - and I am sure the hon. member is - but the hon. member and all

members opposite should realize, too, the great problem that we are facing in

this Province, and I would like to hear hon. members opposite give us some

suggestions in social services as to how we could cope with this tremendous

problem that we now have.

I can tell the hon. member that we are using every resource

that we have, we are using all the people that we have, to the best of our

ability, to ensure that our people are cared for in an adequate fashion.

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

for Bonavista South.

MR. FITZGERALD: Mr. Speaker, the hon. minister continues

to say that this is all under review. The fact is, the cuts in home support

services are being made because of reductions in the Budget now before this

House. Will the minister confirm the memorandum to district offices which says:

In order to remain within the 1993-'94 Budget, a reduction of 30 per cent from

the 1992 expenditure would be required.

Does the minister realize what hardship and pain that a cut

of this size will have on helpless citizens out there in our communities?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Minister of Social Services.

MR. LUSH: Mr. Speaker, the member is aware of all the

difficulties that are being faced by our people - our disabled people and

elderly people and all the people to whom he refers - but I can tell the hon.

member that the department is trying its best to cope with the financial

restrictions that have been placed upon it, and under these conditions that all

of the people in the Department of Social Services are working their utmost to

try and ensure that our people get the best level of care.

Now the memorandum to which the member refers was a

memorandum that was sent out to all of the social services offices just to give

people guidelines as to the kinds of things that might be done in discussion

with people in order to meet the restraints under which we find ourselves. They

were not meant to be definitive decisions or definitive actions. They were just

general guidelines, and I find that hon. members are taking them and using them

as if they were meant to be definitive guidelines - that they had to be followed

right to the nth degree. I say again that these were just general guidelines to

be given to the workers - to the social workers in their respective offices -

just to be followed in a general way.

MR. SPEAKER: Order, please!

The hon. the Member for Placentia.

SOME HON. MEMBERS: Hear, hear!

MR. CAREEN: Thank you, Mr. Speaker. I would like to

address this question to the Minister of Works, Services and Transportation.

The day before yesterday the minister unveiled a new vehicle

license plate that will be manufactured in Nova Scotia.

AN HON. MEMBER: Shame.

MR. CAREEN: The minister said it would take eight or more

years before every vehicle in the Province would be equipped with the new

plates. How many plates will have to be made to equip all vehicles and how much

will that cost the Province and vehicle owners over the next eight to ten years?

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

Transportation.

MR. EFFORD: Mr. Speaker, there is approximately $50,000

for this year to purchase plates. The number of plates to be purchased over the

period of time, I think will cover around 394,000 vehicles totally. I cannot

give you the total cost. I can tell you very clearly that when I asked a

question to the deputy minister at that particular time about the contract, he

told me very clearly, and it makes all the sense in the world, that it cannot be

manufactured in Newfoundland because of the dollar cost of making the number of

plates just for Newfoundland. It takes a period of eight to ten years to

distribute all those plates. So, to make about $50,000 worth of plates for one

year would not make any sense at all.

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

MR. CAREEN: Mr. Speaker, I would have no objection to

spending money on new plates if it was spent to create jobs and opportunities

for business in this Province of ours.

SOME HON. MEMBERS: Hear, hear!

MR. CAREEN: We have made plates here in the past. Why

could we not do it this time? Why will government not use its purchasing power

to create jobs in this Province?

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

Transportation.

MR. EFFORD: Mr. Speaker, this government has no objection

to creating jobs in this Province. In fact, we are doing it with a better record

than the former government did for seventeen years. Let me tell you very clearly

that we will accept bids from any company, any individual, any person or anybody

who wants to start up a business in this Province, no problem. The problem is,

when we called for tenders there was nobody who submitted tenders to make them

in the Province. The only one was in Nova Scotia, which as far as I understand,

is the only one in Eastern Canada. So, if the hon. gentleman opposite or anybody

else wants to submit a bid in manufacturing license plates in this Province we

will be only too glad to accept it, providing it is the lowest tender.

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

for Placentia.

MR. CAREEN: Thank you, Mr. Speaker. Mr. Minister, on our

old license plates two decades ago, it used to read the `Happy Province'. Now it

is the despairing Province and that is the world of difference. When so many

people are unemployed and so many of those with jobs are struggling to make ends

meet, how does the government justify spending the peoples money in Nova Scotia

simply to change license plates on motor vehicles? Thank you.

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

Transportation.

MR. EFFORD: Thank you, Mr. Speaker. We do not take any

delight in not having someone do it here in Newfoundland. The fact is there was

a company here in Newfoundland awarded the contract and he had to have the

plates made in Nova Scotia because that was the only place to have them made. We

have no say in that, a tender was submitted. Nobody in the Province, absolutely

nobody in the Province submitted a bit for any manufacture or to start up

business in this Province. As far as the unhappy Province right now, after

seventeen years of total mismanagement of this Province it is going to take us

awhile to go back to what should be a happy Province and now it is a world of

difference because there is a 'real change' in the Province right now.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Baie Verte - White Bay.

MR. SHELLEY: Thank you, Mr. Speaker, my first question is

to the acting Minister of Environment and Lands -

MR. EFFORD: World of difference.

MR. SPEAKER: Order, please!

MR. SHELLEY: As the minister knows the paper companies in

this Province are using mechanical harvesters in their logging operations. I do

not think there is any dispute about the fact that these harvesters do some

damage to the forest and in particular to young trees. Has the government done a

full environmental study to determine the impact of the harvesters on the

survival of our forest resources?

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

Agriculture.

MR. FLIGHT: Mr. Speaker, I can say with some confidence

that no, there has not been a full environmental study done on the impact of

harvesters on the forest. We are doing an environmental impact study and a

forest management plan for cutting in Labrador which will include of course the

assessment of the types of equipment being used by any companies which start to

harvest timber in Labrador. But at this point in time, I do not think the

harvesting techniques of the paper companies or private operators in

Newfoundland have been submitted for a full environmental assessment.

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

Bay.

MR. SHELLEY: Okay, a supplementary to the Minister of

Forestry and Agriculture this time.

Many people, including the present government, blame the

depletion of fish stocks on the failure of the federal government to control the

use of large high tech-trawlers in the fishery. Is the forestry minister

concerned that this government may be making the same mistake in mismanagement

of the forest resources?

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

Agriculture.

MR. FLIGHT: No, Mr. Speaker, we are not making the same

mistake that the federal government made in fisheries. Number one, Mr. Speaker,

trees do not swim.

SOME HON. MEMBERS: Oh, oh!

MR. FLIGHT: We are managing the forests, Mr. Speaker, on

a sustainable basis and if the forest management plans that we approve are

followed the hon. member will not have any worry about forestry having the same

problems that fisheries had under the management of his cohorts in Ottawa.

MR. SPEAKER: Question Period has expired.

SPEAKER: Order, please!

Presenting Reports by

Standing and Special Committees

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

MR. ROBERTS: Mr. Speaker, the striking committee has

struck again and I have our second report here. The committee recommend, Mr.

Speaker, that the following members comprise the Public Accounts Committee: The

hon. gentleman from Mount Pearl, who is to Chair it, the hon. the Member for

Eagle River, who will be the Vice-Chair, and the members will be the Members for

Harbour Grace, Fortune - Hermitage, Lewisporte, Burin - Placentia West, and

Green Bay.

The Standing Orders Committee: I shall Chair it. My

colleagues, the Members for Gander, Bonavista North, Grand Bank, and Ferryland

will be the other members of the Standing Orders Committee. I ask that this

report be received, please, Mr. Speaker.

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

I rise to present the annual report for the calendar year

1992 of the Workers' Compensation Commission, and if I may, Mr. Speaker, I would

just like to inform the House of two or three things that I would commend to the

attention of all members in perusing the report.

First of all, there is some good news in the report, in the

fact that new claims for accidents and injuries were down again in 1992 for the

second consecutive year, a significant decline, Mr. Speaker, of 2,527 less than

the previous calendar year. The cost of current year servicing of injuries also

declined in the 1992 year, Mr. Speaker, from $86 million the previous year down

to $83 million. The lost-time accidents and injuries, in fact, decreased by 14

per cent overall from 1991 and, taking into account that the workforce and

people reporting through this mechanism decreased by 5 per cent, it showed,

again, a clear 9 per cent decrease in lost-time accidents and injuries reported

to the Workers' Compensation Commission in 1992.

Also of note, Mr. Speaker, is the fact that the unfunded

liability, largely due to a recalculation of future cost based upon the changes

in benefits caused by legislation changes introduced last fall, has been reduced

from $161 million reported in 1992, to $128 million reported now, for a

reduction of some $33 million in the unfunded liability proportion. The overall

funding position of the Commission from 1992 over 1991 has improved by a total

of 7 per cent.

I commend the report, Mr. Speaker, to all hon. members for

their attention, and it will be vitally important for us to assess the report of

this current year, 1993, at this time next year to see whether or not the

long-term positive impacts that we hope to effect by the legislative changes

will be realized.

MS. VERGE: Mr. Speaker, I am still waiting for the answer

to the question I asked two days ago.

SOME HON. MEMBERS: Oh, oh!

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

I believe the member may be out of order. It is Answers to

Questions for which Notice has been Given, not Questions and Answers. If there

is an answer to be given, my understanding of the procedure is that the hon. -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. WINDSOR: She was asking if the answer is going to be

forthcoming.

MR. SPEAKER: According to the rules, it is up to the

minister involved to table the answer as and when he or she thinks fit and I do

not see any time limit being imposed by the rules, so I rule the member out of

order.

Are there any Answers to Questions for which Notice has been

Given?

MS. VERGE: On a point of order, Mr. Speaker.

MR. SPEAKER: Order, please!

On a point of order, the hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

There are several precedents for Opposition members who have

been kept waiting too long for answers, in which ministers have taken notice to

rise at this point on the agenda to point out the delay. I have been waiting for

two days for the Minister of Forestry and Agriculture to let me know if the

animals, the genetically superior swine produced at the Western Swine Breeding

Station, still exist -and their days are numbered, Mr. Speaker.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. member is making a point of order and I would like

to hear it so I can answer.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I will be very brief. To that

point of order, there is no point of order, and even if there were, all the hon.

member is doing, is challenging the ruling Your Honour has just made and she

cannot do that except by the approved procedure. She wants to be - I was going

to say, a man about it - a person about it and challenge Your Honour's ruling.

There is a way to do it and we will deal with it, but all she is doing with this

specious point of order, in my submission, is doing indirectly that which she

cannot and ought not to be allowed to do directly.

MR. WINDSOR: She certainly can do it.

AN HON. MEMBER: What?

MR. ROBERTS: She challenged the ruling.

MR. WINDSOR: She just did it, and did very well.

MR. SIMMS: She just did it.

MR. SPEAKER: The Speaker doesn't make the rules. The

Speaker, reads the rules, interprets them and applies them. The hon. member has

no point of order. There is no rule which allows her, during this point in

procedure, to question why the minister has not given the answer, so, there is

no point of order.

Orders of the Day

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

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Mr. Speaker, my friend, the Minister of

Forestry and Agriculture, may have to leave to take a phone call in a moment.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Before we get on to the bill it might be

helpful to members, Mr. Speaker, if I were to state some arrangements that have

been struck, as it were, behind the Chair between myself and my friend from

Grand Bank and with the concurrence of my friend from St. John's East. I

understand that because of the exemplary answers given by my colleagues in the

ministry - and I say this without any equivocation, because I have not yet been

asked a question in this session of the House, whatever one chooses to read into

that - because of the exemplary answers given by my brethren and sister in the

ministry, there will be no Late Show today, and instead, it has been agreed that

we may use that time for government business. Secondly, in order to enable

members opposite, at least all except the gentleman from St. John's East, who, I

assume, will not be going to the Tory Convention in Ottawa -

AN HON. MEMBER: Don't assume that.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Alright, I withdraw that assumption, Mr.

Speaker. In order to accommodate any members opposite who wish to go to the

convention in Ottawa next week, we will be adjourning the House on Wednesday and

not meeting Thursday, Friday, or Monday. I gather that Friday is a work day in

Ottawa, if that is not an oxymoron, but Thursday and Monday will be given over

to travel, one to celebrate and one to lick their wounds, whatever, depending on

whether Kim or Jan wins the temporary right to be Prime Minister of Canada. It

has also been agreed - and I do ask for unanimous leave to make sure this is so

- it has been agreed by the House Leaders, with the concurrence of my friend

from St. John's East, that next Wednesday will be a business day in the normal

sense. Perhaps Your Honour could ask the House for concurrence and if that is

agreed then we will get on with the regular business of this day and carry on

with the business of the House.

MR. SPEAKER: Thank you.

The Opposition House Leader.

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

Just a brief comment in response to the Government House

Leader. Yes, indeed, we are quite willing to forego the Late Show today because

the government, by way of co-operation, has agreed to close the House for a few

days to allow members to go to the Leadership Convention. To show gratitude for

that and to show that we don't always oppose, and stall, and block, we have

offered to do at least another half-hour of business of business today. As we

get closer to adjourning for the Summer, I am sure the need will arise for

further and greater co-operation. I want to say to the Government House Leader

that with the recent polls, and not disclosing where I stand in support for the

leadership, I think, it will be a Jan that will win the Prime Ministership, and

it will be Jan with a `C' but it will not be Chrtien.

On motion, Private Members' Day, on Wednesday, 9 June,

dispensed with and given over to government business.

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

MR. ROBERTS: Mr. Speaker, could we please call Order No.

7 which is Bill No. 5, and when that is done we will proceed with some more

second readings for the balance of the day, Sir - or if that is done.

MR. SPEAKER: Order No. 7. "An Act To Amend The Taxation

Of Utilities And Cable Television Companies Act."

MR. ROBERTS: The Member for Humber Valley, I think,

adjourned the debate.

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

MR. WOODFORD: Thank you, Mr. Speaker.

Mr. Speaker, I would like to make a few more comments on this

particular bill. I spoke for a few minutes the other day. It is under the other

number. I had Bill 11, under the previous session, instead of Bill 5.

A few more comments, Mr. Speaker, pertaining to this

imposition of the 2.5 per cent on utilities in the Province. I would like to

start by being slightly repetitious. I made a comment the other day pertaining

to the Federation of Municipalities in the Province and other councils who have

approached me concerning this 2.5 per cent imposition of tax on utilities.

One of the concerns of the Federation of Municipalities, as I

stated before, and I will say it again here for the record, this evening, was

the principle of the Provincial Government establishing a regime of municipal

taxation for public utility companies and cable companies. They stated then, and

they say today, that they were supposed to be a partner with the Department of

Municipal Affairs in anything they do pertaining to tax increases or taxation in

this Province. This would set a precedent because it is going outside The

Municipalities Act in that role, and I quote: 'Municipal councils should have

the right to levy local taxes within the general guidelines established by The

Municipalities Act.'

Mr. Speaker, if this is going to be the case, then

municipalities in the Province, both small and large, except for the

municipalities that are governed under a separate act - like the City of St.

John's, the City of Mount Pearl and, I think, the City of Corner Brook, which

are governed by a separate act - they would all be governed by The

Municipalities Act. Under that act now they are allowed to do two things. They

are allowed to collect on gross, and some of them collect at least 2 per cent on

utilities in the Province.

Where the problem is going to be with this is not so much the

2.5 per cent. That is, in some ways, going to benefit some municipalities - the

fact that there is a 2.5 per cent increase. But, in other ways, it is going to -

for instance, the cable companies. The minister is going to have to do something

about the cable companies. If this bill is passed next week and the cable

companies don't pay, if they hesitate or they are a bit reluctant, then the

minister and his department are going to have to introduce further legislation

or bring in further regulations so that the cable companies will pay up. They

have to be made to pay up.

A funny thing I find about utilities - utilities in the

Province, really, have a monopoly. They have a monopoly on telephones in the

Province, a monopoly on electricity and, as far as I am concerned, there is

somewhat of a monopoly on cable television in the Province. The bigger you are,

the stronger you are, the more money you have, the better you can distribute,

the better you can lobby, the better for everything - and Newfoundland Light and

Newfoundland Telephone have shown over the years that whenever they wanted an

increase - I mean, what other individual or what other company in this Province

has the luxury of starting a business anywhere in the Province and being

guaranteed a return on their investment?

All Newfoundlanders and Labradorians, all small businesses in

the Province - nobody has that luxury; but Newfoundland Telephone can go to the

CRTC for an increase. They can be guaranteed a certain return to their

shareholders. The cable companies can go to the CRTC and be guaranteed a certain

return to their shareholders and investors. Newfoundland Light and Power can go

to the PUB and be guaranteed a certain rate - and I think that in the case of

Newfoundland Light it is something like 13 per cent. What company in this day

and age, in the times that we are in, can be guaranteed a return of 13.2 per

cent on their investment to their shareholders? Nobody else can do it.

We have businesses in this Province today, both big and

small, who are suffering because of recession and because of government policy

and because of, in some cases, their own problems with management. But none of

them have the right, regardless of what they are taxed, they do not have the

luxury of going to a PUB board or CRTC or anything else to try to be guaranteed

a return on their investment - and that is what is going to happen.

Municipalities put up the mil rate, for instance, from three

to four, six to seven, seven to eight - businesses have to pay. Municipalities

put a taxation of 2.5 per cent on utilities in the Province - both Newfoundland

Telephone and Newfoundland Light, and the cable companies and what do they do,

Mr. Speaker? They go right on to the governing body, namely, the PUB or the

CRTC, and ask for an increase to cover the rate of the increase of taxation that

is put on by the municipality. So they can't lose. How can they lose? Regardless

of what we tax them, they come right back to the consumer.

To use threats in letters to municipalities to say that they

are even going to mark it on the bill, even going to put it on the bill, that

this is a tax imposed by a certain community in this Province, to me is

dictatorial and there should be some kind of a regulation. The minister has to

take note of that particular one. That is the main one. Newfoundland Light and

Newfoundland Tel, no doubt, will pay, albeit they are going to try to pull some

fast ones, as they did with some municipalities in my district, and say that

their expenses are reduced by almost 50 per cent. If anything, Newfoundland

Tel's and Newfoundland Light's revenues from the municipalities in this Province

are higher, and will be higher.

It is funny how utilities, some of those larger companies,

respond to actions when someone else starts to come in on their territory. Just

a few months ago, when the U.S. networks, the cable companies in the United

States, threatened - didn't threaten, I suppose, that is the wrong word, they

sort of announced that they were going to bring in this so-called Death Stars.

What happened? They said they were going to bring it in - and to explain

briefly, it is an eighteen-inch dish that goes on each home, no matter where it

is in Canada or the U.S. You pay $1,000 to get hooked up, you pay twenty-five

dollars a month, and you can bring anywhere from 150 to 300 channels into your

home from all over North America or wherever.

What happened? Two days later, the cable companies in Canada

started to lobby the CRTC saying there was no such thing, and no way should the

U.S. market be allowed to bring this new so-called Death Stars into Canada - no

way. So they lobbied. It is rather ironic that this utilities bill is on today

because the announcement is going to be made this evening by the CRTC.

AN HON. MEMBER: What announcement?

MR. WOODFORD: The announcement is coming this evening

from the CRTC. It may be out now. I didn't hear it before I came into the House.

But it is going to be announced this evening on the CRTC ruling pertaining to a

number of things, but namely, how the cable companies are going to be licensed

and policed when it comes to the introduction of Death Stars, and if the United

States market will be allowed to come in here.

All of a sudden, the cable companies in Canada were taken

aback. They figure there was something wrong because of someone coming in. They

are not providing the service. They are doing it in the larger centres, they are

doing it in the nucleus of a community, in rural Newfoundland, but the rest of

the people have to sit back and take no for an answer.

Mr. Speaker, municipalities in the Province today - it is not

only the imposition of 2.5 per cent on utilities. Municipalities in this

Province today are being hit hard. They have been hit hard by the recession;

they have been hit hard in the last four years by the reduction in government

funding to municipalities under the municipal operating grants and the formula

for the repayment of capital debt is unreal. They have been hurt in more ways

than one, and now, with the imposition of a 2.5 per cent tax on utilities, this

is another way - utilities, if they are stopped from coming back to the consumer

and coming back to the taxpayer in the community, then there is no problem. But

if they are coming back and going to pick up that 2.5 per cent, really what it

is going to be is a tax on consumers. It will be a consumer tax. Because you are

taxing the utility companies, they will just come back and ask for another 2.5

or 3.5 per cent increase in their mil rate, and then the municipality has to end

up paying the brunt again, the consumer has to end up paying the cost.

That is one of the concerns I have with regards to the

utility companies, Mr. Speaker. Municipalities again this year, just announced

yesterday, that the municipal operating grants for the road components are gone

down to thirty-nine dollars. I would venture to bet before this year is out,

that the total road component for municipalities in this Province will be wiped

out completely. What will happen? That is one of the questions I asked just

yesterday to municipalities in the Province when the road component of this

particular grant is gone. What will happen, Mr. Speaker, is this, they will

start to hit the equalization component and the local revenue component. There

is nowhere else to go.

One of the other concerns, Mr. Speaker, that has to be

highlighted, in the announcement by the former minister, Mr. Hogan, in the

second page of his ministerial statement, effective January 1st, 1993, that

revenues generated from unincorporated areas will be remitted to the Province's

general revenue fund. Now, Mr. Speaker, local service districts in the Province

as we know, do not collect taxes. They collect a fee, a so called fee, they levy

a fee. They are not allowed to collect so called taxes or collect any grants

from the government. That is why municipalities in this Province have made

applications to become councils, community councils or town councils whichever,

and I cannot understand for the life of me why the department is hung up on

granting the individual municipalities their right to do so. Why shouldn't they?

They can collect the taxes, really it has taken the government off the hook.

They will be collecting taxes in an incorporated area instead of an

unincorporated area and then they will become eligible for anything that comes

under the system, under the municipal operating grants system.

What is going to happen here, Mr. Speaker, is they are going

to take all the taxes, the 2.5 per cent levied on the cable companies,

Newfoundland Tel and Newfoundland Light and put it back into the general

revenues of the government. That is where the 2.5 per cent of all unincorporated

areas in the Province are going to go. That revenue is going back into

government coffers.

One of the other statements made by the minister on page

three, is debatable. Not only that, it should be reputed, is that as indicated

revenues generated from unincorporated areas will be remitted to the Province's

general revenue fund. This recognizes that the provincial government generally

provides municipal services in these areas. Now, how could a minister

responsible for municipal government in this Province write such a statement?

The government is responsible for municipal services in these areas. If this

minister is not careful, and this is a bit of advise, he does not have to heed

it at all, but based on the record of the previous two ministers, the Member for

Waterford - Kenmount and the Member for Placentia, all the present minister

today has to do is just look over his shoulders and look for the previous two

ministers. Where are they?

The first brought in the great amalgamation fiasco, the

second followed that and tried to follow up on it, he is gone, the two of them

are history. Municipalities in this Province are not to be fooled with. They are

not to be fooled with, they are a strong force and the message gets out there

and I know that both of those particular gentlemen, their losses cannot be

attributed only to what was done pertaining to amalgamation but a good part of

the adverse publicity generated from those particular decisions had an affect on

those two gentlemen. The two former ministers who are not with us today.

I suggest to the present minister, be careful of the civil

servants, be careful of the bureaucrats. Remember, keep one thing in mind, that

you are the one who is going to have to knock on doors after four years, the

people who are serving you in your department will still be there. They will

still be there when you are gone, they will still be there when I am gone. They

do not have any worries about knocking on doors. We are the people who will be

answerable after three or four years. So, I say to the minister, not only to him

but to other ministers as well, be careful, because if a minister is not strong

in his department - if he is not strong and has a strong backbone and hasn't a

tendency to be swayed, then he's going to survive. But if he has a tendency to

be swayed, you aren't going to last long, I can assure you that. Because they

are going to tell you when to come and when to go and what's right and what's

wrong. The politics in all of it will be swept aside when someone sits down by

the desk and says: Minister, we can't do this and we can't do that. So I say to

the member - I think he's been around long enough to know that what I'm saying

is absolutely true. He's probably starting to experience it, especially the last

couple of weeks. Not all they say is Gospel, I can assure you.

Mr. Speaker, to say that the provincial government generally

provides municipal services in those areas is wrong. That is wrong. Most of the

things provided in local service districts in this Province are roads. There are

quite a few areas in the Province where the Department of Works, Services and

Transportation plows the roads in the wintertime and grades them in the

summertime. No question - and maintenance besides. But garbage? It's paid for by

the people, on a fee collected by the people. Street lighting is paid for on a

fee levied by the local service district and paid by the people. There are all

those other things.

Water. If there are any water services in those particular

areas they usually have their own little water committees. Or if they're hooked

up to a town like the town of Deer Lake in our area they pay the same rate as

the people in Deer Lake. The only other difference would be any monies allocated

under the community water services program. That last year was $1 million for

the whole Province. I looked at the estimates the other night and that's down, I

think it's down $50,000 this year, down to $950,000.

That's the kind of money that would go directly into a local

service district or - not only a local service district, but any unincorporated

areas. Because we have local service districts that are referred to as

unincorporated areas, but then we also have areas in the Province that are not

even a local service district. They just have water committees and so on, and

that's how they survive, by collecting a fee. They're not even a council.

They're not a town council, not a municipal council, they're nothing. That's why

I say to the minister, I know there are some requests in from municipalities -

there are a couple of municipalities in my area - to become town councils. I say

to the minister that it would probably be a good idea to act on it. Because at

least then they (inaudible) collect taxes from the people. Right now, if it

costs fifty dollars to collect garbage they collect fifty. So it would be an

addition and it would help out the whole municipal system if some of those

requests were looked at and acted on.

Just another couple of comments, especially pertaining to the

estimates on Municipal and Provincial Affairs. One of the things that I would

like to make a comment on, I mentioned earlier about the drop in the road

component of the municipal operating grants system. Why, last year, when the

budget - there was $44,950,000 in grants and subsidies under 3.2.04 in the

estimates allocated for municipalities in the Province. The revised, if

anything, should have shown more. But the revised, especially in a department

where municipalities have been crucified over the last four years, has actually

shown a saving of $650,000, from what was budgeted and what was actually spent

in 1992 was $650,000.

Now if it had been $650,000 the other way I'd have said to

the minister: yes, well and good. But to say and look at a budget and then look

at a revised budget and see $650,000 saved on the backs of municipalities in the

Province to me is wrong.

To add insult to injury, next year the budget for

municipalities in the Province is $42,500,000. We know full well that based on

those figures, based on the amount of taxation that's going to be collected

under the 2.5 per cent on utilities, that the department next year has

absolutely no choice but to cut under the equalization component or the local

revenue component. Based on the figures in the estimates of this year's Budget,

that is what will have to happen. There are only two other components. Household

they cannot touch because the number of households in a municipality is pretty

well fixed. The local revenue component after this year is gone. There are only

two other components to hit, and they are the local revenue component and the

equalization component.

Mr. Speaker, I do not know what the former minister saw when

they brought in those two components, but I can assure you that under the

equalization component, if property values go up and households go up in a

municipality then you would get less equalization components. That is what will

happen all around this Province. That is the way that this particular component

of the program will be out.

I can see, in the total grants and subsidies for

municipalities over the next number of years unless - there is only one other

thing that can stop it, and that is the minister and his department or his

officials do put a cap on municipal funding. They are going to have to stop it.

If they do not soon stop it, it is just going to keep sliding and sliding and

sliding. I cannot see it going up. I just cannot see it going up - no way in the

world. Especially with a $650,000 saving this year and a 2.45 saving next year,

there is no way for it to go up.

So I say to the minister, as a word of caution, and I say to

members opposite - I know members opposite, especially new members from rural

parts of the Province, and I say to the Member for St. John's North as well,

because their council have been affected by it and will be affected by it. An

example of that - a prime example of what has happened with the amalgamation

process in this area - look at what is happening in the Goulds. When we brought

the Goulds into the amalgamation process, the people in the Goulds pay the same

mil rate now and they are expecting services - which is human nature. We would

all feel that way, no matter where we lived in this Province, if that particular

thing happened.

That is what I am saying to the minister with regard to the

amalgamation process in the Province. Like you did with Shea Heights years ago -

what did the former administration do to Shea Heights? The Member for St. John's

South should go back and check it out. How smooth did it go? The people of Shea

Heights -

AN HON. MEMBER: Phase in.

MR. WOODFORD: Phase in, right - a transition period phase

in, no problems over an eight to ten year period. There were problems, yes. I

cannot -

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Well that is what is happening. Yes, but

let me explain because if the council now - you say: Then the council whacked it

to them. Right, because what is happening now, the councils are whacking it to

them and the smaller municipalities that are amalgamating with those larger

centres get nothing - cannot get anything for eight or ten years because the

municipal infrastructure in the larger towns have to be brought up to a level

where they can accommodate the other municipalities that are being amalgamated,

and it is true. That is what is happening.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Not all areas of the Province were blessed

with that. We have the Premier on record, and we have two former ministers on

record, saying that there is absolutely going to be no monies up front for

amalgamation process in this Province - nothing. There is not going to be any

transition period. There will be a transition period with regard to the

implementation of a program, or the phasing in of the municipalities themselves,

but no monies up front - no bucks up front. So you know what that means. In my

particular area it will mean that the people of Spillway and Nicholsville will

have to pay immediately - as soon as the thing goes in - the same monies as they

pay in Deer Lake, unless there is some other regime brought in, and they will

not see any services for eight or ten years.

This is why I said to the minister the other night in the

estimates, and he said it before, the concept is a good one. The concept is a

good one. The approach is what is wrong.

AN HON. MEMBER: The appraised value (inaudible).

MR. WOODFORD: The appraised value of what?

AN HON. MEMBER: Property.

MR. WOODFORD: The appraised value of property. Here again

I can give the member all kinds of examples. I can give you all kinds of

examples on appraised value. What happens in rural Newfoundland with appraised

value? Under your equalization component, every time your property value goes up

and your households go up your equalization payment goes down. It goes down.

Your local revenue component, what happens?

AN HON. MEMBER: You are paying your fair share.

MR. WOODFORD: Yes, even when you are paying your fair

share, it does not matter where it is, the only thing about it is, the

difference between paying your fair share. I am not arguing with the gentleman,

I am only pointing out something. The difference between paying your fair share

and getting a fair service, that is the problem. If they could come into

Nicholsville and say in year one we will put in part of your water and sewer,

year two you will get all your water and sewer or year three you will get

something, but right now there is nothing and they know they have to go from

nothing to 7.5 mils - I would not say nothing, but nothing in the sense of a tax

structure as such, from a fee back to the (inaudible) and there is only - yes,

you have areas in and around here affected the same way. We have an example, as

I was telling the Member for St. John's North just now, you have a prime example

in the Goulds, which the hon. Member for Kilbride represents.

They have to pay the same tax structure now as St. John's but

at the same time there is no phase in for the service and that is where we have

the problems today, and under the old transition period for the Shea Heights one

which comes to my mind, because I used to be around the Federation then with

hon. members back in 81-82, there was a transition period there, there was a

phase in period there and it went fairly smoothly for people who did not want to

be amalgamated really.

But now that I mention 1981-82, I have to refer especially

about the present minister, Mr. Speaker. I have to tell you a story about a time

we spent in Gander one really, hot weekend and we had a Minister of Municipal

Affairs then, she was representing Gander, the hon. Hazel Newhook, she was in

Gander that day. I was a rookie too, just being elected a councillor in Cormack,

a small community and I got out among the big fellows and I said: what am I

doing here? And I mean big fellows in more things than just communities; some

were very big in size.

MR. W. MATTHEWS: Hogan was there, wasn't he?

MR. WOODFORD: I won't mention any names, but, Mr.

Speaker, we had one hot weekend. That was the weekend that some of the members

here today, especially the Leader of the Opposition, can certainly remember and

my colleague from Mount Pearl, because he was there the same weekend, come to

think of it, and that was the time the former administration lowered the grant

we used to get under the old package for municipalities. There used to be a

social assistance component and a population component and fifty cents on every

dollar for property tax.

AN HON. MEMBER: The minister remembers that.

MR. WOODFORD: Oh, the minister remembers it, does he ever

remember it, and they lowered that from fifty cents down to forty-five cents.

Now, Mr. Man, if you want to hear something, if you want to hear a racket, that

minister in Gander, that Minister Newhook. The hon. Member for Carbonear and I

must say I was a -

MR. REID: You supported it.

MR. WOODFORD: I was one of the quieter of the four or

five who spoke, I mean I never spoke up too much at that time, I used to be -

AN HON. MEMBER: You were civilized then.

MR. WOODFORD: Yes, civilized, fairly civilized. I changed

over the years a little bit, but that was a hot weekend. I have to draw that

analogy and just compare the two because I cannot understand municipalities in

the Province and I say this today, I do not care who carries it to what

municipalities in the Province. I was from a community of 750 people I spoke up,

the hon. Member for Carbonear was from a community of, I do not know, 3,000 or

4,000 at that time I suppose, 6,000, he spoke up. The hon. Member for Waterford

- Kenmount, he spoke up, but look at what happens today, what is happening in

this Province today. Go back four years ago, if you had seen that back in the

early 80s or the late 70s, there would have been riots in this Province, Mr.

Speaker.

What was done under the Municipal Operating Grants in the

Province in 1989 was nothing but the worst I have ever seen, the worst

treatment, and not a word, hardly a word. Not only that, but then to come in in

'90 and cut them in mid-year, adding insult to injury, and then to stick the

knife in a little further, come in '91 and cut it again, mid-year, to stick it

in and twist it, came in in '92 and cut it again, and this year it is gone

altogether. It is not broken off yet but it is into the bone. The tip is gone

off it so there is nowhere to go but get at the bone. Mr. Speaker, I say to the

present minister today that what he did in early 1981, or 1982, I think it was,

what he did then, he should stand up in the House today and defend those

municipalities in the Province and his own community the same as he did in

1981-82.

SOME HON. MEMBERS: Hear, hear!

MR. WOODFORD: For the sake of five cents on property tax,

and what is gone today? We have to do nothing else only take out the road

component of $2000 a kilometre four years ago, down to nothing. It is just as

well to say nothing today because $39 is nothing. It is just as well gone. I can

go a little further, the formula for repayment on capital debt is the biggest

insult that was ever put on a municipality in the Province, the new formula for

the repayment of capital debt. That applies to everybody. That even applies to

the St. John's members. I can tell you something right now, you had better

sooner than later get used to it, and you might as well go in and have an

audience with the minister and find out what the formulas are. The present

Minister of Health, that is your lad to get talking to. He is really interested

in it in the City of St. John's. He is really interested in the new formula for

the repayment on capital debt. Members opposite might as well get used to it

because they are going to be hit. I tell you something else that would have

happened this year and this administration would have paid the price, if this

had not been an election year for municipalities in the Province, if this had

not been an election year coming up in November, Mr. Man, you want to see mil

rates going up in this Province?

AN HON. MEMBER: Mr. Bursey.

MR. WOODFORD: She is not listening. Mil rates I would

say, the lowest, and I can probably go as far as say an average would be 2 mils

for most municipalities in the Province. It would have been put on in last

December's budget and the only thing that saved it - they are like every other

politician, they are like the members opposite, their election comes up in

November and that is why they held back, because I have municipalities in the

Province who were hit with $200,000. It is funny how you can come up with

$200,000 in one year, an election year, and you cannot do it in the previous

three. Is it not funny? It is rather ironic. I say to the minister just one

thing, especially pertaining to the taxes, 2.5 per cent is in. There was 2 per

cent there anyway and on the gross, I must say to me as far as I am concerned, a

poor way because you had to estimate the gross. You did not have to ask the

company. The onus was on the company to come in and prove that they did not have

the estimated value and that was wrong as far as I am concerned.

You had to bill the company and then the onus was on them to

come in and tell you, and show you an audited report saying they had made so

much money on gross earnings, which hit some of them pretty hard, 2 per cent,

and that was wrong. So the 2.5 per cent is right with regard to a uniform

taxation for utilities but what I am saying is this, the minister is going to

have to be very vigilant in looking at what Newfoundland Tel, Newfoundland

Light, and especially I want the minister to take special note to cable

companies, because I can guarantee you that those three particular utilities,

and more especially the cable companies, are going to try to haul back, they are

going to try to evade, and they are going to do everything in their power not to

pay that 2.5 per cent.

The other thing is for the minister responsible for consumer

affairs, the Minister of Justice, to watch what they do because what they will

do, if they have to pay it, they will go back to the PUB, or the CRTC, to try to

recoup the 2.5 per cent, and you watch. If you or I started a business we cannot

be guaranteed a certain return but Newfoundland Light is guaranteed 13.2 and

Newfoundland Hydro is guaranteed 4 per cent, but we cannot do it and it is not

right. The cable companies today have learnt fast what the other utilities were

doing and now they are hooked onto the CRTC. Now, they are sending letters to

municipalities threatening them and the next step will be to move to the CRTC

and see if they can get a rate increase to cover the 2.5 per cent.

So I say to the minister, be vigilant, be very cautious when

it comes to dealing with the utilities in this Province. If he is, and stands up

for the municipalities in the Province, then I'd say the 2.5 per cent would

work. If not, it won't. Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MS. VERGE: Thank you, Mr. Speaker. I'd like to begin by

praising my colleague, the Member for Humber Valley, the member who represents

the district neighbouring mine. That was a good strong rousing speech. The

member has a wealth of experience in municipal government, having served for

many years as a councillor and then mayor of his home community, Cormack;

serving for some time as a member of the executive of the Provincial Federation

of Mayors and Municipalities; and of course, serving for several years now as a

member of the House of Assembly and now as our Official Opposition municipal

affairs critic.

The member was good enough to share his experience, to offer

some advice to members opposite, particularly the new minister. I'd say to the

new minister that he'd do well to heed the advice so generously offered by the

Member for Humber Valley. Perhaps if his two predecessors had paid attention to

what the Member for Humber Valley was saying they'd still be here in this

Chamber today.

This Bill, Bill 5, is yet another example of the incompetence

of the Wells administration in administering. As I've said many times before,

even when they have a good idea - and there haven't been many - even when they

have a sensible notion, when they have an idea for reform, they bungle the

implementation. This is the third version of this uniform utilities taxation

legislation that we've seen. The first version was hastily and rashly put

together just before Christmas. The previous minister and the Premier insisted

on ramming it through the House of Assembly. We sat here for twenty-four hours

straight doing a number of important bills. They refused to cooperate with the

Opposition and refer the draft legislation to a legislation review committee so

that it could be examined thoroughly and so that the public could be consulted

about it, and instead used their majority, or abused their majority, and passed

it.

That legislation came into force at the start of the new

year. Then, lo and behold, the government discovered that they made a mistake.

They told municipalities; don't go by what's in our new law, we didn't really

mean what's in the fine print. In March when the House of Assembly opened again

they introduced a bill to correct their mistake. They didn't get it through

before the election was called. Now they're back here with this third version of

the legislation.

This Bill provides for retroactive coming into force of a

taxing measure. That's very objectionable. There may be situations in which it's

acceptable for legislation to have retroactive affect, but I would say this is

not one of them. What's the excuse for ramming through taxing legislation with

retroactive effect?

Mr. Speaker, my good friend, the new Minister of Works,

Services and Transportation has just joined us over here on this side of the

House. He wanted to get a better seat so he could take in all my remarks, and

that is very flattering. He is asking if I will go out with him tonight to his

estimates committee meeting. That is an offer that I will have a very hard time

refusing. I will have to think about that because I have many, many concerns

related to the Department of Works, Services and Transportation and the

estimates committee meeting tonight might be a good chance to air them.

Mr.Speaker, I notice the minister has paid a great deal of

attention to me ever since I asked that question to the Premier - the question

about the fox in charge of the hen house.

AN HON. MEMBER: (Inaudible).

MS. VERGE: He says it with a smile. His charm is hard to

resist. He makes his threats with a very sweet smile.

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: Since the minister is over here listening to

me, I would ask him once again if he would please have his staff go to see the

property owners next to the highway work in Corner Brook. The four property

owners - there are four houses, and the owners of those properties on the old

highway between the golf course and Massey Drive are literally circled by the

construction. The new road is coming much closer to them than the original plan

indicated. Blasting has been done there. Yesterday there was blasting that

resulted in a rock striking one of the houses, and the people are upset and

worried. They do not know exactly what is shaping up. They do not like what they

are seeing. Yesterday a tractor bulled across one of the lawns. No permission

was sought in advance, and the people have been asking for three weeks for staff

of the department to go and talk to them and discuss with them the latest design

for the highway - both the four lane Trans-Canada and the ramp and feeder

network. They began by talking to staff of the department in Corner Brook and

Deer Lake. After a week or so they contacted me. One of them was undertaking to

fax the minister this morning.

I am grateful for the minister's personal interest, but he

has a huge department and if people throughout the Province with every problem

and concern have to wait for the minister to come visit, then they are not going

to get the kind of service they deserve. So I would hope that the minister will

make good use of his staff.

MR. EFFORD: Monday.

MS. VERGE: Monday. Monday he is going to Corner Brook. I

am very glad to hear that. Okay. So I would hope that the minister will not only

look at the construction work and check the plans, but also talk to the property

owners, or have his staff talk to the property owners, hear their concerns,

answer their questions, and discuss with them appropriate redress. What may be

required now is government purchase of the properties, or part of the land, or

what may be in order is compensation for loss in value that people will suffer.

Mr. Speaker, to return to my discussion of this Bill, I was

saying that the provision of the Bill making it retroactive to five months ago -

to January 1, 1993 - is offensive. Now the government has, in its treatment of

municipalities over the last four years, been most unfair. The government, as my

colleague has pointed out, has successively told municipalities on what basis

funding would be provided, has outlined the formula for operating grants but

after municipalities have put together their budgets in good faith, drawing on

the information provided by the department, after they have sent out their tax

bills to their residents, even after the deadline for amending taxes, the

government has changed the operating grants formula and cut grants to

municipalities.

Now, Mr. Speaker, in this economic climate with the slowdown

in the rate of increase of federal transfers, with the economy and free-fall and

revenue from provincial sources declining, I may have some sympathy for the

Provinces actions in making changes to municipal operating grants. I certainly

agree with the stated objective of rewarding municipalities who make a

reasonable taxing effort but, Mr. Speaker, there is no excuse for the Province

imposing changes after municipalities have submitted their budgets to the

department and received departmental approval and after the deadline for tax

changes, this kind of altering rules in mid-stream is unacceptable. The

government has to learn how to manage, the government has to learn to be fair to

municipalities and other agencies which depend on government funding and those

agencies include school boards, the University, colleges and hospitals. It is

simply not acceptable for the Province year after year after year to change the

rules in mid-stream. If the Province decides for whatever reason, and we can

debate that, if the Province decides to change the formula for operating grants,

if the Province decides to cut funding to municipalities, then make the

decision. Give municipalities advanced warning, enable the municipalities to

plan on the basis of the new funding arrangement and stick to the decision.

Learn how to plan, learn how to budget and stick to the budget.

Mr. Speaker, this new arrangement sets a uniform utilities

tax rate of 2.5 per cent of utilities gross revenue. Mr. Speaker, I do not

disagree with the principle of having a uniform rate. I think it is desirable

for utilities contributions to municipalities to be spread throughout the

Province on an even basis, on a fair basis. I do agree with representatives of

the government when they say that it was not acceptable for a few municipalities

to be charging utilities high rates when others were charging very low rates.

So, I agree with the objective of bringing about uniformity.

Mr. Speaker, the part of the new legislation that I object to

and I said this back in December when I spoke on the original bill, is that it

allows municipalities to charge more than the uniform rate and then empowers

utilities to pass on the difference to the rate payers. So, what the Province is

doing in essence is setting up the utilities to do double dirty work, I think

that is the phrase I used at the time. It is in essence allowing for a new

indirect tax, because of course the rate payers for telephone, electricity and

cable-tv are one and the same as the taxpayers, municipal, provincial and

federal. There is only one rate payer, a taxpayer, and that person is being

imposed upon more and more and more. What this does is set up the utilities to

collect taxes for municipalities.

Now, the provincial government by squeezing municipalities

has forced municipalities to charge significantly more in local taxes already.

Now, through this legislation, through the legislation that was passed in

December, the Wells administration is setting up utilities to collect the tax

for municipalities - to pass on any excess municipal tax above the standard 2.5

per cent of gross revenue on the utilities bill, on the phone bill or the light

bill, to the taxpayer rate payer.

Mr. Speaker, as my colleague pointed out, the new legislation

also sets up the provincial government to collect from utilities 2.5 per cent of

the gross revenue they derive in unincorporated areas from the residents of

those unincorporated areas. I would ask the minister, when he speaks to close

this debate on second reading of the bill, to tell us how much money the

provincial government so far has either billed or collected from utilities in

respect of the gross revenue the utilities derive from unincorporated areas in

the Province.

This is a new hidden tax, of course, because whatever the

utilities pay out in taxes, whether it be to the municipalities or to the

provincial government, the utilities will simply pass on to the rate payers. If

the utilities end up paying more tax - more when you add up both what they will

be paying to municipalities and what they will be paying to the provincial

government than they have paid previous to this legislation - then that excess

will simply be passed on to the customers - to our constituents - with a quick

and easy application and approval from the PUB, or the CRTC in the case of the

phone company. So I would like the minister to reveal just how much new revenue

the Province is deriving from charging utilities 2.5 per cent of the gross

revenue they get from the unincorporated areas.

Mr. Speaker, the main reason that I decided to participate in

this debate was to draw to the attention of the minister and members opposite,

and to the public, in the hope that some reporter may be listening, the

frustrations that municipalities are having trying to collect tax from the

cable-tv companies. Now my colleague, the Member for Humber Valley, talked about

this already.

As the Member for the district of Humber East, I regularly

sit in on meetings of what is called The Great Humber Joint Council. That is a

regional body comprising a couple of representatives of each municipality in the

Bay of Islands/Humber Valley/White Bay South area. The organization includes

over twenty municipalities as well as some local service districts.

Mr. Speaker, municipalities in that region have had major

headaches dealing with the cable-tv companies. Before the new legislation, the

uniform utilities tax legislation, they were frustrated in their efforts to

collect from the cable-tv companies. Since the coming into force of the December

legislation they have been confronted with what appears to be a ganging up of

the cable-tv companies. The cable-tv companies are either refusing to pay,

refusing to tell them how much gross revenue they are getting from the

municipality, are saying: No, we will not pay 2.5 per cent. We will only

consider paying 1 per cent; or they are saying that they have constitutional

legal grounds for refusing to abide by any of this.

Mr. Speaker, I do not have copies of the correspondence the

cable-tv companies have sent those municipalities, although representatives of

Hughes Brook and Cox's Cove in particular have told me about recent

correspondence from cable-tv companies serving those communities, indicating

objections to complying with this legislation.

Mr. Speaker, the point I am coming to is that there is a

serious problem with cable-tv companies refusing to abide by this legislation.

The problem appears to be widespread. It is not confined to just one or two

municipalities in the Province. The problem may vary from one cable-tv company

to another, that I can't say for sure. Individual, small municipalities should

not be left on their own to deal with the big cable-tv companies. The provincial

government should assume a leadership role. If the cable-tv companies are going

to use their great wealth to hire lawyers and mount a legal challenge to this

legislation, then the minister and the government, who after all are the authors

of this legislation, flawed though the original version was, should provide

financial assistance to the Federation of Municipalities or should, as a

government, meet that challenge.

Small communities such as Hughes Brook and Coxes Cove

shouldn't be left on their own to fight the cable-tv companies. It just doesn't

make any sense. This is a government that's been big on amalgamation, apparently

believing that bigger is always better. Sometimes bigger is better. Sometimes

when you pool your resources you end up with a more efficient operation and you

realise economies of scale. That certainly doesn't result in every case, and it

would not have happened if the government had forced the merger of Corner Brook,

Massey Drive and Mount Moriah. But there are situations where bigger is better.

The combination of Pasadena and South Brook in the district I represent, which

was done during the Peckford administration, was a positive instance of

amalgamation. Although this administration hasn't honoured the commitment to

provide the capital funding to that amalgamated municipality to upgrade the

services in Pasadena West, formerly South Brook. But I digress.

My point is, the government should assist all the

municipalities throughout the Province which are being thwarted by cable-tv

companies in the municipalities' efforts to enforce this legislation by taxing

them the reasonable amount of 2.5 per cent of their gross revenue, or a lower

amount. The Province should initiate and carry out on its own or carry out in

cooperation with the provincial Federation a spirited defence of its

legislation.

Mr. Speaker, I haven't had an opportunity to do the necessary

research, although back in March I talked to the executive director of the

provincial Federation, Doug Smith. I suggested to him that the Federation have

its legal council look at the question of whether an amendment to the provincial

legislation would strengthen the hand of municipalities in dealing with cable-tv

companies. I mentioned at that time concerns that had been related to me during

March that municipalities were also having some difficulty dealing with the

other utilities, Newfoundland Telephone and Newfoundland Power.

My understanding is that those difficulties for the most part

have bene cleared up, but at that time a couple of the municipalities in the

area I represent weren't getting what appeared to be accurate, reliable, gross

revenue figures from the other two utilities. At any rate, perhaps when the

minister rises to speak at the end of this debate he'll talk about how he

proposes to help municipalities in dealing with cable-tv companies.

Municipalities in this Province for the most part are small.

Their councils for the most part are made up of volunteers, with the exception

of councillors in one or two of the larger municipalities. People serve

voluntarily. They give freely of their time and give a considerable amount of

time. I've been extremely favourably impressed by the people serving on the

municipalities in the district I represent. Over the past few years these people

have had to put up with not only significant cuts in provincial government

funding and support, but also the late notice, the changing of rules in

mid-stream, that I talked about earlier.

The councillors have had to hike taxes, in some cases very

sharply.

They have had to put up with abuse from their neighbours and

friends because they operate at the grass roots, they are much closer to their

constituents than we are, and after all we are paid well for our work. We do our

jobs on a full time basis and I think the government had better give more

consideration, more sensitive consideration to the position of citizens as we

approach the upcoming November municipal elections. After all, how can we expect

people to continue to offer themselves for election to municipalities, for

service on community and town councils, if the kind of abuse that the government

has inflicted on councils for the last four years is going to continue.

Mr. Speaker, I will end by recapping my remarks.

First of all, the Member for Humber Valley offered good

advice for all members opposite, but particularly for the new Minister of

Municipal and Provincial Affairs and I hope he listens carefully and pays

attention. Number two, the government typically is clumsy in administering, in

implementing change. I am all for change and reform, in many cases we have no

choice, in other cases it is desirable for other reasons, but, Mr. Speaker, when

the government lights on an idea, for heaven's sake, research it and make proper

provisions for an orderly implementation. Let the people affected know ahead of

time, give them fair warning, allow them to adjust and stop changing the rules

in mid-stream; stop expecting the volunteers who make up municipalities, who

serve as mayors and councillors, to have to change their plans partway through

their year, after in good faith they have made up their budgets, had their

budgets approved by the provincial government, set their tax rates, sent out

their tax bills and even after the provincial deadline for changing taxes. I

mean, surely the members opposite would not want to be treated that way by the

federal government -

AN HON. MEMBER: (Inaudible).

MS. VERGE: - so why are you doing it to municipalities?

And, Mr. Speaker, it just did not happen once or twice, it just did not happen

when they were new to government back in 1989, and it has happened again last

week. Last week the Department of Municipal and Provincial Affairs sent out

letters to municipalities telling them that the road component of their

municipal operating grants were being cut. Now, Mr. Speaker, what does the

government know now that it did not know last December? Remember, we had a

mini-Budget in early December, I mean that is just clumsiness, ineptness, a lack

of care, a lack of consideration for other people who are depending on the

ministers opposite.

Mr. Speaker, a prime example of the ineptness of this

administration is that this is the third bill we have seen in this Legislature

dealing with uniform municipal utilities tax and when the first one was brought

forward just before Christmas, members on this side pleaded with the government

to pause, put it out to a legislation review committee for proper analysis, to

consult the public, but no, they were hell-bent on getting it through and in

force for January 1st. Well, they made a serious mistake and then they told

municipalities: do not pay attention to what is in our new act because that is

not really what we meant, we will bring in a bill in the Spring to clarify what

we really meant, and you have to abide by, not by the strict letter of the law,

but by what we are going to do later, and they have the gall to make this

retroactive to January 1. It is a taxing measure.

AN HON. MEMBER: Did you ever make a mistake?

MS. VERGE: Did I ever make a mistake? As I said before,

Mr. Speaker, I can forgive anyone, even myself, for making one mistake, but when

you see repetition, when you see a whole pattern of mistakes, when you see the

government year, after year, after year, changing the Municipal Operating Grants

formula -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MS. VERGE: By leave, I will just finish my thought.

MR. SPEAKER: Does the hon. member have leave?

SOME HON. MEMBERS: No leave.

MS. VERGE: No leave - thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Waterford -

Kenmount.

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

Mr. Speaker, I find it very frustrating, just having vacated

the office of Mayor of the City of Mount Pearl, to have to speak on this

particular piece of legislation, in particular, since, as my colleague just

said, this is not the first time we have had these kinds of things happen.

I have been on record for a long time as having given my

personal support for the uniform taxation of utilities. There are many letters

which my colleagues opposite have in their files, in which I have been an

advocate for the uniform taxation of public utilities, and, in fact, many of the

press clippings over the last several years will show that to be so. This whole

issue of taxation of public utilities has been a very contentious issue with

municipalities, and a contentious issue for the Federation of Municipalities. It

has been on the books for many, many years and has been a topic of discussion

when my colleague, the Minister of Finance, was with the Federation and he and I

were representing the 'large towns'

section of the Federation. We couldn't find

the consensus to bring it forward as an adopted motion of the Federation at that

particular time, however, many of the larger municipalities have certainly been

on record as supporting this method of taxation of the public utilities

companies.

We felt that public utilities should pay a fair share. We

felt that they should contribute to the municipal revenues. Mr. Speaker, the

City of Mount Pearl has been advocating a system of taxation of public utilities

for, I guess, ten or fifteen years, and probably longer than that.

Mr. Speaker, I want to point out to hon. members, as well,

that the City of Mount Pearl imposed taxation of a property value on public

utilities. Mount Pearl was probably one of the first communities that decided

they would make the cable television companies pay. In fact, at one point, we

went to court and seized the assets of Avalon Cablevision, and were given an

order to take their assets, and would have rendered them, I guess, unable to

carry on normal business. When that happened, the Cablevision very quickly came

forward with the appropriate allowance of their taxation.

In addition to that, some years ago, when the City of Mount

Pearl was having difficulty with Newfoundland Telephone Company, we were very

aggressive and, as a City, we decided that Newfoundland Telephone Company should

pay an appropriate rate of taxation. At the time, there wasn't the uniform

taxation rate available and the City, in its wisdom, decided we would charge on

the property tax the rate that would yield us approximately 2 per cent of their

gross revenues. The telephone company refused to pay, so we took them to court

and we were successful in litigation. The court decision said that the

municipality had the right to determine the rate that would be charged to the

utility companies.

On that basis, Mr. Speaker, the City of Mount Pearl, given

its record, has had a long history of leadership in this particular area and

certainly, when I read Bill 73 back some months ago - "An Act Respecting

Taxation of Utilities and Cable Television Companies" - the files will show that

I was publicly in support of the government's initiatives, and certainly, today,

I stand in support of that particular initiative, as well. It is a step in the

right direction.

However, one of the difficulties that we have is with

consistency. We find it very difficult for a municipality to be able to balance

its budgets when the rules change half-way through. This has been a pattern, and

I plead with the government opposite, try your best to be understanding of the

300 municipalities out there who are going through the very same budgetary

problems, the very same decrease in revenues, that the government, itself, says

is the case for the Province. Certainly, many of the municipalities cannot come

up with the revenues any better than the government can for the whole Province.

Therefore, it is very frustrating when you do a budget and then find, after

three or four months, the rules have changed. In the last five, six, or seven

years - I certainly say to you that this has happened too often over the last

number of years, and particularly, the last four or five years.

Mr. Speaker, it is very difficult to sit in your council

chambers and go on meeting after meeting after meeting, dealing with recreation

commissions, meeting with all of your business groups, and coming up with a fair

rate of taxation, and then finding yourself some months later with the

possibility that the Provincial Government, the parent government, is going to

change the rules. Suddenly, you are down monies on operating grants; you are

down monies on various categories of the Provincial Government municipal

cost-sharing arrangements.

Mr. Speaker, back in November, the Minister of Municipal and

Provincial Affairs wrote the municipalities in the Province. His circular is

dated 23 November. It is on the public record, and he advises municipalities of

the government's intention to introduce legislation to tax public utilities. It

reads, in part, and I quote: `Effective January 1, 1993, government has taken

the decision to establish a standard rate of municipal business taxation

applicable to utility companies. Government has also taken the decision to

include Newfoundland Hydro and cable television companies and to make them

liable for this municipal business tax.' Based on that, the minister then went

on to announce that legislation would be introduced.

Mr. Speaker, it is not the municipalities' fault that the

writing of the legislation was inadequate. It is not the municipalities' fault

that the writing of the legislation shows that there was some inadequate

planning, inadequate thought processes. For example, Clause 10.2 of the bill

reads as follows: When a council imposes a business tax upon a utility for the

year immediately preceding January 1, 1993, which was based upon the real

property value of the utility within the city or municipality served by council,

that council `shall' - there was no option here, it did not say `may'. It said:

that council `shall', and I quote: for the year preceding January 1, 1993,

impose a tax upon the gross revenue of that utility during the preceding year,

derived within the city or municipality served by the council, that is not more

than 2.5 per cent of that gross revenue plus - plus, I say - plus two-thirds of

the actual tax imposed upon the utility for the year immediately preceding

January 1, 1993.

Now, Mr. Speaker, the 309 municipalities in the Province,

when they read that particular piece of legislation, when they got their

directives from the ministry, they immediately followed it precisely to what it

says. They did their budgets - it said; `you shall impose this particular rate

of taxation'. It said that you had to put in the 2.5 per cent plus two-thirds of

the actual tax imposed upon utility for the year immediately preceeding January

1, 1993.

Mr. Speaker, when I got that particular piece of information,

I paused to write the ministry. I drew out the example of what would happen in

the City of Mount Pearl or, very specifically, I would like to show the

difference here. For example, under the 2.5 per cent, the City of Mount Pearl

would have received from Newfoundland Power, $338,883 and from Newfoundland Tel,

$264,837.

Now, Mr. Speaker, that certainly is significant monies, but

if we go, then, and take two-thirds of that and add it on, which is what the

legislation said you must do - it said you `shall' do this - in doing that,

taking two-thirds of these amounts, it meant that Mount Pearl would have had to

impose an extra $402,480. Now, Mr. Speaker, we know that was not the intent of

the legislation. Every municipality in the Province knew that was not the intent

of the legislation. However, the legislation was very prescriptive - it didn't

say, you `may', it said you `shall'. It said, we direct you to do this. So, the

memorandum from the minister, sent out in January - we received it in early

February - gave the examples, and it read as follows - Page 2: `a municipality

which has previously imposed a utility business tax on the basis of real

property value, will, in 1993, impose a business tax of up to 2.5 per cent on

1992 gross revenue plus two-thirds of the actual tax imposed in 1992 on the

basis of the real property value.' Then, it went on to explain what would happen

in 1994 and in 1995. Further, the memorandum gave examples of how this was to be

applied.

Mr. Speaker, all municipalities having read this particular

memorandum - we must, as municipalities, we must take direction, we must abide

by the law. Every municipality tries to live by the rules that are established.

Certainly when we have rules and communication from the minister, when the act

says, you `shall' impose this particular regime of taxation, we simply try then

to do our best to live within the rules.

Mr. Speaker, it is very frustrating to be a municipal leader

- and I know that the hon. the minister has been a municipal leader in his

community of Carbonear, and I know that many members opposite fully understand

the frustrations that this kind of action causes. And certainly, in this

particular case, what we have before us is a situation where there has been

approximately a $4 million error, that is the magnitude of it. If every

municipality imposed the exact wording of this particular piece of legislation

and said we `shall' impose that, it would amount to about a $4 million error.

Now, Mr. Speaker, who was inconvenienced? Who are the people

who are inconvenienced in all of this confusion? Certainly, the Provincial

Government is somewhat embarrassed, I suppose, or they should be. Mr. Speaker,

in this particular case, we have had this piece of legislation, the concept of

which I have supported. I have been a strong advocate of it, and certainly, I

take no joy in standing here and saying that we have some confusion out there.

Because I have been one of the people who have been in municipal government for

a long time and I know what confusion it causes.

Now, Mr. Speaker, some municipalities knew well in advance

that this particular, I would call, adding on the two-thirds, would not be a

factor. Therefore, some municipalities, including my own - we did our budget and

we recognized, and we had communications with the utility companies. We told

them that we expected this would have to be changed. However, our early contacts

within the department, in January, did not lead us to believe that there would

be amendments coming in. In fact, it wasn't until somewhat further into January,

maybe into early February, that we became aware there was even a possibility

that the Government of the Province would amend the legislation to make it

coincide with the intent of the legislation, back when the bill was introduced

in December.

Therefore, many municipalities, by January, had imposed their

taxation rates. They had sent out their invoices. Members have to understand

that if you are a member of a municipal government, you want to get your bills

out as soon as you can. The aim is to have your taxation bills sent out by the

20th or 23rd, 24th probably, of December. The reason for that is very simple. If

you get your invoices sent out, then you can get your revenues coming in in

early January. When you get your revenues coming in from the various mortgage

companies on the real property, of residential properties, therefore you can get

your monies coming in a lot faster. If you wait until February to send out your

taxation notices, therefore, you simply have to go to your bank and borrow the

money, or you have had to do without, you might say, for some particular period

of time, several months.

So, many municipalities found themselves in the difficult

situation, in mid-February, of not knowing what to do. They had sent out their

tax notices in December, based on the two-thirds - they had followed the rules -

and then they found themselves not knowing what to do, being in a bit of a

quandary. Would they go back and now up their mil rates, or how would they

accommodate this loss of revenue?

Mr. Speaker, that, I think, is very unfortunate. If it were

the first time that municipalities had been inconvenienced by the changing of

the rules in mid-stream, I think that most municipalities would be somewhat

forgiving. But I plead on behalf of the 309 municipalities in this Province:

let's try our very best to make sure that this kind of situation never ever

occurs again. Because, as I said, I think we have to respect the honest and the

straightforward, diligent, hard work that all of these elected people do in all

those municipalities. And it causes confusion, causes uncertainty. No mayor or

councillor wants to impose a new tax, change the rate in March month, certainly

not, because you have sent your invoices out, you have done your work, you have

a reasonable expectation, you are trying to accommodate the general decrease in

revenues. It is very difficult to collect taxes, anyway. We all know how

difficult that can be when the economy is in decline. We have bankruptcies in

business, we have people who are personally experiencing great difficulties. We

have, as the Minister of Social Services would know, many families who are going

through tremendous stress, and mayors and councillors don't wish to impose any

additional hardship.

In this particular instance, we know that the inconveniences

are to the people. So, therefore, I say to the minister that, as a supporter of

the principle of this particular piece of legislation, I ask him to be

understanding. We are going to have municipalities which are going to be in

serious financial difficulty before this year is out, for many reasons.

Therefore, it is incumbent upon the government to try to make adjustments where

they can, so that this - if there are municipalities which have serious

difficulties arising from this particular piece of legislation, and the

inadequacy of it, I think we have to reach out and try to be compassionate, and

let us support our third level of government.

Let us make sure that we won't be the cause of - the people

who are trying to run our municipalities, probably there are several thousands

of them out there who are elected in positions in this Province. They are the

people who are doing the greatest job that they can do to try to provide good

government, to try to give the services to their local municipalities.

Certainly, the minister knows that it can be very frustrating, it can be very

difficult.

All I say, on behalf of all the municipalities, is that we

try our best to avoid this kind of situation. As my colleague and the other

speakers on this side have already said, we have enough difficulties in

municipal government without causing any further difficulties by the way this

particular piece of legislation was brought in.

Mr. Speaker, I conclude by saying that support for the

general principle - I think that this taxation of public utilities is something

that is good for this Province. It is good for municipal government. The intent

is honourable. However, I plead with the minister to be cognizant of the

difficulties that the precise reading of the legislation calls for

municipalities, and to try to recognize that some municipalities in this

Province are going to be in difficulty before the end of this year as a

consequence of the government's wording of the original Bill 73.

Thank you very much.

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

MR. HEWLETT: Thank you, Mr. Speaker.

I would like to have a few words to say on this bill, with

regard to, basically, the changing of the rules with regard to the taxation of

utilities - a retroactive change of the rules to cover up a mistake made by the

government when it pushed through, in its usual manner, a piece of legislation

in the last sitting of the House.

Mr. Speaker, first, when I was elected to this Chamber, the

Wells Administration immediately embarked on a two-pronged approach in an

all-out blitzkrieg fashion. One had to do with the Constitution, the other had

to do with amalgamation. When we had war in the Gulf there a little while ago,

Mr. Speaker, it was called Operation Desert Storm. Since coming to office, I

think there has been, on the part of the Wells Administration, an `Operation

Municipal Storm', which has continued over the four years of the Wells

Administration, and now it is really `operation municipal norm.' That is

unfortunate, that a continued assault, a continued bungling, a continued

interference in financing, and shifting of the gears and the rules with regard

to municipalities in mid-stream, has become the norm in the relationships of the

municipal governments in this Province to this particular Provincial Government.

The grants system, they have essentially gutted, forcing

local councils to either cut services to the bone and/or reduce taxes, and take

the heat for reducing taxes, so that they, themselves, would not have to take

the heat. Amalgamation, as I indicated earlier, turned out to be a total

disaster in a lot of areas, with the utterly ludicrous situation, in my

particular district, of this government offering to amalgamate three island

municipalities and only willing to admit its mistake about two years after the

insanity of the proposal that they put forward was pointed out. Some municipal

authorities in my district have lost money due to the fixing of a certain

Province-wide rate with regard to municipal taxation of utilities. This

particular change which is happening in the middle of a financial year is going

to negatively impact on certain municipalities who went along quite literally

with the letter of the law as laid down last year, which was obviously a

mathematical or a legislative blunder on the part of this particular government.

This government, Mr. Speaker, has not been kind to municipal

government in Newfoundland. When I first came to work for government back in

1974 a young minister named Peckford started implementing a number of changes

with regard to improving the level of municipal government in this Province, and

substantial progress was made, both in forming municipal governments and in

getting municipal governments to take more responsibility for the running of

their communities, and the financing of certain aspects of capital works in

their municipalities. Unfortunately, Mr. Speaker, when this government came into

power it immediately began to dismantle what had taken a decade or so to put in

place, and basically, municipal government in this Province has been set back a

good twenty years or more. That is unfortunate and this particular Bill is just

an example of bungling on the part of government in its usual rush to force

something through at the last minute, forcing something through that a lot of

municipalities found difficult to swallow, and having forced it through they

found out they worded it wrong and now some municipalities went with the literal

wording of the Bill and are now going to find themselves in financial difficult

mid-year.

Mr. Speaker, this is a typical example of the treatment of

municipal government by the Wells administration and what started out to be

operation `municipal storm' has now become operation `municipal norm 'and I do

believe that is extremely unfortunate for the municipal level of government in

our Province.

Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

The minister indicated that they were bringing in this Bill

because, and I think they quote, municipalities were taxing cable companies

unfairly. I would assume if they taxed grocery stores unfairly, banks, and

various other businesses, they would bring in a bill putting a limit on the mil

rate that can be charged to various other businesses also. In other words what

they are doing is putting a limit because a municipality, they figured, unfairly

taxed a utility. Now, some municipalities taxed a utility above 2.5, and up to

as high as 6 per cent, and maybe some much higher.

AN HON. MEMBER: (Inaudible)

MR. SULLIVAN: Yes, but I know several where 6 per cent

was a fairly standard number in a lot of municipalities. One of the reasons why,

I think, those municipalities needed to have an opportunity to level the playing

field between rural and urban areas is because a lot of the rural areas do not

have the same basic tax base as in the city. A lot of the rural areas,

especially those close to the major cities, close to the City of St. John's and

Mount Pearl, depend upon the cities to do a lot of their business, doing their

banking, their grocery shopping in a lot of cases, their shopping for clothing

and various other supplies, and motor vehicles, etc. The shopping malls and all

business around the city has increased in size because they have a service base

around the city. Urban areas who were not charging higher amounts had the

opportunity to have access to a much larger tax base and increased revenues by

way of property tax to all of those businesses within the city that rural areas

did not have. So what has happened as a result now is that rural areas have lost

one of the avenues they had available to be able to get taxes from businesses

without putting any further hardships that were occurring because of downloading

upon these municipalities, and it has severely hurt municipalities in this

Province. People who were giving a lot of volunteer time, they were volunteering

their time, they have become disillusioned and discouraged with one thing after

another, a downloading that has occurred over the past while, and I will just go

back to since my term of office which is only about one year and I can certainly

relate some of these problems that have been encountered in just the short time

I have been there.

In June of last year, three days prior to a by-election in my

district, the minister at the time, of Municipal and Provincial Affairs, came to

the district upon the request of municipalities and met with all the

municipalities and told them that they are not going to be experiencing the

hardships that they were given in letter form. In fact, municipalities in this

Province were given last June, a letter indicating that their MOGs were going to

be cut substantially beyond the legal deadline of March 31, of setting their tax

rates for the year. Municipalities had their budgets set, they had their tax

rates set for the year, they had their billings actually done and they were told

last June that they were going to be hit with reductions in MOGS.

It was very unfair to these municipalities and the minister

stated that anyone who experienced problems, they would get some assistance and

he mentioned first, financial assistance, then he talked about assistance

generally, and then he talked about moral support and eventually whittled it

down that they had no support whatsoever, and three days before the election, he

promised at a meeting up in Ferryland of all the municipalities - Since that,

this government brought in, and once again in the tax year, a bill that was

going to enable the utility companies to be treated fairly. Well, municipalities

have been treated unfairly, maybe utility companies were treated fairly but

municipalities did not get treated fairly and the tax payers in these

municipalities did not get treated fairly.

They brought in last December, and once again, the specifics

of this, and I say to the minister, last December, when a budget was struck by

municipalities or the deadline for submitting budgets, this government brought

in a bill regarding utility companies and they made an error in presenting the

bill, there was a mistake either in haste, putting it through and trying to rush

it through or whatever the reason was -

AN HON. MEMBER: There was no mistake.

MR. SULLIVAN: - well whatever the reason was, it is

immaterial. They brought through a bill in December which passed in this House;

municipalities went out and set their budgets, some of them did, they approached

me, several who were in the position where they could take advantage of the

mistake and they set their budgets for the year 1993, based upon the legislation

that went through this House in December. Now we are coming back in June, once

again, six months after they are supposed to prepare their budgets, the

government is coming back to correct a mistake that they made in December, and

they are coming back to correct it now and they are going to make it retroactive

to January 1.

AN HON. MEMBER: That is right, they were told.

MR. SULLIVAN: Yes, they were told but they acted upon the

laws of this Province which went through this House in December and it is the

current law that sits in this Province as of today and they struck their budgets

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, quite possibly, yes you did, but

because you are going to change the laws on any offence, because you are going

to change criminal laws or any other laws, is that the reason not to follow the

laws that are currently in place?

MR. ROBERTS: Municipalities are being too cute by half.

There was a mistake made-

MR. SULLIVAN: That is correct.

MR. ROBERTS: - we acknowledged it early in January, any

municipality -

MR. SULLIVAN: I am agreeing.

MR. ROBERTS: - that says it was relying -

MR. SULLIVAN: I am agreeing.

MR. ROBERTS: - is being too cute by half -

MR. SULLIVAN: I am agreeing with that, but if the

government made a mistake - you made a mistake, you admitted the mistake after a

period of time, I accept that, but that is no reason to punish a municipality

because the law that currently exists -

AN HON. MEMBER: We are not punishing anyone.

MR. SULLIVAN: If I could finish, please -

MR. ROBERTS: A municipality that tried to gouge, taking

advantage of a mistake deserves no sympathy.

MR. SULLIVAN: I will agree, in some cases. Let me finish.

A lot of municipalities in this Province did not gouge. Depending on what you

call gouging, yes a lot charged 6 per cent; some charged less, some charged less

than 2.5 per cent. There are municipalities in my district that did not gouge

and some that did.

MR. ROBERTS: The ones who did not gouge have nothing to

worry about.

MR. SULLIVAN: That is not the point. The point I am

making here in this specific thing is that the law of the Province as it relates

to taxing utilities, which was passed in this House in December, and

municipalities submitted budgets based upon the laws as they currently stand -

we cannot make decisions on laws that are going to be. We know it's going to

come through. The government, all they have to do, the majority, is vote it.

But they made and prepared a budget. They had difficulty

balancing their budgets, so they took advantage of the loophole that was there,

which is legally their right to do. Now, after the budget is struck the least

they could have done was made the legislation effective from January 1, 1994.

That would be playing the game. In a legal sense they have every legal right. I

ask the Minister of Justice: don't they have a legal right to set their budgets

in line with the law that passed in December?

MR. ROBERTS: (Inaudible) and what we're doing is equally

legal and equally proper.

MR. SULLIVAN: Yes. That's correct. Municipalities are

now, that followed the law by submitting their budget, going to find out whether

in June of 1993, they're going to find out now that what they did was legally

right. They are now going to pay the price for doing something that's legally

right. Is that correct?

MR. ROBERTS: (Inaudible) too cute by half. Too cute by

half.

MR. SULLIVAN: Am I right? Am I right in stating that?

MR. ROBERTS: That is half the story.

MR. SULLIVAN: So in other words, the municipalities

didn't set a budget if they based it on the utilities bill that came through

when they set their budgets in line. Is that legally right?

MR. ROBERTS: The government said there was a mistake. We

admitted it.

MR. SULLIVAN: That's correct.

MR. ROBERTS: We said to the mu